TexasSB 489th Legislature Regular SessionSenateWALLET

Relating to an increase in the amount of the exemption of residence homesteads from ad valorem taxation by a school district and the protection of school districts against certain losses in local revenue.

Sponsored By: Carol Alvarado (Democratic), Paul Bettencourt (Republican), Brian Birdwell (Republican), César Blanco (Democratic), Greg Bonnen, Donna Campbell (Republican), Molly Cook (Democratic), Creighton, Sarah Eckhardt (Democratic), Pete Flores (Republican), Roland Gutierrez (Democratic), Brent Hagenbuch (Republican), Bob Hall (Republican), Hancock, Adam Hinojosa (Republican), Juan "Chuy" Hinojosa (Democratic), Joan Huffman (Republican), Bryan Hughes (Republican), Todd Hunter, Phil King (Republican), Lois Kolkhorst (Republican), Trey Martinez Fischer, José Menéndez (Democratic), Morgan Meyer, Mayes Middleton (Republican), Robert Nichols (Republican), Tan Parker (Republican), Angela Paxton (Republican), Charles Perry (Republican), Charles Schwertner (Republican), Kevin Sparks (Republican), Chris Turner, Royce West (Democratic), Judith Zaffirini (Democratic)

Signed by Governor

Education--Primary & Secondary--FinanceProperty Interests--HomesteadTaxation--Property-Appraisals & Appraisal DistrictsTaxation--Property-Assessment & CollectionTaxation--Property-ExemptionsTaxation--Property-Tax RateTaxation--School DistrictEDUCATION AGENCY, TEXASEDUCATION, COMMISSIONER OF

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Bill Overview

Analyzed Economic Effects

5 provisions identified: 3 benefits, 0 costs, 2 mixed.

Bigger school tax break for homeowners

The law raises the school-tax homestead exemption from $100,000 to $140,000, subject to voter approval of S.J.R. 2. The increase takes effect on the amendment’s effective date and applies starting with the 2025 tax year. Without voter approval, the increase has no effect. Eligible homeowners get up to $40,000 more home value exempt from school taxes; savings depend on their school tax rate. For entities operating under former Education Code chapters 17, 18, and 25–28 as of May 1, 1995, the exemption remains $5,000.

Extra state aid protects school budgets

Starting in 2025–2026, districts get extra state aid when state and local school funding falls below a legal benchmark. That benchmark uses school funding laws as of September 1, 2024, without the 2025 homestead exemption increase. The comparison uses the lower of the district’s current operating tax rate or its adopted 2024 rate. The money goes to school districts, not directly to households.

State aid protects school debt payments

Texas provides extra aid when qualifying school debt-tax revenue losses exceed gains in other state aid. For 2023–2024 and 2024–2025, the comparison accounts for the specified 2023 constitutional changes. Starting in 2025–2026, it accounts for the 2025 homestead exemption increase. From that year, covered revenue is limited to payments needed for debt eligible on September 1, 2025, including refinancing. Districts can spend this aid only on principal and interest for the bonds tied to it.

School election delays carry boundary risks

For 2025–2026, districts with no prior Chapter 49 finance election can request a delay while moving to lower local revenue. Approval is mandatory when revenue criteria are met, including no excess local revenue with the constitutional amendment approved. The commissioner sets the election deadline; elections can be held on a Tuesday or Saturday. Approved districts can pay for purchased school-finance credits in equal monthly installments from March 15 through August 15, 2026. They can choose the usual payment method by notifying the commissioner by March 15, 2026; these election-delay and payment rules expire September 1, 2026. If an approved district skips the election or voters reject it, the commissioner must order property transfers or district consolidation to lower its local revenue level by the 2026–2027 school year. That boundary-change rule expires September 1, 2027.

Provisional school tax bills for homeowners

For 2025, assessors must send clearly marked provisional homestead bills when the exemption changes lower school taxes. Approval of S.J.R. 2 on November 4, 2025, makes those bills final. Rejection requires recalculation and supplemental bills for the difference by December 1, 2025, or as soon afterward as practical. Supplemental taxes are due on receipt and become delinquent March 1 of the following year, subject to statutory exceptions. These temporary billing and payment rules expire December 31, 2026.

