According to the Legislative Budget Board (LBB), SB 1754 is expected to have no significant fiscal implications for the State of Texas. Because the bill targets only local government authority to grant property tax abatements and does not affect school district taxable values, which are crucial for calculating state school finance formulas, there would be no meaningful impact on state revenues or expenditures.

For local governments, the bill would prohibit municipalities, counties, and other local taxing units from entering into new tax abatement agreements with renewable energy facilities selling into the wholesale market. To the extent that renewable energy projects proceed without the incentive of property tax abatements, local property tax bases would grow, increasing the overall taxable property value relative to current law. This would slightly enhance local government revenues or allow them to adjust tax rates downward according to the no-new-revenue and voter-approval tax rate formulas established by the Tax Code.

In practical terms, this means that while local governments would lose the discretion to offer certain economic development incentives, they could potentially benefit from a broader tax base if renewable energy investments proceed without subsidies. However, if fewer projects are initiated due to the loss of incentives, the local revenue effects could be more modest or variable across regions.

SB 1754 prohibits cities, counties, and other local taxing units from entering into new property tax abatement agreements for certain renewable energy facilities — namely, solar, wind, and qualifying battery energy storage projects that sell energy or ancillary services into a wholesale power grid. The bill is targeted at ending local subsidies that its author argues distort the market, provide limited job creation, and erode local tax bases over time. It amends Chapter 312 of the Tax Code and Chapters 380 and 381 of the Local Government Code, with the prohibition applying prospectively beginning January 1, 2026.

SB 1754 does not grow the size or scope of government. Instead, it narrows the authority of local governments by eliminating their ability to offer selective tax exemptions for certain industries. There is no creation of new programs, agencies, or regulatory mandates. Furthermore, the bill does not increase the burden on taxpayers; rather, by strengthening the taxable property base, it may help stabilize or reduce property tax rates over time, ensuring more equitable treatment of all property owners. Finally, there is no increase in the regulatory burden on individuals or businesses — renewable energy companies remain free to build and operate, but without relying on preferential local tax treatment.

From a liberty perspective, SB 1754 strongly promotes limited government, personal responsibility, and free enterprise. It helps create a more neutral and competitive energy market without the government picking winners and losers through tax incentives. By protecting private property, taxpayers from subsidizing selected industries, and eliminating a channel for local government overreach, the bill upholds essential conservative principles and advances fiscal responsibility.

Thus, Texas Policy Research recommends that lawmakers vote YES on SB 1754.

• Individual Liberty: The bill does not restrict individual behavior or personal freedoms. It prevents government favoritism that can indirectly disadvantage other taxpayers and businesses.
• Personal Responsibility: By removing selective tax abatements, businesses must succeed based on their own merits and efficiencies, not through government-granted advantages. This fosters a culture where companies are responsible for competing fairly.
• Free Enterprise: The bill strengthens free enterprise by reducing market distortions caused by selective government incentives. It ensures that all businesses, regardless of sector, compete on a level playing field without government picking winners and losers.
• Private Property Rights: Protects property taxpayers from bearing an unfair share of the tax burden. Without selective abatements, all property owners contribute fairly to local revenues, reinforcing property rights and tax equity.
• Limited Government: The bill reduces the scope of local government authority by prohibiting tax abatements for renewable energy facilities. It stops local governments from intervening in the market through selective tax policies and keeps government powers strictly limited.

• HB 4057 (Same As)