About Chapter 312

WHAT IS CHAPTER 312?

Chapter 312 of the Tax Code allows cities, counties, and special districts to offer a temporary property tax exemption to a new investment project. These temporary exemptions have successfully attracted new projects to Texas without raising taxes on existing property and led to thousands of new manufacturing jobs — with more jobs coming in the next few years, helping to create a booming economy.

Chapter 312 is set to expire and must be renewed by the legislature during the 2019 legislative session for Texas to remain competitive with other states. Other states offer these incentives. Texas will lose its competitive edge in attracting investments without Chapter 312.

WHY DOES TEXAS NEED CHAPTER 312?

Almost every other state offers similar exemptions, even though their property taxes are much, much lower than those in Texas. Texas property taxes on industrial projects are the 4th highest of any state – 65% higher than the national average.

High property taxes create a huge barrier to new investment, particularly capital-intensive investments like manufacturing plants. If Chapter 312 is allowed to expire, Texas will lose major projects and jobs to other states. The continuation of Chapter 312 is imperative for Texas to attract investment and stay competitive.