Chapter 312 and 313 property tax abatements under the Texas Tax Code allow counties, cities, school districts, and special purpose districts to reduce the amount of taxes paid by certain businesses within their jurisdictions. These abatements are widely used by renewable energy developers in conjunction with additional state and federal subsidies. Some analysts and critics refer to this system of subsidies as a form of “corporate welfare” allowing investors to turn a profit on what would otherwise be an unprofitable venture at the expense of taxpayers.
According to application materials, the proposed tax abatement from the county will give the Juno Beach, FL based NextEra Energy Resources a $351,850 annual tax break, which is a reduction of 58 percent, for 10 years beginning in 2020. Over the lifetime of the abatements, Hardeman County taxing districts stand to sacrifice an estimated $3,518,500 in property tax revenue.
Similarly, documents show Chillicothe & Quanah ISDs are prepared to reduce the taxable value of the project to $25 & $20 millions, from a high of $121,454,000 & $58,080,000, for a period of 10 years beginning in 2020, respectively. The lost revenue that the district would have gained without the abatement would have been in excess of $8,534,434 over 10 years.
Altogether over the lifetime of the abatements, NextEra Energy Resources stands to receive nearly $12,052,934 in tax incentives. According to reports, the parties have entered into a formal agreement approved by the Texas Comptroller and the school district.
Outside of construction, NextEra Energy Resources is only committed to creating four new jobs related to its projects in Hardeman.
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