Samsung, Inc. Economic Development Project
The Taylor City Council participated in a joint meeting with the Williamson County Commissioners Court held on Wednesday, Sept. 8. In the meeting, Council approved a resolution to support Samsung Austin Semiconductor, LLC's selection of the City of Taylor as the location of its semiconductor plant and authorize several economic development incentives for the project. The City of Taylor is in consideration as the possible location of Samsung's expansion in the United States.
- Samsung is planning on investing $17 billion in land, buildings, equipment, and other personal business property.
- The project will be comprised of:
- $6 billion in buildings and other real property improvements
- $11 billion in machinery and equipment
- 1,000+ acres
- 6 million square foot semiconductor manufacturing facility
- The manufacturing facility is slated to be fully-operational by the end of 2025.
In 2019 alone, the company made a $4.5 billion economic impact in Central Texas, supporting nearly 10,000 jobs and more than $445 million in salaries. With this partnership, Samsung would be the largest single facility paying taxes in Texas. Moreover, this project is critical to national security as the U.S. cannot rely on foreign supply chains for semiconductors, which are integral to daily life and development.
The facility will manufacture advanced semiconductor technology.
Semiconductors are used in the devices and technology we use every day – they are the brains that power your smartphones, make your commute safer and smarter, and impact your daily life in countless other ways.
Frequently Asked Questions
What type of performance-based agreements is the City of Taylor considering for the Samsung Inc. project?
In a joint meeting with Williamson County on Wednesday, September 8, the Taylor City Council approved a resolution to support Samsung Austin Semiconductor, LLC's selection of the City of Taylor as the location of its semiconductor plant and authorize several economic development incentives for the project. The resolution gave Mayor Rydell the authority to take necessary action to execute the following agreements:
- A Chapter 311 Development Agreement
- A Development Review Reimbursement Agreement (in conjunction with the Chapter 311 agreement)
- A Chapter 312 Tax Abatement Agreement
- A Tax Increment Reinvestment Zone Economic Development Agreement and Chapter 380 Economic Development Incentive Agreement (in conjunction with the Chapter 312 Tax Abatement Agreement)
By law, the City must follow a series of steps prior to executing the economic development agreements described in the resolution. These steps include holding a public hearing to designate a reinvestment zone, and then approving a tax abatement agreement after a 30-day public notice period. The City approved the designation of the Reinvestment Zone on Thursday, September 9. The final tax abatement agreement will be scheduled for consideration at Special Called City Council Meeting on Thursday, October 14 after the mandatory 30-day public notice period.
- Chapter 311: Tax increment financing (TIF) is a method local governments can use to pay for improvements that will draw private investment to an area. Tax increment financing isn’t a new tax; instead, it redirects some of the ad valorem tax from a property in a geographic area designated as a Tax Increment Reinvestment Zone (TIRZ) to pay for improvements in the zone. Tax Code Chapter 311 governs tax increment financing. Only a city or county may initiate tax increment financing. Tax increment financing requires the governing body of a city to create a Tax Increment Reinvestment Zone (TIRZ). The governing body of a city by ordinance may: designate a contiguous or noncontiguous geographic area (a) within the corporate limits of a municipality; (b) in the extraterritorial jurisdiction of the municipality, or (c) in both to be a reinvestment zone. The designation of an area that is wholly or partly located in the extraterritorial jurisdiction of a municipality is not affected by a subsequent annexation of real property in the reinvestment zone by the municipality. For more information, there is an overview of Tax Code Chapter 311 on the Texas Comptroller website.
- Chapter 312: A tax abatement is a local agreement between a taxpayer and a taxing unit that exempts all or part of the increase in the value of the real property and/or tangible personal property from taxation for a period not to exceed 10 years. Tax abatements are an economic development tool available to cities, counties, and special districts to attract new industries and to encourage the retention and development of existing businesses through property tax exemptions or reductions. School districts may not enter into abatement agreements. For more information, there is an overview of Tax Code Chapter 312 on the Texas Comptroller website: https://comptroller.texas.gov/economy/local/.
What performance-based agreements are Williamson County and the Taylor Independent School District considering?
In the joint meeting with the City of Taylor on September 8, Williamson County Commissioners Court approved a resolution, a Chapter 381 performance-based agreement and a development agreement as an incentive package for Samsung Austin Semiconductor, LLC, to build its newest semiconductor plant in Taylor, Texas. Since January, Williamson County has been in consideration as the possible location of Samsung’s future expansion in the United States, a $17 billion investment.
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Chapter 381: Chapter 381 of the Local Government Code allows counties to provide incentives encouraging developers to build in their jurisdictions. A county may administer and develop a program to make loans and grants of public money to promote state or local economic development and to stimulate, encourage and develop business location and commercial activity in the county. The county also may develop and administer a program for entering into a tax abatement agreement. This tool allows counties to negotiate directly with developers and businesses. For more information, there is an overview of Tax Code Chapter 381 on the Texas Comptroller website: https://comptroller.texas.gov/economy/local/.
In a meeting on June 29, 2021, the Board of Trustees for the Taylor Independent School District approved a Chapter 313 application for property tax value limitation from Samsung Austin Semiconductor. The full application was submitted to the Texas Comptroller of Public Accounts on July 23, and was on The state's Tax Code Chapter 313 value limitations allow businesses to enter into agreements with school districts to limit how much property taxes they pay for a set amount of time.
See the full application here: https://comptroller.texas.gov/economy/local/ch313/agreement-docs-details.php?id=1620
Chapter 313: Chapter 313 allows a school district to offer a temporary value limitation on the taxable value of a new investment project in manufacturing and certain environmentally-friendly energy projects. The limitation, applied for a maximum of 10 years and ranging from $10 million to $100 million, only applies to school district taxes levied for maintenance and operations (M&O); taxes for debt service are not subject to the limitation, nor do business inventories qualify. Before the school district can approve a limitation, the State Comptroller must issue a certificate of approval that finds the project will generate more tax revenue for the state than the amount of the benefit received by the taxpayer. For more information, there is an overview of Tax Code Chapter 313 on the Texas Comptroller website.
How many jobs will this agreement bring to Williamson County?
This partnership will create opportunities for people with GEDs to PhDs, with plenty of upskilled opportunities. Moreover, the partnership is projected to provide Williamson County approximately 1,800 direct jobs and 6,500 - 10,000 direct construction jobs.
What other tangible benefits will this partnership bring to The City of Taylor, Williamson County, and the Taylor Independent School District?
In addition to thousands of job opportunities, Samsung will provide the following tangible benefits under an approved partnership agreement:
- Internships for a minimum of 24 Taylor ISD students per year.
- Annual Charitable Contributions of at least an average of $300,000 starting in 2022
- Increased economic development through acquiring goods and services from businesses and individuals in Taylor
- Continued use of local small businesses for goods and services
- Samsung will be committed to sustaining a diverse and well-represented workforce
- Samsung will work with local employment recruiting agencies to enhance recruiting of potential minority job applicants and residents of Taylor, Taylor ISD, and Williamson County
- Conduct and hold one or more job and recruiting fairs in Taylor
- Work with the Texas Workforce Commission to assist in the recruitment and hiring of individuals who reside in or who are representative of Taylor and Williamson County
- Require its general construction contractor and major construction subcontractors to hold recruiting fairs in Taylor
- Request general construction contractor to employ as many Taylor residents as possible and hire a diverse workforce