The Texas House of Representatives has given its approval to a new bill as a substitute for the Chapter 313 tax break. However, it explicitly excludes renewable energy companies from its provisions. Chapter 313 was a widely utilized corporate incentive designed to attract large companies to Texas by offering tax discounts on local school district properties. After its expiration last year amidst allegations of favoring corporations, Governor Greg Abbott pledged to reinstate it, stating in February that its absence contributed to Texas losing a significant computer chip factory project to New York, as reported by the Texas Tribune.

Recently, the House passed House Bill 5, also referred to as the Texas Economic Development Act. Representative Todd Hunter from Corpus Christi dictated the bill as a substitute for Chapter 313, but with a prearranged elimination.

A Republican from Corpus Christi, Rep. Todd Hunter mentioned on the House floor on May 4 that he has no qualms with the renewable industry, but the bill deliberately omits their inclusion. By excluding renewable energy companies, Hunter believed that more stakeholders would support the bill, as per Community Impact.

Texas has already managed to appeal to numerous companies specializing in renewable energy or decarbonization. Renewable energy initiatives are now abundant in the state as solar capacity growth and battery storage becomes a standout compared to others in the nation. An example of this, includes new advancements in Swift Current Energy’s construction project spanning a 195-megawatt solar farm in Calhoun. In March, UK-based carbon capture company Carbon Clean established its U.S. headquarters in Houston, TX.

HB5 has earned a prestigious position on House Speaker Dade Phelan’s list of paramount legislative priorities. This bill, an alternative to Chapter 313, holds the potential to offer enticing incentives for various projects, encompassing crucial areas like national and state security, supply chain infrastructure, and manufacturing. These endeavors necessitate substantial investments exceeding $1 billion in a Texas school district, as highlighted by Community Impact.

Having secured approval from the House, the bill has now embarked on its journey to the Senate, where further deliberations and considerations await on the replacement for Chapter 313.