Fayette Co. Commissioners Renew Property Tax Abatement Guidelines
Fayette County Commissioners Court renewed the County’s guidelines and criteria for property tax abatements following a public hearing on Thursday, Nov. 9.
Private tax consultant Evan Horn asked the Commissioners to renew the guidelines and criteria last month, indicating that someone would be seeking a tax abatement. Horn has not stated what kind of project will be seeking an abatement. Pct. 1 Commissioner Jason McBroom previously told the Record the project is a battery storage facility for the electric grid that a developer wants to build on property that he owns. He said the developer wants to build the facility on his property due to its location near an electric substation. McBroom has recused himself from all court discussion and votes concerning the tax abatement due to the conflict of interest.
“All this is just a foundational document for the County should they want to consider someone who applies later,” Horn said at the meeting.
The guidelines and criteria automatically expire after two years. The County has granted two tax abatements in recent years: one to food manufacturer Perdue Farms for expanding a facility in Schulenburg and another to 7V Solar Ranch for building a solar power complex in the Muldoon area.
The guidelines and criteria specify a minimum investment of $10 million for a new facility to qualify for a tax abatement. Existing facilities could qualify with a $2 million minimum investment.
Abatements would only apply to County property taxes and not municipal or school district taxes.
The document stipulates the types of projects eligible for abatements, which include a manufacturing facility, natural gas resource, research facility, distribution center or regional service facility, regional entertainment facility, renewable energy resource or other basic industry.
According to the document, types of projects not eligible for abatements include the following: land, inventories, supplies, housing, hotel accommodations, deferred maintenance investments, property owned or used by the State of Texas or its political subdivisions or by any organization owned, operated or directed by a political subdivision of the State of Texas.
The County may grant a tax abatement for up to 10 years in duration and up to but not exceeding 100 percent of the assessed property taxes. To qualify, a project “must be reasonably expected to have an increase in positive net benefit to the County of at least $100,000 in the case of a new business and $50,000 in the case of an existing business.” The document goes on to state that the “positive net benefit” may include new payroll and new capital investment. In addition, qualifying projects must be expected to prevent the loss of employment, retention of employment or creation of new employment.
Two citizens spoke during the public hearing that preceded the vote.
“The 800 lb. gorilla in the room is alternative energy,” said Jeff Parker, who lives in Pct. 4. “It’s pretty well-known that there’s enormous pressure at the national level to address climate change by eliminating fossil fuel and opening up all kinds of alternative energy. Along with that has come massive amounts of funding from a government that, quite frankly, can’t afford it.”
Parker spoke about the national deficit and the trillion dollars in interest the United States is estimated to pay this year.
“Here in the County, you do have bearing on both the state and federal government,” Parker said. “I know y’all want to be wise leaders and to not just take from us but pass along to our children and their children, the next generations, in the same way as those who settled Fayette County thought of us.
“Do you want to be the Commissioners Court that adds to the national debt?” he asked. “I realize it’s a drop in the bucket, but do you morally want to be a party to that?”
Parker went on to say, “It is well-known that the endgame of alternative energy is to eliminate fossil fuels. Do you want to be the Court that decided to go down that road with welcoming alternative energy projects into this County?”
William Bernsen of Plum said that he understands the County needs to update the guidelines and criteria in order to consider any abatement request, but he agreed with Parker, saying the County should not encourage green energy with tax incentives.
“I accept that private property owners have a right to do whatever they want on their property so long as there’s no harm to their neighbors,” Bernsen said. “But the fact that they come to us for an abatement gives us an opportunity to have a public policy on this. We can adopt a public policy on green energy and adopt a public policy on fossil fuels. We ought to be able to deny or accept based on whether we want green energy. My concern when I read this is do we have the discretion just to say no to green energy?”
County Judge Dan Mueller said the Commissioners Court will have the authority to deny a request. Assistant County Attorney Blake Watson agreed.
“If a project comes to the County and it’s not something we’re interested in bringing into the County, then we do have a right to not enter into an agreement,” Watson said.
The Court voted 4-0 to approve the guidelines and criteria, with McBroom abstaining.