Harrison Bill Caps Local Revenue Growth At Population Plus Inflation

The text as introduced · 891 words

By: Harrison
H.B. No. 774

A BILL TO BE ENTITLED

AN ACT

relating to municipal and county ad valorem tax relief.

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

SECTION 1. Chapter 140, Local Government Code, is amended

by adding Section 140.014 to read as follows:

Sec. 140.014. AD VALOREM TAX RELIEF USING CERTAIN SURPLUS

REVENUE. (a) In this section:

(1) "Consumer price index" means the index that the

comptroller considers to most accurately report changes in the

purchasing power of the dollar for consumers in this state.

(2) "Inflation rate" means the amount, expressed in

decimal form rounded to the nearest thousandth, computed by

determining the percentage change in the consumer price index for

the most recent 12-month period for which the index can be

determined as compared to the consumer price index for the 12-month

period preceding that period.

(3) "Population growth rate" means the rate of growth

of the state's population during the preceding calendar year,

expressed in decimal form rounded to the nearest thousandth,

determined by the board in accordance with the most recent

population estimates published by the United States Census Bureau.

(4) "Surplus revenue" means the total amount of money

received by a county or municipality in the preceding fiscal year in

excess of the amount computed by:

(A) multiplying the amount of the adopted budget

of the county or municipality for the preceding fiscal year by the

sum of 1 and the population growth rate; and

(B) multiplying the amount computed under

Paragraph (A) by the sum of 1 and the inflation rate.

(b) By July 1 or as soon thereafter as practicable, the

comptroller shall determine the rate of inflation in this state and

publish that rate in the Texas Register.

(c) A county or municipality shall use the total amount of

surplus revenue generated by the county or municipality in the

preceding fiscal year for ad valorem tax relief in the current

fiscal year. The relief must be provided in a manner that reduces

the amount of ad valorem taxes that a property owner would otherwise

be required to pay.

SECTION 2. Chapter 26, Tax Code, is amended by adding

Section 26.046 to read as follows:

Sec. 26.046. ANNUAL LIMIT ON TAX RATE OF COUNTY OR

MUNICIPALITY. (a) In this section:

(1) "Consumer price index" means the index that the

comptroller considers to most accurately report changes in the

purchasing power of the dollar for consumers in this state.

(2) "Inflation rate" means the amount, expressed in

decimal form rounded to the nearest thousandth, computed by

determining the percentage change in the consumer price index for

the most recent 12-month period for which the index can be

determined as compared to the consumer price index for the 12-month

period preceding that period.

(3) "Population growth rate" means the rate of growth

of the state's population during the preceding calendar year,

expressed in decimal form rounded to the nearest thousandth,

determined by the board in accordance with the most recent

population estimates published by the United States Census Bureau.

(b) By July 1 or as soon thereafter as practicable, the

comptroller shall determine the rate of inflation in this state and

publish that rate in the Texas Register.

(c) Notwithstanding any other law, including Sections

26.042 and 26.07, the governing body of a county or municipality

may not adopt a tax rate for a tax year that exceeds the rate,

expressed in dollars per $100 of taxable value, computed by:

(1) multiplying the total amount of money received by

the county or municipality from all sources during the preceding

tax year by the sum of 1 and the population growth rate;

(2) multiplying the amount computed under Subdivision

(1) by the sum of 1 and the inflation rate;

(3) subtracting from the amount computed under

Subdivision (2) the amount of money estimated to be received by the

county or municipality in the current tax year from all sources

other than ad valorem taxes; and

(4) dividing the amount computed under Subdivision (3)

by the current total value for the county or municipality.

(d) By August 7 or as soon thereafter as practicable, an

officer or employee designated by the governing body of a county or

municipality shall calculate the rate described by Subsection (c)

and submit the rate to the governing body of the county or

municipality.

(e) Notwithstanding Subsection (c), the governing body of a

county or municipality may adopt a tax rate for a tax year that

exceeds the rate computed under that subsection if:

(1) before the adoption of a tax rate for that tax year

the county or municipality pledged the taxes for payment of a debt;

and

(2) adopting a rate less than or equal to the rate

computed under that subsection would impair the obligation of the

contract creating the debt.

SECTION 3. Section 140.014, Local Government Code, as added

by this Act, applies only to a county or municipal fiscal year that

begins on or after the effective date of this Act.

SECTION 4. Section 26.046, Tax Code, as added by this Act,

applies only to the ad valorem tax rate adopted by a county or

municipality for an ad valorem tax year that begins on or after the

effective date of this Act.

SECTION 5. This Act takes effect January 1, 2025.