Bill Text: TX HB2438 | 2021-2022 | 87th Legislature | Comm Sub
Bill Title: Relating to a limitation on property tax rates for municipalities that adopt budgets that defund municipal police departments.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2021-05-13 - Postponed 6/5/21 10:00 AM [HB2438 Detail]
Download: Texas-2021-HB2438-Comm_Sub.html
| 87R17893 MP-F | |||
| By: Meyer | H.B. No. 2438 | ||
| Substitute the following for H.B. No. 2438: | |||
| By: Noble | C.S.H.B. No. 2438 | ||
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| relating to a limitation on property tax rates for municipalities | ||
| that adopt budgets that defund municipal police departments. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. Subtitle A, Title 4, Local Government Code, is | ||
| amended by adding Chapter 109 to read as follows: | ||
| CHAPTER 109. DETERMINATION OF DEFUNDING MUNICIPALITIES | ||
| Sec. 109.001. DEFINITION. In this chapter, "division" | ||
| means the criminal justice division of the office of the governor. | ||
| Sec. 109.002. APPLICABILITY OF CHAPTER. This chapter | ||
| applies only to a municipality with a population of more than | ||
| 250,000. | ||
| Sec. 109.003. DEFUNDING DETERMINATION. Except as provided | ||
| by Section 109.004, a defunding municipality is a municipality: | ||
| (1) that adopts a budget for a fiscal year that, in | ||
| comparison to the municipality's preceding fiscal year, reduces the | ||
| appropriation to the municipality's police department; and | ||
| (2) for which the division issues a written | ||
| determination finding that the municipality has made the reduction | ||
| described by Subdivision (1). | ||
| Sec. 109.0035. INITIAL DETERMINATION. In making a | ||
| determination of whether a municipality is a defunding municipality | ||
| under Section 109.003 according to the budget adopted for the first | ||
| fiscal year beginning on or after September 1, 2021, the division | ||
| shall compare the appropriation to the municipality's police | ||
| department in that budget to the appropriation to that department | ||
| in the budget of the preceding fiscal year or the second preceding | ||
| fiscal year, whichever is greater. This section expires September | ||
| 1, 2023. | ||
| Sec. 109.004. EXCEPTIONS. A municipality is not considered | ||
| to be a defunding municipality under Section 109.003 if: | ||
| (1) for a fiscal year in which the municipality adopts | ||
| a budget that is less than the budget for the preceding fiscal year, | ||
| the percentage reduction to the appropriation to the municipality's | ||
| police department does not exceed the percentage reduction to the | ||
| total budget; or | ||
| (2) before the adoption of a budget, the municipality | ||
| applies for and is granted approval from the division for a | ||
| reduction to the appropriation to the municipality's police | ||
| department to account for: | ||
| (A) capital expenditures related to law | ||
| enforcement during the preceding fiscal year; | ||
| (B) the municipality's response to a state of | ||
| disaster declared under Section 418.014, Government Code; or | ||
| (C) another reason approved by the division. | ||
| Sec. 109.005. TERMINATION OF DEFUNDING DETERMINATION. A | ||
| municipality's defunding determination under Section 109.003 | ||
| continues until the division issues a written determination finding | ||
| that the municipality has reversed the reduction, adjusted for | ||
| inflation, described by Section 109.003(1). | ||
| Sec. 109.006. DIVISION DUTIES. (a) The division shall: | ||
| (1) compute the inflation rate used to make | ||
| determinations under Section 109.005 each state fiscal year using a | ||
| price index that accurately reports changes in the purchasing power | ||
| of the dollar for municipalities in this state; and | ||
| (2) publish the inflation rate in the Texas Register. | ||
| (b) The division shall adopt rules establishing the | ||
| criteria the division uses to approve reductions under Section | ||
| 109.004(2). | ||
| SECTION 2. Chapter 26, Tax Code, is amended by adding | ||
| Section 26.0501 to read as follows: | ||
| Sec. 26.0501. LIMITATION ON TAX RATE OF DEFUNDING | ||
| MUNICIPALITY. (a) In this section, "defunding municipality" means | ||
| a municipality that is considered to be a defunding municipality | ||
| for the current tax year under Chapter 109, Local Government Code. | ||
| (b) Notwithstanding any other provision of this chapter or | ||
| other law, the governing body of a defunding municipality may not | ||
| adopt a tax rate for the current tax year that exceeds the lesser of | ||
| the defunding municipality's no-new-revenue tax rate or | ||
| voter-approval tax rate for that tax year. | ||
| (b-1) Notwithstanding Subsection (b), if a municipality is | ||
| determined to be a defunding municipality according to the budget | ||
| adopted by the municipality for the first fiscal year beginning on | ||
| or after September 1, 2021, the governing body of the defunding | ||
| municipality may not adopt a tax rate for the current year that | ||
| exceeds the least of the defunding municipality's no-new-revenue | ||
| tax rate or voter-approval tax rate for that tax year, the preceding | ||
| tax year, or the second preceding tax year. This subsection expires | ||
| September 1, 2023. | ||
| (c) For purposes of making the calculation required under | ||
| Section 26.013, in a tax year in which a municipality is a defunding | ||
| municipality, the difference between the municipality's actual tax | ||
| rate and voter-approval tax rate is considered to be zero. | ||
| SECTION 3. Chapter 109, Local Government Code, as added by | ||
| this Act, applies only to a budget adopted for a fiscal year that | ||
| begins on or after the effective date of this Act. | ||
| SECTION 4. Section 26.0501, Tax Code, as added by this Act, | ||
| applies beginning with the 2021 tax year. | ||
| SECTION 5. This Act takes effect September 1, 2021. | ||
