On Jan. 1, 2024, Texas will launch a new tax break program for companies that want to build industrial facilities in the state. Billed as a necessary measure to stimulate economic development and keep the so-called Texas miracle going, the new incentive — Chapter 403 — will give massive tax breaks and other incentives to major oil and gas corporations, fossil fuel power generators and semiconductor fabricators, among other large-scale manufacturing projects. Critics say this is nothing more than a thinly veiled replacement for Chapter 313, a similar program that expired last year amid controversy over tens of billions of dollars in tax breaks spent to “attract” enormously profitable corporations that would have located in Texas without an incentive. Now that the new program is law, those same critics warn that loopholes in Chapter 403 will lead to exploitation — especially by oil and gas companies — and that the climate, the environment and Texas schoolchildren will pay the price.
Activists have reason to be concerned. Chapter 313 was rife with wasteful loopholes that were exploited for decades — right from its very inception. In what must count among the costliest copy-editing failures in history, the original sales pitch to Texas legislators in 2001 drew on panic over a Site Selection Magazine article that claimed Texas was 37th in the nation for new manufacturing plants. But the article was wrong. A decade and a half later, a 2016 Texas Senate investigation traced the mistaken ranking to a typo. Turns out Texas had been eighth, not 37th. “What if Texas blew billions of dollars because someone misread an obscure business report 15 years ago?” Patrick Michels asked in the Texas Observer at the time. At that point, in 2016, the total value of Chapter 313 abatements was $7.1 billion, but the discovery of the error didn’t lead to its repeal or reforms. The program continued unchanged for another six years, eventually racking up a staggering final price tag of $31 billion.
