Texas House Republican Kills His Own Bill
in Move that Puts School Tax Breaks at Risk

Capitol Inside
May 10, 2021

State-subsidized tax breaks that have been a valuable weapon for luring corporate investment to Texas could be in peril after an influential Republican lawmaker pulled the plug abruptly on a bill that he'd been sponsoring to keep the incentive program alive.

State Rep. Jim Murphy of Houston sought and received permission to postpone House Bill 1556 until 10 o'clock on the morning after the regular session adjourns at midnight on May 31 if not sooner.

Murphy, who wields significant influence as the chair of the House GOP Caucus and the Higher Education Committee, encountered opposition from conservatives and liberals who portrayed the measure as corporate welfare at the expense of public schools.

Murphy failed to fight off an amendment that GOP State Rep. Tony Tinderholt of Arlington served up and the House approved on a vote of 81-61 with substantial numbers of Republicans and Democrats on both sides of the fight. The Tinderholt amendment would eliminate a proposed expansion of the school tax abatements to capital investments that are smaller than the minimum now.

The House voted 86-59 to attach an amendment by Democratic State Rep. Jon Rosenthal of Houston to the bill in a move that would require private companies to promise to ensure that at least half of the jobs they create are located in the school district that's offering the break.

HB 1556 would extend the Texas Economic Development Act for an entire decade when it's set to expire on December 31, 2022. The fund that's contained in Chapter 313 of the Texas Tax Code - based on information from Comptroller Glenn Hegar - had attracted $134 billion in capital investment to the state with more than 500 active developments.

Chapter 313 gives school districts the ability to offer tax breaks to businesses in exchange for business expansion and development that brings jobs to their jurisdictions. The school tax abatements have drawn fire from education advocates who say that they've drained money from the classroom and failed to pay off based on promises made to secure the subsidies.

Murphy appeared to have strong bipartisan support for HB 1556 with three Democrats and three Republicans as co-sponsors. The measure cleared the Ways & Means Committee on a 9-1 vote with Democratic State Rep. Eddie Rodriguez of Austin as the lone dissent.

The shuttering of the debate on the measure represented a setback for GOP Speaker Dade Phelan and his leadership team that features Murphy as a key player.

Murphy could try to get the House to recall HB 1556 from the future for another shot in the regular session's final 20 days. But the Legislature could wait and revive the measure in a special session on redistricting at some point this fall.