H.B. No. 294 proposes an exemption from ad valorem taxation for the appraised value of certain residential real properties that have undergone energy efficiency-related improvements. The bill introduces Section 11.272 to the Tax Code, defining "energy efficiency-related improvement" to include various technologies and enhancements such as high-efficiency heating and cooling systems, smart thermostats, and high-efficiency windows. To qualify for the exemption, the property must have been originally constructed before January 1, 2011, and the improvements must be installed on or after January 1, 2027. The comptroller, with assistance from the State Energy Conservation Office, is tasked with developing guidelines for local officials to administer this exemption.

Additionally, the bill outlines that if certain constitutional amendments are approved by voters, the exemption will be integrated into existing tax code provisions, ensuring that once granted, the exemption does not need to be claimed in subsequent years unless ownership changes or the qualification status changes. The bill is set to take effect on January 1, 2027, contingent upon voter approval of the related constitutional amendment.

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