Vasut Bill Ends Property Taxes, Starting In 2035

The text as introduced · 623 words

89R2078 RDS-D

By: Vasut
H.B. No. 165

A BILL TO BE ENTITLED

AN ACT

relating to the elimination of ad valorem taxes and the creation of

a joint interim committee on the elimination of those taxes.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. (a) In this section, "committee" means the joint

interim committee on the elimination of ad valorem taxes.

(b) The joint interim committee on the elimination of ad

valorem taxes is composed of:

(1) five members of the house of representatives

appointed by the speaker of the house of representatives; and

(2) five senators appointed by the lieutenant

governor.

(c) The speaker of the house of representatives and the

lieutenant governor shall make the appointments under Subsection

(b) of this section not later than November 1, 2025.

(d) The speaker of the house of representatives and the

lieutenant governor shall each designate a co-chair from among the

committee members.

(e) The committee shall convene at the joint call of the

co-chairs.

(f) The committee has all other powers and duties provided

to a special or select committee by the rules of the senate and

house of representatives, by Subchapter B, Chapter 301, Government

Code, and by policies of the senate and house committees on

administration.

(g) The committee shall conduct a comprehensive study of

alternative methods of taxation to replace local tax revenue that

will be lost when ad valorem taxes are eliminated.

(h) For each alternative method of taxation considered by

the committee, the committee shall:

(1) consider whether political subdivisions that

currently impose ad valorem taxes would have the authority to

impose the proposed alternative tax;

(2) determine the average tax rate for the proposed

alternative tax imposed by each type of political subdivision that

would be necessary to generate the same amount of tax revenue as the

amount of tax revenue lost as a result of the elimination of ad

valorem taxes;

(3) determine, if appropriate, the effect that

broadening the application of the proposed alternative tax at the

local level would have on the tax rates identified under

Subdivision (2) of this subsection;

(4) identify whether tax revenue generated by the

proposed alternative tax would require redistribution to offset

disparities in available local tax revenue as a result of the

elimination of ad valorem taxes and, if so, evaluate the different

mechanisms of redistribution available; and

(5) identify and examine any other issue that would

need to be addressed to implement the elimination of ad valorem

taxes.

(i) On request of the committee, a state agency or political

subdivision shall provide information for and assistance in

conducting the study under this section.

(j) Not later than November 1, 2026, the committee shall

prepare and submit to the legislature a written report containing

the results of the study and any recommendations for legislative or

other action.

(k) The committee is abolished and this section expires

January 1, 2027.

SECTION 2. (a) Title 1, Tax Code, is repealed.

(b) Notwithstanding any other law, this state or a political

subdivision of this state may not impose an ad valorem tax. To the

extent of a conflict, this section controls over a conflicting

provision in a general or special law.

(c) The change in law made by this section does not affect

tax liability accruing before the effective date of this section.

That liability continues in effect as if this section had not been

enacted, and the former law is continued in effect for the

collection of taxes due and for civil and criminal enforcement of

the liability for those taxes.

(d) This section takes effect January 1, 2035.

SECTION 3. Except as otherwise provided by this Act, this

Act takes effect September 1, 2025.