Preheat the oven to 400 degrees and grease a 9x13 baking dish with nonstick cooking spray.
Brown the sausage with the bell peppers and onion in a large skillet.
When the sausage is cooked through, add the diced tomatoes with chilies and taco season. Stir to combine. Cook over medium heat until the liquid from the tomatoes has reduced. Remove from heat and set aside.
Combine the hashbrowns with one cup of shredded cheese. Season with salt and pepper and spread the mixture evenly in the bottom of the baking dish.
Top the hashbrowns with the sausage mixture.
Whisk together the eggs, milk, salt and pepper in a large bowl. Pour the mixture over the top of the casserole.
Top with remaining shredded cheese.
Bake in the preheated oven for 40 minutes, until the eggs are set and the cheese is melted.