Texas Legislature Passes Key Disaster Tax Reform Bill to Protect Taxpayers from Misuse

Sen. Bettencourt’s Says HB 30 Will Head to Gov’s Desk to Stop Post-Disaster Property Tax Abuse

Harris County Post-Disaster Property Tax Exemption Misuse Sparked Bill, HB 30 closes that loophole! 

AUSTIN, TX – Senator Paul Bettencourt (R-Houston), Chair of the Senate Committee on Local  Government, announced the Senate passage of House Bill 30 (HB 30) with a strong bipartisan 22-9 vote. Authored by Rep. Ellen Troxclair (R-Lakeway) and sponsored by Sen. Bettencourt, who authored the  Senate Bill, SB 1449. The bill replaces an abused disaster tax exemption under Tax Code Section 26.042(d)  with a targeted formula that ensures disaster tax flexibility is used for real recovery efforts and victims, not  for massive property tax hikes without reason. The bill now heads back to the House to concur and then to  the Governor’s desk, and will take effect January 1, 2026.

“We’re ending the no voter approved old roll back tax rate that was driving property tax hikes and  replacing it with a precise formula based on actual, verifiable disaster recovery expenses. said  Senator Bettencourt. “Taxpayers should not be exploited after a disaster.” He added.

Senator Bettencourt pointed to Harris County’s massive property tax hike in 2024 after Hurricane Beryl as  the tipping point: “Harris County drove a Mack Truck through the disaster exemption code by jacking up tax rates nearly 14%!” said Bettencourt. “County Judge Lina Hidalgo publicly said it was only 8% increase, but that was just the old rollback rate. Actually, the avg. homeowner got walloped with a  $312 tax bill hike, even though just 51/49% of voters approved a small part it. This is why Rep.  Troxclair and I filed these bills. If there has to be a tax increase, it should only reflect real disaster  costs and not used to add additional property tax revenue to fill County Coffers!” He concluded.

HB 30 Key Provisions: 

• Repeals Tax Code Section 26.042(d) to eliminate the no voter approval automatic post-disaster  8% old roll back tax rate hikes being misused by taxing units
• Replaces it with a clearly defined “Disaster Debris Rate” formula, allowing tax increases only for  documented, unreimbursed “Disaster Debris Costs” for:

o ALL FEMA Category A, including debris and wreckage removal

o FEMA Category B, Essential Assistance related to: Emergency sheltering, first responder  overtime/hazard pay, water testing, essential supplies, search and rescue, evacuation  services, medical care/transport, and security

• Requires cost estimates to be submitted to the Texas Division of Emergency Management (TDEM)  • Sunsets the tax flexibility area’s property values return to pre-disaster levels or after three years

“This bill is about making government accountable and ensure disaster flexibility is used for real  emergencies—to serve our disaster victims and laws, not government budgets,” said Rep. Ellen  Troxclair. “I’m proud to have worked with Senator Bettencourt to restore fiscal discipline in declared  disasters to help protect both recovery efforts and the taxpayers who fund them.” 

HB 30 is the result of collaboration between the Texas Legislature, Lt. Governor, Speaker and Governor  Offices, TDEM, and local government stakeholders, to balance local tax flexibility with strong statutory  guardrails that prevent disaster recovery tax abuse while preserving FEMA reimbursement eligibility. The  bill takes effect January 1, 2026, upon Governor Abbott’s signature if concurred by the Texas House.