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Signed Into Law
Signed June 20, 2025Effective 2026-01-01
SB2520

Regular Session

Relating to the calculation of the limitation on the total amount of ad valorem taxes imposed by a school district on the residence homestead of an individual who is elderly or disabled.

Government Affairs & Regulatory Compliance Analysis

SB2520: Government Affairs Overview

SB2520 mandates a specific "lesser of" calculation method for determining the school district tax ceiling on residence homesteads for the tax year immediately following a homeowner's mid-year qualification for an elderly or disabled exemption. This legislation primarily impacts mortgage servicers and tax agents, who must update escrow analysis algorithms to prevent systematic over-collection of funds and ensure compliance with RESPA limitations.

Sen. Paul Bettencourt·Senate Bill·Regular Session

Low
Low Cost
Effective:2026-01-01
Enforcing Agencies

County Appraisal Districts • Local Tax Assessor-Collectors • Texas Comptroller of Public Accounts

Business Impact

Who SB2520 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: low

Standard regulatory changes (effective 2026-01-01). Review during normal business planning.

🏢

Real Estate

Affected business types:

  • Property developers
  • Commercial landlords
  • Property managers
  • Real estate investors
View all real estate legislation

Key Operational Considerations

  • 1Customer Service: Prepare scripts to explain to borrowers why their projected tax payments may differ from the standard "freeze" amount shown on previous estimates.

Estimated Cost Impact

lowMinimal cost impact anticipated.

Enforcing Agencies

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SB2520
Low
Relating to the calculation of the limitation on the total amount of ad valorem taxes imposed by a school district on the residence homestead of an in...
Low Compliance Urgency
Requires routine attention
Cost Impact
Low
Effective
2026-01-01
Enforcing Agencies
County Appraisal DistrictsLocal Tax Assessor-CollectorsTexas Comptroller of Public Acco...
Primary Author: Sen. Paul Bettencourt
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: January 1, 2026
  • Compliance Deadline: Q4 2025 (Systems must be updated prior to running annual escrow analyses for the 2026 tax year).
  • Agency Rulemaking: No formal rulemaking is mandated, but the Texas Comptroller will likely update *Truth in Taxation* calculation worksheets and technical advice for Appraisal Districts by late 2025.

Immediate Action Plan

  • 1. Identify Affected Portfolio: Query your servicing database to quantify how many borrowers currently hold or are likely to claim Section 11.13(c) (elderly/disabled) exemptions.
  • 2. Issue Vendor Directives: Send formal notice to your tax service providers immediately, inquiring about their roadmap for SB2520 compliance.
  • 3. Update Algorithms: Task IT with modifying the tax projection logic to include the "lesser of" comparison test for the tax year following a new exemption.
  • 4. Beta Test: Run a sample batch of "newly elderly" loans through the updated escrow analysis model in Q4 2025 to verify the math before the law takes effect.

Operational Changes Required

Contracts

  • Tax Service Vendors: Review and amend Service Level Agreements (SLAs) with third-party tax data providers (e.g., CoreLogic, Lereta). You must insert a provision requiring them to verify that their data feeds account for the SB2520 "lesser of" calculation logic by January 1, 2026.

Hiring/Training

  • Escrow Analysis Teams: Train staff to identify "mid-year qualification" accounts. They must understand that the tax ceiling is not static during the first full year of exemption but is subject to a specific comparison test.
  • Customer Service: Prepare scripts to explain to borrowers why their projected tax payments may differ from the standard "freeze" amount shown on previous estimates.

Reporting & Record-Keeping

  • Data Field Updates: Servicing platforms must track the specific date an exemption was granted, not just the tax year. The logic trigger is whether the qualification occurred *after* the beginning of the previous tax year.
  • Audit Trails: Maintain documentation showing the comparison between the standard limitation and the "actual tax imposed" to justify the escrow amount collected in the event of a RESPA audit.

Fees & Costs

  • IT Remediation: Budget for one-time costs associated with reprogramming internal tax estimation engines and escrow analysis software.
  • No New Government Fees: The bill does not impose new filing fees.

Strategic Ambiguities & Considerations

  • Appraisal District Software Lag: There is a high probability that not all 254 County Appraisal Districts (CADs) will update their software simultaneously.
  • *Risk:* A CAD may certify a tax roll using the old, higher ceiling calculation.
  • *Operational Check:* Do not rely blindly on the tax certificate provided by the county for these specific borrowers. Your system must independently calculate the SB2520 limit. If the CAD's figure is higher, you must flag the account for protest/correction to avoid over-escrowing.

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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.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Mar 13, 2025
Passed Senate
May 9, 2025
Passed House
May 28, 2025
Signed
Jun 20, 2025
Effective
Jan 1, 2026
TopicsAgingDisabilities, Persons WithProperty InterestsProperty Interests--homesteadTaxationTaxation--property-appraisals & Appraisal DistrictsTaxation--property-exemptions
03

Senate Authors

Sen. Paul BettencourtRepublican · Primary Author

House Sponsor

Rep. Candy NobleRepublican · Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

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Quick Reference

Frequently Asked Questions

Common questions about SB2520

Q

What does Texas SB2520 do?

SB2520 mandates a specific "lesser of" calculation method for determining the school district tax ceiling on residence homesteads for the tax year immediately following a homeowner's mid-year qualification for an elderly or disabled exemption. This legislation primarily impacts mortgage servicers and tax agents, who must update escrow analysis algorithms to prevent systematic over-collection of funds and ensure compliance with RESPA limitations.

Q

Who authored SB2520?

SB2520 was authored by Texas Senator Paul Bettencourt during the Regular Session.

Q

When was SB2520 signed into law?

SB2520 was signed into law by Governor Greg Abbott on June 20, 2025.

Q

Which agencies enforce SB2520?

SB2520 is enforced by County Appraisal Districts, Local Tax Assessor-Collectors and Texas Comptroller of Public Accounts.

Q

How significant are the changes in SB2520?

The regulatory priority for SB2520 is rated as "low". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of SB2520?

The cost impact of SB2520 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does SB2520 address?

SB2520 addresses topics including aging, disabilities, persons with, property interests, property interests--homestead and taxation.

Q

What are the key dates for SB2520?

Key dates for SB2520: Effective date is 2026-01-01. Consult with legal counsel regarding applicability.

Q

Which Texas businesses are affected by SB2520?

SB2520 primarily affects property owners and real estate professionals. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026