HB774 - Relating to municipal and county ad valorem tax relief.

      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.