Texas Senate bill by Sen. Bettencourt increases homestead exemption for school district taxes

Passed bill authored by State Sen. Paul Bettencourt aims to increase the homestead exemption for school district taxes and provide state aid to districts experiencing revenue losses due to these changes, according to the Texas Legislature website.

In the Senate, 11 Democrats and 20 Republicans voted in favor of the bill, with no opposition.

Meanwhile, in the House, 59 Democrats and 84 Republicans voted in favor, also with no opposing votes.

Paul Bettencourt introduced the bill in the Texas Senate on Thursday, Feb. 6, during the 89th regular legislative session.

Bettencourt graduated from Texas A&M University with a BS.

Bettencourt, a Republican, was elected to the Texas State Senate in 2015 to represent the state’s 7th Senate district, replacing previous state senator Dan Patrick.

According to the Texas Legislature, the bill’s official text was summarized as follows: ‘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’.

The following is our breakdown, based on the actual bill text, and may include interpretation to clarify its provisions.

In essence, this bill increases the homestead exemption for school district ad valorem taxes to $140,000 and specifies that, for certain entities, only $5,000 of this exemption applies. It provides additional state aid to school districts for the 2023-24 and 2024-25 school years if their revenue drops due to homestead exemption increases or tax limitations. From the 2025-26 school year, it continues support if revenue falls short due to further legislative changes. The bill outlines the calculation methodology for state aid and tax rates for various scenarios, including adjustments based on constitutional amendments. Additionally, it sets transitional provisions for district elections and bond payments related to increased homestead exemptions and allows corrections to tax rolls and issuance of provisional tax bills. The bill stipulates it will take effect either immediately upon receiving the required vote or by Sept. 1, 2025, with parts contingent on voter approval of a related constitutional amendment.

The bill was co-authored by Sen. Carol Alvarado (Democrat – District 6), Sen. Peter P. Flores (Republican – District 24), and Sen. Bryan Hughes (Republican – District 1), along with 26 other authors.

The bill received its final legislative approval on Thursday, May 29, and was signed into law by Gov. Greg Abbott on Monday, June 16.

Bills in Texas go through a multi-step legislative process, including committee review, debates, and votes in both chambers before reaching a final decision. Each session, there are typically thousands of bills introduced, but only a portion successfully navigate the process to become law.

You can read more about the bills and other measures here.