Texas House rejects Senate tax plan, OKs its own and ends its part in special session

After failing to pass record property tax relief for Texans during the Legislature's 88th regular session, which ended Monday, lawmakers were called back to the Capitol for a special session Tuesday and after each chamber passed its own tax plan, the House adjourned for the special session.

Nearly three hours after the regular session ended Monday, Gov. Greg Abbott called a special session for lawmakers to deliver on the GOP's promise for tax relief and to crack down on human smuggling across the Texas-Mexico border.

Senators convened the special session Tuesday afternoon and advanced a $60,000 increase to the state's homestead exemption tax while compressing tax rates. Later in the day, House Speaker Dade Phelan, R-Beaumont, said the Senate's proposal will not be heard in a House committee, saying the homestead exemption is outside the governor's directive for the special session.

"Senate Bill 1 and Senate Joint Resolution 1 are not germane to the call of the governor," Phelan said Tuesday, emphasizing Abbott's call for legislation that would "cut property-tax rates solely by reducing the school district maximum compressed tax rate."

The House on Tuesday also passed its own property tax proposal before adjourning the special session on sine die, which was met with a raucous cheer from the 143 members in the chamber when the end came.

Phelan said what proved to be a dramatic end to the one-day session was in the cards from the start.

"When Governor Abbott declared a special session yesterday evening, we had every intention of gaveling in this morning, fulfilling the governor’s call, and gaveling out," Phelan said in a statement released just minutes after the House adjourned. "I am proud to say that’s exactly what happened in the Texas House today.”

In a statement Tuesday evening, Abbott said he was supportive of the House's plan.

"The Texas House is the only chamber that passed a property tax cut bill that is germane to the special session that I called to provide Texans with property tax relief," he said. "It provides more cuts to property tax rates than any other proposal at this time. ... I look forward to signing it when it reaches my desk."

Phelan seemingly outmaneuvered Patrick during the special session by having the governor endorse his tax plan after the House and Senate chiefs had been at odds during the whole regular session with competing tax relief proposals. Patrick, who oversees the Senate, had been pushing to raise the state's homestead exemption, while Phelan proposed lowering the annual property appraisal cap from 10% to 5%.

After the House adjourned Tuesday, its members walked out of the chamber remarking to one another about the gambit, with one saying to a colleague, "Now that's how you sine die," using the traditional Latin phrase that signifies the end of a legislative session.

Patrick, who has taken to social media to belittle Phelan and the House's tax plan, blasted Abbott in a tweet on Tuesday night.

"He seems misinformed about the roles of the executive and legislative branches of government," Patrick said of Abbott. "While the Governor has the sole authority to call the Legislature into Session, the Legislature writes the bills — the courts have been crystal clear on this."

Patrick continued: "I stand by our bill. It is germane to the call — legal precedent is clear on this point. Something Governor Abbott and Speaker Phelan should remember — for any bill to pass, it must go through both the House AND the Senate."

The Texas Senate's tax plan

Carried by the Senate's point man on property tax, Senate Bill 1 and its companion joint resolution by Sen. Paul Bettencourt, R-Houston, proposes to raise the homestead exemption from $40,000 to $100,000.

The Senate's plan also proposes to lower school district maintenance and operation tax rates by nearly 21 cents, which is about a 21.8% reduction in property tax rates across the state, Bettencourt said while laying out the bill on the Senate floor Tuesday. Hours later, the House refused to take up the measure.

The Senate's bill and the joint resolution, which is necessary as the homestead exemption increase would require voter approval to change the state's constitution, were passed unanimously from the Senate Finance Committee on Tuesday and was made available for consideration to the full chamber minutes later.

After the quick vote and approval by the Senate, Bettencourt told his colleagues that the homestead exemption would be retroactive and be applicable this year, possibly allowing savings up to $1,246 and $1,416 for seniors.

More: Texas Legislature starts special session with House, Senate at odds over property tax cuts

"I am astonished with the magnitude of this," Bettencourt said before the Senate approved both measures by a 30-0 vote.

Throughout the regular session, the House and Senate could not agree on the upper chamber's proposed homestead exemption or the lower chamber's push to limit property appraisal increases.

As negotiations continued late in the regular session, the House amended the Senate's homestead proposal to increase the exemption to $100,000, from a previously proposed $70,000, while also lowering the allowed annual appraisal cap increase to 5%.

A deal was never struck on the House's final proposal, resulting in a special session.

The regular session ended Monday with $17.6 billion allocated in the upcoming biennium budget for property tax relief, though with no bicameral agreement on how to deliver that relief.

On the other side of the Capitol Rotunda on Tuesday, the House filed several bills focused on providing property tax relief and addressing the border, specifically to curb human smuggling.

Rep. Morgan Meyer, R-Dallas, had been on the front line for the House during the ongoing property tax debate during the regular session. On Tuesday, Meyer's newest House-backed bill, House Bill 1 — focused on decreasing the maximum compressed tax rate of a school district by $0.162, not increasing the homestead exemption — easily passed the chamber.

After the Senate passed SB 1 on Tuesday, Patrick called its proposed homestead exemption increases and tax compression powerful relief tools.

"The combination of a substantial homestead exemption and property tax compression is a very powerful way to deliver serious property tax relief," Patrick said in a statement. "I have been crystal-clear that taxpayers deserve to receive the largest property tax cut in Texas history, and SB 1 delivers on that promise sustainably and responsibly.”

Outside of the total tax relief amount, Patrick said the governor's call for a special session does not get in the way of either chamber's discretion in crafting proposals to reach the tax relief goal.

More: After Texas House impeaches Ken Paxton, Senate will have trial where his wife has a vote

"It's well established in both Senate precedences and Texas case law that the Legislature is not held in strict interpretation of something submitted in the governor's call," Patrick said. "But that the Legislature has the authority to determine the specific details of legislation as long as they come generally within the call."

Phelan clearly disagreed, as he said the Senate's proposals will not advance in the House and are "not germane" to the governor's call.

After signaling that Senate bills will be dead on arrival, the House adopted its property tax proposal and adjourned the special session permanently.

Earlier in the day, the Texas Senate recessed until Friday at 10 a.m.

The Senate still has a chance to take up the House's plan, take a vote on the proposals and advance them to the governor to become law. But Patrick's statement suggests the Senate is not ready to jump on board with the House plan.

"While the House may have thrown in the towel, the Senate continues to work," Patrick said.

This article originally appeared on Austin American-Statesman: Texas Legislature: House spurns Senate tax plan, OKs its own, adjourns