Six companies have applied for Texas’ new business tax relief program since it began in February, according to the state Comptroller’s Office.
Among the initial applicants were a Fort Worth-based aircraft manufacturer, a sustainable aviation fuel company and a semiconductor manufacturer.
The Texas Legislature passed the Jobs, Energy, Technology and Innovation Act last year with bipartisan support. Eligible manufacturing, research and development companies launching new projects in Texas will receive a 10-year reduction in property taxes paid to local school districts.
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The JETI Act replaces Chapter 313, a similar economic incentive program that expired in December 2022 amid concerns about “corporate welfare” and inequity in public schools. According to a report by the Board of Audit, Section 313 will create more than 14,000 new jobs by 2021.
To qualify for the new program, proposed projects must create salaried or contract jobs with health benefits and competitive wages. Approved projects will receive a 50% tax break over 10 years, and projects located in low-income “opportunity zones” will qualify for a 75% tax break. Companies can receive 100% tax relief under Article 313.
Texas plans to use general fund funds to compensate school districts for money lost through tax cuts.
The projects eligible for the JETI program are:
Manufacturing, including semiconductor manufacturing Utilities and power generation facilities Natural resource development “Critical infrastructure” research and development companies such as water treatment plants and natural gas facilities Wind, solar and battery storage companies were excluded from the program. Renewable energy accounted for about two-thirds of Chapter 313 projects.
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Interested companies must submit a project application to the Audit Office. Local school districts and the governor have the final say, but the audit team can support or oppose each application.
As of September 27, three projects received active nominations, one project was not recommended, one application was deemed incomplete, and one project is still under review.
The recommended applicants are:
Summit Next Gen plans to build a new ethanol jet fuel production facility in Harris County to help reduce carbon emissions for aircraft companies and airlines, according to the company’s filing. The $1 billion project will create at least 75 new jobs, the company said. The plant will be located within the boundaries of Galena Park ISD.
Bell Textron aims to invest more than $600 million in a new advanced manufacturing facility, according to the company’s filing. The civil and military aircraft company plans to create about 411 jobs with an average wage of $85,000. The project would be located within the boundaries of Northwest ISD.
American Foundry Bryan is working on a 3 million square foot semiconductor manufacturing project on 288 acres of land owned by the Texas A&M University System in Bryan, according to the company’s filing. The company is partnering with San Francisco-based technology startup Substrate and will hire 2,000 employees for the $10 billion project. The facility would be located within the boundaries of Bryan ISD.
“(The JETI Act) is an important economic development tool that will be used to attract significant capital-intensive economic development projects and bring good-wage jobs to Texas communities,” said Texas Economic Development and Tourism Executive Director , said Adriana Cruz.
One more thing
To increase competition, JETI applicants must consider project sites in multiple states. John Villarreal, the comptroller’s economic development manager, said the applications that were not recommended for approval “did not compete with sites outside of Texas.”
The new program is described in Chapter 403 of the state tax code. The program expires at the end of 2033, and lawmakers can choose to modify, extend or cancel it.
