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.
Impact
This legislation impacts the dynamics of renewable energy investment within Texas, making it less financially attractive for some developers if they cannot benefit from local tax abatements. It may lead to a reduction in the number of new renewable energy projects initiated within jurisdictions that previously offered tax incentives for such developments. Advocates for this bill argue that local governments should maintain a steady revenue stream, especially if these facilities are generating substantial renewable energy, while opponents may contend that the lack of tax incentives could deter green investment.
Summary
House Bill 4057 seeks to amend the Local Government Code and the Tax Code to prohibit the abatement of ad valorem taxes on certain renewable energy facilities. Specifically, it restricts municipalities and counties from entering into agreements that would exempt from taxation any part of the value of property where renewable energy facilities, including solar and wind power generation facilities, or battery storage facilities are located or planned to be located. By doing this, the bill aims to ensure that such facilities contribute fully to local tax revenues, which can be critical for funding community services.
Contention
Notable points of contention surrounding HB 4057 involve the balance between promoting renewable energy and ensuring that local governments have the necessary funding to operate effectively. Supporters typically assert that maintaining tax revenues is crucial for local services, while detractors may argue that without tax incentives, Texas risks falling behind in the competitive renewable energy market, especially as other states continue to offer more favorable conditions for renewable energy investment. The discussion also touches upon the broader implications of tax policies on environmental goals and economic growth within the state.
Texas Constitutional Statutes Affected
Local Government Code
Chapter 380. Miscellaneous Provisions Relating To Municipal Planning And Development
Section: New Section
Chapter 381. County Development And Growth
Section: New Section
Tax Code
Chapter 312. Property Redevelopment And Tax Abatement Act
Identical
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.
Relating to the authority of the governing body of a taxing unit to adopt an exemption from ad valorem taxation of a portion, expressed as a dollar amount, of the appraised value of an individual's residence homestead.
Relating to the duty of a school district to enter into an ad valorem tax abatement agreement under the Property Redevelopment and Tax Abatement Act for certain property.
Relating to an exemption from ad valorem taxation of a portion of the appraised value of tangible personal property that is held or used for the production of income and a franchise tax credit for the payment of certain related ad valorem taxes.
Relating to the exemption from ad valorem taxation of certain assets used for agricultural production and to the authority of a county commissioners court to adopt an exemption from ad valorem taxation by each taxing unit that taxes the property of the portion of the appraised value of a person's property that is attributable to the installation in or on the property of certain water conservation systems.
Relating to a local option exemption from ad valorem taxation by a county or municipality of all or part of the appraised value of real property used to operate a child-care facility.
Relating to a local option exemption from ad valorem taxation by a county or municipality of all or part of the appraised value of real property used to operate a child-care facility.
Relating to an exemption from ad valorem taxation of a portion of the appraised value of tangible personal property a person owns that is held or used for the production of income.