Texas House Bill HB32

Texas 2021 - 87th 3rd C.S.

Caption

Relating to a credit against the ad valorem taxes imposed on property owned by a person who makes a donation to the state for the purpose of border security and reimbursement to taxing units for the revenue loss incurred as a result of the credit.

Impact

If enacted, the bill would amend existing tax code provisions to allow property owners who donate to border security initiatives to receive tax credits, potentially increasing state revenue as more individuals and businesses recognize the value of their contributions through tax relief. This could also lead to increased funding towards state-sponsored border security programs, as the bill aims to reimburse taxing units for losses incurred due to the implementation of these credits, thereby maintaining local revenue levels.

Summary

House Bill 32 establishes a credit against ad valorem taxes for property owners who donate to the state in support of border security efforts. This bill aims to incentivize donations by offering a tax relief mechanism to both individuals and businesses that contribute to initiatives enhancing the security of Texas' international border with Mexico. The credit can be claimed up to the amount of the property taxes owed, effectively linking financial support for border security to property tax liabilities.

Contention

During discussions surrounding HB 32, there were concerns expressed regarding the implications of linking tax credits to donations for border security. Critics argue that this could divert essential tax revenue from local services and public goods to border security initiatives, which they claim may not be a priority for all constituents. Supporters of the bill contend that enhancing border security is crucial for state safety and that incentivizing financial contributions via tax credits is a practical and necessary measure.

Reimbursement

The bill delineates a clear process whereby taxing units can seek reimbursement for the revenue losses resulting from the tax credits granted. It specifies that an application for reimbursement must be made by the taxing unit to the state, and includes provisions outlining evaluation procedures. This ensures that while property owners benefit from tax credits, local governments are protected against any adverse financial impacts.