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 Durham, NC based Cypress Creek Renewables a $827,836 annual tax break, which is a reduction of 85 percent, for 10 years beginning in 2021. Over the lifetime of the abatements, Kinney County taxing districts stand to sacrifice an estimated $8,278,357 in property tax revenue.
Similarly, documents show Brackett ISD is prepared to reduce the taxable value of the project to $10 million, from a high of $121,868,250, for a period of 10 years beginning in 2021. The lost revenue that the district would have gained without the abatement would have been in excess of $5,375,769 over 10 years.
Altogether over the lifetime of the abatements, Cypress Creek Renewables stands to receive nearly $13,654,126 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, Cypress Creek Renewables is only committed to creating three new jobs related to its projects in Kinney.
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