The first official day of the second special session called by Governor Greg Abbott to tackle property tax relief ended with both legislative chambers  continuing to back separate proposals – signaling negotiations are still at an impasse.

House Bill 1 by Representative Morgan Meyer (R-University Park), which passed unanimously in the House Ways and Means Committee, is identical to the final property tax plan the House previously approved prior to adjourning at the start of the first special session.

This legislation exclusively includes tax compression – sending state dollars to school districts to lower their property tax rates – which aligns with how Abbott suggested the chambers provide property tax cuts to Texans.

Lieutenant Governor Dan Patrick said this proposal would not pass through the Senate, which took up Senate Bill 1 by Senator Paul Bettencourt (R-Houston). This new legislation is nearly the same as Senate Bill 26, which passed in the chamber last week.

This proposal includes what Patrick and Abbott want, an increase to the homestead exemption and tax compression, respectively. It also increases the number of businesses that do not have to pay their franchise tax and tightens revenue caps on school districts – all methods of cutting taxes from the previous Senate bill.

Bettencourt said the new component of the bill was the prohibitions tacked on to keep school districts from canceling their local homestead exemptions.

Bettencourt said this measure would be a “win, win, win” as it would lower local property taxpayers’ tax bills by billions, exempt 67,000 Texas businesses from paying their franchise taxes and help public school districts with their debt budgets by $642 million.

The Senate approved the new proposal and its corresponding constitutional amendment, and an amendment that provides $2,000 and $6,000 in supplemental pay for urban and rural teachers, respectively. However, these funds will just be available through the end of this coming school year.

The House recessed earlier than the Senate, without considering its proposal referred out of committee. House Speaker Dade Phelan said it would stand adjourned until Wednesday, July 5.

The ongoing deadlock between the two lawmakers began during the regular session, with Patrick wanting to increase the homestead exemption and Phelan instead calling to reduce the state’s appraisal cap. The lack of agreement intensified when Abbott called the first special session, asking both chambers to pass a proposal that only included tax compression.

The House sided with the governor, dropping Phelan’s hope to tighten the appraisal cap and passed legislation that solely provided property tax cuts through compression. The chamber then adjourned on the first day of the session.

The Senate was stuck and either had to pass this proposal or not act on property tax altogether. Senators rejected the legislation, citing concerns that it primarily benefited commercial land and business owners – as opposed to Texas homeowner.

Instead, after convening multiple times, the Senate passed Senate Bill 26, which increased tax cuts to more business owners while simultaneously saving an estimated $1,270 in tax payments for homeowners and $1,450 to those older than 65 or disabled.

Patrick said this measure was close to leading both chambers to a compromise and included “the best parts” of what items were up for discussion during negotiations between the House and the Senate.

Ultimately, the House did not reconvene to consider the proposal despite Patrick asking the representatives to return. Talks between the two legislative bodies did not result in an agreement before the first special session ended.

Before the Senate recessed until Friday, Patrick said he texted Phelan to suggest meeting “face to face” as he saw this as the best way to reach a possible deal. He said the speaker agreed to meeting with the lieutenant governor.

Patrick said both chambers could have a chance to get this “resolved quickly” in the coming week and bring an early end to the second special session. The Senate remains unwilling to compromise in one area — the homestead exemption — while the House has already sacrificed its appraisal cap plan.

The governor has said in his memo calling for a special session, that he would continue to call for property tax cuts through tax compression, unless and until the House and Senate agreed on a different proposal to provide property tax cuts.