JD Key Consulting Logo
Signed Into Law
Signed May 22, 2025Effective 2025-09-01
SJR85

Regular Session

Proposing a constitutional amendment authorizing the legislature to increase the amount of the exemption from ad valorem taxation by a school district of the market value of the residence homestead of a person who is elderly or disabled.

Government Affairs & Regulatory Compliance Analysis

SJR85: Government Affairs Overview

SJR85 proposes a Constitutional Amendment to increase the school district residence homestead exemption for individuals over 65 or disabled from $10,000 to $60,000. While contingent on voter approval in November 2025, the amendment contains a retroactive provision applying the tax cut to the entire 2025 tax year, creating immediate operational requirements for mortgage servicers managing escrow accounts and tax professionals projecting liabilities.

Sen. Paul Bettencourt·Senate Bill·Regular Session

Low
Low Cost
Effective:2025-09-01
Enforcing Agencies

County Tax Assessor-Collectors • School District Tax Offices • Texas Comptroller of Public Accounts

Business Impact

Who SJR85 Affects

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

Regulatory Priority: low

Standard regulatory changes (effective 2025-09-01). Review during normal business planning.

🏢

Real Estate

Affected business types:

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

Estimated Cost Impact

lowMinimal cost impact anticipated.

Enforcing Agencies

Need Government Relations Support?

JD Key Consulting provides government affairs and regulatory strategy services. We help businesses navigate Texas agencies, understand legislative impacts, and advocate for their interests.

Need Help Navigating This Legislation?

JD Key Consulting provides strategic guidance on Texas regulatory compliance and legislative impact for your business.

SJR85
Low
Proposing a constitutional amendment authorizing the legislature to increase the amount of the exemption from ad valorem taxation by a school district...
Low Compliance Urgency
Requires routine attention
Cost Impact
Low
Effective
2025-09-01
Enforcing Agencies
County Tax Assessor-CollectorsSchool District Tax OfficesTexas 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: September 1, 2025 (Legislative Resolution); January 1, 2025 (Retroactive Tax Year Application).
  • Compliance Deadline: November 4, 2025 (Election Day). If approved, mortgage servicers and tax offices must immediately reconcile 2025 tax bills against the new exemption levels before year-end.
  • Agency Rulemaking: The Texas Comptroller and local Appraisal Districts must issue guidance on handling "split-roll" billing or refunds if tax statements are mailed prior to the November election results.

Immediate Action Plan

  • Immediate: Audit loan portfolios to identify all accounts currently benefiting from the Over-65 or Disabled Person homestead exemption.
  • Q3 2025: Update escrow analysis software to handle a potential mid-cycle tax rate change retroactive to January 1.
  • October 2025: If you are a Tax Assessor-Collector, prepare two versions of the tax roll: one under current law and one reflecting the SJR85 exemption increase.
  • Post-Election (Nov 2025): If passed, immediately initiate escrow surplus processing to avoid RESPA violations regarding maximum cushion requirements.

Operational Changes Required

Contracts

  • Mortgage Servicing Agreements: Review "Escrow Surplus" clauses. The retroactive tax cut will likely generate escrow overages. You must determine if your current contracts allow for immediate refunding or if you are required to hold the surplus until the annual analysis.
  • School District Bond Covenants: If you hold or underwrite school district debt, review "impairment of obligation" clauses. The amendment permits the continued levy of taxes on the exempted value *only* if necessary to prevent default on existing debt.

Hiring/Training

  • Customer Service (Lenders/Servicers): Train staff to handle inquiries regarding escrow recalculations. Borrowers will expect immediate payment reductions post-election; staff must explain the timeline for escrow analysis.
  • Tax Consultants: Staff must be trained to calculate 2025 liabilities using both the current $10,000 exemption and the proposed $60,000 exemption to provide accurate "best/worst case" scenarios for clients.

Reporting & Record-Keeping

  • Portfolio Segmentation: Mortgage lenders must immediately tag loans associated with borrowers claiming "Over 65" or "Disabled Person" exemptions to facilitate rapid bulk-processing of escrow adjustments in Q4 2025.
  • Tax Certificates: Real estate closings occurring between Jan 1, 2025, and Nov 4, 2025, will rely on tax certificates that do *not* reflect the exemption increase. Closing documents should include disclosures regarding potential future tax adjustments.

Fees & Costs

  • Administrative Costs: Expect increased overhead related to re-issuing tax statements (for Tax Assessor-Collectors) or running off-cycle escrow analyses (for Lenders).
  • No Direct Fee Increases: The legislation does not impose new filing fees on businesses.

Strategic Ambiguities & Considerations

  • The "Bill-Then-Correct" Gap: Tax bills are typically mailed in October. The election is in November. It is currently unclear if Tax Assessor-Collectors will mail bills based on current law (requiring a subsequent refund/correction) or delay billing until post-election. Prepare for a chaotic Q4 billing cycle.
  • "Economic Need" Authority: The amendment text authorizes the Legislature to limit the exemption based on "economic need." While the current political intent is a blanket increase, the constitutional language permits future means-testing without a new voter referendum. Watch enabling legislation (SB 23) for income caps.

Need Compliance Guidance on This Legislation?

JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey—former Chairman of the Republican Party of Texas—to understand this bill's impact on your operations and develop an actionable compliance plan.

Schedule a 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.

02

Legislative Timeline

This bill's path through the Texas Legislature

Filed
Passed Senate
Apr 23, 2025
Passed House
Signed
May 22, 2025
Effective
Sep 1, 2025
TopicsAgingDisabilities, Persons WithProperty InterestsProperty Interests--homesteadResolutionsResolutions--constitutional AmendmentsTaxationTaxation--property-appraisals & Appraisal DistrictsTaxation--property-exemptionsTaxation--school District
03

Senate Authors

Sen. Paul BettencourtRepublican · Primary Author
Coauthors (27)

House Sponsors

Rep. Morgan MeyerRepublican · Primary Sponsor
Joint Sponsors
Cosponsors (102)

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

Explore more bills from this author and on related topics

More from Sen. Paul Bettencourt

View all bills by Sen. Paul Bettencourt

Related by Topic

View more Aging legislation
Quick Reference

Frequently Asked Questions

Common questions about SJR85

Q

What does Texas SJR85 do?

SJR85 proposes a Constitutional Amendment to increase the school district residence homestead exemption for individuals over 65 or disabled from $10,000 to $60,000. While contingent on voter approval in November 2025, the amendment contains a retroactive provision applying the tax cut to the entire 2025 tax year, creating immediate operational requirements for mortgage servicers managing escrow accounts and tax professionals projecting liabilities.

Q

Who authored SJR85?

SJR85 was authored by Texas Senator Paul Bettencourt during the Regular Session.

Q

When was SJR85 signed into law?

SJR85 was signed into law by Governor Greg Abbott on May 22, 2025.

Q

Which agencies enforce SJR85?

SJR85 is enforced by County Tax Assessor-Collectors, School District Tax Offices and Texas Comptroller of Public Accounts.

Q

How significant are the changes in SJR85?

The regulatory priority for SJR85 is rated as "low". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of SJR85?

The cost impact of SJR85 is estimated as "low". This may vary based on industry and implementation requirements.

Q

What topics does SJR85 address?

SJR85 addresses topics including aging, disabilities, persons with, property interests, property interests--homestead and resolutions.

Q

What are the key dates for SJR85?

Key dates for SJR85: Effective date is 2025-09-01. Consult with legal counsel regarding applicability.

Q

Which Texas businesses are affected by SJR85?

SJR85 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