REALTOR® Issues Won Big This Legislative Session

Several critical REALTOR®-supported bills passed and were signed into law by Governor Greg Abbott this past legislative session. This includes a major disaster relief package and monumental property tax reform and school finance reform bills. These bills not only support the growth of the real estate industry in Texas, but also provide much needed relief and protection for consumers. 

Disaster Relief

Gov. Abbott signed four bills into law aimed at bolstering the state’s emergency preparedness and disaster relief programs, including a framework that provides more than $1.6 billion for flood control projects and repairs across the state. SB 7 comes nearly two years after Hurricane Harvey slammed Texas with record rainfall. Authored by state Sen. Brandon Creighton and sponsored by state Rep. Dade Phelan, the legislation establishes two funds that would provide grants and loans for flood control and mitigation projects. 

Additionally, House Joint Resolution 4 would amend the Texas Constitution to create the Flood Infrastructure Fund — one of the funds outlined in SB 7. This proposed amendment will go before Texas voters in November as Proposition 8. 

Property Tax Reform 

Under the new property tax law, Central Appraisal Districts are required to create an online database to show property owners how proposed tax rate changes would affect their bills, make it easy for taxpayers to submit comments via an online form and provide information about when and where a property owner’s local taxing entities are holding public hearings to set their tax rates.

(Senate Bill 2 has effective dates between Sept. 1, 2019 and Sept. 1, 2020)

Protecting property owners from excessive taxes

REALTOR®-supported House Bill 1743, authored by Rep. Tracy King and sponsored by Sen. Brandon Creighton, reduces change-of-use lookback taxes due when a property is changed from agricultural to non-agricultural use.

 Currently, when a property changes its use classification from agricultural to non-agricultural, chief appraisers can assess the owners five years of retroactive taxes based on the new classification, plus 7% interest per year.

This REALTOR®-supported legislation reduces the lookback period from five to three years and reduces the interest due from 7% to 5%.

This law is fully effective Sept. 1, 2019.

School Finance Reform

The Texas Legislature passed legislation to overhaul the public school finance system and property tax system. 

  • Lower school property tax rates statewide: 
    Provides $5.1 billion in tax relief
  • Provides $6.5 billion in additional funding to public education and school employee compensation
  • 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
  • Lowers ISD rollback rates from 8% to 2.5%.

(House Bill 3 has effective dates between Sept. 1, 2019 and Sept. 1, 2021)

Transportation funding

REALTOR®-supported Senate Bill 962 continues the development of a stronger highway system for Texas. The legislation was authored by Sen. Robert Nichols and sponsored by Rep. John Zerwas.

In 2014, 80% of voters approved an amendment to the Texas Constitution to allocate revenue from oil and gas production tax (a.k.a. severance tax), split between the State Highway Fund and the Economic Stabilization Fund (a.k.a. the state’s Rainy Day Fund). The State Highway Fund can only be used for constructing, maintaining, and acquiring rights of way for public non-toll roadways.

The new law extends provisions related to that constitutional amendment to ensure no interruption of funding for 10 years and continuing the voters’ desire to invest in transportation projects.

 Gov. Abbott signed the bill into law on June 15 with a Sept. 1, 2019 effective date.

Texas REALTORS® support addressing our state’s infrastructure needs to provide residents a safe and efficient transportation system.

Building materials 

REALTOR®-supported House Bill 2439, authored by Rep. Dade Phelan and sponsored by Sen. Dawn Buckingham, protects Texas property owners.

This new law prevents a governmental entity (city/county) from requiring or prohibiting the use of certain building methods, products, or materials in the construction of a residential or commercial structure.

Gov. Abbott signed the bill into law, effective Sept. 1, 2019.

Permitting fees 

REALTOR®-supported House Bill 852 was authored by Rep. Justin Holland—who is a Texas REALTOR® himself—and sponsored by Sen. Pat Fallon.

The new law will keep cities from using construction fees as a backdoor tax for the funding of other services, bring greater fairness to the distribution of the fee burden, and prevent cities from requiring sales price disclosure as part of the permitting process.

The law took effect immediately upon the governor’s signature on May 21, 2019.

Tenant late fees

REALTOR®-supported Senate Bill 1414, authored by Sen. Kelly Hancock and sponsored by Rep. Dade Phelan, establishes clearer parameters around fees that may be assessed for the late payment of rent.

The law clarifies what types of costs and considerations may be included in the calculation of late fees and provides a safe harbor for reasonable late fees.

This law is fully effective Sept. 1, 2019.

Enhanced seller’s disclosure

This pro-consumer legislation is the most comprehensive update to the Seller’s Disclosure statement since the statement’s creation in 1993. These bills (SB 339/HB 3815) add significant information related to flooding, providing buyers with in-depth information about past flooding on the property and its structures, while still limiting the seller’s liability.

This law is fully effective Sept. 1, 2019.

There were more than 7,000 bills filed this legislative session. If you have any questions regarding a specific bill not listed above, please contact me at amber.burton@har.com with the bill number and your question.

Amber Burton-Alfred

Director of Governmental Affairs & Advocacy

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