Texas Senate Bill SB2337

Texas 2019 - 86th Regular

Caption

Relating to the treatment of captured appraised value and tax increment in the calculation of ad valorem tax rates for a taxing unit.

Impact

The repeal of Section 26.03 directly impacts the financial strategies employed by local taxing units when setting their ad valorem tax rates. By changing the treatment of captured appraised values in the tax calculation framework, this bill may result in lower tax burdens for some units, thus impacting revenue flows. Local governments that rely heavily on property taxes may need to adapt to this new methodology in their budgeting and fiscal planning, with the potential consequences rippling through various public services typically funded by such tax revenues.

Summary

SB2337 introduces changes to the way captured appraised value and tax increment are treated in the calculations of ad valorem tax rates for taxing units in Texas. This bill aims to repeal Section 26.03 of the Tax Code, thereby indicating a significant shift in tax rate calculation methods. The legislation is applicable for tax years beginning on or after the bill’s effective date, which is set for January 1, 2020. This move is seen as an effort to streamline tax rate calculations and potentially provide relief for certain taxing units by altering how appraised values contribute to their tax bases.

Contention

While the bill is positioned as a means to simplify tax calculations, there are discussions regarding the fairness and implications of the repeal. Opponents may argue that this legislation could exacerbate inequalities in taxation, leading to potential losses in revenue for local governments that already face funding challenges. The debate centers around whether such changes serve the broader community's interests or primarily benefit specific sectors or taxpayers. Given that taxation is inherently linked to local governance and funding for essential services, the implications of SB2337 are likely to provoke significant dialogue among stakeholders, including local officials, business leaders, and community advocates.