HB2723

Regular Session

Relating to the requirement that a person submit an application for an exemption from ad valorem taxation for certain property used for human burial.

LowStandard timeline

Low Cost

Effective:2026-01-01

Enforcing Agencies

Local Appraisal Districts (Chief Appraisers)

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

Effective Date: January 1, 2026
Compliance Deadline: April 30, 2026 (Standard deadline to protest if the automatic exemption is *not* applied to the 2026 tax roll).
Agency Rulemaking: No state-level rulemaking mandated. However, Local Appraisal Districts will develop internal standards for "reasonable inspection" throughout 2025.

Immediate Action Plan

1. Q3 2025 Audit: Review land holdings to identify parcels currently taxed that serve exclusively as abandoned cemeteries.
2. Q4 2025 Notification: Send certified letters to relevant Chief Appraisers identifying these tracts and citing HB2723 to ensure they are flagged for the 2026 appraisal.
3. January 2026 Verification: Review the preliminary 2026 tax rolls. If the exemption is not applied automatically, file a Notice of Protest immediately.
4. Stop Payments: Adjust accounts payable to cease tax payments on these specific parcels for bills originating after Jan 1, 2026.

Operational Changes Required

Contracts

Purchase and Sale Agreements (PSAs): For closings scheduled on or after January 1, 2026, amend tax proration clauses. Do not escrow funds for ad valorem taxes on parcels identified as abandoned cemeteries with unidentifiable owners.
Title Work: Ensure legal counsel reviews title commitments to distinguish between a *tax exemption* and a *title defect*. An automatic exemption confirms the "unidentifiable" ownership status, which may complicate clearing title for development.

Hiring/Training

Tax Consultants: In-house tax teams must be trained to stop filing Form 50-114 (Application for Cemetery Exemption) for these specific parcels. Filing the form admits ownership, which triggers unrelated maintenance liabilities under the Health and Safety Code.

Reporting & Record-Keeping

Verification Evidence: While the application requirement is removed, you must maintain a "Cemetery Verification File." This includes geolocated photographs of headstones, fencing, or markers to satisfy the "reasonable inspection" standard if the Chief Appraiser challenges the land's use.
Notice Letters: Replace the formal exemption application with a "Notice of Existence" letter to the Appraisal District to trigger their statutory duty to inspect.

Fees & Costs

Tax Savings: Elimination of tax liability for qualifying parcels starting Tax Year 2026.
Sunk Costs: No refunds available for taxes paid on these parcels for Tax Year 2025 or prior.

Strategic Ambiguities & Considerations

The "Identifiable Owner" Trap:

The law requires the exemption only if the owner is "not identifiable."

The Risk: If a developer holds title to a 100-acre tract surrounding a 1-acre cemetery, the Chief Appraiser may argue the developer is the presumed owner of the cemetery, making the owner "identifiable."
The Consequence: The Appraiser may deny the automatic exemption, forcing the developer to either pay the tax or file an application claiming ownership. Claiming ownership triggers perpetual care and public access obligations.
Watch For: Local Appraisal Districts issuing guidance on how they determine ownership of landlocked, un-deeded burial sites.

Need Help Understanding Implementation?

Our government affairs experts can walk you through this bill's specific impact on your operations.

Schedule Consultation

Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

Legislative Timeline

This bill's path through the Texas Legislature

TopicsCemeteries Taxation Taxation--property-appraisals & Appraisal Districts Taxation--property-assessment & Collection Taxation--property-exemptions Taxation--property-miscellaneous

Official Analysis

View HRO Analysis View All Bill Documents

BILL ANALYSIS

C.S.H.B. 2723

By: Cunningham

Ways & Means

Committee Report (Substituted)

BACKGROUND AND PURPOSE

The bill author has informed the committee that there have been multiple cases in Texas of nonprofit cemeteries being sold for non-payment of property taxes. Current Health and Safety Code provisions provide for an exemption from property taxation for property dedicated for cemetery purposes; however, current Tax Code provisions provide for an exemption from property taxation for property a person owns and uses exclusively for human burial and does not hold for profit. Accordingly, the comptroller of public accounts cemetery tax exemption form must include ownership information and be signed by the cemetery owner. However, according to the bill author, many nonprofit cemeteries have no identifiable owner, leading to exemption forms not being returned, notices of taxes due being mailed to the cemetery address, and, if the taxes have accrued for a certain time, the local appraisal district being able to foreclose and sell the property. C.S.H.B. 2723 seeks to address the discrepancy in state law by requiring a chief appraiser to grant a cemetery property tax exemption for properties for which a person does not apply for the exemption, no owner is identifiable, and the chief appraiser determines the property's use otherwise qualifies the property for exemption.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

C.S.H.B. 2723 amends the Tax Code, with respect to the property tax exemption to which a person is entitled for property the person owns and uses exclusively for human burial and does not hold for profit, to require the chief appraiser of an appraisal district in which such property is located to grant the exemption if, as follows:

·a person does not apply for the exemption;

·the owner of the property is not identifiable; and

·the chief appraiser knows or should know based on a reasonable inspection of the property that the property is used exclusively for human burial.

