Senate Finance Committee Opens Interim Agenda With Roads, Data Center Tax Breaks and Rural Fire Grants

Sen. Joan Huffman’s committee will take invited and public testimony July 27 on transportation funding, the fast-growing cost of the data center sales tax exemption, the state’s rural volunteer fire department grants and the Crime Victims’ Compensation Fund.

The Texas Senate Committee on Finance will gavel in at 10:30 a.m. Monday to take invited and public testimony on four interim charges spanning highway money, a sales tax break for data centers that has grown more than two hundredfold, grants for rural volunteer fire departments and the state’s compensation fund for crime victims.

Chaired by Sen. Joan Huffman, R-Houston, the 14-member panel carries a 10-4 Republican majority and writes the state budget and tax code — the widest jurisdiction of any Senate committee. Monday’s meeting takes up four of the eight interim charges assigned to the committee; its posted video archive shows no full committee hearing since the 89th Legislature’s second called session in August 2025.

The Evaluating Transportation Resources charge asks members to study transportation funding from all sources, assess how money appropriated by the 89th Legislature is being spent and recommend ways to use it more efficiently. The timing is deliberate: the Texas Transportation Commission in June added $500 million to its draft 2027 Unified Transportation Program, lifting the 10-year planning document to $95 billion in planned investment through 2036, as The Texas Dispatch previously reported, and opened that draft for public comment from July 3 through Aug. 3 ahead of a final adoption vote in late August.

Much of the underlying revenue flows from Proposition 7, the 2015 constitutional amendment that dedicates sales tax and motor vehicle sales and rental tax revenue to the State Highway Fund; the 88th Legislature extended those transfers through 2042 and 2039, respectively.

The Data Center Investment and State Fiscal Effects charge is the sharpest fiscal question on the agenda. The exemption dates to House Bill 1223 in 2013 and is codified at Tax Code Sections 151.359 and 151.3595, which temporarily exempt equipment “necessary and essential” to a qualifying data center from the 6.25% state sales and use tax. By the committee’s own accounting, the cost has climbed from an estimated $14.6 million for the 2014-15 biennium to a projected $3.3 billion for 2028-29.

The Texas Tribune reported in April that the state is forgoing more than $1 billion a year under the break. The charge directs members to recommend “safeguards to ensure that Texans benefit” — language that lands as public sentiment sours; a recent survey found most Texans oppose a data center in their own community, and a House panel was told in June that no agency limits how much groundwater a data center may pump across much of the state.

The Rural Fire Protection Funding charge monitors the Rural Volunteer Fire Department Assistance Program, created by House Bill 2604 in 2001 and administered by the Texas A&M Forest Service. The 89th Legislature appropriated roughly $88 million for the 2026-27 biennium — the most ever allocated — plus more than $192 million to clear outstanding unfunded requests.

The agency says it has awarded $225 million in fiscal 2026 so far, including $29.3 million and 531 grants in a June round covering protective equipment, brush trucks and training. More than 85% of Texas fire departments are volunteer. Members are asked whether the money is actually shrinking the application backlog and whether it is reaching high-risk wildfire areas.

The Examining Crime Victims’ Compensation and Assistance Funds charge covers the program the attorney general runs under Chapter 56B of the Code of Criminal Procedure, which reimburses victims for medical bills, counseling and lost wages. Federal support has been contracting: Legislative Budget Board recommendations for the 2026-27 biennium show a $51.6 million reduction in federal Crime Victims Assistance funds, offset by $115.2 million in added state general revenue for victims programs. The charge asks members to review eligibility criteria, allocation processes and distribution to victims and service providers.

Because the committee is meeting in the interim, it will take no vote on legislation. Findings will shape recommendations to the 90th Legislature, which convenes in January 2027. Texans who want to testify must appear in person and register with the clerk; there is no online comment portal for Senate hearings.