The House Committee on Ways & Means met on March 13, 2023 to take up the following bills in order: HB 1058 (Goldman), HB 1228 (Metcalf), HB 1689 (Murr), HB 1285 (Shine), and HB 2/HJR 1 (Meyer). All new bills were left pending, the committee also voted out previously heard bills are the end of the hearing. A video archive can be found here: Part 1 & Part 2.


This report is intended to give you an overview and highlight the various topics taken up. It is not a verbatim transcript of the discussions but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.


Vote Outs at End of Hearing

HB 105 (Noble) Relating to excluding the furnishing of an academic transcript from the definition of “information service” for purposes of sales and use taxes.

  • Voted out to full House (9-0)

HB 260 (Murr) Relating to the calculation of net to land in the appraisal of open-space land for ad valorem tax purposes.

  • Voted out to Local & Consent (9-0)

HB 300 (Howard) Relating to an exemption from sales and use taxes for certain family care items.

Voted out to full House (9-0)

HB 456 (Craddick) Relating to an exemption from ad valorem taxation of certain royalty interests owned by a charitable organization.

  • Voted out to full House (9-0)

HB 591 (Capriglione) Relating to an exemption from the severance tax for gas produced from certain wells that is consumed on site and would otherwise have been lawfully vented or flared.

  • Voted out to full House (9-0)

HB 596 (Shaheen) Relating to a local option exemption from ad valorem taxation by a county of a portion of the value of the residence homestead of a physician who provides health care services for which the physician agrees not to seek payment from any source, including the Medicaid program or otherwise from this state or the federal government, to county residents who are indigent or who are Medicaid recipients.

  • Voted out to full House (9-0)

HJR 45 (Shaheen) Proposing a constitutional amendment authorizing a local option exemption from ad valorem taxation by a county of a portion of the value of the residence homestead of a physician who provides health care services for which the physician agrees not to seek payment from any source, including the Medicaid program or otherwise from this state or the federal government, to county residents who are indigent or who are Medicaid recipients.

  • Voted out to full House (9-0)


Bills on Notice

HB 1058 (Goldman) Relating to a franchise or insurance premium tax credit for certain housing developments.

  • Goldman – Passed out of House twice, died in Senate
  • Change to Federal Low-Income Housing Tax Credit Program by creating a state match


HB 1058 left pending


HB 1228 (Metcalf) Relating to the right of a property owner or the owner’s agent to receive on request a copy of the information used to appraise the owner’s property for ad valorem tax purposes.

  • Metcalf – Before formal hearings before ARB, ARB must mail notice that data & docs are available that the appraisal district intends to use at the hearing; HB 1228 allows property owner or agent to request to obtain data on how the district set value
  • Noble – Assume most would want it electronically, but bill looks to do mail as well; cost of printing and mailing?
    • Metcalf – Goal is to prevent skyrocketing appraisals, serves as a backstop


HB 1228 left pending


HB 1689 (Murr) Relating to the use of county hotel occupancy tax revenue for an electronic tax administration system and the reimbursement of tax collection expenses.

  • Murr – Expands on HB 1905 HOT bill, allows counties to use lesser of $75k or 1% of HOT revenue for creation and maintenance of electronic tax collection systems
  • Gervin-Hawkins – Hotels in city? In county? Additional tax?
    • Murr – HOT is revenue collected by cities and counties, doesn’t change what is collected, allows counties to use revenue already collected for the electronic collection system


Garret Coppedge, Associate General Counsel Texas Hotel & Lodging – For

  • Extends authority that cities have to counties


Ron Cunningham, Llano County Judge – For

  • Not an increase, just being to use funds that are already being collected


HB 1689 Left pending


HB 1285 (Shine) Relating to the duties of the taxpayer liaison officer of an appraisal district.