The bill authorizes the chief appraiser to request the assistance of a state agency, municipality, county, county historical commission, or other governmental or nonprofit entity to help make that determination as to the property's use.

C.S.H.B. 2723 applies only to a property tax year that begins on or after the bill's effective date.

EFFECTIVE DATE

January 1, 2026.

COMPARISON OF INTRODUCED AND SUBSTITUTE

While C.S.H.B. 2723 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

The substitute includes a provision absent from the introduced that authorizes the chief appraiser to request the assistance of a state agency, municipality, county, county historical commission, or other governmental or nonprofit entity to help make a determination as to a property's use.

House Authors

Rep. Charles CunninghamRepublican · Primary Author

Joint Authors

Senate Sponsor

Sen. Royce WestDemocrat · Primary Sponsor

Bill Text(with markup)

H.B. No. 2723

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

	AN ACT
	relating to the requirement that a person submit an application for
	an exemption from ad valorem taxation for certain property used for
	human burial.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Section 11.43, Tax Code, is amended by adding
	Subsections (t) and (u) to read as follows:
	(t) Notwithstanding Subsections (a) and (c), the chief
	appraiser of an appraisal district in which property described by
	Section 11.17 is located shall grant the exemption authorized by
	that section for the property if:
	(1) a person does not apply for the exemption;
	(2) the chief appraiser knows or should know based on a
	reasonable inspection of the property that the property is a
	property described by that section; and
	(3) the owner of the property is not identifiable.
	(u) A chief appraiser may request the assistance of a state
	agency, municipality, county, county historical commission, or
	other governmental or nonprofit entity to help determine whether a
	property is a property described by Section 11.17 for the purpose of
	Subsection (t)(2).
	SECTION 2. The change in law made by this Act applies only
	to an ad valorem tax year that begins on or after the effective date
	of this Act.
	SECTION 3. This Act takes effect January 1, 2026.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


March 30, 2025

TO:	Honorable Morgan Meyer, Chair, House Committee on Ways & Means

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	HB2723 by Cunningham (Relating to the requirement that a person submit an application for an exemption from ad valorem taxation for certain property used for human burial.), As Introduced

No significant fiscal implication to the State is anticipated.

The bill would require a chief appraiser to grant a property tax exemption for a qualifying cemetery if: 1) a person does not apply for the exemption; 2) the chief appraiser knows or should know based on a reasonable inspection of the property that the property is a cemetery; and 3) the owner of the property is not identifiable.

To qualify for the property tax exemption a cemetery must be used exclusively for human burial and not for profit. The bill would remove the requirement to apply for the exemption and grants the chief appraiser the duty to make the decision based on local knowledge or reasonable inspection of the property.

For qualifying cemeteries that are currently taxed because there is no application on file, this would create a taxable value loss to the units of local government and the state via the school funding formula. It could also lead to some cemeteries receiving the exemption when they may not be eligible. Overall, no detailed cemetery value information was located and the fiscal impact on the state and units of local government cannot be estimated; however, it is likely not significant.

Local Government Impact

No significant fiscal implication to units of local government is anticipated.

Source Agencies:

304 Comptroller of Public Accounts

LBB Staff:

JMc, KK, SD, BRI

Related Legislation

Explore more bills from this author and on related topics

Frequently Asked Questions

Common questions about HB2723

What does Texas HB2723 do?

HB2723 shifts the burden of property tax exemption filings for "orphan" cemeteries from the property owner to the Chief Appraiser, effective January 1, 2026. This legislation mandates that Appraisal Districts automatically exempt land used for human burial if the owner is "not identifiable," impacting land developers, historical societies, and entities holding rural tracts with abandoned burial sites. Implementation Timeline Effective Date: January 1, 2026 Compliance Deadline: April 30, 2026 (Standard deadline to protest if the automatic exemption is not applied to the 2026 tax roll).

Who authored HB2723?

HB2723 was authored by Texas Representative Charles Cunningham during the Regular Session.

When was HB2723 signed into law?

HB2723 was signed into law by Governor Greg Abbott on May 24, 2025.

Which agencies enforce HB2723?

HB2723 is enforced by Local Appraisal Districts (Chief Appraisers).

How urgent is compliance with HB2723?

The compliance urgency for HB2723 is rated as "low". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of HB2723?

The cost impact of HB2723 is estimated as "low". This may vary based on industry and implementation requirements.

What topics does HB2723 address?

HB2723 addresses topics including cemeteries, taxation, taxation--property-appraisals & appraisal districts, taxation--property-assessment & collection and taxation--property-exemptions.

Legislative data provided by LegiScanLast updated: November 25, 2025

Need Strategic Guidance on This Bill?

Need help with Government Relations, Lobbying, or compliance? JD Key Consulting has the expertise you're looking for.