In the closing weeks of the 2025 legislative session, over 100 Texas IAF leaders mobilized once again to stop a corporate tax giveaway that would have slashed wages and cost Texas schools hundreds of millions in lost revenue.

House Bill 105, filed quietly in the final days for bill filing, would have gutted key wage and job creation standards in the JETI (Jobs, Energy, Technology and Innovation) program. JETI replaced the failed Chapter 313 program in 2023, effectively cutting it in half.

If passed, HB 105 would have created a new class of “Priority Projects” for companies investing $750 million or more, allowing them to:

• Avoid proving their tax breaks were a “compelling factor” in choosing Texas,
• Sidestep any requirement to create new jobs,
• Lower wage standards from 110% of the average industry wage for that type of manufacturing facility to 110% of the average county manufacturing wage, which includes many low wage manufacturing jobs, often tens of thousands of dollars less.

In short, it would have allowed some of the largest companies in the world to drive down the wages in their industry by locating new plants in Texas counties with low average manufacturing wages.

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“Tax breaks should be decoupled from school funding and from school board decision making, period,” said Rev. Miles Brandon, a [Central Texas] Interfaith leader and pastor of St. Julian of Norwich Episcopal Church...

Brandon said the new program is better than what existed previously because it no longer includes direct payments to schools, which he described as a “perverse incentive” for districts to approve deals despite the cost to the state's overall education system. He also said the decrease in the total size of each tax abatement is an improvement over Chapter 313, as is the requirement that each deal must pass the governor's office.

But he said Austin Interfaith will continue to encourage school board members to vote in opposition to any request by a company to participate in the new program...“As we see how this law unfolds, I think we will continue to oppose" applications, Brandon said."

[Photo Credit: Arnold Wells, Austin Business Journal]

Texas' New Incentives Tool is Ready, Austin Business Journal [link]

Two Years of Texas IAF Opposition Leads to Reforms to Limit Giving School Money for Corporate Tax Breaks 

The Texas Senate and House passed a compromised version of HB5 that still fundamentally represents misguided economic development to the benefit of out of state corporations that would come here for other factors anyway.  This perpetuates a corporate welfare state which Chambers of Commerce and industry groups could never prove otherwise.

However, a 2-year campaign by Texas IAF and allies led to some major reforms in HB5 compared to the now defunct and failed Chapter 313 program.  When these tax abatement deals are proposed at local school districts, there will now be a fair fight for taxpayers and public school supporters concerned about corporate welfare.  HB 5 Reforms to Chapter 313 include:

CREATE 2-YEAR PAUSE TO ASSESS FISCAL IMPACT OF $31 BILLION IN CURRENT CHAPTER 313 TAXPAYER OBLIGATIONS

The Networks of Texas IAF Organizations (Texas IAF) urge Texas Senators to vote NO on HB5, the bill to renew the failed and defunct Chapter 313 program. With just a few days to go before the deadline for the Senate to pass House bills, the legislature has no clear path forward for the state’s costliest corporate tax incentive program, which was ended last legislative session with bi-partisan opposition.  HB5 passed out of committee late Sunday with only 6 of 11 votes in favor.

“Though in the past few days there has finally been a real debate on the use of hard-earned taxpayer dollars on corporate giveaways, time has run out to put together an economic development program that protects schools and taxpayers,” said Rosalie Tristan, leader with Valley Interfaith of the Texas IAF. “Legislators and lobbyists had two years to put together a plan, and it’s clear that none exists because school-based corporate tax breaks are a failed strategy that undermines the future of our state.”

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Chapter 313 was one of the country’s worst examples of crony capitalism, funneling billions in Texas taxpayer dollars to out-of-state interests. The program still costs Texas taxpayers over $1 billion a year in tax breaks to major oil, gas and manufacturing companies — money that could go to educating our children.

Dallas Area Interfaith, the Texas IAF, allies and a bipartisan group of legislators killed the reauthorization of Chapter 313 in the 2021 legislative session. Rather than leaving the program in the grave, industry groups are actually proposing to resurrect Chapter 313 this legislative session and make it worse in the form of House Bill 5.

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A coalition of more than a dozen organizations such as the Network of Texas IAF Organizations, the Texas Campaign for the Environment, the Texas State Teachers Association and the Texas AFL-CIO wrote a letter to lawmakers Thursdayopposing the bill and any efforts to revive Chapter 313.

“We urge you to support alternative policies that promote fair and transparent economic development, adequately fund our public education and ensure a level playing field for all businesses in Texas,” they wrote.

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“Speaker Phelan and Chair Hunter, and the multinational companies that will benefit from HB5, need to get their hands out of the pockets of Texas taxpayers and off the backs of Texas schoolchildren,” said Rosalie Tristan, a leader with Valley Interfaith of the Texas IAF. “Over the past month we have seen them use every lever of the House, every carrot and stick, to bully members to sign on to renew a worse version of the failed Chapter 313 program. We call on House Members to stand up and say ‘no’ to HB5. They should put that same energy and our tax dollars into increasing the basic student allotment that funds teacher salaries and our public schools.”

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"HB5 takes the failed and destructive Chapter 313 corporate giveaway program and makes it worse: worse for taxpayers, worse for schools, worse for workers, and worse for the environment. It is shameful to think that the Legislature might pass an expansion of a failed and corrupt program that benefited multibillion-dollar multinational corporations to the tune of now $31 billion at the expense of Texas taxpayers and 95% of the students in the state. Rather than creating a real economic development strategy, industry lobbyists are taking crony capitalism to its greatest heights in the form of HB5. House Republicans and Democrats need to stop it in its tracks. Texas taxpayers and voters will be watching." - Jose Guerrero, CTI [Central Texas Interfaith] leader - Austin Business Journal

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With little more than five weeks left in the legislative session, the House is contemplating passing something worse — House Bill 5, a less transparent and potentially far more costly tax incentive program than Chapter 313, which forfeited tens of billions of dollars in school property taxes in order to lure new businesses to local school districts....

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Texas economic development evangelists speak of this program – once known as Chapter 313 but now House Bill 5 – with almost biblical reverence. It may not turn water into wine, but they argue it will at least turn our school property tax dollars into new jobs for years to come.