The Texas Chapter 313 value limitation program is a powerful economic development tool that allows a school district to agree temporarily to reduce ad valorem taxes on an eligible project’s investment for a period of 10 years. Although the Texas House approved recent legislation to extend the program, the legislation failed in the Texas Senate. As a result, the program is set to expire on December 31, 2022.
The takeaway: The state continues to offer several other incentive programs, such as Chapter 380 and Chapter 381 property tax abatements, Enterprise Zone benefits, the governor’s “deal-closing” Texas Enterprise Fund grants, and other programs. However, the Chapter 313 program generally provides the largest overall benefit in incentive packages for capital-intensive projects. Taxpayers considering major projects in Texas should act soon in seeking time to secure the substantial benefits afforded by the Chapter 313 program.