  • Shine – Intent is to create more friendly system within the appraisal district, Taxpayer Liaison Officer (TLO) will field and address complaints from taxpayers
  • Requires additional training for the officer, will require contact info to be prominently posted on district website
  • CS coming that will clarify some questions the Comptroller had


Ray Head, TAPTP – For

  • TLO provides an essential role at the district; likely aware of what CS will do and will likely be in favor
  • In support of any way to make appraisal process more friendly to taxpayers


Marya Crigler, Texas Association of Appraisal Districts – On

  • Provides needed clarity to the TLO, will help them perform duties of assisting taxpayers


HB 1285 left pending


HB 2 (Meyer) Relating to providing property tax relief through the public school finance system and property tax appraisal and administration.

  • Chair Meyer – Reduces ISD maximum compressed rate by .15 cents, along with HB 1 provides over $17b of tax relief; state share of education funding will reach over 50%
  • With HB 1, homeowners will save $542 in 2024 & $733 in 2025
  • 211 ISDs subject to recapture in 2025, reduces recapture payments $4.5b
  • Extends appraisal cap to all property owners, reduces it from 10% to 5%
  • Requires escrow accounts to help property owners mange property tax burden


Justin McDonald, Texas Association of Builders – For

  • In favor of 5% appraisal cap, will make annual tax burden smaller and more predictable; without this families will be priced out of homes
  • Will slow rate at which rental rates go up, will reduce costs for developers by capping costs during development period


Blanca Aldaco, Aldaco’s Mexican Cuisine – For

  • Property tax relief will allow business to provide bonuses, retain staff; will help businesses recover from difficult 3 years
  • Gervin-Hawkins – Your belief that the relief will strengthen what you’re doing?
    • Yes, will also be able to budget better
    • Will help colleagues who are renting, landlord will pass savings down to tenants


Ray Head, TAPTP – On

  • Strongly support rate compression and escrow provisions
  • Appraisal cap on all real property is troubling, caps are counter to a fair tax system and have numerous unintended consequences
  • Will raise tax rates for all and benefit most those with desirable property with rapidly increasing values
  • Should study
  • Raymond – I don’t think many want to wait another two years to do something, study is not a good idea; your only option?
    • Compression is a good place to start, works to control taxes
    • With caps, taxable value will be based on how long you’ve owned the property, takes out uniform & equal taxation
  • Hefner – Dropping appraisal caps would increase rates?
    • Once you decrease value of property, you have to increase rates
  • Hefner – Doesn’t affect value, just caps at 5% instead of 10%
    • Might be a good idea first year, but reduces value going forward
    • Tax rates will benefit property rapidly appreciating over those that aren’t
    • 5% has nothing to do with rate calculation, only with taxable value, rate will need to go up as values stay below market value
  • Gervin-Hawkins – Within a small city generating $100k in taxes
    • You have to increase rate to generate same dollar amount of revenue
  • Gervin-Hawkins – Asks after damage and challenges
    • Will see big differences in taxes paid by similarly situated individuals, no longer taxed on value, but on how long you’ve owned the property; those coming in 5 years from now will start on new tax base
  • Gervin-Hawkins – Protection for legacy homeowners?
    • Yes, but this isn’t the intent; Constitution says that tax should be even and uniform
  • Craddick – Why don’t we cut some spending? Need to cut spending and lower costs, wrong what is going on in the taxing districts
    • Agrees, intent of SB 2 in 2019 was to limit spending
  • Craddick – But it didn’t work
    • It has worked for me; tax compression has worked
  • Craddick – You are causing the problem because rates keep going up; not catching point that we need to bring property taxes down
  • Craddick – Understand that if you bring taxes down, you need to fill the hole; won’t be an income tax so need to find some other means, can’t raise sales tax
    • I don’t set tax rates or determine government spending, job has always been to lower tax liability
  • Craddick – Picking on process, not you
    • If the people who protested value showed up at tax rate hearings, would see a difference
  • Craddick – Trying to fix problem so people don’t have to go in every year to object; process is broken and need a massive fix
    • If you lower taxable value, you have to increase rates to get to same amount
  • Craddick – If it’s the same amount, but I’m suggesting lowering the amount
    • If you can get district to lower rates


Skeeter Miller, County Line Restaurants Owner – For

  • County Line restaurants are successful, generate a lot of economic activity for local govs; property taxes are increasing
  • Noble – Previous witness acted like property taxes were the only thing cities and counties rely on, but sales tax also supports local govs


