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Bill

HB 265

Relating to the elimination of ad valorem taxes and the creation of a joint interim committee on the elimination of those taxes.

89th Legislature, 1st Called Session (2025) Introduced by Cody Vasut

Bill proposes eliminating Texas property taxes and establishes committee to study transition; lacks identified replacement revenue sources.

Filed
#education--primary&secondary--finance(i0250) #interimstudies(i0448) #lieutenantgovernor(s0096) #politicalsubdivisions(i0588) #speakerofthehouse(s0306) #taxation--city(i0775) #taxation--county(i0780) #taxation--general(i0815) #taxation--property-miscellaneous(i0797) #taxation--sales(i0800) #taxation--state(i0790)
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WeVote Research Nonpartisan
Bill Summary · HB 265

Legislative bill overview

HB 265 proposes to eliminate ad valorem taxes (property taxes) in Texas and establishes a joint interim committee to study and plan the elimination process. The bill would fundamentally restructure how local governments and school districts fund operations, currently heavily dependent on property tax revenue.

Why is this important

Ad valorem taxes generate approximately $70+ billion annually for Texas schools, counties, cities, and special districts. Eliminating this revenue source without identifying alternative funding mechanisms could severely impact public education, infrastructure maintenance, emergency services, and local government operations statewide.

Potential points of contention

  • Revenue replacement uncertainty — The bill does not specify how the $70+ billion in annual property tax revenue would be replaced, leaving unclear funding for schools and local services
  • Implementation timeline and transition — Abrupt elimination could create fiscal crises for local governments; a gradual phase-out could extend uncertainty for decades
  • Equity concerns — Property taxes fund local services differently across regions; elimination could widen disparities between wealthy and poor communities unless state funding equalizes significantly

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

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