Economic Benefit Statement for
Chapter 403 / JETI Program
The Jobs, Energy, Technology and Innovation Act (JETI) was created by the 88th Texas Legislature in 2023 and began accepting applications in January 2024. The JETI program (Subchapter T of Tex. Gov’t Code Chapter 403) enables a company, school district and Governor’s office to enter into an agreement for a 10-year property tax incentive and is the replacement to the Chapter 313 value limitation program. In short, eligible projects making the required investment, hiring the required number of jobs and paying above the required wage level can qualify for a reduction in property taxes due to the school district.
Additional detail on the JETI Program’s requirements can be found on the Texas Comptroller’s website.
Economic Benefit Statement Requirement
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.
JETI Economic Benefit Statement vs. Texas Enterprise Fund (TEF) Grant Application Impact Analysis
Economic developers, businesses, and others may be familiar with the Texas Enterprise Fund which has been around for approximately 20 years and has an economic impact analysis requirement. The TEF Economic Impact Analysis also has specific requirements, though different from the JETI Program’s Economic Benefit Statement. The TEF Economic Impact Analysis considers only the statewide economic impact and statewide tax revenues for a period of 10 years. The JETI Program’s Economic Benefit statement requests both state and local economic impacts and tax benefits for a period extending through construction, the 10-year incentive period, and an additional 25 years. Although there is some overlap in the requirements for the TEF Economic Impact Analysis and the JETI Program’s Economic Benefit Statement, the reports will be different.
Impact DataSource Expertise for TEF or JETI Programs
Established in 1993, Impact DataSource is an Austin, Texas-based economic consulting, research, and analysis firm, specializing in delivering comprehensive economic analyses tailored for state and local government planners and economic developers.
Impact DataSource is a leading provider of economic impact studies required for Texas Enterprise Fund Grants. The firm has conducted more than 350 economic impact analyses for projects applying for grants from the Texas Enterprise Fund and is currently preparing several Economic Benefit Statements for businesses preparing applications for the just launched JETI Program.