Brad Wuest, Natural Bridge Caverns Owner – For

  • Rate that taxes and appraisals are increasing is unsustainable


Neal Patel, AAHOA, Blue Chip Hotels – For

  • AAHOA members represent significant amount of state and US economic activity; Blue Chip based in Round Rock, TX
  • TX’s high property taxes are a major consideration when siting hotels in TX versus another state
  • Tax rate caps in 2019 were particularly helpful, appraisal rate cap of 5% will help business


Tim Hardin, Texans for Fiscal Responsibility – On

  • Bill is addressing symptoms of problem instead of addressing problem of property axes in general
  • Strongly prefer compression and cap versus homestead exemption


Bill Peacock, Huffines Liberty Institute – Against

  • HB 2 fails to stop future growth of property tax bills, even with HB 2 in place property taxes will have gone up by $8b within 4 years; bills haven’t stopped runaway growth of local govs and ISDs
  • Path to M&O elimination is lower rates, cap will lead to higher rates as rates will have to go up to make up revenue
  • Shine – You want to freeze M&O rates? Have to consider school growth, statute require
    • Already 5 or 6 bills that move us towards eliminating M&O, state would take over funding
  • Shine – By what method?
    • Using more of the funds to buy down rate, funding would come from the state
  • Shine – Where would the buy down money come from?
    • On average state GR-R funding grows 5% every year, if you limited revenue to 3% you’d have a 2% delta to eliminate this rate, if we use surplus funds to help
  • Shine – May not have a surplus next round, need to have sustainability in process
    • If you take surplus from the current biennium and put $8b in the buy down, then can use the rest to pay down over time; then can use future surpluses
  • Shine – By what guarantee do we have future surplus
    • Basically have surpluses every year, have had surplus over the last 25 years
  • Shine – Basically advocating eliminating property tax
    • The M&O portion
  • Shine – How will we fund government functions?
    • Suggesting state spending grows slower than it has been
  • Shine – If we continue to grow as a state, will put a burden on government
    • May requirement decisions on where to allocate funds
  • Raymond – You don’t do anything about county or city taxes, correct?
    • Focused on ISD taxes as funding comes through the state
  • Raymond – Not proposing property tax cuts for cities?
    • No, but did propose bringing tax increase percentage down


Paul Pennington, Citizens for Appraisal Reform – On

  • CFAR commends compression in HB 2, provides relief to all residential, commercial, and business taxpayers; also like escrow provision
  • 5% cap on all real property raises concerns and might be problematic; Constitution requires taxation be equal and uniform; cap on real property shifts tax burden to others
  • Shine – So new property violates equal & uniform?
    • Under cap all commercial property would be capped at 5%, exception would be newly built property, retrofits, etc.
    • Constitution says all taxation should be equal & uniform, new buildings will have different burden for similarly situated properties
    • Will affect number of sales of residential properties
  • Shine – On Business Personal Property tax, you’re saying it shifts burden to owners of high value machinery and equipment?
    • People who own personal property would not enjoy 5% cap
  • Shine – Biggest concern is what it does to equal & uniform?
    • Yes
  • Chair Meyer – Once you build you will then have 5% cap on a go forward basis?
    • There will be a year where you set taxable base
  • Chair Meyer – Will then see the 5% on a go forward basis; Constitution already has a 10% appraisal cap, so caps are not unconstitutional
    • Cap for homestead and single family residences
  • Gervin-Hawkins – Differences in rates for suburban and urban?
    • No, when you have 2 properties in the same neighborhood, they should be taxed the same
  • Gervin-Hawkins – So you’re against the 5% cap?
    • State decided to treat single-family homestead properties differently, added other components to this group of taxpayers
  • Gervin-Hawkins – What about businesses?
    • Businesses have options to seek relief; supporting tax compression
  • Gervin-Hawkins – Homestead exemption protects homeowners and existing system for businesses is okay with compression in place?
    • Spoke with business taxpayers about a 5% cap, cap would be good so long as you don’t build retrofit, or sell
    • Have systems in place to help small and large businesses
  • Shine – In California where they did caps, you’re saying there is a competitive disadvantage for new property?
    • Yes
  • Shine – In California, how do they get around that? Have heard they don’t sell the property but do 99 year leases?
    • Not familiar with the leases, but have heard of LLC creation and buying out of interest in LLC, doesn’t show up as real estate sale
    • A lot of unique ways to transfer single family
  • Shine – We don’t have sales price disclosure, so how would change in ownership affect Texas?
    • CADs are tied into certain subscriptions, primary way is looking at deed transfers where names change
  • Shine – New buyer still can go through appraisal review process
    • Yes, reason the tax system is fair in Texas is that you can go to court or arbitration and claim the tax isn’t fair or equal; many provisions are taxpayer friendly
  • Shine – So we get back into the equal and uniform issue?
    • If properties are capped, value might get reduced, but won’t help you on the tax part because it’s already capped; slippery slope when you do the 5% across the board
    • Has been done in other states
  • Thierry – Wouldn’t the bill eliminate need for litigation based on certainty of rates?
    • Yes, if you cap all existing owners at 5% that’s true, but you need to think about the new person in town and how they are treated
  • Thierry – But they would receive the new benefit going forward as well
    • Highlights ag use rollback where properties are undervalued for many years then you need to come back out of it
    • Sales under 5% would be like this, has an affect on commercial and residential sales in California


