Bill > HB774

This bill introduces new provisions for municipal and county ad valorem (property) tax relief and tax rate limitations in Texas. The bill establishes a mechanism for calculating surplus revenue by comparing a county or municipality's annual budget and revenue to population growth and inflation rates, requiring any surplus to be used for reducing property taxes. It also places a cap on annual tax rates by mandating that local governments cannot adopt a tax rate that exceeds a calculated maximum, which is determined by multiplying the previous year's total revenue by population growth and inflation rates, then subtracting estimated non-property tax revenues and dividing by the current total property value. The comptroller will be responsible for determining and publishing the inflation rate annually by July 1st. An exception to the tax rate limit exists for counties or municipalities that have pledged taxes for debt payment, allowing them to maintain a rate that ensures their contractual obligations can be met. The bill will take effect on January 1, 2025, and will apply to fiscal and tax years beginning on or after that date, with the goal of providing property tax relief and constraining local government tax increases.

Budget and Finance

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB774