Property Tax on Texas Legislature Special Session Agenda

The regular session of the 88th Texas Legislature is over – but that doesn’t mean lawmakers can go home yet. On May 29th, Gov. Abbott called an immediate special session to finish work on property taxes and border security. In a special session, lawmakers focus on topics the governor’s “call,” a list of topics he’ll allow to be addressed. The governor also hinted on Monday night that this special session may only be the first of several to come. “Several special sessions will be required to ensure each priority receives the time and attention it deserves to pass into law, only a few will be added each session.” Each session lasts 30 days, and the governor can call as many special sessions as he sees fit. 

Property taxes and border security were the only two issues on the call for this special session. Read the call in the governor’s own words: 

“Legislation to cut property-tax rates solely by reducing the school district maximum compressed tax rate in order to provide lasting property-tax relief for Texas taxpayers.

“Legislation solely for the purpose of increasing or enhancing the penalties for certain criminal conduct involving the smuggling of persons or the operation of a stash house.”

On Tuesday afternoon, both the House and Senate filed new versions of property tax legislation that appear designed to squelch disagreement between the two chambers. Both HB 1 and SB 1 call for “compression,” through which the state would give more money to public schools to reduce the burden school districts place on property owners through taxes. SB 1 additionally would raise the homestead exemption from its current $40,000 to $100,000. By the end of the day yesterday, the House had already passed the chamber unanimously. 

Background on Property Taxes

Although the Legislature allocated $17.6 billion of the next state budget solely for the purpose of reining in property taxes, lawmakers were unable to reach a compromise about how they would accomplish the goal during the 140 days of the regular session. This is largely because of differences between the policies preferred by the two chambers. 

The House initially preferred to lower the appraisal cap for homesteaded properties down from its current 10% and expand it to apply to all real property. The Senate is steadfastly against that policy. The last iteration of the property tax legislation filed during the regular session represented the House’s attempt to reach a compromise. The proposals in that bill included raising the homestead exemption to $100,000 (an increase from the Senate’s plan to put the homestead exemption at $70,000); a 5% appraisal cap for all properties (identical to the House’s HB 2); and also a compression of local school property taxes via state funds – a concept that was included in both the original House and Senate plans. 

Source: Texas REALTORS® Legislative Liaison