Texas Senate Bill SB116

Texas 2017 - 85th 1st C.S.

Caption

Relating to the repeal of the Texas Economic Development Act.

Impact

The repeal of the Texas Economic Development Act is expected to have major implications on state laws that govern economic incentives for businesses. Previously, the Act allowed for a system of property tax exemptions that benefited companies, particularly those establishing operations into reinvestment zones. By removing these provisions, the bill could impact local government revenue streams, as these exemptions previously encouraged economic growth and job creation through favored tax treatment. Consequently, cities may need to reassess their economic development strategies.

Summary

Senate Bill 116, titled 'Relating to the repeal of the Texas Economic Development Act', seeks to eliminate certain tax exemptions and benefits that have been established under this Act. The primary objective of this bill is to repeal Chapter 313 of the Tax Code, which has provided significant tax reductions for businesses that engage in specific types of property investments and developments. By aiming to repeal this Act, the bill addresses broader fiscal implications regarding how state incentives are administered to encourage business activity within Texas.

Contention

Notable points of contention around SB116 include concerns about the potential decline in business investment in Texas if such tax incentives are repealed. Supporters of the bill may argue that the existing framework leads to substantial budgetary burdens on local governments without sufficient returns in job creation or economic growth. On the other hand, critics believe that repealing these incentives could deter businesses from establishing or expanding operations in Texas, ultimately leading to job losses and reduced economic activity in the state. This debate illustrates the ongoing tension between fiscal responsibility and economic development policy in Texas.