August Texas Strategic Investment and Job Creation Act of 2026

A BILL TO BE ENTITLED AN ACT
relating to strategic investment and job creation incentives; providing for a short title and sunset provision.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. This Act shall be known and may be cited as the August Texas Strategic Investment and Job Creation Act of 2026.

SECTION 2. Targeted Tax Incentives.

Scope of abatement. Property tax abatements apply to the total appraised taxable value of the qualifying property (including land and all improvements). Abatements are available only for qualifying major projects that meet the tier thresholds established in this section.

Tier Determination. The maximum abatement percentage and duration for a project shall be determined by the project’s projected cumulative net new property tax revenue over the abatement period, as certified by an independent third-party economic analysis paid for by the applicant. The tiers are as follows:

(a) Tier 1 (High Performer): Projected cumulative net revenue return of 200 percent or greater over the abatement period. Abatement schedule: 75 percent in years 1 and 2; 55 percent in years 3 and 4; 35 percent in years 5 through 7.

(b) Tier 2 (Solid Performer): Projected cumulative net revenue return of 150 to 199 percent over the abatement period. Abatement schedule: 55 percent in years 1 and 2; 40 percent in years 3 through 5; 25 percent in years 6 and 7.

(c) Tier 3 (Marginal Performer): Projected cumulative net revenue return of 101 to 149 percent over the abatement period. Abatement schedule: 30 percent in years 1 through 3; 20 percent in years 4 and 5.

(d) Ineligible: Projected cumulative net revenue return of 100 percent or less. No abatement shall be granted (though expedited permitting under Section 4 may still apply).

Application of the $20 Million Per-Project Cap. The total value of all property tax abatements granted to any single project under this Act shall not exceed $20 million. If application of the abatement schedule for the applicable tier would result in a total abatement exceeding $20 million, the schedule shall be adjusted by reducing or eliminating the abatement percentages in the final years of the period (beginning with the last year and working backward) until the total does not exceed $20 million. This adjustment shall preserve the higher abatement percentages in the initial years of the schedule, if possible.

Revenue Test and Clawback. A project must generate cumulative net new property tax revenue over the abatement period (as adjusted under subsection (c), if applicable) that exceeds the total value of the abatement granted, consistent with the tier threshold. If this test is not met, the recipient shall repay the abated amount plus interest at a rate of the prime rate plus two percent. The Comptroller shall conduct reviews at the end of years 3, 5, and 7 (or at the end of the adjusted period) and may trigger early clawback if projections are not being met.

Independent Verification. All projections of incremental taxable value and resulting tax revenue used to determine tier eligibility and the revenue test must be certified by an independent third-party appraiser or economist acceptable to the Comptroller. The applicant shall bear the cost of such certification.

SECTION 3. Infrastructure Support.
State infrastructure grants or loans (prioritized for roads & utilities development) may be provided for qualifying projects, capped at 15% of total project cost and fully repayable, if applicable, via increased tax revenue or user fees. Public-private agreements shall include clear revenue-sharing provisions.

SECTION 4. Expedited Permitting.
Approved projects receive 60-day fast-track permitting (deemed approved if unmet). Regulatory waivers may be granted for zoning and permitting hurdles in exchange for meeting investment and job commitments.

SECTION 5. Transparency and Reporting.
All incentives require annual reporting to the Legislature on jobs created, revenue generated, and return on investment.

SECTION 6. Sunset Provision.
This Act sunsets five (5) years after the effective date.

SECTION 7. This Act takes effect immediately upon passage and approval by the Governor.