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A BILL TO BE ENTITLED
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AN ACT
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relating to municipal and county ad valorem tax relief. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 140, Local Government Code, is amended |
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by adding Section 140.014 to read as follows: |
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Sec. 140.014. AD VALOREM TAX RELIEF USING CERTAIN SURPLUS |
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REVENUE. (a) In this section: |
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(1) "Consumer price index" means the index that the |
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comptroller considers to most accurately report changes in the |
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purchasing power of the dollar for consumers in this state. |
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(2) "Inflation rate" means the amount, expressed in |
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decimal form rounded to the nearest thousandth, computed by |
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determining the percentage change in the consumer price index for |
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the most recent 12-month period for which the index can be |
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determined as compared to the consumer price index for the 12-month |
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period preceding that period. |
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(3) "Population growth rate" means the rate of growth |
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of the state's population during the preceding calendar year, |
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expressed in decimal form rounded to the nearest thousandth, |
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determined by the board in accordance with the most recent |
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population estimates published by the United States Census Bureau. |
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(4) "Surplus revenue" means the total amount of money |
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received by a county or municipality in the preceding fiscal year in |
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excess of the amount computed by: |
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(A) multiplying the amount of the adopted budget |
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of the county or municipality for the preceding fiscal year by the |
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sum of 1 and the population growth rate; and |
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(B) multiplying the amount computed under |
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Paragraph (A) by the sum of 1 and the inflation rate. |
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(b) By July 1 or as soon thereafter as practicable, the |
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comptroller shall determine the rate of inflation in this state and |
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publish that rate in the Texas Register. |
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(c) A county or municipality shall use the total amount of |
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surplus revenue generated by the county or municipality in the |
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preceding fiscal year for ad valorem tax relief in the current |
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fiscal year. The relief must be provided in a manner that reduces |
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the amount of ad valorem taxes that a property owner would otherwise |
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be required to pay. |
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SECTION 2. Chapter 26, Tax Code, is amended by adding |
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Section 26.046 to read as follows: |
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Sec. 26.046. ANNUAL LIMIT ON TAX RATE OF COUNTY OR |
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MUNICIPALITY. (a) In this section: |
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(1) "Consumer price index" means the index that the |
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comptroller considers to most accurately report changes in the |
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purchasing power of the dollar for consumers in this state. |
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(2) "Inflation rate" means the amount, expressed in |
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decimal form rounded to the nearest thousandth, computed by |
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determining the percentage change in the consumer price index for |
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the most recent 12-month period for which the index can be |
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determined as compared to the consumer price index for the 12-month |
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period preceding that period. |
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(3) "Population growth rate" means the rate of growth |
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of the state's population during the preceding calendar year, |
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expressed in decimal form rounded to the nearest thousandth, |
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determined by the board in accordance with the most recent |
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population estimates published by the United States Census Bureau. |
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(b) By July 1 or as soon thereafter as practicable, the |
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comptroller shall determine the rate of inflation in this state and |
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publish that rate in the Texas Register. |
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(c) Notwithstanding any other law, including Sections |
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26.042 and 26.07, the governing body of a county or municipality |
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may not adopt a tax rate for a tax year that exceeds the rate, |
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expressed in dollars per $100 of taxable value, computed by: |
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(1) multiplying the total amount of money received by |
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the county or municipality from all sources during the preceding |
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tax year by the sum of 1 and the population growth rate; |
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(2) multiplying the amount computed under Subdivision |
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(1) by the sum of 1 and the inflation rate; |
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(3) subtracting from the amount computed under |
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Subdivision (2) the amount of money estimated to be received by the |
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county or municipality in the current tax year from all sources |
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other than ad valorem taxes; and |
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(4) dividing the amount computed under Subdivision (3) |
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by the current total value for the county or municipality. |
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(d) By August 7 or as soon thereafter as practicable, an |
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officer or employee designated by the governing body of a county or |
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municipality shall calculate the rate described by Subsection (c) |
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and submit the rate to the governing body of the county or |
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municipality. |
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(e) Notwithstanding Subsection (c), the governing body of a |
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county or municipality may adopt a tax rate for a tax year that |
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exceeds the rate computed under that subsection if: |
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(1) before the adoption of a tax rate for that tax year |
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the county or municipality pledged the taxes for payment of a debt; |
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and |
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(2) adopting a rate less than or equal to the rate |
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computed under that subsection would impair the obligation of the |
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contract creating the debt. |
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SECTION 3. Section 140.014, Local Government Code, as added |
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by this Act, applies only to a county or municipal fiscal year that |
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begins on or after the effective date of this Act. |
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SECTION 4. Section 26.046, Tax Code, as added by this Act, |
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applies only to the ad valorem tax rate adopted by a county or |
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municipality for an ad valorem tax year that begins on or after the |
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effective date of this Act. |
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SECTION 5. This Act takes effect January 1, 2025. |