State axes business tax relief package

As it stood, Texas Tax Code Chapter 313, or the 2001 Legislature’s Texas Economic Development Act, let businesses enter into agreements with school districts and limit their taxable value on the new property for 10 years. The program was intended to draw businesses to the state by limiting the overall tax burden on newly opened businesses, by replacing the forgone business taxes with state funding, as reported by the Texas Comptroller’s website.

Typically, the largest portion of a property tax burden in an area is the ISD’s tax rates, with El Campo ISD’s tax rate at $1.0527 per $100 of taxable value, and Louise ISD’s tax rate at $0.9429 per $100 of taxable value, with no other Wharton County taxing entities approaching the same proportion of property tax burden.

With school districts unable to offer this business incentive, it remains to be seen how this will effect school funding moving forward.

“It means a lot to bring outside sources (of revenue) in. It (also) depends on the community and what their desire is. Our community has spoken and wants to remain rural. And if that’s their desire, that’s what we do ... The incentive for a district to offer an abatement to these companies to pay less on the (maintenance and operations) side, just goes back to the state because we’re considered property wealthy ... I absolutely see it slowing down investments in rural communities,” Louise Superintendent Garth Oliver said.

“El Campo has had no communication with any manufacturing or energy company applying for the 10-year discount on their property tax bills in exchange for their building or expanding in the community,” El Campo Superintendent Bob Callaghan said.

The abatements allow schools to limit businesses evaluations and their M&O burdens, while still allowing them to continue to collect on the interest and sinking rate.

As businesses attracted by tax abatements enter communities, they bring jobs into the area, allowing for the district to capture more M&O funding, as well as bringing new jobs to the local community.

Louise ISD is currently receiving funding from the Hecate Energy Ramsey solar project and has entered into a 313 agreement with the company to limit their property tax evaluation to $20 million for ten years.

“Our property values are something like $360 million, and that Ramsey (solar) project would about double it ... If we got a bond, they’d pay the full value, because the abatement doesn’t cover the bond side and they’d end up paying half the bond,” Oliver said.

Louise ISD attempted to issue a bond in 2022 that voters rejected.

The Texas Comptroller lists two active 313 agreements with Louise ISD, Louise Solar, LLC and Hecate Energy Ramsey, LLC. LISD’s agreement with Louise Solar has lapsed due to inactivity, district officials report

There are no active 313 agreements with El Campo ISD. East Bernard ISD is currently involved with three 313 abatements, two with CG Wharton County, LLC and one with Raven Solar, LLC and Raven Storage, LLC. Wharton ISD has entered three agreements and applied for four more, all with solar and wind power LLCs.

Louise ISD was in negotiations, along with other county governmental entities, with Southern Rock Energy Partners looking to bring in a clean energy refinery, before the agreement fell through in August 2022.

There have been no new bills filed in the Texas legislature to extend the abatement program as of press time. The new Legislative session gets under way Tuesday, Jan. 10.