89R8321 RDS-D

By: Money H.B. No. 4004

A BILL TO BE ENTITLED

AN ACT

relating to the eligibility of property for certain ad valorem tax incentives if a wind-powered energy device or a solar energy device has been installed or constructed on the property.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 11.43(c), Tax Code, is amended to read as follows:

(c) An exemption provided by Section 11.13, 11.131, 11.132, 11.133, 11.134, 11.17, 11.18, 11.182, 11.1827, 11.183, 11.19, 11.20, 11.21, 11.22, 11.23(a), (h), (j), (j-1), or (m), 11.231, 11.254, [11.27,] 11.271, 11.29, 11.30, 11.31, 11.315, 11.35, or 11.36, once allowed, need not be claimed in subsequent years, and except as otherwise provided by Subsection (e), the exemption applies to the property until it changes ownership or the person's qualification for the exemption changes. However, except as provided by Subsection (r), the chief appraiser may require a person allowed one of the exemptions in a prior year to file a new application to confirm the person's current qualification for the exemption by delivering a written notice that a new application is required, accompanied by an appropriate application form, to the person previously allowed the exemption. If the person previously allowed the exemption is 65 years of age or older, the chief appraiser may not cancel the exemption due to the person's failure to file the new application unless the chief appraiser complies with the requirements of Subsection (q), if applicable.

SECTION 2. Section 23.42, Tax Code, is amended by adding Subsection (a-1) to read as follows:

(a-1) Notwithstanding Subsection (a), land on which a wind-powered energy device as defined by Section 23.51 is located may not be designated for agricultural use under this section.

SECTION 3. Section 23.51, Tax Code, is amended by adding Subdivision (9) to read as follows:

(9) "Wind-powered energy device" means an apparatus designed or adapted to:

(A) convert the energy available in the wind into thermal, mechanical, or electrical energy;

(B) store the converted energy described by Paragraph (A), either in the form to which originally converted or another form; or

(C) distribute the converted energy described by Paragraph (A).

SECTION 4. Section 23.56, Tax Code, is amended to read as follows:

Sec. 23.56. LAND INELIGIBLE FOR APPRAISAL AS OPEN-SPACE LAND. Land is not eligible for appraisal as provided by this subchapter if:

(1) the land is located inside the corporate limits of an incorporated city or town, unless:

(A) the city or town is not providing the land with governmental and proprietary services substantially equivalent in standard and scope to those services it provides in other parts of the city or town with similar topography, land utilization, and population density;

(B) the land has been devoted principally to agricultural use continuously for the preceding five years; or

(C) the land:

(i) has been devoted principally to agricultural use or to production of timber or forest products continuously for the preceding five years; and

(ii) is used for wildlife management;

(2) the land is owned by an individual who is a nonresident alien or by a foreign government if that individual or government is required by federal law or by rule adopted pursuant to federal law to register his ownership or acquisition of that property; [or]

(3) the land is owned by a corporation, partnership, trust, or other legal entity if the entity is required by federal law or by rule adopted pursuant to federal law to register its ownership or acquisition of that land and a nonresident alien or a foreign government or any combination of nonresident aliens and foreign governments own a majority interest in the entity; or

(4) a wind-powered energy device is located on the land.

SECTION 5. Section 312.0021(a)(2), Tax Code, is amended to read as follows:

(2) "Wind-powered energy device" has the meaning assigned by Section 23.51 [11.27].

SECTION 6. Subchapter A, Chapter 312, Tax Code, is amended by adding Section 312.0022 to read as follows:

Sec. 312.0022. PROHIBITION ON ABATEMENT OF TAXES ON CERTAIN PROPERTY INCLUDING A WIND-POWERED ENERGY DEVICE. (a) In this section, "wind-powered energy device" has the meaning assigned by Section 23.51.

(b) The governing body of a taxing unit may not enter into an agreement under this chapter to exempt from taxation a portion of the value of real property on which a wind-powered energy device 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 7. Sections 11.27 and 23.26, Tax Code, are repealed.

SECTION 8. The repeal by this Act of Sections 11.27 and 23.26, Tax Code, and the changes in law made by this Act to Sections 11.43, 23.42, 23.56, and 312.0021(a)(2), Tax Code, apply only to an ad valorem tax year that begins on or after the effective date of this Act.

SECTION 9. Section 312.0022, Tax Code, as added by this Act, applies only to an agreement entered into under Chapter 312, Tax Code, on or after the effective date of this Act.

SECTION 10. It is the intent of the 89th Legislature, Regular Session, 2025, that the amendments made by this Act to Section 11.43(c), Tax Code, be harmonized with another Act of the 89th Legislature, Regular Session, 2025, relating to nonsubstantive additions to and corrections in enacted codes.

SECTION 11. (a) Except as provided by Subsection (b) of this section, this Act takes effect January 1, 2026.

(b) Section 2 of this Act takes effect January 1, 2026, but only if the constitutional amendment proposed by the 89th Legislature, Regular Session, 2025, to prohibit land from being appraised for ad valorem tax purposes only on the basis of its agricultural use if a wind-powered energy device has been installed or constructed on the land is approved by the voters. If that amendment is not approved by the voters, Section 2 of this Act has no effect.