Bill > HB246

This bill establishes a joint interim committee to study the potential abolition of ad valorem taxes (property taxes) in Texas and explore alternative revenue sources. The committee will consist of five representatives from the House and five senators, appointed by the House Speaker and Lieutenant Governor by February 1, 2026. The committee's primary task is to conduct a comprehensive study on how to replace local tax revenue currently generated by property taxes with local sales and use taxes. Specifically, they will investigate the feasibility of political subdivisions imposing sales taxes, determine appropriate tax rates to generate equivalent revenue, examine the potential impact of broadening sales tax applications, and identify mechanisms to redistribute tax revenue to offset potential disparities. The committee is required to submit a written report with their findings and recommendations to the legislature by December 1, 2026. The bill is contingent upon voter approval of a constitutional amendment to abolish ad valorem taxes, with key provisions taking effect in 2026 and 2031. If the constitutional amendment is not approved, the bill will have no effect. The legislation would ultimately repeal the entire Title 1 of the Tax Code and prohibit the state and its political subdivisions from imposing property taxes after January 1, 2031.

Budget and Finance

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=892&Bill=HB246