Texas voters approved a constitutional amendment Tuesday that is expected to level the playing field in attracting life sciences investment to the state.

Proposition 10 will exempt equipment or inventory held by a manufacturer of medical or biomedical products from personal property taxation. Texas voters approved the proposition with about 55%, or 1.37 million people, voting in favor.

The personal property tax it will eliminate isn't present in other states with top medical and biomedical sectors, according to information circulated by the Greater Houston Partnership. Those familiar with the sector say it will promote growth and stem a trend of people and ideas going to other states.

“In this one particular area, in personal property in life sciences, we’re at a disadvantage,” said Shawn Cloonan, general counsel for Houston-based McCord Development. “With this change, I think it level-sets. Instead of a headwind, it puts us on equal footing with Massachusetts and North Carolina.”

The Greater Houston Partnership rallied votes with the promise a yes vote would “help save lives and make people healthier by ensuring Texas is a more competitive location for manufacturers of medical and biomedical devices, drug therapies, PPE, and other critical health care solutions.”

The change will allow Texas, particularly the Houston area, to better leverage its other strengths to attract life sciences investment, Cloonan said. Those strengths include Port Houston, its central location and the Texas Medical Center, he said.

“Combined with the work [McCord has] done on the workforce with San Jacinto’s Biotechnology Center, it puts us in a great position to compete moving forward,” Cloonan said. “I think we’re going to land some really large manufacturing projects here because of it.”

Incentives are an important part of any site selection process, and it is critical to be competitive, Cloonan said.

Since 2020, Texas has lost more than 4,000 new biomanufacturing jobs and $3B in medical manufacturing private investments to other states, according to the Greater Houston Partnership.

The state has been disadvantaged in attracting its share of what is a rapidly growing sector, Cloonan said. The medical and biomanufacturing industry is expected to add another 100,000 jobs over the next decade with an average annual salary of $75K to $150K.

“These are jobs … that further diversify this economy,” Cloonan said. “I think it’ll be a great opportunity for Houston and the whole region.”

The proposition will help Texas capitalize on the sector, which has an expected national economic impact of $54B over the next decade, according to the Greater Houston Partnership.

Cloonan said the measure's success is an example of the public and private sector coming together to proactively address an issue, and it will reap rewards.

“It puts us in a better position on these pursuits to where I think we can land these opportunities,” Cloonan said.