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Texas Senate unveils property tax relief bills

Lawmakers proposed a $70,000 homestead exemption on school property taxes. Those over 65 or disabled would get $100,000 in exemptions.

AUSTIN, Texas — Lawmakers in the Texas House and Senate have separate plans for property tax relief that they say could save homeowners hundreds on their tax bills.

Lt. Gov. Dan Patrick and a group of Republican senators unveiled the upper chamber's property tax relief proposal at the Capitol on Tuesday. The three bills shared are the largest tax relief package to date. 

Property tax reform has been a top priority for Texas lawmakers. 

Senate Bill 3, Senate Bill 4 and Senate Bill 5 were presented on Tuesday. In total, the bills offer $16.5 million in tax relief.

Senate lawmakers proposed a $70,000 homestead exemption on school property taxes – a $30,000 increase that Patrick said is a priority for him this legislative session. Those over 65 or disabled would get $100,000 total in exemptions.

SB 3, authored by Houston State Sen. Paul Bettencourt, would increase the homestead exemption from $40,000 to $70,000.

SB 4 decreases schools' maximum compressed rates from 90% to 80%. This is a move Bettencourt said will decrease what districts pay in recapture.

SB 5 increases property exemptions for businesses from $2,500 to $25,000 and would give some businesses a 20% tax credit. State Sen. Tan Parker, who authored SB 5, said it could save businesses $1.5 billion.

Bettencourt said these bills will help Texans who are being taxed out of their homes.

"For an over 65 homeowner, they're not just getting a $70,000 homestead exemption," Bettencourt said. "They're getting a $100,000 exemption and that's going to stay with them for the rest of their life."

To make up for the changes to the school tax rate, the State would put in $5.8 billion.

Gov. Greg Abbott has called for a $100,000 business tax exemption. SB 5 would provide $25,000. Patrick and Bettencourt said on Tuesday that business owners they've spoken with said they prefer tax relief to be in their inventory.

"I listen to what they say," Patrick said. "They said they'd rather you put that money in the inventory tax. It impacts us."

The House similarly has its own tax relief plan that would lower school district property taxes by 28%. It would also reduce how much property appraisals can increase from 10% to 5%.

Patrick said he believes the House has good intentions with its tax relief plan, but that the Senate's bill package will save Texans more money in the long run.

The three Senate property tax bills were scheduled for a Wednesday committee hearing.

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