Commissioners OK tax abatement agreement, table development agreement for data center
Commissioners approved a Chapter 312 tax abatement agreement between Caldwell County and EDC Austin LLC related to the planned construction and improvements of a turnkey data center.
The data center, which would be owned and operated by Edged Energy, is expected to be located on approximately 330 acres off SH 142 near the LCRA Timmerman Powerplant in the Maxwell area. The total estimated cost of improvements is projected to be $7.3 billion.
Chapter 312 agreements are local agreements between a taxpayer and a taxing unit that exempts increases in the value of the property from taxation for up to 10 years.
The agreement would allow the property owner to make pilot payments to the County in lieu of taxation during the years the agreement is in effect. Pilot payments allow the county to keep the property off the tax roll, allowing it to use its operation budget to optimally serve citizens and shift the tax burden to industries.
Why that’s important: The Texas Legislature limits the increase in new revenue for a county to 3.5% annually above the no new revenue rate.
Caldwell County currently has around $9 billion in value on the tax roll. If several multi-billion-dollar data centers hit the tax roll, the county would be forced to lower the tax rate to a level that would cut the county’s income by 50% to potentially 100%.
For at least a year, the County would be insolvent and need to use reserves in order to pay salaries and operating costs.
Related to that project, Commissioners earlier in the meeting voted to table discussion and action on a development agreement between the county and EDC Austin, LLC.
The county has a very limited ability to influence development, as it does not control or provide utilities and is not able to zone land for allowable use the way cities can.
The Texas Commission on Environmental Quality — not the county — issues air quality and other environmental permits for data centers, focusing on emergency generator engines, onsite power generation, and water usage.