Texas Schools for Economic Development

Legislative Update HB 4242-May 27

TSED — Thu, 27 May 2021 21:45:11 +0000

TSED UPDATE!

Despite our best efforts, the Texas Senate did not pass HB 4242 (Meyer). Lieutenant Governor Dan Patrick refused to allow it to even be heard on the Senate floor. HB 4242 would have extended Chapter 313 of the Texas Tax Code through December 31, 2024, but now the program will sunset on December 31, 2022. That means that the program will expire before the next legislative session begins. HB 4242 was the only bill regarding 313 agreements that made it past the House and to the Senate. No Senate bills addressing 313s even made it out of committee. Business and industry were our good partners in calling for passage of the bill, but even our collective efforts were not enough for the Lieutenant Governor to bring it to the floor for a vote.

Now what?

It is possible that HB 4242 could get attached to another bill and get through on the back of other legislation that the Senate passes. If so, that would happen Saturday. It is also possible that the Senate could hear HB 4242 during the special session planned to address redistricting. Both scenarios are longshots.

What about agreements we currently have or that are in the works?

The sunset of Chapter 313 will have no effect on any current agreements that you have, and you can continue to enter into new agreements up to the December 31, 2022 deadline.

Thank you all for your efforts. You rallied when we called, and it made a difference. Peace to all of you as you get ready for graduation and the summer. I know you are tired. Just know that we at TSED appreciate you, collectively and as individuals, and are here for you if you need us.

ENHANCING EDUCATION THROUGH ECONOMIC GROWTH!

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Legislative Update – HB 4242 – Afternoon Update

TSED — Mon, 24 May 2021 19:18:55 +0000

TSED ALERT!

Urgent Action Needed:

Support for HB 4242 is waning in the Senate. It has not yet come up for a vote. Please have your Chamber of Commerce, Economic Development Council members and the company receiving the 313 limitation call their Senator immediately and voice support for HB 4242.

What is at stake is the future of 313 Agreements. If we can’t get this extended it is possible the state could take it out of our hands and give the limitation to the company with no benefit to districts.

The Senate is about to break for lunch, so you have a little bit of time, but not much. Call, text, email, send up a smoke signal in support for HB 4242.

ENHANCING EDUCATION THROUGH ECONOMIC GROWTH!

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Legislative Update – HB 4242

TSED — Mon, 24 May 2021 19:17:54 +0000

TSED ALERT!

Urgent Action Needed:

The Senate did not vote on HB 4242 on Saturday but have it on the calendar for today.

The series in the Houston Chronicle and other forces seem to be causing some Senators to waiver. They need to hear from you and from your board members that the 313 program is important to your school district and your community. Ask for them to please support HB 4242, which simply extends the 313 program for two more years. The extension will allow lawmakers, business leaders, and school districts time to work together on a bill that works for all.

ACTION REQUIRED: Session starts at 10:00am. Please call, text, email your Senator and ask them to support HB 4242.

ENHANCING EDUCATION THROUGH ECONOMIC GROWTH!

The post Legislative Update – HB 4242 first appeared on Texas Schools for Economic Development.

Legislative Update – HB 4242 – 5/22/21

TSED — Sat, 22 May 2021 17:59:59 +0000

TSED ALERT!

Urgent Action Needed:

HB 4242 to be voted on TODAY:

The session is coming down to the wire, so things are happening very quickly. The Senate has decided to vote on HB 4242 TODAY in their session that begins at 12:00. Call, email, text, do whatever is necessary to communicate to your state Senator that HB 4242 is important to your district and your community.

If you want to watch the session live, you can do so at this link beginning at 12:00:

https://senate.texas.gov/

Under the News and Media tab, choose Live Video.

This is it, folks. This is our last opportunity to influence the future of 313 Agreements for this session. Text your fellow Superintendents and let them know this is coming TODAY so they can do their part.

We at TSED appreciate you. Enjoy the rest of the weekend.

ENHANCING EDUCATION THROUGH ECONOMIC GROWTH!

The post Legislative Update – HB 4242 – 5/22/21 first appeared on Texas Schools for Economic Development.

Legislative Update – HB 4242

TSED — Fri, 21 May 2021 19:15:51 +0000

Urgent Action Needed:

HB 4242, the only viable 313 program extension option left on the table, passed out of the Senate Economic Development and Natural Resources Committee today on a vote of 7-2. That means it will need to be heard and passed by the entire Senate. YOUR SENATOR NEEDS TO HEAR FROM YOU VERY SOON! The vote on HB 4242 will likely be Monday or Tuesday.

ACTION NEEDED:

Call and email your Senator right away to ask them to vote FOR HB 4242. If you have been involving your school board this session, please ask them to do the same.

