BILL ANALYSIS

H.B. 2894

By: Hickland

Ways & Means

Committee Report (Unamended)

BACKGROUND AND PURPOSE

In 2009, the Texas Legislature enacted a law granting a residence homestead property tax exemption to 100 percent or totally disabled veterans. In 2011, the legislature expanded this exemption to include the surviving spouses of these disabled veterans, and in 2015, the legislature established a framework for providing relief to certain local governments disproportionately affected by the granting of property tax relief to such disabled veterans and surviving spouses. Under that framework, municipalities adjacent to a U.S. military installation and counties in which a U.S. military installation is wholly or partly located are eligible to receive disabled veteran assistance payments from the state. However, the bill author has informed the committee that only nine local governments currently meet these eligibility requirements, even though many communities could benefit greatly from these payments. The bill author has also informed the committee that, as the number of disabled veterans using the exemption increases statewide, the burden of higher property taxes shifts to other homeowners and may strain local governments with a high concentration of veterans that do not qualify for the assistance payments. H.B. 2894 seeks to address these issues by expanding the eligibility criteria for these assistance payments to municipalities that are not adjacent to a U.S. military installation but experience property tax revenue loss due to the exemption of an amount equal to or greater than 10 percent of the municipality's general fund revenue in a fiscal year .

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

H.B. 2894 amends the Local Government Code to entitle a municipality other than a municipality adjacent to a U.S. military installation to a disabled veteran assistance payment from the state for a fiscal year if the amount of lost property tax revenue due to the granting of property tax relief to disabled veterans calculated under applicable state law for that fiscal year is equal to or greater than 10 percent of the municipality's general fund revenue for that fiscal year. Accordingly, the bill removes the condition that a municipality be adjacent to a U.S. military installation to be classified as a local government for purposes of statutory provisions relating to the provision of state aid to certain local governments disproportionately affected by the granting of property tax relief for disabled veterans. This removal applies only to the eligibility of a local government to apply for a disabled veteran assistance payment beginning with the fiscal year of the local government that ends in the 2025 tax year.

EFFECTIVE DATE

September 1, 2025.