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SJR 72

Proposing a constitutional amendment to authorize the legislature to exempt from ad valorem taxation the total appraised value of real property used as a data center and the tangible personal property used by the data center to meet the data center's demand for energy.

89th Legislature (2025) Introduced by Tan Parker

Texas constitutional amendment would authorize legislature to exempt data centers' real and energy-related property from ad valorem taxation to attract investment.

Referred to Local Government
#business&commerce--general(i0050) #energy--general(i0315) #propertyinterests--personalproperty(i0600) #resolutions--constitutionalamendments(i0661) #taxation--property-exemptions(i0793)
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Bill Summary · SJR 72

Legislative bill overview

SJR 72 proposes a constitutional amendment that would allow Texas's legislature to create tax exemptions for data centers on both their real property (buildings, land) and the tangible personal property (equipment, machinery) used to generate or manage energy for their operations. Currently, Texas law does not permit blanket exemptions of this magnitude for commercial data center facilities.

Why is this important

Data centers represent a growing sector of Texas's economy, particularly as companies like Meta, Google, and others expand operations in the state. The exemption could make Texas significantly more competitive in attracting major data center investments by reducing operating costs, but it would shift tax burden to other property owners and reduce municipal revenue streams that fund schools, infrastructure, and local services.

Potential points of contention

  • Tax base erosion: Exempting large data center properties could substantially reduce property tax revenue for school districts and municipalities, requiring either tax rate increases on remaining properties or service reductions
  • Equity concerns: The exemption creates preferential treatment for one industry sector, potentially disadvantaging other large industrial or commercial operations that don't qualify
  • Revenue uncertainty: The fiscal impact is difficult to predict and depends on how many data centers are actually built; could affect long-term budget planning for local governments

Compiled from official sources — confirm details with the bill’s official record.

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