About Chapter 313

WHAT IS CHAPTER 313?

Chapter 313 of the Tax Code allows school districts to attract new major industrial development projects by offering a temporary and limited tax discount against a portion of their school property tax bill.  These limited discounts 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 make Texas number one among the states for economic growth.

Chapter 313 is set to expire and must be renewed by the legislature during the 2021 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 313.

Growing the state’s manufacturing base is a good way to create sustained, long-term jobs and future local tax revenue.  Texas needs Chapter 313 to attract manufacturing investment.

WHY DOES TEXAS NEED CHAPTER 313?

Almost every other state offers similar discounts, 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 – 61% higher than the national average.

High property taxes create a huge barrier to new investment, particularly capital-intensive investments like manufacturing plants. If Chapter 313 is allowed to expire, Texas will lose major projects and jobs to other states. The continuation of Chapter 313 is imperative for Texas to attract investment and stay competitive.

Given Texas’ high property taxes, Chapter 313 is the state’s most important economic development tool to attract new investment, grow local tax bases, and create new jobs.