Texas Passes Bill Restricting Tax Incentives for Wind Farms Near Military Aviation Facilities

6.7.17

On May 29, 2017, the Texas Legislature passed a bill that may significantly impact the siting of wind energy generation facilities in Texas by prohibiting certain tax incentives to owners of wind farms near military aviation facilities. Specifically, if a “wind-powered energy device,” which would include wind turbines, is placed within 25 nautical miles (28.7695 miles) of a military aviation facility located in Texas, the owner would not receive property tax incentives under a tax abatement agreement or limitation on appraised value agreement (LAVA) entered into on or after September 1, 2017.

SB 277, authored by Senator Donna Campbell, takes into account existing wind farms in Texas. If a wind-powered energy device is installed or constructed within 25 nautical miles of a military aviation facility as part of an expansion or repowering of an existing project, the prohibition on receiving tax exemptions under a tax abatement agreement executed after September 1, 2017, does not apply. This exception, however, does not apply to LAVAs executed after September 1, 2017.

SB 277 does include a carve-out for tax abatement agreements and applications for LAVAs for which approval is pending on September 1, 2017. The bill stipulates that if a LAVA has not been executed as of September 1, 2017, but its application is pending approval, an owner will still be able to reap the tax benefits regardless of the project’s location near a military aviation facility. However, the bill is vague on whether a tax abatement agreement application or the agreement itself must be awaiting approval on September 1, 2017, to remain eligible for property tax exemptions.

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