While the compiler must determine whether a proposed project is likely to generate sufficient tax revenue within 25 years to compensate for the shortfall, such findings are often uncertain. For example, an evaluation by the bureau of complators shows that among the 13 limitation agreements that expired between 2013 and 2015, the actual market values for the last year of the limitation period were between 28 and 125% of the initial market value. Soon, this dock could be in the heart of a new industrial district, as the Rio Grande Valley has never seen. Large facilities will receive natural gas from the Eagle Ford Shale, turn it into liquid form and be shipped to Latin America, Europe and Asia, where it has a higher price. Five exporters of liquefied natural gas (LNG) have leases on the shipping channel. Three of them, including Annova LNG, submitted plans to the federal authorities. Annova wants to build its terminal right in front of the canal of this quay. Tankers that can absorb 40 million gallons of LNG would come out of the Gulf, relax in a dock and fill up with storage tanks the size of tall buildings. Agreements reached by Chapter 313 of the Texas Tax Code, commonly known as the Texas Economic Development Act, increase school district tax bases, benefit municipalities, and get people to work by attracting large, capital-intensive investments to the community. Concluding these agreements can be time-consuming and complex, so it is necessary to have a trusted advisor throughout the process. The development of these agreements generally includes: finally, the evidence indicates that tax incentives are totally useless to attract business investment.
When reviewing more than 360 limitation agreements, the Texas Observer found that many agreements were made even after companies had already announced plans to build in Texas. Keep in mind the cost of these unnecessary deals: From 2002 to 2014, Texas schools struck limitation agreements that cost the state budget $5.5 billion. The Texas Comptroller, established in November 2018, estimated that the limitation agreements would reduce school district revenues by about $585 million in 2019, which also indicates that the school district`s total revenue could be reduced by $944 million in 2022 and $1.1 billion in 2024.  First, it is not clear whether the macroeconomic benefits of limitation agreements outweigh the costs. In 2013, the Texas Comptroller released a report that found taxpayers spent $341,363 on every new Job Created by Chapter 313. A 2019 Texas Comptroller report to the Texas legislature reported 389 active restraint agreements, representing about $183 billion in total investment by 2039. The report found that for project agreements between 2004 and 2018, reductions in local basic tax revenues due to restrictive agreements were approximately $9.7 billion.  The minimum qualified investment required and the minimum value limit vary throughout the state of Texas.
This depends on whether a school district is considered a “rural district” or a “non-rural district” (pursuant to sub-chapter B) and the amount of taxable real estate value in the school district. In 2012, Site Selection magazine paraphrased Freeport LNG CEO Michael Smith — whose company holds three 313 deals with Brazosport ISD and is seeking a fourth — and said tax credits “were not a factor in the location decision.” But he was quite happy to cling to the $375 million that saved his business. Smith`s company also announced plans for an export terminal near Annova`s site on brownsville Ship Channel, but did not apply for a 313 deal. “The reality,” Smith says of the Brownsville project, “is that there are only a very limited number of ports with a deep enough canal that had all the necessary requirements.” Our lawyers have extensive experience in preparing and monitoring school districts by Chapter 313 Property Value Limitation Agreements….