We are aware that there is some misinformation circulating about 313 agreements and would like to provide accurate information to ensure our community understands the positive impact these agreements can have.
Today the Board of Trustees took action to approve an application to amend a 313 agreement with Dow for an appraised value limitation on qualified property for school district maintenance and operations taxes. The project is to construct a global-scale polyethylene plant. The project benefits our local community as it represents a $700 million investment to construct the new facility and will create 40 new permanent jobs and hundreds of temporary construction jobs, creating direct and indirect economic impact to the Brazosport communities. In the absence of a value limitation agreement, the additional tax dollars that Dow would pay would not be additional revenue to Brazosport ISD or result in a lower tax rate.
“Dow has been a great partner to Brazosport ISD and we have a long-standing history of utilizing these agreements to grow and enhance our local community,” said Rebecca Kelley, BISD Chief Financial Officer. She added that “the District has entered into seven agreements with Dow that today represent over $4.3 billion in total taxable value on our Interest & Sinking tax roll.”
The agreement is in accordance with Chapter 313 of the Texas Property Tax Code and the Texas Economic Development Act. The purpose of the Economic Development Act was to encourage large-scale capital investments, create new jobs, strengthen and improve the Texas economy and expand local property tax base by providing economic development incentives.
Based on the projected peak taxable value of $595 million, the value limitation is only applied to the Maintenance and Operations portion of the tax rate and is temporary for a 10-year period. After the limitation period, the project will be fully taxable with an estimated $454 million taxable value. The estimated tax benefit to Dow will be $25.3 million with $8.5 million in revenue protection and supplemental payments made to Brazosport ISD. Supplemental payments received by a school district are outside of the state funding formulas and not subject to the State’s Recapture system (aka Robin Hood).
The original value limitation on this project was approved in 2018 and the request for an amendment was necessitated by delays in construction. The application to amend was reviewed by the Texas Comptroller who also made the determination that the requested changes are economically beneficial to the State of Texas.
Texas Comptroller: Chapter 313:
Attracting Jobs and Investment
Texas Comptroller:
Economic Development