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Bill

HB 165

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

89th Legislature (2025) Introduced by Briscoe Cain and 8 co-sponsors

Bill proposes eliminating Texas property taxes and creates committee to plan the elimination, affecting $60+ billion in annual local government and school funding without specifying replacement revenue.

Referred to Ways & Means
#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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Bill Summary · HB 165

Legislative bill overview

HB 165 proposes to eliminate ad valorem taxes (property taxes based on assessed value) in Texas and establishes a joint interim committee to study and plan the elimination process. The bill would fundamentally restructure how Texas funds local services currently supported by property tax revenue.

Why is this important

Ad valorem taxes fund essential local services including public schools, county operations, municipal services, and special districts. Eliminating this revenue source without replacement mechanisms could create significant funding gaps for these services, affecting educational quality, emergency services, infrastructure maintenance, and local government operations. This represents one of the most consequential tax policy proposals in Texas legislative history.

Potential points of contention

  • Revenue replacement mechanism: The bill does not specify how local governments would replace billions in annual property tax revenue, raising questions about service delivery sustainability
  • School funding impact: Texas schools depend heavily on property tax revenue; elimination could require substantial state budget increases or result in reduced educational funding
  • Unfunded mandate concerns: Shifting funding responsibility to the state without clear revenue sources effectively creates an unfunded mandate for state government
  • Implementation timeline and transition: No clear process for transitioning away from property taxes is outlined, creating uncertainty for taxpayers, local governments, and service providers
  • Business vs. individual property tax burden: Elimination affects commercial property owners and residents differently, with unclear equity implications

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

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