Will Wiggins, Self – On

  • HB 2 will create a significant cap gap for similarly situated properties
  • Only over last two years have we realized impact of caps, has created $50k for the DFW MSA; proposal will create an enormous $250k taxable value gap
  • Some neighbors are paying significantly more for the same product
  • Pursuit should be for market value, complete & unform appraisal is the only way to keep system fair


Dick Lavine, Every Texan – Against

  • Speaking on equity aspects of this
  • Appreciate that Chair Meyer has requested a tax equity note, important to request it on these bills, but does not give us any info on HJR 1
  • Thierry asks Lavine to keep comments to HB 2, HJR 1 will be brought up later
  • Lavine – On affect of lowering cap to 5%, with 10% you catch up to market value much faster, 5% cap catches up much later
  • In late 80s and early 90s there was a real estate crash in TX, properties wou8ld’ve taken much longer for taxable value to catch up to market value under 5% cap
  • Commercial market is much more likely to be volatile
  • When markets go down there is a rachet effect, with a tighter cap they will stay down for longer
  • Turner – Committee has provided an equity note for HB 2, just says there is no significant impact; do you want to speak to that?
    • Correct in that it doesn’t directly affect state tax or fee, but Comptroller’s Tax Exemption & Incidence study shows more data and can model a 5% cap
    • LBB have the model and have used it in the past, like with HJR 3 in 2019; fiscal note had details
    • Would be appropriate ask LBB or Comptroller for the  info on HB 2 even though it is not strictly required
  • Turner – You have material based on 10% cap?
    • That is the data I have, 5% may different, but won’t know until an equity note is done
  • Turner – On 10% cap, slightly more than half of benefit goes to households with income of $166k or higher, whereas homestead exemption is more evenly distributed & rate compression in between


Glenn Hammer, Texas Association of Business – On

  • Businesses and homeowners are benefiting from reforms in HB 3 from 2019, support aggressive tax measures from SB 2
  • Appreciate inclusion of compressions for all property owners
  • Cap would create unequal burden for uncapped property with rapidly growing rates
  • Compression is the way to go, everyone wins
  • Shine – Compression works
    • Love it, want as much compression as possible
  • Shine – Is it your opinion that we need to put more effort into compression and give it time to have even more effect? What about Rep. Craddick’s comments re: local gov spending
    • For purposes of tax policy, support is on more compression
    • TX formula is the best formula the country has seen in terms of job creation, makes sense to continue down compression path
    • Support Ways & Means interim report


