Legislative Update: Texas Schools for Economic Development – February 11, 2021

Action Required:  Contact your State Representatives

There are currently four bills under consideration regarding 313 Agreements.  HB 1502 (Deshotel), HB 778 (Lozano), and SB 144 (Powell) all propose an extension of the Chapter 313 program through 2032 without any changes.

  • Good for school districts, good for the state, good for businesses

That is the best case scenario for school districts and the state.  

The fourth bill filed is HB 1556 (Murphy).  If proposes the following changes to the 313 Agreement process:

  • Prohibits any Revenue Protection Payments to the district
  • Prohibits any Supplemental Payments to the district
  • Applications are made directly to the Comptroller and are not seen by the school board until after the Comptroller accepts the application
  • Application fees are paid directly to the Comptroller so districts are not given fees for legal representation or financial analysis so they can make an informed decision (must use district funds for this)
  • No negotiation is allowed – school board either must accept or deny the application as presented to the Comptroller
  • Only benefit to the district is that the applicant would pay Tier 2 M&O Enrichment taxes in addition to full I&S taxes
  • In an analysis of several current agreements using this system, the districts lose a significant amount of revenue.  Additionally, the state also loses significant revenue.  The only entity to benefit from this new system would be the businesses, and they would benefit significantly more than they already do.
  • Bad for school districts, bad for the state, good for businesses            

By tipping the scales so much in favor of business, this bill eliminates almost all incentive for school boards to pass a 313 agreement.

Please contact your representatives and educate them and ask for their support in continuing the Chapter 313 Economic Development Program in its present form.  It has been a successful program because it is fair and beneficial to all.