Bill Text: TX HB91 | 2017 | 85th Legislature 1st Special Session | Introduced
Bill Title: Relating to the abolition of ad valorem taxes and a study of alternative methods of taxation to replace revenue lost to political subdivisions as a result of the abolition of ad valorem taxes.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2017-07-20 - Referred to Ways & Means [HB91 Detail]
Download: Texas-2017-HB91-Introduced.html
| 85S10039 CJC-D | ||
| By: Swanson | H.B. No. 91 | |
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| relating to the abolition of ad valorem taxes and a study of | ||
| alternative methods of taxation to replace revenue lost to | ||
| political subdivisions as a result of the abolition of ad valorem | ||
| taxes. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. (a) The legislature finds that: | ||
| (1) the imposition of ad valorem taxes is an | ||
| inherently inequitable means to generate revenue necessary to fund | ||
| the provision of essential services to residents of this state; | ||
| (2) ad valorem taxes may increase annually without | ||
| regard to the property owner's ability to pay; | ||
| (3) ad valorem taxes are perpetual and detrimental to | ||
| private property rights as secured by the Texas Constitution; | ||
| (4) the use of ad valorem taxes as a means to finance | ||
| the maintenance of public free schools has led directly to three | ||
| decades of school finance litigation in which the Texas Supreme | ||
| Court has referred to the system as "Byzantine" and has urged the | ||
| legislature to "choose a new path" of revenue for public free | ||
| schools; | ||
| (5) the use of ad valorem taxes by local governmental | ||
| entities as a means to generate revenue to fund the provision of | ||
| essential services places a disproportionate burden on those | ||
| residents that own property to pay for services that are enjoyed by | ||
| all residents; and | ||
| (6) the legislature has an obligation to ensure that | ||
| local governmental entities provide essential services in a manner | ||
| that is fair and fiscally responsible, and should encourage the use | ||
| of a more equitable source of revenue, such as the sales tax, to | ||
| fund the provision of those services. | ||
| (b) It is the intent of the legislature to abolish ad | ||
| valorem taxes and to create a more equitable means of funding the | ||
| provision of essential services to residents of this state by local | ||
| governmental entities and of meeting the state's constitutional | ||
| duty to make suitable provision for the support and maintenance of | ||
| an efficient system of public free schools. | ||
| SECTION 2. (a) The comptroller of public accounts shall | ||
| conduct a comprehensive study of alternative methods of taxation to | ||
| replace local tax revenue that will be lost when ad valorem taxes | ||
| are abolished. | ||
| (b) For each alternative method of taxation considered by | ||
| the comptroller, the comptroller shall: | ||
| (1) consider whether political subdivisions that | ||
| currently impose ad valorem taxes would have the authority to | ||
| impose the proposed alternative tax; | ||
| (2) determine the average tax rate for the proposed | ||
| alternative tax imposed by each type of political subdivision that | ||
| would be necessary to generate the same amount of tax revenue as the | ||
| amount of tax revenue lost as a result of the abolition of ad | ||
| valorem taxes; | ||
| (3) determine, if appropriate, the effect that | ||
| broadening the application of the proposed alternative tax at the | ||
| local level would have on the tax rates identified under | ||
| Subdivision (2) of this subsection; | ||
| (4) identify whether tax revenue generated by the | ||
| proposed alternative tax would require redistribution to offset | ||
| disparities in available local tax revenue as a result of the | ||
| abolition of ad valorem taxes and, if so, evaluate the different | ||
| mechanisms of redistribution available; and | ||
| (5) identify and examine any other issue that would | ||
| need to be addressed to implement the abolition of ad valorem taxes. | ||
| (c) On request of the comptroller, a state agency or | ||
| political subdivision shall provide information for and assistance | ||
| in conducting the study under this section. | ||
| (d) Not later than December 1, 2018, the comptroller shall | ||
| prepare and submit to the governor, lieutenant governor, speaker of | ||
| the house of representatives, and members of the legislature a | ||
| written report containing the results of the study and any | ||
| recommendations for legislative or other action. | ||
| (e) This section expires September 1, 2019. | ||
| SECTION 3. (a) Title 1, Tax Code, is repealed. | ||
| (b) Notwithstanding any other law, this state or a political | ||
| subdivision of this state may not impose an ad valorem tax. To the | ||
| extent of a conflict, this section controls over a conflicting | ||
| provision in a general or special law. | ||
| (c) The change in law made by this section does not affect | ||
| tax liability accruing before the effective date of this section. | ||
| That liability continues in effect as if this section had not been | ||
| enacted, and the former law is continued in effect for the | ||
| collection of taxes due and for civil and criminal enforcement of | ||
| the liability for those taxes. | ||
| (d) This section takes effect January 1, 2022. | ||
| SECTION 4. Except as otherwise provided by this Act, this | ||
| Act takes effect December 1, 2017. | ||