James Popp, Popp Hutcheson LLP – On

  • Current winners are homestead exemptions, appraisal caps, farmers & ranchers; businesses have very limited benefits with pollution control, freeport
  • Tax system in TX is good due to equal & uniform provision, single valuation standard, annual evaluation
  • Appraisal caps have a benefit for homeowners, but shifts burden to personal property owners
  • Shine – Can you give us an example of how this shifts from commercial to homeowners, if it is 5% for everybody why wouldn’t everyone benefit?
    • Taxing units in TX brought in $75b in property tax revenue, based upon $3.79t in taxable value, including $270b in reduction from the 10%
    • If you apply the 11% reduction in total value to real property, would reduce overall taxable value from $3.79t to $3.6t, $179b reduction
    • By capping commercial property, amount of taxable value goes down, if you still raise $75b in taxes it shifts that $179b to homeowners and $338m from real property to personal property
    • Hypothetical because not certain 11% on real reduction will be the same as on homeowners
    • Can share example with anyone on request
  • Raymond – $75b total?
    • Roughly
  • Raymond – How much was schools?
    • $36b-$38b of that, so buy down will help


Joseph Castillanos, Self – Against

  • Testifying against appraisal cap due to negative impact on property taxpayers; distributes property tax burden unequally, will be passed onto tenants and residential homeowners
  • Needs to be a solution to benefit all residents equally & uniformly


James Lebaugh, Texas Chemical Council, Texas Association of Manufacturers, TxOGA – On

  • 1997 Bush plan got us to this point, decided to buy down school tax for the first time in 1997; failed to pass but led to 2006 Texas Tax Reform Commission and the compression mechanism
  • Left toothless Truth in Taxation calculation and taxes went back up, took another 13 years to get teeth in that calculation at 3.5% and 2.5%
  • Have legal machinery now and rates continue to drop; with rate compression everyone benefits and in proportion to size of their problem
  • Have some deviations like ag use, tax abatements for capital investment, but can’t determine what we’re trying to encourage with an appraisal cap
  • Does shift the burden, not just from business to residential, but also within the business community for those that buy & sell property rather than hold
  • Appraisal caps do not affect tax levies, set each year by the districts; don’t make levies go up or down, just change who pays
  • When FL adopted a cap, saw the same problem
  • Raymond – Appraisals do affect taxes going up or down
    • Testimony was they don’t affect tax levies


Christy Rome, Texas School Coalition – On

  • Appreciates commitment to property tax relief, reduces burden of recapture on taxpayers & HB 2 would cause meaningful reduction in recapture
  • Want to make sure rate balance is struck between controlling taxes and ensuring schools have resources they need
  • State dollars spent to hold down taxes will not reach classrooms, schools are facing increased costs
  • Appraisal caps will have significant impact on I&S tax rates, also diminishes bond capacity
  • Chair Meyer – In fact increasing school funding
    • Correct, you are increasing the state share of funding to schools, not increasing overall funding for schools


Lorri Michel, Property Tax Attorney – On

  • Compression component of the bill is very favorable
  • Understand where caps are coming from, difficult to run businesses with volatility in appraisal increases, but voicing concern about equality in taxation among similar business owners
  • Equal & uniform in Texas preserves level playing field among taxpayers; cap can increase volatility over time by way of competition
  • Not sure what the answer is, concerned about competition & understand need to address this
  • Gervin-Hawkins – Want to be clear on where the disparities are
    • Disparities as they exist now can be readily corrected; if you have multiple similar apartment buildings in the same area, you want to offer competitive lease rates, but one building has a tax liability of $200k/year and across the street they have $100k/year, the one across the street gets to offer a more competitive lease rate
  • Gervin-Hawkins – Difference is because of the year they were built?
    • Right now, could be a number of reasons for unequal appraisals; typically can happen in cases where one building sells
    • Under HB 2, afraid that over time the new purchaser’s starting point will be higher than the owner who didn’t sell
  • Thierry – Disparities are happening now despite this bill
    • Correct
  • Thierry – So this bill does not cause that
    • No, it is ongoing across the state
  • Thierry – So this bill could actually level that with the 5% cap on appraisals
    • Could see more consistency and more ability to predict and plan
  • Chair Meyer – Doesn’t change anything that’s going on today, new owner has 5% cap after year one
    • It does; my concern is the disparity between owners and new purchasers
  • Chair Meyer – Already goes on today
    • Yes, and there are mechanisms to address
  • Chair Meyer – And not changing those
    • Over time there could be an inequality in taxation among similar properties based on the date the properties were constructed
  • Chair Meyer – Which is currently going on today and those mechanisms exist today
    • They will not to the extent it is financially benefit for the owner to seek a level playing field
  • Chair Meyer – Because we’re limiting the growth, won’t have to make those decisions
    • In some instances, the disparity will be so great they will need to seek equalization, will over time get more unequal and greater disparity will be created
  • Hefner – Aren’t you assuming that based on what you’ve seen in previous years, now have record inflation and interest rates are rising; if they leveled out wouldn’t it reduce the problem?
    • I think so, concern for inequality does come about in a continuing rising market
  • Chair Meyer – But there’s inequality today, so not creating inequality, creating stability
    • Do agree it can crate stability in projecting liability


