Local Government

HB 23 exempts property taxes for specific nonprofits in Texas counties with 3.3 million or more residents (like Harris County). It applies to nonprofit corporations organized exclusively for charitable, educational, or scientific purposes that use their property to promote agriculture, support youth, or provide community educational programs. The exemption covers all real and personal property owned by these nonprofits but does not apply to for-profit leaseholders of such property. This change takes effect January 1, 2026, after the bill was signed into law in September 2025.

HB 17 requires Texas school districts to include specific enrollment and inflation data in their annual property tax notices to property owners. The notice must state the district's enrollment growth rate and the state's inflation rate from the previous year, and compare the proposed tax revenue to what it would be if adjusted only for these factors. The bill defines terms like "adjusted tax collections" to standardize this calculation for transparency. School districts must now add this statement to notices about proposed tax rates and budget meetings. This change applies to all school districts in Texas and aims to clarify how enrollment and inflation impact property tax revenue.

SB 9 amends Texas Tax Code sections to update how local taxing units (like cities, counties, and school districts) calculate voter-approval tax rates when implementing or adjusting sales taxes. It introduces specific formulas that account for new sales tax revenue by adding a "sales tax gain rate" to the calculation, ensuring the voter-approval rate reflects the impact of the new revenue source. The bill differentiates rules based on the taxing unit type, applying multipliers of 1.08 for special districts, 1.035 for small municipalities/counties (<30,000 population), and 1.025 for others. These changes directly affect how local governments determine tax rates that require voter approval when they add or modify sales taxes.

HB 762 limits severance pay for employees and independent contractors working with local governments (like cities, counties, and school districts) in Texas. It requires that severance pay from tax funds cannot exceed 20 weeks of the person's regular pay (excluding vacation or PTO) and prohibits payments if termination results from misconduct (including criminal conduct). Local governments must also post all severance agreements on their websites. The law applies to contracts entered into or lawsuits filed on or after September 1, 2025, and excludes public teaching hospitals.

HB 3120 requires owners or operators of facilities housing unaccompanied immigrant children under federal contracts (like those with ICE or HHS) to conduct criminal background checks on staff applicants and employees. It permits these checks for employment screening only, prohibits using the results for any other purpose, and bans disclosure without consent or a court order. Facilities must destroy all such background information within 180 days of receiving it or after an employee's probationary period. The bill also mandates facilities to create agreements with local governments for reporting illnesses and health issues. This law directly affects private facilities contracted by federal agencies to house immigrant youth.