HJR1

Regular Session

Proposing a constitutional amendment to authorize the legislature to exempt from ad valorem taxation a portion of the market value of tangible personal property a person owns that is held or used for the production of income.

LowStandard timeline

Low Cost

Effective:2025-05-20

Enforcing Agencies

Texas Comptroller of Public Accounts • County Appraisal Districts

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

Effective Date: May 20, 2025 (Passage of Resolution authorizing ballot placement).
Voter Approval Date: November 4, 2025 (Constitutional Amendment Election).
Compliance Deadline: April 15, 2026 (Deadline for filing renditions or exemption claims for the 2026 tax year).
Agency Rulemaking: The Texas Comptroller must update rendition forms and exemption applications between November 2025 and January 2026. Expect a "regulatory gray zone" regarding aggregation rules during this window.

Immediate Action Plan

Immediate: Audit your current BPP tax rolls. Identify locations with TPP market values between $100,000 and $300,000.
Q3 2025: Review standard lease templates to address tax allocation adjustments triggered by statutory exemptions.
November 5, 2025: If voters approve the amendment, immediately direct counsel to review the finalized text of HB 9 for "aggregation" rules regarding multi-location businesses.
January 2026: Download updated Comptroller forms for the 2026 rendition cycle.

Operational Changes Required

Contracts

Triple Net (NNN) Leases: Review all lease agreements immediately.
Tenants: If you reimburse landlords for property taxes, ensure the agreement mandates that any BPP tax savings realized by the landlord are credited back to you.
Landlords: Prepare to recalculate pass-through expenses for the 2026 tax year to avoid over-billing tenants, which could lead to contract disputes.

Hiring/Training

Tax Compliance Staff: Staff must be trained to distinguish between "Book Value" and "Market Value." The exemption applies to market value. If your assets are borderline (e.g., valued around $250,000), precise market valuation is critical to claiming the full exemption.

Reporting & Record-Keeping

Asset Segregation: Update asset ledgers to clearly separate Tangible Personal Property (TPP) from Real Property.
Entity Identification: Ensure legal ownership of assets is distinct. The exemption applies to property "a person owns." Ambiguity exists regarding whether this applies per location or per legal entity; maintain records that support the most advantageous interpretation until rules are finalized.

Fees & Costs

Budgeting: Adjust tax liability projections for FY 2026. This is a cost-saving measure, not a fee increase.
Filing Fees: No new filing fees are anticipated, but failure to file the new exemption claim (if required by HB 9) could result in a forfeiture of the tax break and standard rendition penalties (10%).

Strategic Ambiguities & Considerations

The "Aggregation" Trap: The text exempts property "a person owns." It does not specify if this exemption is per location or per owner. If you own multiple retail outlets under one LLC, the Appraisal District may attempt to cap your total exemption at $250,000 for the entire company, rather than per store. Watch the language in HB 9 closely.
The Dollar Amount Conflict: HJR 1 text specifies $125,000, while the Legislative Budget Board Fiscal Note references $250,000. We are proceeding under the assumption that the Legislature intends the higher cap via enabling legislation, but the constitutional floor is currently set lower.
"Income Production" Definition: Assets held for passive investment versus active income production must be clearly categorized to avoid challenges from aggressive Appraisal Districts.

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Legislative Timeline

This bill's path through the Texas Legislature

TopicsBusiness & Commerce Business & Commerce--general Property Interests Property Interests--personal Property Resolutions Resolutions--constitutional Amendments Taxation Taxation--property-appraisals & Appraisal Districts Taxation--property-exemptions

Official Analysis

View HRO Analysis View All Bill Documents

RESOLUTION ANALYSIS

H.J.R. 1

By: Meyer

Ways & Means

Committee Report (Unamended)

BACKGROUND AND PURPOSE

According to the 2022-2023 Biennial Property Tax Report published by the comptroller of public accounts, local property taxes in Texas are rising. Increased property taxes affect all property owners across the state, including many of the state's small business owners. Additionally, taxes on income-producing personal property can impose significant compliance and administrative burdens on businesses. H.J.R. 1 seeks to address these issues by proposing an amendment to the Texas Constitution to allow the legislature to exempt from property taxation $250,000 of the market value of tangible personal property a person owns that is held or used for the production of income.

CRIMINAL JUSTICE IMPACT

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

ANALYSIS

H.J.R. 1 proposes an amendment to the Texas Constitution to replace the authorization for the legislature to exempt from property taxation tangible personal property that is held or used for the production of income and has a taxable value of less than the minimum amount sufficient to recover the costs of the administration of the taxes on the property, as determined by or under the general law granting the exemption, with an authorization for the legislature by general law to exempt from property taxation $250,000 of the market value of tangible personal property a person owns that is held or used for the production of income. The amendment takes effect for the tax year beginning January 1, 2025.

ELECTION DATE

The constitutional amendment proposed by this joint resolution will be submitted to the voters at an election to be held November 4, 2025.

House Authors

Rep. Morgan MeyerRepublican · Primary Author

Joint Authors

Coauthors (71)

Senate Sponsors

Sen. Paul BettencourtRepublican · Primary Sponsor

Cosponsors (13)

Bill Text(with markup)

H.J.R. No. 1

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

	A JOINT RESOLUTION
	proposing a constitutional amendment to authorize the legislature
	to exempt from ad valorem taxation a portion of the market value of
	tangible personal property a person owns that is held or used for
	the production of income.
	BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Section 1(g), Article VIII, Texas Constitution,
	is amended to read as follows:
	(g) The Legislature by general law may exempt from ad
	valorem taxation $125,000 of the market value of tangible personal
	property that is held or used for the production of income [~~and has~~
	~~a taxable value of less than the minimum amount sufficient to~~
	~~recover the costs of the administration of the taxes on the~~
	~~property, as determined by or under the general law granting the~~
	~~exemption~~].
	SECTION 2. This proposed constitutional amendment shall be
	submitted to the voters at an election to be held November 4, 2025.
	The ballot shall be printed to permit voting for or against the
	proposition: "The constitutional amendment to authorize the
	legislature to exempt from ad valorem taxation a portion of the
	market value of tangible personal property a person owns that is
	held or used for the production of income."

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


March 2, 2025

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

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	HJR1 by Meyer (Proposing a constitutional amendment to authorize the legislature to exempt from ad valorem taxation a portion of the market value of tangible personal property a person owns that is held or used for the production of income.), As Introduced

No fiscal implication to the State is anticipated, other than the cost of publication.

The cost to the state for publication of the resolution is $191,689.

The resolution would propose an amendment to Article VIII of the Texas Constitution to allow the Legislature by general law to exempt $250,000 of the market value of tangible personal property a person owns that is held or used for the production of income from property taxation.

Adoption of the proposed constitutional amendment alone would have no fiscal impact on the state or units of local government. Any fiscal impact would depend on the corresponding enabling legislation (HB 9).

Local Government Impact

No fiscal implication to units of local government is anticipated.

Source Agencies:

304 Comptroller of Public Accounts

LBB Staff:

JMc, KK, SD, BRI

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Frequently Asked Questions

Common questions about HJR1

What does Texas HJR1 do?

HJR 1 initiates a constitutional amendment process to authorize a significant increase in the Business Personal Property (BPP) tax exemption, potentially exempting between $125,000 and $250,000 of tangible personal property market value. This legislation affects all entities holding income-producing assets (inventory, machinery, equipment) but is contingent on voter approval in November 2025 and the passage of enabling legislation (HB 9). Implementation Timeline Effective Date: May 20, 2025 (Passage of Resolution authorizing ballot placement).

Who authored HJR1?

HJR1 was authored by Texas Representative Morgan Meyer during the Regular Session.

When was HJR1 signed into law?

HJR1 was signed into law by Governor Greg Abbott on May 20, 2025.

Which agencies enforce HJR1?

HJR1 is enforced by Texas Comptroller of Public Accounts and County Appraisal Districts.

How urgent is compliance with HJR1?

The compliance urgency for HJR1 is rated as "low". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of HJR1?

The cost impact of HJR1 is estimated as "low". This may vary based on industry and implementation requirements.

What topics does HJR1 address?

HJR1 addresses topics including business & commerce, business & commerce--general, property interests, property interests--personal property and resolutions.

Legislative data provided by LegiScanLast updated: November 25, 2025

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