Electrofuels plant tax break contingent on state OK
The Corpus Christi Independent School District Board of Trustees approved tax incentives for Monarch Energy on Dec. 20. The agreement would create a reinvestment zone and include annual supplemental payments of $330,000 to the school district if Monarch Energy builds an electrofuels plant in northwest Corpus Christi. The company, which was formed earlier this year, produces synthetic, renewable fuels with a lower carbon emission than fossil fuels.
The board’s action is also contingent on certification by the Texas Comptroller’s Office, the agency charged with evaluating applications that fall under the state tax code's Chapter 313, set to expire on Dec. 31.
The run-up to the expiration date has seen a flurry of applications for tax breaks, which have overwhelmed the Comptroller’s Office. Final approval of the Monarch Energy agreement is in doubt as the state agency failed to meet a deadline for an economic impact evaluation of the proposed project. In response, Monarch Energy petitioned the Texas Supreme Court for a writ of mandamus, which would require the agency to act on the company’s applications with CCISD and two other school districts.
Other companies seeking tax breaks have taken similar actions. Texas Comptroller Glenn Hegar has denounced the moves as a “frivolous attempt to get the Texas Supreme Court to force my office to put even more resources toward the program in the final two weeks of its existence.”
The proposed agreement between CCISD and Monarch Energy would include a tax abatement, running from 2028 through 2038, although a Texas Supreme Court ruling against the company would effectively make the pact null and void.
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