88R25618 CJC-F
 
  By: Shine, Martinez Fischer, Kuempel, Ordaz, H.B. No. 1613
      Slawson, et al.
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the provision of state aid to certain local governments
  to offset the cost of the exemption from ad valorem taxation of the
  residence homestead of a 100 percent or totally disabled veteran.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  This Act may be cited as the State Economic
  Reimbursement for Veterans Exemption (SERVE) Act.
         SECTION 2.  Sections 140.011(a)(1) and (2), Local Government
  Code, are amended to read as follows:
               (1)  "Ad valorem tax [General fund] revenue" means the
  dollar amount of ad valorem taxes imposed [revenue generated] by a
  local government for the tax year in which the local government's
  [from the following sources during a] fiscal year begins [and
  deposited in the dedicated general operating fund of the local
  government during that fiscal year:
                     [(A)  ad valorem taxes;
                     [(B)  sales and use taxes;
                     [(C)  franchise taxes, fees, or assessments
  charged for use of the local government's right-of-way;
                     [(D)  building and development fees, including
  permit and inspection fees;
                     [(E)  court fines and fees;
                     [(F)  other fees, assessments, and charges; and
                     [(G)  interest earned by the local government].
               (2)  "Local government" means a municipality or county 
  [:
                     [(A)  a municipality adjacent to a United States
  military installation; and
                     [(B)  a county in which a United States military
  installation is wholly or partly located].
         SECTION 3.  Section 140.011, Local Government Code, is
  amended by amending Subsections (b), (d), (h), and (i) and adding
  Subsections (j) and (k) to read as follows:
         (b)  To serve the state purpose of ensuring that the cost of
  providing ad valorem tax relief to disabled veterans is shared
  equitably among the residents of this state, a local government is
  entitled to a disabled veteran assistance payment from the state
  for each fiscal year that the local government is a qualified local
  government.  A local government is a qualified local government for
  a fiscal year if the amount of lost ad valorem tax revenue
  calculated under Subsection (c) for that fiscal year is [equal to
  or] greater than one [two] percent of the local government's ad
  valorem tax [general fund] revenue for that fiscal year.
         (d)  Subject to Subsection (i), a [A] disabled veteran
  assistance payment made to a qualified local government for a
  fiscal year is calculated by subtracting from the local
  government's lost ad valorem tax revenue calculated under
  Subsection (c) for that fiscal year an amount equal to one percent
  of the local government's ad valorem tax [general fund] revenue for
  that fiscal year.
         (h)  The disabled veteran local government assistance trust
  fund is established as a trust fund outside the state treasury. The
  fund consists of money deposited to the credit of the fund under
  Section 151.801, Tax Code, and other money deposited to the credit
  of the fund at the direction of the legislature. The comptroller
  shall administer the fund as trustee on behalf of qualified local
  governments. The comptroller shall allocate the money deposited to
  the credit of the fund [transfer funds to a newly created account in
  the state treasury] for the purpose of making payments to which
  qualified [reimbursement of] local governments are entitled under
  this section. The comptroller may make a payment from the fund to a
  qualified local government without the necessity of an
  appropriation.
         (i)  If the comptroller determines that the balance of the
  disabled veteran local government assistance trust fund in a state
  fiscal year is not sufficient to pay the full amount of each
  disabled veteran assistance payment to qualified local governments
  in that year, the comptroller shall proportionately reduce the
  amount of each payment made to the qualified local governments that
  year as necessary to prevent the fund from becoming insolvent.
         (j)  If in a state fiscal year the amount of money in the
  disabled veteran local government assistance trust fund exceeds the
  amount necessary to pay the full amount of each disabled veteran
  assistance payment to qualified local governments in that year, the
  comptroller shall transfer the excess amount to the general revenue
  fund not later than the last day of that year.
         (k)  The comptroller shall adopt rules necessary to
  implement this section.
         SECTION 4.  Section 151.801, Tax Code, is amended by
  amending Subsection (a) and adding Subsection (g) to read as
  follows:
         (a)  Except for [the] amounts otherwise allocated under this
  section [Subsections (b), (c), (c-2), (c-3), and (f)], all proceeds
  from the collection of the taxes imposed by this chapter shall be
  deposited to the credit of the general revenue fund.
         (g)  Each state fiscal year the comptroller shall determine
  in the manner prescribed by this subsection an amount of the
  proceeds from the collection of the taxes imposed by this chapter
  and deposit that amount to the credit of the disabled veteran local
  government assistance trust fund established under Section
  140.011, Local Government Code. For the state fiscal years
  beginning September 1, 2023, and September 1, 2024, the amount to be
  deposited to the credit of the disabled veteran local government
  assistance trust fund is $200 million. In the state fiscal year
  beginning September 1, 2025, and each subsequent state fiscal year,
  the amount to be deposited to the credit of the disabled veteran
  local government assistance trust fund is an amount equal to the
  amount deposited to the credit of the fund in the preceding state
  fiscal year, adjusted by the annual rate of change in disabled
  veteran assistance payments made under Section 140.011, Local
  Government Code. For purposes of this subsection, the annual rate
  of change in disabled veteran assistance payments is equal to the
  percentage increase, if any, in the amount of disabled veteran
  assistance payments made under Section 140.011, Local Government
  Code, in the preceding state fiscal year as compared to the amount
  of those payments made in the state fiscal year preceding that state
  fiscal year. When computing the annual rate of change in disabled
  veteran assistance payments for purposes of this subsection, the
  comptroller may not consider the amount by which a disabled veteran
  assistance payment was reduced under Section 140.011(i), Local
  Government Code.
         SECTION 5.  Section 140.011, Local Government Code, as
  amended by this Act, applies to the eligibility of a local
  government to apply for, and the calculation of, a disabled veteran
  assistance payment beginning with the fiscal year of the local
  government that ends in the 2023 tax year.
         SECTION 6.  This Act takes effect September 1, 2023.