Texas 2025 - 89th 2nd C.S.

Texas House Bill HB246

Voted on by House
 
Out of Senate Committee
 
Voted on by Senate
 
Governor Action
 
Bill Becomes Law
 

Caption

Relating to the abolition of ad valorem taxes and the creation of a joint interim committee on the abolition of those taxes.

Impact

If passed, HB 246 would repeal Title 1 of the Texas Tax Code, effectively eliminating ad valorem taxes across the state. While this move is seen as progressive by some lawmakers who advocate for reduced property taxation, the bill also necessitates careful consideration of how local services will be funded in the absence of such taxes. The committee's study will analyze how various political subdivisions can adapt by potentially granting them the authority to impose sales and use taxes, which could lead to a notable change in the overall taxation framework and financial practices of local governments.

Summary

House Bill 246 proposes the abolition of ad valorem taxes in the state of Texas, introducing a significant shift in the tax landscape by recommending the formation of a joint interim committee dedicated to exploring alternative revenue sources for local governments. This bill aims to replace lost revenue from ad valorem taxes with local sales and use taxes, thereby maintaining financial stability for local entities. The committee, comprised of ten members from both the House and Senate, is tasked with conducting a comprehensive study to provide recommendations and insights on this transition and its practical implications for Texas residents and political subdivisions.

Contention

The discussions surrounding HB 246 are likely to provoke a mix of support and opposition, largely because the abolition of ad valorem taxes raises concerns about potential fiscal impacts on education funding, public safety, and other critical local services. Supporters argue that reducing property taxes could alleviate financial pressures on homeowners and stimulate economic growth, while detractors warn that this could lead to disparities in local funding and inequities in service delivery. Therefore, the recommendations made by the interim committee, slated for submission by December 2026, will be crucial in determining the viability and fairness of the proposed tax system overhaul.

Texas Constitutional Statutes Affected

Tax Code

  • Chapter 1. General Provisions
    • Section: New Section

Companion Bills

No companion bills found.

Previously Filed As

TX HB698

Relating to the abolition of ad valorem taxes and the creation of a joint interim committee on the abolition of those taxes.

TX HB45

Relating to the abolition of ad valorem taxes and the creation of a joint interim committee on the abolition of those taxes.

TX HB260

Relating to the abolition of ad valorem taxes and the creation of a joint interim committee on the abolition of those taxes.

TX HB181

Relating to the abolition of ad valorem taxes and the creation of a joint interim committee on the abolition of those taxes.

TX HB3455

Relating to the abolition of ad valorem taxes and the creation of a joint interim committee on the abolition of those taxes.

TX HB16

Relating to the abolition of ad valorem taxes and the creation of a joint interim committee on the abolition of those taxes.

TX HB13

Relating to the abolition of ad valorem taxes and the creation of a joint interim committee on the abolition of those taxes.

TX HB265

Relating to the elimination of ad valorem taxes and the creation of a joint interim committee on the elimination of those taxes.

TX HB165

Relating to the elimination of ad valorem taxes and the creation of a joint interim committee on the elimination of those taxes.

TX HB1513

Relating to the elimination of ad valorem taxes and the creation of a joint interim committee on the elimination of those taxes.

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