County Gives Fracking Company Sweet, Low Tax Deal to Park its Expensive Equipment Here
SAN ANGELO, TX —Tom Green County Commissioners Tuesday approved an economic development agreement with U.S. Well Services, Inc. that will provide a five year, 50-percent tax abatement on $20 million in personal property the company locates in Tom Green County.
According to the Texas Comptroller’s website, a Chapter 381 agreement allows the county to develop and administer a program for entering into a tax abatement agreement. This tool allows counties to negotiate directly with developers and businesses.
Chapter 381 of the Texas 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.
U.S. Well Services, Inc, a Houston-based company, provides high-pressure, hydraulic fracturing services in unconventional oil and natural gas basins. According to the company’s website, both their conventional (diesel) and (electric) hydraulic fracturing fleets are among the most reliable and highest performing fleets in the industry, with the capability to meet the most demanding pressure and pump rate requirements in the industry.
U.S. Well Services operates in many of the active shale and unconventional oil and natural gas basins of the United States including the Permian Basin and their clients benefit from the performance and reliability of our equipment and personnel. Specifically, all of their fleets operate on a 24-hour basis and have the ability to withstand the high utilization rates that result in more efficient operations.
U.S. Well Services has already purchased a property for a yard on Arden Rd. in San Angelo. The tax abatement only applies to equipment and not the real estate. By offering the company this deal, the county is providing incentive for the company to claim the value of its equipment, placing expensive oil and gas machinery on county tax rolls. The 381 agreement will be in the form of a rebate the county will pay to the company after their property taxes are paid in full each year for five years. Essentially, U.S. Well services will pay half the tax rate on approximately $20 million in personal property for five years. The value of the personal property is determined by the Tom Green County Tax Appraisal District. Since the property is not currently on the tax rolls, the agreement will increase revenue for the county.
U.S. Well Services has 75 employees locally and plans to hire about another 180 employees in 2019.