BILL ANALYSIS

Senate Research Center	S.B. 1754
89R9074 CJC-D	By: Birdwell
	Economic Development
	4/4/2025
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Chapter 312 of the Tax Code, which allows local property tax abatements, includes the ability for local governments to offer tax incentives for wind, solar, and battery storage facilities. Additionally, Chapters 380 and 381 of the Local Government Code, which authorize economic development agreements using property taxes, sales taxes, and other forms of incentives, also allow for agreements with renewable energy facilities and offer even fewer safeguards and transparency measures than Chapter 312. Wind, solar, and battery facilities offer few jobs, depreciate in taxable value quickly, and distort the energy market as a result of the historic subsidies they have received from the federal government. As such, their inclusion in local economic development agreement statutes is not appropriate.

S.B. 1754 prohibits local tax abatements for renewable energy facilities that sell energy or ancillary services at wholesale for a power grid. Specifically wind, solar, and battery storage facilities would not be allowed under Chapter 312, Tax Code, and Chapters 380 and 381, Local Government Code. The prohibition does not impact battery energy storage facilities that accompany thermal natural gas generation plants because they support dispatchable, firm energy generation.

As proposed, S.B. 1754 amends current law relating to the authority of a taxing unit to enter into an agreement to exempt from ad valorem taxation a portion of the value of property on which a renewable energy facility is located or is planned to be located.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 380, Local Government Code, by adding Section 380.005, as follows:

Sec. 380.005.� PROHIBITION ON ABATEMENT OF TAXES ON CERTAIN RENEWABLE ENERGY FACILITY PROPERTY.� (a)� Defines "renewable energy facility."

(b)� Provides that this section applies only to a renewable energy facility that sells energy or ancillary services at wholesale for a power grid.

(c) Prohibits the governing body of a municipality from entering into an agreement authorized by Chapter 380 (Miscellaneous Provisions Relating to Municipal Planning and Development) to exempt from ad valorem taxation a portion of the value of real property on which a renewable energy facility is located or is planned to be located during the term of the agreement, or of tangible personal property that is located or is planned to be located on the real property during that term.

SECTION 2. Amends Chapter 381, Local Government Code, by adding Section 381.006, as follows:

Sec. 381.006.� PROHIBITION ON ABATEMENT OF TAXES ON CERTAIN RENEWABLE ENERGY FACILITY PROPERTY.� (a)� Defines "renewable energy facility."

(b)� Provides that this section applies only to a renewable energy facility that sells energy or ancillary services at wholesale for a power grid.

(c)� Prohibits a county, county industrial commission, or development board from entering into an agreement authorized by Chapter 381 (County Development and Growth) to exempt from ad valorem taxation a portion of the value of real property on which a renewable energy facility is located or is planned to be located during the term of the agreement, or of tangible personal property that is located or is planned to be located on the real property during that term.

SECTION 3. Amends Subchapter A, Chapter 312, Tax Code, by adding Section 312.0022, as follows:

Sec. 312.0022.� PROHIBITION ON ABATEMENT OF TAXES ON CERTAIN RENEWABLE ENERGY FACILITY PROPERTY.� (a)� Defines "qualifying battery energy storage facility," "renewable energy facility," "solar power generation facility," and "wind power generation facility."

(b)� Provides that this section applies only to a renewable energy facility that sells energy or ancillary services at wholesale for a power grid.

(c)� Prohibits the governing body of a taxing unit from entering into an agreement under Chapter 312 (Property Redevelopment and Tax Abatement Act) to exempt from taxation a portion of the value of real property on which a renewable energy facility is located or is planned to be located during the term of the agreement, or of tangible personal property that is located or is planned to be located on the real property during that term.

SECTION 4.� Makes application of this Act prospective.

SECTION 5.� Effective date: January 1, 2026.