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HJR 38

Proposing a constitutional amendment to authorize the legislature to provide for an exemption from ad valorem taxation of the amount of the market value of residential real property that arises from the installation in the property of certain energy efficiency-related improvements.

89th Legislature, 2nd Called Session (2025) Introduced by Barbara Gervin-Hawkins

Texas amendment would exempt property value increases from energy efficiency improvements from ad valorem taxation to encourage residential upgrades.

Filed
#energy--conservation(i0317) #energy--general(i0315) #propertyinterests--realproperty(i0595) #resolutions--constitutionalamendments(i0661) #taxation--property-appraisals&appraisaldistricts(i0792) #taxation--property-exemptions(i0793)
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Bill Summary · HJR 38

Legislative bill overview

HJR 38 proposes a constitutional amendment allowing Texas to exempt the increased property value from energy efficiency improvements from property taxation. This would mean homeowners who install qualifying energy-efficient upgrades (such as solar panels, insulation, or HVAC systems) wouldn't pay additional property taxes on the value those improvements add to their homes.

Why is this important

Property tax increases from home improvements can deter investment in energy efficiency, even when those improvements reduce long-term energy costs. This amendment could incentivize residential energy upgrades by removing a financial penalty, potentially supporting both environmental goals and homeowner finances while requiring voter approval to change the Texas Constitution.

Potential points of contention

  • Revenue impact: Property tax assessors could lose tax revenue from increased home values, shifting burden to other taxpayers or reducing local school/government funding
  • Definition challenges: Determining which "energy efficiency-related improvements" qualify could be complex and subject to disputes between homeowners and tax assessors
  • Equity concerns: The benefit primarily accrues to homeowners wealthy enough to afford efficiency upgrades, potentially creating tax advantages for higher-income residents
  • Implementation costs: Administrative expenses for verifying qualifying improvements and processing exemptions could offset some savings

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

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