Members of the Aledo ISD Board of Trustees got a quick education on Chapter 313 of the Texas Tax Code at a special meeting on Monday, July 25, in the wake of a request from an unnamed company to approve an application that would mitigate property taxes on a possible $3.7 billion solar panel facility on Walsh Ranch.
Dubbed “Project Redeemer,” representatives from KPMG representing the manufacturer told the board that the Walsh Ranch location is one of four possible sites for the facility: another site is also in the DFW area, one is in Georgia, and one is in South Carolina.
Ulrich Schmidt, principal, tax with KPMG’s Global Location Expansion Services, explained his company’s role.
“We provide the analysis and the methodologies for companies to go from the many options to the few,” Ulrich said. “Our purpose is to help the company check off all the little risks that they may perceive in terms of timeline or financial risks, or risks to operation, to make sure that once they are down to this short list, they actually have the best site.
David MacNamara, senior manager, tax, for KPMG, told the board the proposed site is about 1,100 acres between I-20 and I-30 to the east of Aledo. If Project Redeemer ends up there, MacNamara said it would ultimately employ about 3,000 full-time employees with salaries averaging about $85,000 inclusive of benefits.
KPMG’s request of the school board was that it accept a Chapter 313 Value Limitation Application to Aledo ISD from Project Redeemer.
What is Chapter 313?
Earlier in the meeting, Kathy Mathias and Mali Hanley with MoakCasey, explained the Chapter 313 program to the board.
Texas Tax Code Chapter 313 is a state tax incentive program through which certain large businesses can receive a 10-year limitation on their appraised value for school district tax purposes in exchange for developing property and creating jobs in the school district.
“Most of the local tax revenue the school district forgoes under Chapter 313 is replaced with state funding. Thus, the act uses state revenue to promote local economic development,” according to the Texas State Comptroller’s website.
The program ends in December of 2022, although the expiration will not affect existing applications.
The school district voted to accept the application in three action items. First the board adopted a policy that would “outline the procedures the district will use for the filing, accepting, and reviewing of applications made under the Texas Economic Development Act, as set forth in Chapter 313 of the Texas Tax Code.”
The board then voted to accept the Project Redeemer application. The board set an application fee of $90,000 to be paid by the company. Finally, the board voted to retain the services of MoakCasey to assist the district in processing the application.
Under the Chapter 313 program, the appraisal limitation would only apply to the Maintenance and Operations (M&O) tax rate, not the Interest & Sinking fund rate.
The board is not obligated to approve the application, but if it does, the application then goes to the State Comptroller’s office for its findings. Negotiations would then begin between the school district and Project Redeemer on the terms of the agreement.
The agreement would then be sent back to the comptroller 20 days before the school board would vote to accept the final agreement.
For more information on Chapter 313, visit https://comptroller.texas.gov/economy/fiscal-notes/2016/april/chap313.php.
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