89R11518 DRS-D

By: Bryant H.J.R. No. 200

A JOINT RESOLUTION

proposing a constitutional amendment to authorize the legislature to provide for an exemption from ad valorem taxation by a school district of a portion of the market value of certain leased residential real properties, to establish and prescribe the permissible uses of the property tax relief to rental households fund, and to include payments from the property tax relief to rental households fund in the exception of certain appropriations to pay for ad valorem tax relief from the constitutional limitation on the rate of growth of appropriations.

BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Article VIII, Texas Constitution, is amended by adding Sections 1-b-3 and 30 to read as follows:

Sec. 1-b-3. (a) In this section, "qualified residential real property" means real property that:

(1) is at least 15 years old on the date the owner of the property applies for the exemption authorized under this section;

(2) is a multifamily residential property that consists of or includes residential units leased to lessees and used by those lessees as a primary residence; and

(3) satisfies the eligibility requirements prescribed by the legislature by general law.

(b) The legislature by general law may exempt from ad valorem taxation by a school district:

(1) 50 percent of the market value of qualified residential real property a person owns, excluding the portion of the market value of the property described by Subdivision (2) of this subsection, if applicable; and

(2) any increase in the market value of qualified residential real property that is attributable to the rehabilitation of the property.

(c) The legislature by general law may prescribe additional eligibility requirements for the exemption.

(d) The legislature by general law may prescribe procedures for the implementation and administration of this section.

Sec. 30. (a) The property tax relief to rental households fund is established as a fund in the state treasury.

(b) The property tax relief to rental households fund may consist of money:

(1) transferred or appropriated to the fund by the legislature; or

(2) dedicated for deposit to the credit of the fund by the legislature by general law.

(c) Money in the property tax relief to rental households fund may be appropriated to the comptroller of public accounts only for the purpose of making direct payments to rental households to provide property tax relief in the manner prescribed by the legislature by general law.

(d) A general law enacted under this section may:

(1) define "rental household" for purposes of this section;

(2) prescribe eligibility requirements for the receipt of a payment from the property tax relief to rental households fund; and

(3) prescribe procedures for the administration of this section.

(e) On January 1, 2026:

(1) the amount of $3.8 billion is appropriated from the general revenue fund to the comptroller of public accounts for the purpose of immediate deposit to the credit of the property tax relief to rental households fund; and

(2) the amount of $3.8 billion is appropriated from the property tax relief to rental households fund to the comptroller of public accounts for the purpose of making direct payments to rental households during the state fiscal biennium ending August 31, 2027, in the manner prescribed by the general law enacted under this section.

(f) For purposes of Section 22 of this article, an appropriation made under Subsection (e) of this section is treated as if it were an appropriation of revenues dedicated by this constitution.

(g) This subsection and Subsections (e) and (f) of this section expire December 31, 2026.

SECTION 2. Section 22(a-1), Article VIII, Texas Constitution, is amended to read as follows:

(a-1) Appropriations from state tax revenues not dedicated by this constitution that are made for the purpose of paying for ad valorem tax relief as identified by the legislature by general law, including payments made from the property tax relief to rental households fund under Section 30 of this article, are not included as appropriations for purposes of determining whether the rate of growth of appropriations exceeds the limitation prescribed by Subsection (a) of this section.

SECTION 3. The following temporary provision is added to the Texas Constitution:

TEMPORARY PROVISION. (a) This temporary provision applies to the constitutional amendment proposed by the 89th Legislature, Regular Session, 2025, to authorize the legislature to provide for an exemption from ad valorem taxation by a school district of a portion of the market value of certain leased residential real properties, to establish and prescribe the permissible uses of the property tax relief to rental households fund, and to include payments from the property tax relief to rental households fund in the exception of certain appropriations to pay for ad valorem tax relief from the constitutional limitation on the rate of growth of appropriations.

(b) The amendments adding Sections 1-b-3 and 30 to Article VIII of this constitution take effect beginning with the tax year beginning January 1, 2026.

(c) The amendment to Section 22(a-1), Article VIII, of this constitution applies to appropriations made for the state fiscal biennium beginning September 1, 2025, and subsequent state fiscal bienniums.

(d) This temporary provision expires January 1, 2027.

SECTION 4. This proposed constitutional amendment shall be submitted to the voters at an election to be held November 4, 2025. The ballot shall be printed to permit voting for or against the proposition: "The constitutional amendment to authorize the legislature to provide for an exemption from ad valorem taxation by a school district of a portion of the market value of certain leased residential real properties, to establish and prescribe the permissible uses of the property tax relief to rental households fund, and to include payments from the property tax relief to rental households fund in the exception of certain appropriations to pay for ad valorem tax relief from the constitutional limitation on the rate of growth of appropriations."