Dale Craymer, Texas Taxpayers and Research Association – On

  • Appreciate and support tax rate compression
  • Not taking position on bill because of inclusion of appraisal caps, create substantial inequities based on when title to property changes
  • Appraisal caps would reverse accomplishes success of the 2019 legislation which used value growth to push down tax rates; caps limit growth so reduces ability to push down rates
  • Reducing rates is the best solution to bring tax relief
  • With cap tax rates will be higher across an increasing tax base, some will see tax reductions
  • TTARA supports property taxation based on single market value standard; for this reason asking that cap be removed from the bill
  • Turner – Can you tell us history of current appraisal cap?
    • As introduced imposed 5% appraisal cap on homestead property, substantial opposition from businesses on caps for one time of property, those holding onto property are disadvantaged as 5% won’t keep up with market value
    • 10% was chosen as it was higher than typical homestead increase, 10% acts a circuit breaker for very high tax bills
  • Turner – So 10% was tolerable at the time
    • Yes, business withdrew opposition
    • Last year was tolerable but with some pain, in order to subsidize value not on the rolls districts adopted higher rates; many saw higher taxes due to appraisal cap in place right now
  • Turner – When you have a cap for one type of property it creates inequality, but how does an across the board cap do this?
    • Because all types of property don’t increase in value the same way, homes and commercial property tends to appreciate, industrial depreciates as it is used; industrial taxpayers with a depreciating asset will end up paying higher rates than they would’ve otherwise
    • Cap does not apply to business personal property which also depreciates
    • Even though cap applies to all real estate, will still create substantial shift from one type of property to another
    • With O&G and a 5% cap, when oil went from $50 to $90, would’ve been valued at $52.50; creates distortions
  • Turner – You said this will make rates go up?
    • Fiscal note states that because you’re limiting value going on tax rolls it will lead to higher Effective and Voter Approval rate than otherwise
  • Shine – Objective is to recue tax liability; with a cap how does it affect property value study used for school finance?
    • Comptroller looks at taxable value, net effect will be to make value study somewhat irrelevant
    • If Comptroller says property was undervalued by 20%, with a 5% cap cannot catch up to that at all
  • Shine – And that is what drives the funding formula for school finance; would it be in conflict then?
    • Potentially, number of technical issues associated with an appraisal cap, e.g. ag value rollback, possible 313 property caps
  • Thierry – You did say relief provided through bill would provide relief to homeowners and small businesses
    • If appraisals are rising rapidly then yes, but state is not subsidizing and will come from other taxpayers
  • Thierry – But those two groups are seeking the relief
    • Correct, looked at data and how a 5% cap would’ve affected past data, would not have affected homeowners very much; TTARA shows not much difference for homeowners on a 10% homestead cap versus 5% statewide
  • Thierry – Hearing that 5% would make a substantial difference
    • Would make a difference on appraisals, but not rates
  • Chair Meyer – Any difference for homeowners is great and not taking any property value of the roll, only slowing growth going forward
    • Depends on what your point of comparison is, concerned about impact on tax rates next year with 5% cap versus 10% homestead cap
  • Chair Meyer – But they’re still constrained by SB 2 and HB 3
    • SB 2 and HB 3 constrain revenue, not tax rates
  • Chair Meyer – Respectfully disagree, still have the current sum and not taking value off the roll
    • Would argue you are taking property off the roll if one year 100% is on tax rolls and next year 80% is on the tax roll


