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HJR 196

Proposing a constitutional amendment requiring the periodic review of state and local tax preferences and the expiration of certain tax preferences if not reauthorized by law.

89th Legislature (2025) Introduced by Harold Dutton

Texas would require a constitutional amendment mandating periodic reviews of state-local tax breaks; if not reauthorized, exemptions and credits sunset.

Referred to Ways & Means
#resolutions--constitutionalamendments(i0661) #taxation--general(i0815) #taxation--property-appraisals&appraisaldistricts(i0792) #taxation--property-assessment&collection(i0798) #taxation--property-exemptions(i0793) #taxation--property-miscellaneous(i0797)
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Bill Summary · HJR 196

Summary of HJR 196 (Texas)

A constitutional amendment proposal that would require periodic review of state and local tax preferences and trigger sunset/expiration of certain tax preferences if they are not reauthorized by law.

Overview and Intent

  • What it does: HJR 196 would propose a constitutional amendment requiring the periodic review of state and local tax preferences and would cause certain tax preferences to expire if they are not reauthorized by law.
  • Purpose: To increase accountability and transparency in the tax code by ensuring that tax exemptions, deductions, credits, and other preferences are periodically reviewed and not automatically continued without legislative action.

Key Provisions (highlights)

  • Periodic review requirement: The amendment would mandate regular (periodic) evaluation of tax preferences at the state and local levels.
  • Sunset/expiration mechanism: If a tax preference is not reauthorized by law, it would expire. In other words, unless the Legislature acts to renew a given preference, that preference would terminate.
  • Constitutional reform mechanism: Because this is a proposed amendment to the Texas Constitution, any changes would require voter approval after legislative passage.

Note: The full text would specify the exact review cadence, criteria for review, and how expiring preferences interact with existing tax policy and local tax authority.

Affected Parties and Impacts

  • State and local tax preferences: The primary focus is on exemptions, deductions, credits, exemptions, and other preferential treatments embedded in tax law.
  • Taxpayers and businesses: Potential changes in the availability of certain tax breaks, with possible revenue impact and adjustments to planning.
  • Tax policy administrators: Administrative processes would need to align with periodic review and sunset rules.
  • Local governments: If they rely on local tax exemptions or credits, there could be implications depending on how local preferences are treated under the periodic review.

Procedural History and Timeline

  • Introduced: March 13, 2025
  • Legislative actions:
    • Filed: March 13, 2025
    • Read first time: April 3, 2025
    • Referred to: Ways & Means (April 3, 2025)
  • Status: Referred to Ways & Means (as of the latest actions provided)

Note: As a constitutional amendment proposal, passage would require approval by two-thirds of both the House and Senate and then voter ratification in a statewide election.

Next Steps and Considerations

  • If advanced, a detailed bill text would specify the review cadence, sunset timing, which types of tax preferences are subject to expiration, and any transition rules.
  • Stakeholders may wish to assess fiscal impact, potential revenue effects, and administrative feasibility for both state and local tax systems.
  • Monitor for amendments clarifying scope (e.g., which preferences are covered) and implementation timelines.

Compiled from official sources — confirm details with the bill’s official record.

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