Chapter 312 and 313 property tax abatements under the Texas Tax Code allow counties, cities, school districts, and special purpose districts to reduce the amount of taxes paid by certain businesses within their jurisdictions. These abatements are widely used by renewable energy developers in conjunction with additional state and federal subsidies. Some analysts and critics refer to this system of subsidies as a form of “corporate welfare” allowing investors to turn a profit on what would otherwise be an unprofitable venture at the expense of taxpayers.
According to application materials, the proposed tax abatement from the county will give the Longueuil, Canada based InnerGex Renewable Energy a $10,204,267 annual tax break, which is a reduction of 39 percent, for 10 years beginning in 2021. Over the lifetime of the abatements, Knox County taxing districts stand to sacrifice an estimated $102,042,670 in property tax revenue.
Similarly, documents show Benjamin & Seymour ISDs are prepared to reduce the taxable value of the project to $20 & $30 millions, from a high of $97,324,500 & $114,250,500, for a period of 10 years beginning in 2021, respectively. The lost revenue that the district would have gained without the abatement would have been in excess of $10,991,533 over 10 years.
Altogether over the lifetime of the abatements, InnerGex Renewable Energy stands to receive nearly $113,034,203 in tax incentives. According to reports, the parties have entered into a formal agreement approved by the Texas Comptroller and the school district.
Outside of construction, InnerGex Renewable Energy is only committed to creating three new jobs related to its projects in Knox.
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