Manufacturers Applaud House Passage of Chairman Hunter's Texas Jobs & Security Act (HB 5)
May 5, 2023
The following can be attributed to Tony Bennett, president and CEO of the Texas Association of Manufacturers:
“Manufacturers applaud the Texas House for passing Chairman Hunter’s Texas Jobs & Security Act (HB 5), which will help Texas bolster our state’s economic security by helping to reestablish our global manufacturing dominance, reshore our supply chain, and ensure electric grid reliability. The limited, temporary, school M&O property tax discounts included in the economic development program HB 5 creates are imperative to attract new capital investment and the long-term benefits they bring. Participating companies must still pay all I&S tax (debt service), sales and use, franchise, inventory, payroll and other taxes. The legislation includes provisions that protect the interests of the state and participating school districts. Projects must be clear ‘wins’ for Texas as the comptroller must find that the project will generate more tax dollars than the amount that will be discounted during the incentive period.
Even at the reduced value, the taxable value of the property will be higher than it was prior to the investment, creating a net gain under every circumstance. Companies must also demonstrate the incentive is a determining factor in their decision to invest here. That is, without the incentive, these properties would remain undeveloped. The program also includes strong accountability provisions that require a company to return any tax savings should the project not meet the terms of the agreement. For example, with the exception of electric grid reliability projects, there are mandatory job creation requirements in every agreement. Schools are protected because school finance formulas guarantee the district will receive the same amount of revenue per student with the project and agreement as it would have without. The bill also contains a provision whereby the industry project shares a portion of its tax savings through an incentive formula with the school district. This will ensure that districts are better off financially with the project. As a part of the application fee, the project will pay for a school district to hire school finance experts to do a financial impact statement prior to approval so the district will know ahead of time if it is in its best interest to approve the agreement.
HB 5 is a winning proposal for Texas taxpayers, our schools, and our economy. We appreciate Speaker Phelan and Chairman Hunter’s leadership and joint authors Representatives Morgan Meyer, Dustin Burrows, Hugh Shine and Oscar Longoria for their efforts to keep Texas globally competitive and the best place to do business.”
Media contact: Gretchen Fox, 512-694-4326