The 86th Texas Legislature adjourned May 27, closing out a monumental session for Texas real estate consumers and private property rights.
Thanks to your grassroots advocacy efforts during REALTOR® Day at the Texas Capitol and timely response to calls for action, Texas REALTORS® earned several legislative victories this session.
The following REALTOR®-supported bills passed the Texas House and Senate and have been signed into law.
Property Tax Reform
After years of advocating for changes to the state’s property tax system, Texas REALTORS® succeeded in giving taxpayers more information about how tax rates are set and how to engage in the rate-setting process that determines your property tax bill.
The Texas Legislature agreed that property tax reform is critical, passing REALTOR®-supported Senate Bill 2, also known as The Texas Property Tax Reform and Transparency Act.
This legislation, authored by Sen. Paul Bettencourt and sponsored by Rep. Dustin Burrows, makes changes to the rollback rate for local taxing entities that is currently at 8%:
- Most cities and counties will be subject to a 3.5% rollback rate
- Most cities and counties will have automatic elections if they exceed the rollback rate. (Currently, these elections may only happen if voters petition for them.)
- Keeps rollback rate at 8% for special taxing units, including:
- Cities/Counties with population <30,000
- Junior colleges
- Hospital districts
- Renames the rollback rate the “voter-approval tax rate”
- Renames the effective rate the “no-new-revenue tax rate”
Senate Bill 2 also implements several REALTOR®-supported measures that enhance transparency for taxpayers:
- Central Appraisal Districts are required to create an online database to show property owners how proposed rate changes would affect their bills and make it easy for taxpayers to comment on increases using an automatically generated online form.
- The database would also include information about when a property owner’s local taxing entities are holding public hearings to set their tax rates.
School Finance Reform
The Texas Legislature unanimously approved legislation to reform the public school finance system and the property tax system: House Bill 3, authored by Rep. Dan Huberty and sponsored by Sen. Larry Taylor.
This REALTOR®-supported legislation is a comprehensive reform of the state’s public school finance system and property tax system to lessen the burden on local property taxpayers while increasing the state’s investment in educators and students.
The legislation’s website, thetexasplan.com, has details. Here are highlights:
- Lowers school property tax rates statewide
- Increases the state’s share of education funding from 38% to 45%
- Reduces recapture by 47% ($3.6 billion) in the next biennium
- Raises the basic allotment from $5,140 to $6,160 per student, benefiting all school districts
- Maintains the enhanced transparency measures and automatic rollback elections REALTORS® support.
As leaders in the fight for property tax and school finance reform, Texas REALTORS® issued a press release with comments from Chairman Tray Bates reinforcing our support of the legislation when the final version was rolled out. Chairman Bates’s comments were included on Gov. Abbott’s website.
Ending Forced Annexation Statewide
REALTOR®-supported House Bill 347, authored by Rep. Phil King and sponsored by Sen. Brian Birdwell, ends forced municipal annexation statewide, giving property owners a say in whether they are annexed. If a municipality seeks to annex an area into its limits, the municipality must now hold an election for the affected residents to decide whether they wish to be annexed.
Expanded Access to Home Equity
House Bill 1254, authored by Rep. Jim Murphy and sponsored by Sen. Kelly Hancock, will allow a property owner to use agricultural land as collateral for a home equity loan.
In 2017, voters approved a REALTOR®-supported constitutional amendment (Prop 2) to modernize the home equity lending process for property owners. This new law further updates those provisions to allow more homeowners the ability to access the hard-earned equity in their homes while maintaining the strong consumer protections in the Texas Constitution.
TREC Sunset Review
In 2018, the Texas Real Estate Commission underwent what’s known as sunset review—a process for state agencies during which Texas Sunset Advisory Commission staff evaluate the agency and issue recommendations for positive change.
Texas REALTORS® staff worked on your behalf with the Sunset Commission and staff on final recommendations for TREC that are reflected in the legislation—REALTOR®-supported Senate Bill 624, authored by Sen. Robert Nichols and sponsored by Rep. Senfronia Thompson.
This legislation implements the Sunset Commission’s recommendations for the Texas Real Estate Commission, such as extending TREC for six years; allowing the agency to maintain its self-directed, semi-independent status; and requiring additional reporting to the Legislature, governor, and Sunset Commission.
After the devastating effects of Hurricane Harvey and other recent natural disasters were experienced across the state, Texas lawmakers passed several bills this session to increase resources for affected property owners and create disaster recovery and prevention plans.
The following REALTOR®-supported bills have been signed into law:
- House Bill 5 (authored by Rep. Dade Phelan and sponsored by Sen. Lois Kolkhorst) creates a catastrophic debris management plan and training for cities and counties.
- House Bill 6 (authored by Rep. Geanie Morrison and sponsored by Sen. Lois Kolkhorst) creates a disaster recovery task force to assist with long-term recovery plans.
- House Bill 7 (authored by Rep. Geanie Morrison and sponsored by Sen. Joan Huffman) creates a disaster recovery plan to be enacted by state agencies as needed.
- Senate Bill 6 (authored by Sen. Lois Kolkhorst and sponsored by Rep. Geanie Morrison) creates a disaster response plan for local officials
- Senate Bill 7 (authored by Sen. Lois Kolkhorst and sponsored by Rep. Dade Phelan) creates the Flood Infrastructure Fund to finance flood mitigation projects.
- Senate Bill 8 (authored by Sen. Charles Perry and sponsored by Rep. Lyle Larson) creates a statewide flood plan.
On the November Ballot
The Texas Legislature passed several measures that require voter approval. These two REALTOR®-supported joint resolutions call for constitutional amendments to help Texans prepare for or recover from disasters.
- House Joint Resolution 4 (authored by Rep. Dade Phelan and sponsored by Sen. Brandon Creighton) proposes a constitutional amendment to create a fund to aid in financing flood mitigation projects.
This constitutional amendment will be on the Nov. 5, 2019, ballot statewide with the following language: The constitutional amendment providing for the creation of the flood infrastructure fund to assist in the financing of drainage, flood mitigation, and flood control projects.
- House Bill 492/House Joint Resolution 34 (authored by Rep. Hugh Shine and sponsored by Sens. Larry Taylor and Paul Bettencourt, respectively) propose a constitutional amendment to provide a temporary property tax exemption for qualified property damaged by a disaster.
The constitutional amendment will be on the Nov. 5, 2019, ballot statewide with the following language: The constitutional amendment authorizing the legislature to provide for a temporary exemption from ad valorem taxation of a portion of the appraised value of certain property damaged by a disaster.
I’m thinking the “Property Tax Reform”, is doing nothing to solve the real issue with property taxes…and that is that property values have gone up so much, that people are struggling to pay their property taxes.
What is being done about that? This is affecting both property owners and likely tenants even more.
When tax rates go down appraisals go up by a higher percentage to cover the difference.