Troxclair’s Tax Injunction Window Closes 15 Days After Rate Adoption

The text as introduced · 646 words

By: Troxclair
H.B. No. 3879

A BILL TO BE ENTITLED

AN ACT

relating to restrictions on the levy and use of certain ad valorem

taxes and the issuance of certain bonds supported by ad valorem

taxes.

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

SECTION 1. Section 26.012, Tax Code, is amended by adding

Subdivision (16-a) to read as follows:

(16-a) "Materially Deviate" means to make a

significant change in carrying out the purpose stated to voters on a

ballot proposition, stated in any order or resolution calling for

an election required under this chapter, or resolutions adopted to

accompany or supplement a ballot proposition, including:

(A) a significant change in purpose;

(B) a significant change in the financing

structure for the purpose;

(C) an increase of more than 33 percent in actual

or projected costs of the purpose;

(D) a significant reduction in scope or scale of

the purpose;

(E) a legal determination, including a finding

under Government Code 1202 or 1205, that the purpose stated on the

ballot proposition or any order or resolution calling for an

election required under this chapter was not in conformity with

law; or

(F) any other attempt to substantially impair the

rights and expectations of the voters as they existed at the time of

the election.

SECTION 2. Section 26.05, Tax Code, is amended by adding

Subsection (e-2) to read as follows:

(e-2) A person who owns taxable property is entitled to an

injunction restraining the collection of taxes by a taxing unit in

which the property is taxable if the taxing unit materially

deviates from the purpose stated at the time the voters approved a

tax rate under this chapter. A property owner is not required to

pay the taxes imposed by a taxing unit on the owner's property while

an action filed by a property owner under this subsection is

pending. If the property owner pays the taxes and subsequently

prevails in the action, the property owner is entitled to a refund

of the taxes paid, together with reasonable attorney's fees and

court costs. The property owner is not required to apply to the

collector for the taxing unit to receive the refund.

SECTION 3. Section 26.07, Tax Code, is amended by adding

Subsection (h) to read as follows:

(h) Notwithstanding any other law, an increase in a taxing

unit's maintenance and operations tax revenue derived from an

election under this section may not be used or transferred to a

local government corporation to repay a public security in

installment payments or otherwise.

SECTION 4. The heading to Chapter 1253, Government Code, is

amended to read as follows:

CHAPTER 1253. PUBLIC SECURITIES [ GENERAL OBLIGATION BONDS ]

ISSUED BY LOCAL ENTITIES [ POLITICAL SUBDIVISIONS ]

SECTION 5. Chapter 1253, Government Code, is amended by

adding Section 1253.004 to read as follows:

Sec. 1253.004. LIMITATION ON AUTHORITY TO USE AD VALOREM

TAX REVENUE TO PAY PUBLIC SECURITIES. (a) In this section, "public

security" has the meaning assigned by Section 1201.002.

(b) A municipality, county, or local government corporation

may not dedicate, pledge, or otherwise use revenue subject to

annual appropriation and derived wholly or partly from ad valorem

taxes from an election under Chapter 26 of the Tax Code for payment

of a public security, including revenue transferred to a local

government corporation, to secure or make payments on a public

security.

SECTION 6. Section 1253.004, Government Code, as added by

this Act, applies only to a public security as defined by that

section issued on or after the effective date of this Act.

SECTION 5. This Act takes effect immediately if it receives

a vote of two-thirds of all the members elected to each house, as

provided by Section 39, Article III, Texas Constitution. If this

Act does not receive the vote necessary for immediate effect, this

Act takes effect September 1, 2025.