Senator Schwartner proposes bill to end tax abatements for renewable energy facilities

The Senate Committee on Economic Development convened on April 7, 2025, to discuss significant changes to Texas tax policy regarding renewable energy projects. The meeting focused on proposed legislation aimed at reforming tax abatements for solar, wind, and battery storage facilities.

Senator Burwell introduced a bill, SB 1754, which seeks to prohibit property tax abatements for renewable energy facilities that sell energy or ancillary services at wholesale. This legislation is a response to the expiration of previous tax incentives and aims to align current tax policies with the evolving energy landscape. The bill specifically excludes battery energy storage facilities that are associated with natural gas generation plants from this prohibition, ensuring that ongoing negotiations between local governments and businesses are not adversely affected. The proposed changes are set to take effect on January 1, 2026.

During the meeting, committee members discussed the implications of these tax reforms. Senator Burwell emphasized the need for these adjustments to prevent local governments from granting excessive tax incentives to renewable energy projects, which he argued could lead to financial burdens on rural communities. He noted that while Chapter 312 of the tax code allows for property tax abatements, the lack of expiration provisions in Chapters 380 and 381 of the local government code necessitates immediate action.

Public testimony followed, with several witnesses expressing their support for the bill. John Highsmith, a resident of Pecan Plantation, highlighted the negative impacts of renewable energy projects on local communities, including noise and decreased property values. He argued that rural Texans should not bear the financial burden of tax abatements for renewable energy companies that receive substantial federal subsidies.

Joanne Friebel and Charlie Cody echoed similar sentiments, emphasizing the need for transparency and accountability in tax incentive programs. They argued that the current abatement policies do not benefit local economies and disproportionately affect rural residents. Cody shared personal experiences of living near extensive solar developments, which he claimed have diminished his property value and quality of life.

Robert Fleming, a farmer from Freestone County, also voiced concerns about the financial implications of tax abatements for renewable energy projects. He urged the committee to reconsider the allocation of taxpayer money to subsidize these initiatives, which he believes are already heavily funded by federal programs.

The committee's discussions and public testimonies underscored a growing concern among rural Texans regarding the economic impact of renewable energy projects and the fairness of tax incentive policies. As the committee moves forward, the proposed legislation aims to address these issues while balancing the interests of local communities and the renewable energy sector. The next steps will involve further deliberation on the bill and potential adjustments based on feedback from stakeholders.