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HB 3390

Relating to an exemption from ad valorem taxation of the amount of the appraised value of real property that arises from the installation or construction on the property of a generator that is primarily for the production and distribution of energy for on-site use.

89th Legislature (2025) Introduced by Brooks Landgraf

Texas bill exempts property tax increases from on-site energy generators used primarily for self-consumption, reducing owner tax bills but potentially cutting revenue for schools and local governments.

Referred to Ways & Means
#comptrollerofpublicaccounts(v2608) #energy--general(i0315) #taxation--property-appraisals&appraisaldistricts(i0792) #taxation--property-exemptions(i0793) #utilities--electric(i0831)
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Bill Summary · HB 3390

Legislative bill overview

HB 3390 would exempt from property tax assessments the added value to real property resulting from installing or constructing an on-site energy generator used primarily for self-consumption. The exemption applies to the appraised value increase attributable solely to the generator installation, not the underlying property value.

Why is this important

Property tax assessments typically increase when property improvements like generators are added, raising owners' annual tax bills. This exemption could reduce the financial barrier to residential and commercial adoption of on-site renewable or backup energy systems, potentially accelerating energy independence investments while reducing tax revenue for local governments and school districts that depend on property tax.

Potential points of contention

  • Revenue impact: Local taxing entities (schools, counties, municipalities) could lose significant property tax revenue if widespread generator adoption occurs, potentially requiring budget adjustments or rate increases elsewhere
  • Equity concerns: The exemption primarily benefits property owners who can afford to install generators, potentially creating disparities where wealthier properties receive tax breaks unavailable to others
  • Scope definition: "Primarily for on-site use" may be ambiguous—disputes could arise over systems that occasionally sell excess power back to the grid or serve multiple properties
  • Long-term cost: As renewable energy costs decline, the fiscal impact could grow substantially over time if adoption accelerates

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

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