88th LegislatureEnergyTaxes & SpendingRenewable Companies’ Attempt to Force Processing of Chapter 313 Applications into 2023 Denied by Texas Supreme Court

Dozens applications filed with the comptroller will not be processed due to the program's expiration at the end of 2022.
January 2, 2023
An attempt to force through the approval of all Chapter 313 tax abatement applications, even after the program’s expiration on New Year’s Eve, was rejected by the Texas Supreme Court.

A litany of renewable energy companies who applied for property tax abatements under Chapter 313 of the tax code sued Texas Comptroller Glenn Hegar in mid-December. Their suit asked the court to force the comptroller to approve and process a large number of agreements filed in 2022 before Chapter 313 expired.

The suit was filed in response to letters sent by Hegar stating that not all the submitted applications could be processed in time due to the office’s already stretched workforce and its limited time before the clock struck midnight on Saturday.

The court’s majority denied the renewable companies’ appeal — seven different suits consolidated into one — in a forceful opinion.

In the end, the real problem for relators is the expiration of Chapter 313,” it reads in conclusion. “But for that deadline, it would not much matter if the Comptroller’s resources were insufficient to process the applications in 90 days or far longer.”

The Texan Tumbler

The reason that the coach turns into a pumpkin at midnight on New Year’s Eve, however, is because the legislature so willed that result long ago. If the pumpkin is again to be a coach, that too must follow from the legislature’s will.”

The program was not renewed during the 2021 session despite an effort to drastically expand it, allowing recipients to effectively double-dip on the abatements, and a last-ditch effort to extend it for two years.

Sen. Lois Kolkhorst (R-Brenham) told The Texan at the time, “The body was very uncomfortable with the program as it is and we couldn’t find consensus on what the program needed to look like.”

It fell on the weight of itself.”

Renewal of Chapter 313 last session created a dynamic of unusual bedfellows; the conservative Texas Public Policy Foundation and the progressive think tank Every Texan united in loud opposition to the extension.

After the Legislature declined to renew the program, abatement applications flooded the comptroller’s office. Since the 2021 session concluded, 466 applications have been filed — almost half of the total number filed during Chapter 313’s 20-year lifespan. Applicants filed 393 agreements during the 2022 calendar year.

The abatements are agreements between the companies and their respective school districts for a 10-year reduction in the taxable value of their property — reducing the amount of taxes paid in the entities’ fledgling years.

Some, like Speaker Dade Phelan (R-Beaumont), who is determined to revive the program in some fashion this year, see it as a beneficial economic development program responsible for bringing jobs and investment to Texas. Those opposed call it a used and abused system that grants tax breaks to companies that would’ve built their operations in the state anyway.

Texans can expect an intense debate over revival of the program this session as those who might benefit lobby up and those opposed to continue their fervent resistance.

State Rep. Jared Patterson (R-Frisco) said last week, “We fought to kill 313 last session in large part due to renewable incentives.”

If something like 313 comes back, it won’t have renewables. That’s a nonstarter, and not just for me. We’ll work [overtime] to kill anything like that.”

In the meantime, the Supreme Court’s decision ensures the program remains dead and the processing of applications doesn’t drag into 2023.


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Brad Johnson

Brad Johnson is a senior reporter for The Texan and an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.