87th LegislatureState HouseState SenateTaxes & SpendingProperty Tax Relief Bills Pass Texas Senate but Stall Due to House Stalemate

Two property tax reforms were passed by the Texas Senate while the House was stalled during a break of quorum caused by Democrats fleeing the state to Washington, D.C.
July 16, 2021
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The Texas Senate passed three priority property tax bills this week while the House was deadlocked. The reforms made in the bills would allow new homeowners to benefit from the first year exemption during the calendar year in which they purchase the homestead, rather than waiting until the following year. Tax compression for disabled and elderly homeowners is also included.

Senate Bill (SB) 8 accomplishes the first item while SB 12 accomplishes the latter and is accompanied by a constitutional amendment — Senate Joint Resolution (SJR) 4.

“Property tax relief has been one of my top priorities since I was elected to the Texas Senate in 2014 and one that is very important to constituents of Texas. These bills will provide much needed relief to homeowners for first year homestead exemptions and those over 65 or disabled,” Sen. Paul Bettencourt (R-Houston), co-author of all three pieces of legislation, said in a release.

In the expedited fashion for which the Senate is known, all three passed the chamber 22 to 0 — nine Democratic senators are off in the nation’s capital with their House colleagues who broke quorum.

But the four Democrats who did not leave — Sens. Chuy Hinojosa (D-McAllen), Eddie Lucio, Jr. (D-Brownsville), John Whitmire (D-Houston), and Judith Zaffirini (D-Laredo) — each voted for the legislation.

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Because of the House impasse, right now these bills cannot advance through the lower chamber. House Democrats have said they will run out the clock on this special session, staying in D.C. until August 8.

Bettencourt further said, “I will file them again and again until the House Democrats return to the Call of the Governor for a special session to get tax relief for the people of Texas.”

SB 12’s fiscal impact is estimated to total $197 million in savings for elderly and disabled property owners through the 2022-2023 biennium with an increasing projection each year following.

Because the elderly and disabled property owners are governed in a different category of property taxpayer, reforms to their tax rates must be made via constitutional amendment.

Last session, the legislature approved an $11.6 billion school finance injection and property tax compression. SB 12 and SJR 4 are meant to follow through on that for elderly and disabled homeowners that did not benefit from the 2019 reform.

SB 8, meanwhile, will eliminate the delay new home buyers face in realizing their homestead exemption in the first year of purchase. It would be allocated proportionally for the time the homeowner had purchased the property — i.e. if the taxpayer purchased the property halfway through the year, they will receive 50 percent of the typical annual homestead on that year’s tax bill.

The fate of these bills is up in the air due to the lack of quorum in the House but the Senate and Lt. Governor Patrick wasted no time in passing these property tax bills that fall within one of Governor Greg Abbott’s special session items.

Correction: An earlier version of this article used the fiscal impact’s General Revenue figure rather than the All Funds figure. It has been updated.

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Brad Johnson

Brad Johnson is an Ohio native who graduated from the University of Cincinnati in 2017. He is an avid sports fan who most enjoys watching his favorite teams continue their title drought throughout his cognizant lifetime. In his free time, you may find Brad quoting Monty Python productions and trying to calculate the airspeed velocity of an unladen swallow.