Preheat the oven to 350 degrees and spray a 9X13 casserole dish with nonstick spray. Pour in the shredded potatoes and set aside.
In a medium saucepan, on medium heat, add the olive oil and allow it to heat up. Cook the shallots until soft, about 3 minutes.
Add the nacho cheese and stir until smooth and creamy. Add the Pace® Picante Medium Salsa and stir. Finally, add the taco seasoning, bacon, and stir once more. In the casserole dish, add the cheese sauce to the potatoes and fold gently until cheese sauce is evenly distributed. Top with cheese evenly and bake for 20-25 minutes. Allow to cool slightly and serve.