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2025 · Regular session · House bill
HB2894
HB2894 expands which cities and counties can qualify for state assistance when specified disabled-veteran property-tax exemptions substantially reduce their revenue.
Official caption: Relating to the provision of state aid to certain local governments disproportionately affected by the granting of ad valorem tax relief to disabled veterans.
Official report lists House author(s): Hickland, Gervin-Hawkins, Schoolcraft, Bernal, Lujan. This does not identify sponsors or amendment drafters.
Bill explanation published · Version and amendment review scope is stated below · Individual amendment records may not be separately annotated.
Bill highlights
Selected points from the published explanation. Follow each point to its source-linked context; conditions and limits may matter.
- HB2894 expands which cities and counties can qualify for state assistance when specified disabled-veteran property-tax exemptions substantially reduce their revenue.
- The law retains the existing route for a city adjacent to a U.S. military installation or a county containing all or part of one: calculated lost property-tax revenue must reach at least 2 percent of general-fund revenue.
- The unchanged calculation rules matter.
- The act took effect September 1, 2025.
What does it do?
HB2894 expands which cities and counties can qualify for state assistance when specified disabled-veteran property-tax exemptions substantially reduce their revenue. It changes aid to local governments—not veterans’ eligibility for the underlying exemption, and not a direct payment to veterans. Although the definition of local government now includes any municipality or county, the separate qualification rules still sharply limit eligibility. Final law, Sections 1–4.
The law retains the existing route for a city adjacent to a U.S. military installation or a county containing all or part of one: calculated lost property-tax revenue must reach at least 2 percent of general-fund revenue. It adds a 10-percent threshold for these specified additional categories:
- A municipality in a military-installation county whose population is more than 370,000 but no more than 380,000, or more than 83,000 but no more than 84,000.
- A county with fewer than 25,000 people, adjacent to two counties containing the same U.S. Army installation, neither adjacent county having more than 400,000 people; municipalities in that qualifying small county are also included.
The unchanged calculation rules matter. Lost revenue is based on the local tax rate and appraised value exempt under Tax Code Section 11.131, which covers the residence homestead exemption for qualifying fully disabled veterans and specified surviving spouses. The payment formula subtracts 1 percent of general-fund revenue from calculated lost revenue; it does not simply reimburse every dollar lost. Existing application deadlines and payment from available funds remain. Local aid statute; underlying exemption.
The act took effect September 1, 2025. Its transition expressly applies the amended local-government definition to eligibility beginning with the local fiscal year ending in the 2025 tax year. The governor signed June 20, 2025. Official history.
What changed along the way?
The filed bill and House committee version proposed a broader 10-percent eligibility route for municipalities not adjacent to a military installation, while retaining the existing county definition. Spiller’s adopted House amendment expanded the county definition and added counties adjacent to a military-installation county to that proposed 10-percent route. The House-passed text reflects that amendment.
The Senate substitute narrowed the new eligibility route to the population and geographic categories listed above. The House concurred May 23, and those narrower rules became law. The sole indexed floor amendment was Spiller’s; the Senate committee substitute is a separate substantive change. The final law does not give every city or every county near a military installation the new 10-percent route.
For the full amendment record, open the official amendment index.
Official bill versions
Compare the published text versions in the official text index. A change is not attributed to a specific amendment here without a verified record.
Who could benefit—and who could bear the costs?
Newly qualifying local governments could receive help supporting services despite a concentrated loss of taxable homestead value. The existing exemption for veterans and surviving spouses is unchanged. Broader aid eligibility can also change how a limited pool of state funding is distributed among applicants.
The latest fiscal note anticipates no state fiscal impact from this bill alone because the program has a fixed appropriation available for distribution; expanding eligibility changes distribution rather than automatically adding funding. It says local fiscal effects cannot be determined. This does not promise full payment to every eligible government, establish a new appropriation or quantify each locality’s gain or loss.
Official sources
- Bill history and latest recorded action
- Bill versions, analyses and fiscal notes
- Action history and votes
- Amendment index
Catalog report retrieved 2026-10-25. Check the official record for corrections or later changes.