This bill proposes a constitutional amendment to ban most property taxes based on property value (ad valorem taxes) in Texas by 2030. It would prevent cities, counties, and other local governments from imposing these taxes after January 1, 2030, except for a limited exception: they could still use such taxes solely to repay bonds issued before that date. The amendment requires voter approval in a May 2026 election, with the ballot asking voters to approve "the constitutional amendment to abolish ad valorem taxes." This change would directly affect all Texas local governments that currently rely on property taxes for funding.
HB 140 would limit local governments' ability to issue new debt by capping annual property tax-based debt payments at 10% of the average property tax revenue from the previous three fiscal years. It directly affects cities, counties, and school districts that issue bonds or public securities, preventing them from authorizing new debt if payments exceed this 10% threshold. The bill establishes this statewide cap, overriding local charters or other provisions that might allow higher debt levels. The law would take effect 91 days after the legislative session ends.
