Taylor ISD is considering tax incentives for Samsung Austin Semiconductor that could allow the company to electrify its investment by $167.4 billion and thousands of new jobs.
State records made public July 20 show Samsung Austin Semiconductor wants to add nine more fabrication plants at its Taylor site, creating up to 10,000 jobs and a nearly $185 billion investment in the region. Information released by the Texas Comptroller of Public Accounts Wednesday show Samsung has submitted Chapter 313 applications with Taylor ISD for appraised tax-value limitations for the proposed nine additional fabrication plants.
“Close partnerships with companies like Samsung, who recognize the boundless possibilities Texas has to offer, are bringing greater opportunities to Texans, and this potential investment will bring billions of additional capital to continue growing our world-class business climate and diverse, highly-skilled workforce,” said Gov. Greg Abbott. “These new facilities solidify the Lone Star State as the nation’s leader in the semiconductor industry, and I thank Samsung for increasing their investment in the hardworking people of Central Texas.”
If approved, Samsung’s investment in its 6-million-squarefoot Taylor site, which potentially could contain a total of 10 plants, would inflate from $17 billion into $184.6 billion.
The company originally planned to employ 1,800 workers, but the applications indicate the staffing level could soar by another 8,200.
The initiative could potentially be the largest local investment in Taylor history and one of the biggest in foreign investment for the state and even the country, officials said.
“I am excited about Samsung’s potential expansion in the region that could exceed $184 billion in Williamson County,” said County Judge Bill Gravell. “Our working relationship is strong and our future is bright. We are grateful to Samsung for partnering with us to be a leader in the technology industry as the home to potentially the largest semiconductor facility in the world. We are proud to provide this critical infrastructure for national security by producing semi conductors here in the United States. We also are excited for what these agreements could mean for the children of Taylor and Taylor ISD.”
Construction is underway, with Samsung’s original plant to be operational by 2024 and continue in construction for another two years. The site is west of Taylor High School at the southwestern edge of the city in what was formerly extraterritorial jurisdiction.
If additional fabrication plants, also known as fabs, are approved, one plant would come online each year from 2034 to 2042.
Samsung’s applications
Samsung submitted the application May 24, which was accepted by Taylor ISD’s board the same day.
The company says it would be difficult to move forward with further investments in Texas if current taxincentive programs weren’t in place.
“This project is highly competitive, and the company is exploring national and global sites, plus sites in South Korea where Samsung Austin Semiconductor’s parent company is headquartered,” said Samsung in the documents. “Due to the higher tax cost of operating in Texas, the appraised value limitation is a determining factor. Without the appraised value limitation award, the company would likely not locate the project in Texas.”
Each application, including the original Chapter 313 agreement, applies for $80 million of appraised value limitation, which is the minimum qualified investment required for Taylor ISD per application. The property value limitation amount is based on property values at the time of application and may change before approval of any final agreement, according to records.
What is Chapter 313?
Tax Code Chapter 313, also known as the Texas Economic Development Act, is an incentives program in which a taxpayer agrees to build or install property and create jobs in exchange for a 10-year limitation on the taxable property value for school district maintenance and operations tax purposes.
The minimum limitation value varies by school district.
The act was passed in 2001. Its code is set to expire, which is also known as sunsetting, at year’s end. The comptroller’s office asked that Samsung’s Chapter 313 applications be submitted by June 1, according to reports.
According to earlier stories in the Taylor Press and its East Wilco Insider magazine, the multinational chipmaker is still paying millions in local levies on previously undeveloped land.
While Samsung could save millions on property-tax assessments over a decade, Taylor ISD would reap millions that could go toward staffing pay, better services and other costs.
The federal government has encouraged local business growth by chipmakers such as Samsung to reduce the United States’ reliance on foreign sources of technology. Semiconductors help power everything from cars to cellphones.
In Austin, where Samsung has had a 640- acre facility since the 1990s, the company is looking at adding two more fabrication plants. It has also sought tax incentives from Manor ISD.
To view the documents, visit https:// comptroller.texas.gov/ economy/local/ch313/ agreement-docs.php and scroll down to Taylor ISD’s documents.
CITY OF TAYLOR AGREEMENTS & AMENDMENTS
Samsung Austin Semiconductor’s plans for new plants come on the heels of agreements and ordinances with Taylor’s municipal government that expands tax incentives and but may benefit the city in other ways.
On July 14, the Taylor City Council approved by split votes to designate or amend tax increment reinvestment zones for Samsung Austin Semiconductor. New agreements or amendments to existing agreements were also approved.
The votes were 3-2 on an ordinance to designate Reinvestment Zone No. 9, with council members Mitch Drummond and Dwayne Ariola voting opposed and council members Brandt Rydell, Robert Garcia and Gerald Anderson voting in favor. The council voted 4-1, with Ariola opposed, on expanding the boundaries of Tax Increment Reinvestment Zone No. Two and on the new agreements and amendments.
Both reinvestment zones cover the same geographic zone, which encompasses Samsung’s property in southwest Taylor. No. 9, also called the Technology Expansion Zone and replaces Zone No. 8, deals with personal property. Zone No. 2 is for real property, which is defined as land and buildings.
The new Chapter 380 agreement was described by City Manager Brian LaBorde as a revenue sharing agreement and is meant to capture use tax from construction. Use tax is a nonrecurring tax that is complementary to sales tax and is imposed on the storage, use or other consumption of tangible personal property or a taxable service in Texas.
The Project Funding Agreement formalizes the various infrastructure costs that Samsung will be paying over the course of this project. They include the following phases:
• FM 973 water supply line;
• County Road 401 water line (Williamson County project); and
• North pump station.
The new agreement outlines the payment schedule and the funding mechanism that will be used to fund the entire cost of the infrastructure improvements needed to complete the project.
On July 7, Samsung requested existing tax abatements be extended to the new parcels of land in the reinvestment zones. A council meeting to discuss abatements is scheduled for Aug. 25.
For more on the ordinances, agreements and amendments from the July 14 meeting, as well as discussion from council members for and against action taken, view or download the July 20 e-Edition of the Taylor Press at http://www. taylorpress.net.
