By Julie Tomascik
Editor

Trending topics in agriculture are solar energy and foreign ownership of agricultural land. Both issues were highlighted during a Texas Farm Bureau forum last month.

“These are growing issues across the state, and they have a lot of moving parts. Increasing demand for energy, school finances, land use, decreased agricultural acreage—it’s all important to Texas, and we want our members to be better informed on these topics,” TFB President Russell Boening said.

About 70 members and landowners attended the forum at the TFB Conference and Training Center in Waco and about 200 participated virtually.

Solar energy
Solar energy has experienced rapid growth in Texas, and it’s set to continue because Texas is the one of the easiest states to deploy solar resources, according to Commissioner of the Texas Public Utility Commission (PUC) Will McAdams.

The cost of solar panels and products are now cheaper than natural gas production, he said.

East regions of the state have the greatest potential for solar growth and installed capacity in the west regions is expected to triple by the end of 2023, according to PUC data.

Government tax incentives have also spurred investment in Texas solar. The recently passed Inflation Reduction Act will inject more funds into wind and solar subsidies.

An overview was provided on the chapter 313 tax abatements used by solar projects by Will Counihan, director of Data Analysis and Transparency with the Texas Comptroller’s office. Chapter 313 is an economic development program within the state’s tax code allowing taxable property value to be traded for promised job creation. It’s a tool long-used by school districts, but it is set to expire in December.

Counihan noted most solar projects are installed in rural areas due to land availability and fewer limitations in rural school districts.

He said that only 44 agreements have been fully certified and executed so far this year.

The deadline to execute an agreement between the applicant and school district is Dec. 31. If not met, those agreements will be terminated.

“We fully expect that there will be a significant number of agreements terminated,” Counihan said. “We don’t normally terminate agreements, but we do expect that there are going to be dozens, if not hundreds, of agreements that will be terminated this year simply because they have run out of time.”

Solar leases
Attorneys with the National Agricultural Law Center shared general information about solar leases. They urged landowners who are considering entering into agreements with energy companies to have the contracts reviewed by lawyers.

“It’s going to be important that if you are approached by a landman that you get someone that is knowledgeable to go through the lease and make sure that you’re getting everything that you’re entitled to receive,” Rusty Rumley, senior staff attorney with the National Agricultural Law Center, said.

Solar leases vary widely and can run from $400 to $1,600 per acre per year, he noted.

Solar leases are typically much longer than traditional ag leases and can range from 25 to 40 years.

Land that is relatively flat, open, well drained and conveniently located near electrical transmission lines is ideal for solar projects.

Rumley stressed that not all leases will turn into solar projects, so it’s important to make sure the lease doesn’t give away other rights—like building a wind farm.

For more information about solar leases, contact a lawyer or the National Agricultural Law Center at nationalaglawcenter.org.

Foreign ownership of ag land
Foreign ownership of American agricultural land has increased, according to U.S. Department of Agriculture (USDA) data. All 50 states and Puerto Rico report having some level of foreign ownership or investment. That has American farmers, ranchers and legislators increasingly concerned.

In Texas, there are no state laws restricting foreign ownership or investment of land, and the Lone Star State has the largest amount of foreign-owned acreage at 4.7 million acres, mostly owned by Canadian investors.

Maine has the second largest amount at just over 3.5 million acres, and Alabama comes in third with 1.8 million acres.

States showing the largest increases in foreign-held agricultural land acres in 2020 were Oklahoma with an increase of nearly 383,600 acres. Texas had an increase of about 287,000 acres, and Colorado had an increase of over 286,000 acres.

These three states combined had 39% of the overall increase in acreage between 2019 and 2020.

Canadian investors own the largest amount of acreage, followed by the Netherlands, Italy, the United Kingdom and Germany.

Chinese investors only own 352,140 acres of American land, representing slightly less than 1% of total foreign ownership.

Watch the recording
The recording of the forum can be viewed at bit.ly/solarforumrecap.

For questions related to solar projects or foreign ownership of agricultural land, contact TFB Associate Director of Government Affairs Billy Howe at bhowe@txfb.org or 254-751-2208.