Economic Benefit Statement for the JETI Program (Jobs, Energy, Technology and Innovation)

There are a number of differences between the new JETI Program and the previous Tax Code Chapter 313 school district value limitation incentive but  one key difference is the new requirement of an Economic Benefit Statement. As requested on the JETI application: 

The economic benefit statement must include the project’s associated economic benefits that, at minimum, consist of the following:
1. the impact on the gross revenues and employment levels of local businesses that provide goods or services in connection with the project or to an applicant’s
employees;
2. the amount of state and local taxes that will be generated as a result of the indirect economic impact of the project;
3. the development of complementary businesses or industries that locate in this state as a direct consequence of the project;
4. the total impact of the project on the gross domestic product of this state;
5. the total impact of the project on personal income in this state; and
6. the total impact of the project on state and local taxes.

The economic benefit statement requirements are detailed further in the Tax Code.

Sec. 403.608. ECONOMIC BENEFIT STATEMENT.

(a) An applicant shall submit an economic benefit statement with the applicant’s application.

(b) An economic benefit statement must include the following information for each year of the period that begins on the date the applicant projects construction of the proposed project that is the subject of the application will begin and ends on the 25th anniversary of the date the incentive period ends:

(1) an estimate of the number of total jobs that will be created by the project;

(2) an estimate of the total amount of capital investment that will be created by the project;

(3) an estimate of the increase in appraised value of property that will be attributable to the project;

(4) an estimate of the amount of ad valorem taxes that will be imposed by each taxing unit, including the applicable school district, on the property used as part of the project;

(5) an estimate of the amount of state taxes that will be paid in connection with the project; and

(6) an estimate of the associated economic benefits that may reasonably be attributed to the project, including:

(A) the impact on the gross revenues and employment levels of local businesses that provide goods or services in connection with the project or to the applicant’s employees;

(B) the amount of state and local taxes that will be generated as a result of the indirect economic impact of the project, including all ad valorem taxes not otherwise estimated in Subdivision (4) that will be imposed on property placed into service as a result of the project;

(C) the development of complementary businesses or industries that locate in this state as a direct consequence of the project;

(D) the total impact of the project on the gross domestic product of this state;

(E) the total impact of the project on personal income in this state; and

(F) the total impact of the project on state and local taxes.

(c) An applicant may use standard economic estimation techniques, including economic multipliers, to create an economic benefit statement. An applicant must base each estimate required by Subsection (b) on reasonable projections of the economic and labor conditions of this state for the period for which the estimate is made.

(d) The comptroller shall establish criteria for the methodology to be used by an applicant to create an economic benefit statement.

(e) The comptroller may require an applicant to supplement or modify an economic benefit statement to ensure the accuracy of the estimates required to be included in the statement under Subsection (b).

Translation

Essentially, the Economic Benefit Statement for the JETI program needs to include the (1) statewide economic impact, (2) the local economic impact, (3) the statewide tax benefit and (4) the local area tax benefit as well as  a few other specific items. In addition, these impacts need to be estimated each year during construction, the 10-year incentive period, and an additional 25 years.