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On Thursday, July 13, after a weeks-long impasse, both the House and Senate passed property tax relief measures. The two bills are now headed to the governor’s desk. SB 2 and SB 3 include the following:

  • Compress tax rates by 10.7 cents ($12 billion)
  • Increase the homestead exemption from $40,000 to $100,000
  • Prohibit school districts, municipalities, and counties that had an optional homestead exemption in 2022 from repealing or reducing the exemption until 2028
  • Provide M&O and I&S hold harmless provisions for school districts
  • Cap non-homestead properties for both residential and commercial properties with an appraised value of $5 million or less at 20% from the previous year beginning in 2024 (three-year pilot program)
  • Increase current franchise tax exemption from $1 million to $2.4 million
  • Expand the appraisal district board of directors to include three at-large, elected members in counties of 75,000 or more

SJR 3 is the constitutional measure needed to authorize the property tax provisions in SB 2 and SB 3, and it exempts some appropriations for the tax relief from counting against the state’s constitutional spending limit.

The governor is expected to approve the three measures as part of the deal struck earlier last week between himself, Lt. Gov. Dan Patrick and Speaker of the House Dade Phelan.