In an Aug. 20 letter to TISD Superintendent Devin Padavil, the office of the Texas Comptroller of Public Accounts issued a certificate for a limitation on appraised value of the facility, a request by Samsung to keep Texas competitive for the project that would bring 1,700 jobs to the region.
Samsung Semiconductor in January sought a 100% tax abatement for 20 years as incentive to bring its 6.1 million-square-foot chipmaking plant to the area. That facility would have come with a $17 billion investment—$6 billion in structure and other real estate developments and $11 billion worth of personal property in machinery and equipment. The same amount of investment is described in the application approved by TISD.
The assessed value limitation proposal from the Samsung application would cap the estimated taxable value for TISD maintenance and operations ad valorem tax purposes at $80 million per year for 10 years beginning in 2024 and ending in 2033. From 2022-38, the savings to Samsung would be $314,114,505 with the assessed value cap for 10 of those years. The comptroller's office stated in its letter "... the project proposed by the applicant is reasonably likely to generate tax revenue in an amount sufficient to offset the school district's maintenance and operations ad valorem tax revenue lost as a result of the agreement before the 25th anniversary of the beginning of the limitation period."
The highly competitive chip-producing project has narrowed Samsung’s focus on Travis County and Williamson County in Texas, the Phoenix area, upstate New York and South Korea, where Samsung’s headquarters is located.
“Due to the higher tax cost of operating in Texas, the appraised value limitation is a determining factor,” according to documents in the application submitted to the comptroller’s office. “Without the appraised value limitation award, the company would likely locate the project in Arizona, New York or Korea.”
In the project’s description, construction would involve building cleanroom facilities, utility additions and support structures for the installation of new production equipment as well as tool sets. Based on the limitation agreement, if Samsung opts for the site within TISD, the plan dictates a ground breaking during the first quarter of 2022, and the facility would be running by the end of 2024.
The plant's precise location within TISD has not yet been made public.
Representatives for TISD have not not responded to requests for comment on the certificate for limitation on appraised value of property.
The application, under the name “Project Colin,” was approved June 30 by the TISD board of trustees.
Community Impact Newspaper also reported that the district's approval alone did not signal approval from higher authority, which was necessary for the district to continue with its process of designating a reinvestment zone associated with the project. This designation will likely include the physical location of the project, information which has not been previously available.
Samsung has also entered negotiations for Chapter 28 tax limitation in Travis County.
Community Impact Newspaper will continue to follow this story as it develops.
Brian Rash contributed reporting to this story.