Fort Bend Offers Tesla Up to 35 Years of Tax Breaks

Fort Bend County has approved a package of tax breaks to compete for a planned Tesla solar cell factory that county records describe as a roughly $10 billion investment employing about 9,712 people, with relief that could run as long as 35 years.

Commissioners approved the agreements 4-0 on October 22, with interim County Judge Daniel Wong abstaining because of a business relationship with the company, ABC13 reported. The county has not yet posted minutes, and the agreements posted with the agenda are unsigned drafts.

Tesla has not chosen the site. “It’s a very competitive project. That’s why the county needed to step up to stay in the running,” Carlos Guzman, the county’s economic director, told ABC13. “If we had not done this, the county would’ve been eliminated from consideration.”

What Tesla would build

The county’s draft abatement agreement with Tesla, Inc. describes “a high technology, utility-scale, photovoltaic manufacturing facility” whose commercial operations mean “regular commercial production of solar cells.” It would sit on about 1,732 acres near Farm-to-Market Roads 762 and 1994 south of Rosenberg, in Precinct 2 and the county’s Reinvestment Zone No. 34.

The agreement calls for “approximately $10,000,000,000” in investment and “approximately 9,712 Employees,” ramping from 2,500 jobs in the first employment year to 9,712 by the fourth. It sets a minimum average of $55 an hour in employee compensation, a figure that counts benefits and payroll taxes, not wages alone.

Construction must start by June 30, 2027, and production by the end of 2030.

How the 35 years are built

The package stacks several agreements, according to the county’s agenda documents:

The first 10 years: a Chapter 312 abatement of “100% of County property taxes” on Tesla’s equipment, starting no earlier than tax year 2029. Land and buildings stay on the tax rolls.

The next 20 years: under a separate Chapter 381 agreement, the county would pay Tesla a cash grant equal to “90% of the Eligible County Taxes” on that equipment.

Up to five more years: if Tesla averages at least 12,000 employees for two consecutive years during the abatement, the grant rises to 100% for the first five years of that period and the rebate period grows to 25 years. The agreement “shall end no later than the end of Project Year 35.”

Inventory is handled separately through a foreign trade zone, which still needs approval from the federal Foreign-Trade Zones Board. Tesla would make no payment in lieu of inventory taxes during the abatement and 10% during the rebate period.

A separate agreement sets a $2 million annual floor on what Tesla pays the county, minus credits for other taxes and payments.

If Tesla misses its targets

If Tesla misses 90% of its job target or the pay floor, it loses that year’s abatement, and two straight misses count as a breach, the draft says. A material default would require Tesla to repay all abated taxes. Grants already paid under the 20-year rebate agreement would not be recovered.

Tesla has also applied to Lamar Consolidated Independent School District for a limit on school property taxes under the state’s Jobs, Energy, Technology and Innovation Act program, according to the application on file with the Texas Comptroller. That application lists $10.1 billion in investment.