The 181 members of the Texas Legislature meet for 140 days every two years to conduct the state’s business. This year’s session brought several critical advancements for the real estate industry and private property rights.
Your state association analyzed every piece of legislation that was filed and tracked 2,784 of the 7,851 bills and resolutions because of their potential to directly or indirectly affect real estate.
As the strongest advocates for real estate in our state, Texas REALTORS fought hard — and your efforts paid off, earning several important victories for every taxpayer and property owner.
Property tax reform
Thanks to REALTORS’ efforts advocating to improve the state’s property tax system, lawmakers found a way to limit the growth of property taxes and provide taxpayers with more proactive, transparent information about the process that determines their property tax bills.
In the new law, most cities and counties will be subject to a 3.5 percent rollback rate and have automatic elections if they propose a tax rate that exceeds the rollback rate.
We’ll also have enhanced transparency for taxpayers. For instance, Central Appraisal Districts are each required to create an online database to show property owners how proposed tax rate changes would affect their own property tax bills. The database will include the date, time and location of public hearings when each of the taxing entities are setting their tax rates so taxpayers have a convenient way to provide feedback online.
SCHOOL FINANCE REFORM
After years of attempts, we finally have a comprehensive reform of the state’s public school finance and property tax system. The result will decrease the burden on local property taxpayers while increasing the state’s investment in educators and students.
Check out TheTexasPlan.com for details. Here are a few highlights:
• Lowers school property tax rates statewide
• Increases the state’s share of education funding from 38% to 45%
• Reduces recapture by 47% ($3.6 billion) in the next biennium
• Raises the basic allotment from $5,140 to $6,160 per student, benefiting all school districts.
Ending forced annexation statewide
A new law ends the practice of forced municipal annexation statewide, finally giving property owners a say in whether they are annexed. If a municipality seeks to annex an area into its limits, the municipality must now hold an election for the affected residents to decide whether they wish to be annexed.
MORE ACCESS TO HOME EQUITY
Beginning Jan. 1, 2020, property owners will be able to use agricultural land as collateral for a home equity loan.
In 2017, voters approved a REALTOR-supported constitutional amendment to modernize the home equity lending process for property owners. This new law further updates those provisions to allow more homeowners the ability to access the hard-earned equity in their homes while maintaining the strong consumer protections in the Texas Constitution.
TREC SUNSET REVIEW
In 2018, the Texas Real Estate Commission underwent what’s known as sunset review — a process for state agencies during which Texas Sunset Advisory Commission staff evaluate the agency and issue recommendations for positive change.
Your state association worked on your behalf with the Sunset Commission and staff on final recommendations for TREC that lawmakers supported.
This legislation implements the Sunset Commission’s recommendations for the Texas Real Estate Commission, such as extending TREC for six years, allowing the agency to maintain its self-directed-semi-independent status, and requiring additional reporting to the legislature, governor and Sunset Commission.
DISASTER RECOVERY AND PREVENTION
After the devastating effects of Hurricane Harvey and other recent natural disasters were experienced across the state, lawmakers passed several bills that will increase resources for property owners affected by disasters and created disaster recovery and prevention plans.
On the November ballot
Voters statewide will have 10 constitutional amendments on the Nov. 5 ballot — two are directly related to Texas real estate. One will create a fund to aid in financing flood mitigation projects, and another will provide a temporary property tax exemption for qualified property damaged by a disaster.