Some senators have already come out against HB 4242 in committee (Kolkhorst and Hughes). Offer your Senator positive talking points they may be able to use on the floor of the Senate if they feel compelled to speak. If they hear from you that districts know that changes are necessary to keep this economic development tool viable, and that we are committed to working together to accomplish this goal, then they may be more comfortable voting for HB 4242.

This is the home stretch! Let’s get HB 4242 passed so we can get on with closing out this school year. TSED appreciates you and all that you do!

The post Legislative Update – HB 4242 first appeared on Texas Schools for Economic Development.

Legislative Update: May 10, 2021

TSED — Tue, 11 May 2021 00:18:13 +0000

TSED ALERT!

This afternoon the Texas House of Representatives took up HB 1556, which would extend Chapter 313 of the Tax Code for a 10-year period. HB 1556 began as a bill that TSED vigorously opposed. TSED worked together with representatives of industry and other school district interest groups to modify the bill to be a “win-win” for both school districts and industry, and specifically, improving benefits under Chapter 313 for small school districts. HB 1556 died today on the floor after suffering a point of order and a number of efforts to add poison pills to the bill.

The House did vote in favor of HB 4242, which provides for a two-year extension of Chapter 313 in its current form. HB 4242 will not proceed to the Senate.

We will continue to update you as events unfold.

If you have been receiving and benefiting from these newsletters and the work of TSED but have not become a member, please consider becoming a member. We are hard at work in the legislature and those efforts cost money. So far this session TSED has been instrumental in blocking legislation that would harm school districts as well as promoting legislation that would allow this powerful economic development tool bring value to our state as well as to our local school districts. Please help us by joining TSED!

To join TSED, please e-mail Kayler Williams at kwilliams@saraleonlaw.com

ENHANCING EDUCATION THROUGH ECONOMIC GROWTH!

The post Legislative Update: May 10, 2021 first appeared on Texas Schools for Economic Development.

Legislative Update: HB 4242 and 1556

TSED — Thu, 06 May 2021 23:45:09 +0000

TSED ALERT!

IMPORTANT NOTICE FOR YOU:

Two very important bills involving Chapter 313 ISD property tax limitation Agreements will be heard on the state House floor TOMORROW Friday. HB 4242 (Meyer) extends the program for two years to expire December 31, 2024. The second bill, HB 1556, started out as unsupportable, but has since been amended to become favorable to school districts.

YOUR CALL TO ACTION:

Please contact your House member TODAY Thursday to voice your support for both HB 4242 and HB 1556. Since the intentions of the Senate are unknown, it is important that both of these bills successfully pass out of the House. It is critical that House members hear from you today — and your board members — as many of us previously expressed a negative view of the then-unsupportable original filed version of HB 1556.

ENHANCING EDUCATION THROUGH ECONOMIC GROWTH!

The post Legislative Update: HB 4242 and 1556 first appeared on Texas Schools for Economic Development.

Legislative Update: HB 1556

TSED — Wed, 28 Apr 2021 18:30:30 +0000

TSED ALERT!

First and foremost, a heartfelt thank you to all who mobilized in order to defeat previous versions of HB 1556. You spoke, and legislators listened. Superintendents, board members, and lawmakers should all be commended for their efforts to create a bill that is acceptable to all stakeholders.

Monday night Representative Murphy laid out a new version of HB 1556 that school districts can easily support. It offers a definite improvement for small districts and allows room for negotiation for larger districts. The new version does not impact current agreements, and continues to provide full value for I&S taxes. Instead of Revenue Protection Payments and Supplemental Payments, the new rendition of HB 1556 calls for “Stabilization Payments” to be made to the district during each year of the value limitation. This payment is “not to exceed” 38% of the total tax benefit of the limitation for that year. The bill calls for a 10-year extension of Chapter 313 of the Texas Tax Code.

Chairman Meyer of the House Ways and Means Committee has also begun to move his own bill, HB 4242. It calls for a two-year extension of Chapter 313 and a study of the program. TSED will definitely continue to work towards a longer extension. The Ways and Means Committee is scheduled to meet today, so it is possible that one or both bills could be voted out of committee and sent to the Senate for them to consider.

Again, thank you all so much for your efforts thus far. We know your schedule this time of year is non-stop. TSED will continue to keep up with the day-to-day details so that you can focus on your district. We will alert you if and when action is needed. In the meantime, we are wishing you well as you wind down this epic year.

ENHANCING EDUCATION THROUGH ECONOMIC GROWTH!

The post Legislative Update: HB 1556 first appeared on Texas Schools for Economic Development.

Immediate Action Needed HB 1556

TSED — Tue, 13 Apr 2021 21:25:45 +0000

TSED ALERT!

Yesterday afternoon, Representative Jim Murphy filed a revised version ofHB 1556. While the new version has addressed concerns about Revenue Protection Payments for agreements already in existence, the bill is bad for school districts. This is a complete re-write of Chapter 313 of the Tax Code:

Less taxable value to pay school district debt. HB 1556 provides for 85% tax abatement of the District’s total tax rate. Currently, Chapter 313 allows school districts to issue debt and pay I&S taxes on 100% of the assessed value of the property; HB 1556 reduces the I&S taxes a school can collect toonly 15% of the appraised value of the project.

