H.B. No. 265 proposes the elimination of ad valorem taxes in Texas and establishes a joint interim committee to explore alternative taxation methods to replace the revenue lost from this elimination. The committee will consist of ten members, with five appointed by the Speaker of the House and five by the Lieutenant Governor, and is required to convene by January 1, 2026. The committee's responsibilities include conducting a comprehensive study of potential alternative taxes, assessing their feasibility, and preparing a report with findings and recommendations by November 1, 2026. The committee will be dissolved, and the section will expire on January 1, 2027.

In addition to the establishment of the committee, the bill includes the repeal of Title 1 of the Tax Code, effectively prohibiting the imposition of ad valorem taxes by the state or its political subdivisions. This prohibition will take precedence over any conflicting laws and will not affect tax liabilities that accrued before the effective date of the bill, which is set for January 1, 2035. The bill will take effect 91 days after the conclusion of the legislative session, unless otherwise specified.

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