According to the Legislative Budget Board (LBB), HB 972 is expected to have no significant fiscal implications for the State. However, it is projected to have some minor downstream effects, particularly related to public school funding and local property tax revenues.

The bill provides a property tax exemption equal to the general homestead exemption (under Tax Code Section 11.13(b)) for certain non-homestead properties serving as the primary residence of an adult with an intellectual or developmental disability. This exemption is only available if the property does not already receive a homestead exemption and if the resident is related to the owner or trustee within the third degree of consanguinity.

Approximately 6,400 individuals across Texas are estimated to live in arrangements that would qualify under the bill, out of a broader IDD population of around 489,000. Because this population is relatively limited, the reduction in taxable property value—and consequently the decrease in associated tax revenue—is not expected to substantially affect the state budget. However, under the school finance formula, the state would absorb some increased costs to compensate for reduced local school district revenue, though these impacts are not considered significant.

At the local level, governments could experience a modest reduction in taxable property values. This may prompt adjustments to their no-new-revenue and voter-approval tax rates under Section 26.04 of the Tax Code. If taxing units do not increase their rates, they would experience a slight revenue decline. However, if they do adjust rates upward, the initial impact would be distributed among other taxpayers, slightly reducing the savings to property owners receiving the new exemption.

HB 972 proposes a targeted and narrowly crafted property tax exemption to benefit families who provide housing for adult relatives with intellectual or developmental disabilities (IDD). Currently, such adults are often unable to hold property in their own name without jeopardizing essential federal benefits like Medicaid or Supplemental Security Income. This forces many families to title the residence under a relative’s name, rendering them ineligible for the existing residence homestead exemption. HB 972 addresses this gap by allowing an exemption equivalent to the general homestead amount, provided the property serves as the primary residence of an adult with IDD who is related within the third degree of consanguinity.

The bill strengthens individual liberty by respecting family caregiving decisions and enhancing housing stability for Texans with disabilities. It reinforces private property rights by extending tax fairness to owners who use their property to support loved ones. The measure also avoids creating new mandates or entitlements, maintaining a limited scope in alignment with the principle of limited government.

That said, this recommendation is made with measured caution. While the fiscal impact to the state is projected to be minimal, and the affected population is small (estimated at approximately 6,400 qualifying households), each additional exemption incrementally narrows the local tax base​. Over time, the accumulation of such exemptions can shift the burden onto those who do not qualify, including small business owners and working-class homeowners, unless accompanied by spending restraint or structural reforms. This broader concern—that tax relief for some may come at the expense of others—should remain central to any ongoing review of property tax policy.

In summary, Texas Policy Research recommends that lawmakers vote YES on HB 972 due to its fairness, narrow tailoring, and alignment with core liberty principles—but that support is tempered by a standing policy concern over expanding exemptions without parallel efforts to control spending or re-balance the tax system.

• Individual Liberty: The bill supports individual liberty by recognizing and accommodating the unique housing arrangements required by adults with intellectual or developmental disabilities (IDD). Many individuals with IDD rely on family members to provide housing, often through homes owned by parents or siblings, because owning property themselves can disqualify them from essential federal support programs. This bill ensures those individuals still benefit from the protections and tax relief typically afforded to homestead residents, even if they cannot hold legal title. It respects the autonomy and dignity of disabled Texans by supporting family-based, community-integrated living instead of institutional alternatives.
• Personal Responsibility: The bill indirectly promotes personal and familial responsibility by enabling families to care for their loved ones in their own homes without being penalized through higher property tax burdens. Rather than rely solely on public housing or care facilities, this measure empowers families who voluntarily assume responsibility for the long-term care and housing of relatives with disabilities. It does not create new entitlements or subsidies, but rather supports those already exercising personal initiative.
• Free Enterprise: The bill does not directly interfere with or promote private commercial enterprise. However, by easing the financial burden on families caring for disabled adults at home, it may slightly reduce reliance on publicly or privately run group homes and institutional care providers. This creates space for voluntary, decentralized solutions without imposing mandates or restrictions on the private sector.
• Private Property Rights: The bill expands property tax relief to a class of property owners who use their property in service of a compelling family and social purpose—housing a loved one with a disability. It treats these owners more equitably under the law, ensuring that the tax system recognizes a legitimate use of property even if the legal owner is not the occupant. This affirms the idea that owners should not be penalized for using their property in ways that serve family and community needs.
• Limited Government: While the bill is carefully targeted and avoids regulatory expansion, it still adds a new exemption to the Tax Code. Over time, the accumulation of special exemptions can narrow the tax base and prompt local governments to raise rates on non-exempt property, potentially undermining tax fairness and transparency. From a limited government perspective, this kind of exemption should ideally be paired with a broader strategy to review, consolidate, or sunset outdated exemptions and restrain public spending. So while the bill does not expand government control or bureaucracy, it raises a longer-term concern about the sustainability and simplicity of the tax system.

• HJR 72 (Enabling for)