Sponsors & Cosponsors

Cosponsors

Daniel Alders
House
Alma A. Allen
House
Rafael Anchía
House
Trent Ashby
House
Jeff Barry
House
Cecil Bell Jr.
House
Keith Bell
House
Salman Bhojani
House
Rhetta Andrews Bowers
House
Brad Buckley
House
John H. Bucy lll
House
Benjamin Bumgarner
House
Angie Chen Button
House
Briscoe Cain
House
Elizabeth "Liz" Campos
House
Giovanni Capriglione
House
Philip Cortez
House
Charles Cunningham
House
Pat Curry
House
Drew Darby
House
Aicha Davis
House
Mano DeAyala
House
Jay Dean
House
Mark Dorazio
House
Harold V. Dutton Jr.
House
Paul Dyson
House
Caroline Fairly
House
James Frank
House
Cassandra Garcia Hernandez
House
Josey Garcia
House
Linda Garcia
House
Gary Gates
House
Stan Gerdes
House
Charlie Geren
House
Barbara Gervin-Hawkins
House
Vikki Goodwin
House
Ryan Guillen
House
Erin Gámez
House
Sam Harless
House
Cody Harris
House
Caroline Harris Davila
House
Cole Hefner
House
Hillary Hickland
House
Donna Howard
House
Lacey Hull
House
Carrie Isaac
House
Ann Johnson
House
Helen Kerwin
House
Stan Kitzman
House
Suleman Lalani
House
Stan Lambert
House
Brooks Landgraf
House
Jeff Leach
House
Terri Leo Wilson
House
Janie Lopez
House
Ray Lopez
House
AJ Louderback
House
J. M. Lozano
House
John Lujan
House
Christian Manuel
House
Armando "Mando" Martinez
House
Don McLaughlin
House
John McQueeney
House
Will Metcalf
House
Terry Meza
House
Borris L. Miles
Democratic • Senate
Eddie Morales
House
Matt Morgan
House
Sergio Muñoz Jr.
House
Candy Noble
House
Tom Oliverson
House
Claudia Ordaz
House
Angelia Orr
House
Jared Patterson
House
Dennis Paul
House
Mary Ann Perez
House
Vincent Perez
House
Dade Phelan
House
Katrina Pierson
House
Mihaela Plesa
House
Richard Peña Raymond
House
Ron Reynolds
House
Alan Schoolcraft
House
Matt Shaheen
House
Joanne Shofner
House
Shelby Slawson
House
John T. Smithee
House
David Spiller
House
Valoree Swanson
House
Tony Tinderholt
House
Steve Toth
House
Ellen Troxclair
House
VanDeaver
Affiliation unavailable
Cody Vasut
House
Denise Villalobos
House
Hubert Vo
House
Charlene Ward Johnson
House
Trey Wharton
House
Terry M. Wilson
House
Erin Zwiener
House

Roll Call Votes

All Roll Calls

Yes: 568 • No: 36

Senate vote • 5/29/2025

Record vote

Yes: 31 • No: 0

House vote • 5/21/2025

Record vote

Yes: 143 • No: 0

House vote • 5/20/2025

Record vote

Yes: 142 • No: 0

House vote • 5/20/2025

Record vote

Yes: 145 • No: 0

House vote • 5/20/2025

Record vote

Yes: 96 • No: 35

Senate vote • 2/13/2025

Record vote

Yes: 0 • No: 0

Senate vote • 2/13/2025

Record vote

Yes: 0 • No: 0

House vote • Unknown

Committee vote: Ways & Means

Yes: 11 • No: 1

Actions Timeline

See remarks for effective date
6/16/2025House
Signed by the Governor
6/16/2025House
Sent to the Governor
6/1/2025House
Signed in the House
6/1/2025House
Signed in the Senate
5/31/2025Senate
Reported enrolled
5/30/2025Senate
Senate concurs in House amendment(s)-reported
5/29/2025House
Record vote
5/29/2025Senate
Senate concurs in House amendment(s)
5/29/2025Senate
Read
5/29/2025Senate
House amendment(s) laid before the Senate
5/29/2025Senate
House passage as amended reported
5/21/2025Senate
Statement(s) of vote recorded in Journal
5/21/2025House
Record vote (RV#3116)
5/21/2025House
Passed
5/21/2025House
Read 3rd time
5/21/2025House
Additional sponsor(s) authorized
5/20/2025House
Rules suspended
5/20/2025House
Record vote (RV#3056)
5/20/2025House
Passed to 3rd reading as amended
5/20/2025House
Statement(s) of vote recorded in Journal
5/20/2025House
Record vote (RV#3055)
5/20/2025House
Amendment tabled (2-Olcott and Hopper)
5/20/2025House
Record vote (RV#3054)
5/20/2025House
Amended (1-Meyer)
5/20/2025House

Bill Text

Engrossed
HTML PDF
Enrolled
HTML PDF
House Committee Report
HTML PDF
Introduced
HTML PDF
Senate Committee Report
HTML PDF

Related Bills

Back to State Legislation

Relating to an increase in the amount of the exemption of residence homesteads from ad valorem taxation by a school district and the protection of school districts against certain losses in local revenue.

How does this bill affect your finances?

Bill Overview

Analyzed Economic Effects

Medium Impact

Bigger school tax break for homeowners

Extra state aid protects school budgets

State aid protects school debt payments

School election delays carry boundary risks

Low Impact

Provisional school tax bills for homeowners

Sponsors & Cosponsors

Sponsors

Cosponsors

Roll Call Votes

Actions Timeline

Bill Text

Related Bills