Honorable Phil King, Chair, Senate Committee on Economic Development
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
SB1754 by Birdwell (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.), As Introduced
No significant fiscal implication to the State is anticipated.
The bill would amend Chapters 380 and 381 of the Local Government Code and Chapter 312 of the Tax Code to prohibit a governing body of a municipality, county, or other government entity subject to Chapter 312 of the Tax Code from entering into an agreement to exempt from property 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 with a renewable energy facility that sells energy or ancillary services at wholesale for a power grid.
The bill would not affect school district taxable property values and therefore would have no significant state fiscal implications.
The bill would apply only to agreements entered into on or after the effective date of the bill. The bill would take effect January 1, 2026.
Local Government Impact
The bill would prohibit units of local government from entering into tax exemption agreements with certain renewable energy facilities. To the extent planned renewable energy facility projects would go forward without an abatement agreement there'd be an increase in taxable value relative to current law. However, the no-new-revenue and voter-approval tax rates as provided by Section 26.04, Tax Code would be lower as a consequence of the increased taxable property value proposed by the bill.