Texas House Bill HB2971

Texas 2021 - 87th Regular

Caption

Relating to the repeal of the Texas Economic Development Act.

Impact

The repeal of the Texas Economic Development Act aims to simplify the state's approach to economic incentives but it could also decrease available tools for local governments that facilitate business growth. By removing the chapter, local governments will lose the authority to implement appraisal limitations and tax abatements that were previously intended to attract and retain businesses. This is expected to impact school funding, as these incentives often play a role in maintaining fiscal stability for local districts through redirected funds.

Summary

House Bill 2971 proposes the repeal of the Texas Economic Development Act, which has provided various tax incentives designed to stimulate economic growth in the state. Specifically, the bill seeks to eliminate provisions found in Chapter 312 and 313 of the Texas Tax Code, which relate to property appraisal limitations and tax abatements under certain conditions. The implications of this repeal are substantial as it directly affects how local governments can offer incentives to businesses for expansion or new investments.

Contention

The bill has generated mixed reactions among stakeholders. Proponents argue that the repeal will streamline regulations and discourage dependency on tax incentives that may not provide a proportional return on investment to the state. Conversely, opponents highlight that such a repeal may undermine local governments' ability to compete with alternative economic development strategies available in other states. There are concerns that without these incentives, Texas may become less attractive to businesses considering relocation or expansion within its borders.