$18 billion deal reached: Texans to get biggest property tax cut in state's history

After months of trying to reach a deal, the leaders of the Texas Senate and House announced proposed legislation for property tax relief on Monday.

AUSTIN (KXAN) — After months of trying to reach a deal, leaders of the Texas Senate and House announced proposed legislation for property tax relief on Monday.

Lt. Gov. Dan Patrick and Speaker Dade Phelan released a joint statement detailing the following proposed legislation:

• Over $12 billion will be spent on reducing the school property tax rate for all homeowners and business properties.
• Every homeowner who homesteads their home (about 5.7 million homeowners) will get a $100,000 homestead exemption.
• Non-homesteaded properties, valued at $5 million and under, including residential and commercial properties, will receive a 20% circuit breaker on appraised values as a three-year pilot project.
• The legislation will also include savings on the franchise tax for small businesses and create newly elected positions on local appraisal boards.

"Negotiations with the Lieutenant Governor have been extremely productive, and by coming together and finding common ground, the House and Senate are one step closer to providing much-needed, much-deserved relief," Phelan said. "I look forward to the passage of this package in the coming days and delivering on our commitment to the people of Texas."

The omnibus property tax relief bill and the franchise tax relief bill will originate in the Senate, while a constitutional amendment will be introduced in the House.

Both the House and Senate will file legislation Monday, with the goal of passing the bills later this week, according to the statement.

"It has been a long road, but this is a great day for all property owners," Patrick said. "Speaker Phelan and I worked diligently together over the last week on the final bill. It made the difference. It may have taken overtime, but the process has produced a great bill for homeowners and businesses."

Gov. Greg Abbott tweeted he intended to sign the bill once passed.

"I promised during my campaign that the state would return to property taxpayers at least half of the largest budget surplus we have ever had. Today's agreement between the House and the Senate is a step toward delivering on that promise," Abbott said.

Months-long struggle for property tax agreement

The deal comes after a months-long stalemate between the House and Senate over how best to provide property tax relief to Texans. Gov. Greg Abbott called a second special session on June 27, after House and Senate leaders failed to reach a compromise and pass any legislation during the first special session.

In that first special session, the House passed Abbott's preferred property tax bill on the first day and immediately gaveled out, leaving the Senate with only two options: take it or leave it.

The House bill would have used $12.3 billion of available Texas dollars to reduce property taxes by "compression." It was the language Abbott specifically used in his call for a special session and would, in essence, give more money to school districts on the agreement that districts lower property tax rates.

Over the following 30 days, Patrick stood firmly on the Senate's promise to Texans to raise the homestead exemption — the amount of a home's value that taxpayers can write off from their tax bill.