Texas Senate Bill SB 1633

Texas 2025 - 89th Regular

• Filed: 2/25/25
• Out of Senate Committee: 5/16/25
• Voted on by Senate: 5/20/25

Caption

Relating to the authority of a county commissioners court to adopt an exemption from ad valorem taxation by each taxing unit that taxes the property of the portion of the appraised value of a person's property that is attributable to the installation in or on the property of certain water conservation systems.

Summary

SB 1633 authorizes a county commissioners court to adopt an ad valorem tax exemption for the portion of a property’s appraised value that is attributable to the installation of a rainwater harvesting system or a graywater system. If a county adopts the exemption, it applies across all taxing units that tax the property, not just the county itself. The bill is framed as a property-tax incentive for water conservation improvements. The bill is contingent on voter approval of a related constitutional amendment. It would take effect on January 1, 2026, and would apply only to ad valorem taxes imposed for tax years beginning on or after that date. If the constitutional amendment is not approved, the bill has no effect. The measure also defines graywater by reference to the Health and Safety Code.

Impact

The bill would amend the Texas Tax Code by adding a new Section 11.325, giving counties local-option authority to exempt the added value of qualifying water conservation systems from property taxation. This would affect property owners who install rainwater harvesting or graywater systems, and it would reduce the taxable value assessed by all taxing units on the property when a county adopts the exemption. The bill does not mandate an exemption statewide; it creates permissive authority for counties, subject to the constitutional amendment.

Sentiment

The available voting history suggests the bill had meaningful support but not unanimity in the Senate, passing second reading 25-6 after suspension of the rules and the three-day rule. No committee transcript is available, so there is no recorded debate to indicate detailed arguments for or against the measure. Overall, the vote pattern indicates broad but not universal approval for using tax policy to encourage water conservation.

Contention

The main point of contention is likely the use of property-tax exemptions to incentivize private installation of rainwater harvesting and graywater systems, which can be viewed either as a conservation benefit or as a tax preference that reduces local revenue. Another possible issue is local control: the bill allows county commissioners courts to adopt the exemption, so counties may differ in whether they offer it, and the exemption would affect all taxing units that levy taxes on the property. The bill’s dependence on a constitutional amendment also makes its effectiveness contingent on voter approval.