85S10039 CJC-D
	By: Swanson	H.B. No. 91

	A BILL TO BE ENTITLED
	AN ACT
	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.