Marcus Phipps, Texas Realtors – Against

  • Agrees with Rep. Craddick that problem is that local govs need to stop spending more money
  • Many provisions in HB 2 we support, including the compression
  • Extended appraisal caps are the wrong tax policy for TX, should uphold equal & uniform standard from the Constitution
  • Appraisal caps benefit high value more than lower value, commercial more than residential, etc.; people don’t want values limited, concerned about increasing tax rates
  • Munoz – So what’re you proposing then?
    • Fully support $.15 compression, any more that state can do on that is excellent
  • Munoz – So you’re against the cap completely?
    • Against the cap
  • Munoz – So option is to do more on compression?
    • Correct
  • Munoz – How would that tie into limiting government spending?
    • Will help how we can
  • Turner – If this legislation is implemented with the 5% cap, does this raise or lower the cost for new home buyers?
    • 5% cap helps everyone up front, but over time someone else will start carrying tax burden for you
  • Chair Meyer – This is currently ongoing if I move in and buy a home for higher value
    • With the exception that the 10% value can catch up significantly quicker
  • Chair Meyer – But whole point is to provide relief and respond to constituents saying appraisals are out of control
  • Thierry – Doesn’t this help new homeowners who wouldn’t want appraisals to go up with new and larger developments being built nearby
    • This is more apples and oranges
  • Thierry – Sometimes properties are appraised higher because new property is more valuable, substantially different than older property
  • Gervin-Hawkins – Do you have any recommendations for neighborhoods that are highly gentrified, when values go up to match new high value investors
    • Senior exemption
  • Gervin-Hawkins – What about when she wants to pass property onto children, trying to protect legacy folks versus new investors
    • 10% cap we have now maintains continuous growth while ensuring their bills don’t jump overnight
    • Maintaining a balance in these gentrified neighborhoods
  • Gervin-Hawkins – Cap hurts this?
    • Overall cap shifts burden from one point to another and overtime increases rate


Foy Mitchell, Self – On

  • Opposed to caps
  • If you look at total tax burden a citizen in Texas pays we’re 44th, property tax system is basically fair
  • Appraisal caps do not work, redistribute the burden
  • Cap bill provides that if 50% of property ownership change it will trigger reappraisal, but large businesses structure purchases to not trigger reappraisals; homeowners sell roughly every 7 years and valuation rises unequally
  • Caps are incredibly discriminatory, under 10% high income properties get huge benefits, redistributes property taxes among those least able to pay
  • If you get control of spending you’ll watch taxes fall, spending runs things up
  • Noble – Isn’t it true that businesses also generate a lot on income through sales tax and use fees as opposed to homeowners
    • Yes, business do pay a large burden, but comparing apples and oranges
  • Noble – All of this goes into supporting local infrastructure
    • If we look at how to partition property taxes, should look at other things
  • Noble – Think we’re looking at how cities and counties are funded
    • Caps will redistribute burden to the poor


Tony Comparin, Business Owner – On

  • Support property tax relief for businesses and homeowners
  • Capping appraisal value will not benefit my small business, will give benefit to out of state purchasers more
  • Would be nice to have two years to see if tax rate reductions are working


Burr, Self – On

  • Have concerns about fairness of the market in TX under HB 2, becomes an ownership appraisal and creates an unequal appraisal
  • Commercial appraisal cpas would hinder property developer’s ability to lease new property due to preference for leasing existing property because of the appraisal difference
  • Bill would affect sales price due to risk of higher taxes hitting balance sheet


David Mintz, Texas Apartment Association – On

  • Appreciate support of rate compression to provide relief to all property owners
  • Taxable value for multi-family units went up 22% last year, faster than single-family home valuations; overall burden for industry has doubled since 2016
  • Cap would help with predictability, but concerned about unintended consequences like possible competitive advantage


Robin Armstrong, Galveston County Commissioner – For

  • Reads statement from Cheryl Johnson, Tax Assessor Collector, statement notes that cap will benefit all taxpayers and could drive investment
  • As a county commissioner have concerns about revenue, have been able to reduce rates year to year, but have seen tax bills go higher due to appraisal creep
  • If appraisals are capped at 5%, property owners will see relief and local govs will still have ability to raise rate if needed; can raise and still be under the No New Revenue rate
  • Galveston County has a unanimous support resolution