Reduces funding for schools statewide. HB 1556 now has an effective date of 2023, which means it can proceed without a fiscal note. An independent analysis of the bill’s impact performed by Oppenheimer Co., Inc. reveals that over the course of those agreements entered in 2019 and 2020 alone (recall that this period includes a pandemic and downturn in oil prices), industry will pay $1.5 Billion in taxes to local school districts, all of which will go either through the funding formulas or to pay local school debt. If HB 1556were applied to those same agreements, the companies would only pay $220 Million. This would be a net loss to school funding statewide of $1.2 Billion attributable only to those agreements entered in a single biennium. HB 1556 expands the size and scope of eligible projects, so it is fair to assume that the actual loss will greatly exceed $1.2 Billion per biennium.

Less benefit to local school districts. HB 1556 limits the school district benefit limited to 15% of tax savings, as compared to the 30-40% that industry has routinely agreed to under existing 313 agreements. HB 1556 mandates an 85% abatement of all school district taxes- there is no local negotiation. 15% of the value of the project will be taxed through the school funding formulas, which brings limited revenue to the state school finance system as a whole, but no new revenue to the local school district. The school district’s benefit outside of the funding formulas is limited to 15% of the remaining tax savings- the rest of the savings goes back to industry.

Replaces local district legal counsel/school finance consultant with Comptroller’s office. HB 1556 continues to require the Comptroller’s office to issue a Certificate, which contains the financial analysis provided by that office. No one from the Comptroller’s office typically speaks directly to the school district and no one from the Comptroller’s office attends school board meetings to discuss the pros and cons of entering an agreement. While the Comptroller’s office is prohibited from advocating or from offering legal advice, Big Industry will continue to have representation from their legal counsel.

Analysis of recapture, tax compression and possible revenue losses are simply not addressed in the Comptroller’s Certificate. Further, the Comptroller’s staff reports that they do not have the staff to perform the analysis stated in the statute and that they do not have the ability to make a determination as to whether a school district will be harmed by an agreement.

Removes Protection Against Future Revenue Losses. While the revised bill retains the revenue protection calculations as negotiated in existing agreements, the bill does away with any protections for school districts against unintended or unanticipated revenue losses due to future changes in the school funding laws. Because future changes in the law may have a negative impact on the school district, current 313 agreements provide protection from future revenue losses. HB 1556 does away with that protection.

HB 1556 is bad for school districts and will stifle economic development. We anticipate a vote in the House Ways and Means Committee on Thursday. House Bill 1502 from Deshotel extends Chapter 313 with no modification.

Action Needed: Call your Representative as well as members of the Ways and Means Committee:

https://house.texas.gov/committees/committee/?committee=C490

If you have an Economic Development Corporation, let your local EDC know that school districts will not enter agreements that are so one-sided in favor of industry.

Urge them to vote NO on 1556 and YES on HB 1502.

ENHANCING EDUCATION THROUGH ECONOMIC GROWTH!

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Immediate Action Required: House Ways and Means Action

TSED — Mon, 29 Mar 2021 17:22:06 +0000

Good morning, Superintendents.

Today the House Ways and Means Committee will hear two different bills regarding 313s. You received a message on Friday encouraging you to call your Representative’s office. I hope most of you were able to do that. If you were not, it’s not too late. The bills will be heard Monday some time after 10:00 a.m.

Today I am encouraging you to communicate with your Representative through the portal to the Ways and Means Committee. If you click on the link, it will take you to the Comments portal for the committee meeting on Monday. Fill out the information at the top of the form and click on the bills on which you wish to comment. PLEASE DO THIS FIRST THING TODAY. Again, it will take a couple minutes of your time but could mean millions of dollars for your district.

HB 1502 (Deshotel) – Good bill. It simply extends Chapter 313 of the Texas Tax Code through 2032. Everything about the agreements stays the same.

HB 1556 (Murphy) – Very problematic. It does away with Revenue Protection Payments, Supplemental Payments, and Application fees. That will mean millions in savings for the applicant with little benefit to the district or the state. It also means that if you want to consider a 313 Agreement, the district must pay for their own attorney and financial analysis instead of the applicant funding these necessities. Currently that cost is usually between $50,000-$75,000. The bill hopes superintendents and boards will enter into these complex negotiations without information, representation, and guidance from anyone. That scenario is unlikely to result in good outcomes for school districts. It’s a bad bill and will likely end the era of 313 Agreements for economic development in Texas. Let them hear from you!

https://comments.house.texas.gov/home?c=c490

ENHANCING EDUCATION THROUGH ECONOMIC GROWTH!

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