Texas House Bill HB23

Texas 2025 - 89th 2nd C.S.

• Filed: 8/15/25
• Out of House Committee: 8/22/25
• Voted on by House: 8/25/25
• Out of Senate Committee: 8/26/25
• Voted on by Senate: 8/26/25
• Governor Action: 9/17/25
• Bill Becomes a Law: 9/17/25

Summary

HB 23 creates a new property tax exemption in the Texas Tax Code for certain nonprofit corporations in counties with populations of 3.3 million or more. The exemption applies to all real and personal property owned by a nonprofit organized exclusively for charitable, educational, and scientific purposes when that property is held for use in promoting agriculture, supporting youth, and providing educational support in the community. The bill also specifies that the exemption does not extend to a for-profit lessee’s interest in the property, such as a leasehold or other possessory interest. The exemption applies only to ad valorem tax years beginning on or after the bill’s effective date, and the act takes effect January 1, 2026.

Impact

HB 23 amends Section 11.23 of the Texas Tax Code by adding a new exemption category for qualifying nonprofit-owned property in the state’s most populous counties. In practical terms, it removes local property tax liability from eligible nonprofit real and personal property used for agriculture promotion, youth support, and educational support, while preserving taxation of for-profit possessory interests in that property. The bill affects county and local taxing authorities in large counties and benefits qualifying nonprofit organizations operating in those communities.

Sentiment

The bill appears to have broad legislative support. It passed the House by a wide margin, 113-13, and the Senate by 26-1, suggesting general agreement with the policy goal of supporting nonprofit community organizations. The recorded votes indicate only limited opposition and no committee transcript is available to show extended debate.

Contention

The main point of contention is likely the creation of a targeted property tax exemption limited to counties with populations of 3.3 million or more, which may raise concerns about unequal treatment across counties or the narrowing of the tax base for local governments. Another possible issue is whether the exemption is broad enough or too broad in defining nonprofits and qualifying uses, though the bill’s text limits eligibility to nonprofits organized exclusively for charitable, educational, and scientific purposes and excludes for-profit leasehold interests. The small number of dissenting votes suggests these concerns did not generate major resistance.