Walter Wolf, Self – On

  • HB 2 has provisions that are helpful to taxpayers, particularly the compression; concerned about the appraisal cap
  • Looked at historical data and calculated deficit based on cap proposal, homeowners received minimal benefit and it disproportionately went to high end of the market
  • For large commercial properties seeing benefits from cap, most of the value they bring goes outside of TX


Mark Hutcheson, Popp & Hutcheson – On

  • Tax levy affects the burden on taxpayers, anything affecting valuation or rate is shifting funds around and doesn’t address the levy
  • Highlights how residential properties went up over COVID while hotels saw decreases in valuation; will necessarily have a shifting of tax burden because of the tax base split, cap in place significantly slows valuation back to market value, will effectively institutionalize structural inequality


Joseph Comparin, Self – On

  • Through the caps the tax rates over time will be higher than they otherwise would’ve been


Kevin Kavanaugh, LBB – Resource Witness

  • Turner – On the tax & fee equity note, says there is no statistically significant impact on a state tax or fee; not talking about a state tax, but school finance determines more than half of property tax bill
  • Turner – Could the LBB produce an equity note based on local taxes and fees?
    • On non-state revenue bill can prepare at the request of the committee chair, but have not received that yet


Chair Meyer closes

  • HB 2 along with HB 1 will provide $17.3b of tax relief, will increase state share of education, will reduce recapture by $4.5b, and lower appraisals
  • Hear constantly about appraisals, constituents appreciate compression and rate reduction, but also appreciate the cap; want predictability & witnesses agreed this will provide predictability


HB 2 left pending


The committee recessed for the floor


HJR 1 (Meyer) Proposing a constitutional amendment to authorize the legislature to limit the maximum appraised value of real property for ad valorem tax purposes and to except certain appropriations to pay for ad valorem tax relief from the constitutional limitation on the rate of growth of appropriations.

  • Chair Meyer – Constitutional amendment for HB 2, amends TX constitution to expand cap to all property owners and reduces it from 10% to 5%, ensures that property tax measures will not run up against

David Mintz, Texas Apartment Association – On

  • Appreciate legislature’s intent to provide greater predictability, but concerned about unintended consequences of cap & cannot support appraisal cap
  • Raymond – Neutral, but support parts of it and you would not want it to fail?
    • Neutral on the HJR


HJR 1 left pending


Vote Outs at End of Hearing

  • HB 105 (Noble) Relating to excluding the furnishing of an academic transcript from the definition of “information service” for purposes of sales and use taxes.
    • Voted out to full House (9-0)
  • HB 260 (Murr) Relating to the calculation of net to land in the appraisal of open-space land for ad valorem tax purposes.
    • Voted out to Local & Consent (9-0)
  • HB 300 (Howard) Relating to an exemption from sales and use taxes for certain family care items.
    • Voted out to full House (9-0)
  • HB 456 (Craddick) Relating to an exemption from ad valorem taxation of certain royalty interests owned by a charitable organization.
    • Voted out to full House (9-0)
  • HB 591 (Capriglione) Relating to an exemption from the severance tax for gas produced from certain wells that is consumed on site and would otherwise have been lawfully vented or flared.
    • Voted out to full House (9-0)
  • HB 596 (Shaheen) Relating to a local option exemption from ad valorem taxation by a county of a portion of the value of the residence homestead of a physician who provides health care services for which the physician agrees not to seek payment from any source, including the Medicaid program or otherwise from this state or the federal government, to county residents who are indigent or who are Medicaid recipients.
    • Voted out to full House (9-0)
  • HJR 45 (Shaheen) Proposing a constitutional amendment authorizing a local option exemption from ad valorem taxation by a county of a portion of the value of the residence homestead of a physician who provides health care services for which the physician agrees not to seek payment from any source, including the Medicaid program or otherwise from this state or the federal government, to county residents who are indigent or who are Medicaid recipients.
    • Voted out to full House (9-0)