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Texas House Bill HB1900

Texas 2021 - 87th Regular

Texas House Bill HB1900 Compare Versions

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1-H.B. No. 1900
1+By: Goldman, et al. (Senate Sponsor - Huffman) H.B. No. 1900
2+ (In the Senate - Received from the House May 10, 2021;
3+ May 10, 2021, read first time and referred to Committee on
4+ Jurisprudence; May 21, 2021, reported favorably by the following
5+ vote: Yeas 4, Nays 1; May 21, 2021, sent to printer.)
6+Click here to see the committee vote
27
38
9+ A BILL TO BE ENTITLED
410 AN ACT
511 relating to municipalities that adopt budgets that defund municipal
612 police departments.
713 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
814 ARTICLE 1. DEFUNDING MUNICIPALITY DETERMINATION
915 SECTION 1.01. Subtitle A, Title 4, Local Government Code,
1016 is amended by adding Chapter 109 to read as follows:
1117 CHAPTER 109. DETERMINATION OF DEFUNDING MUNICIPALITIES
1218 Sec. 109.001. DEFINITION. In this chapter, "division"
1319 means the criminal justice division of the office of the governor.
1420 Sec. 109.002. APPLICABILITY OF CHAPTER. This chapter
1521 applies only to a municipality with a population of more than
1622 250,000.
1723 Sec. 109.003. DEFUNDING DETERMINATION. Except as provided
1824 by Section 109.004, a defunding municipality is a municipality:
1925 (1) that adopts a budget for a fiscal year that, in
2026 comparison to the municipality's preceding fiscal year, reduces the
2127 appropriation to the municipality's police department; and
2228 (2) for which the division issues a written
2329 determination finding that the municipality has made the reduction
2430 described by Subdivision (1).
2531 Sec. 109.0035. INITIAL DETERMINATION. In making a
2632 determination of whether a municipality is a defunding municipality
2733 under Section 109.003 according to the budget adopted for the first
2834 fiscal year beginning on or after September 1, 2021, the division
2935 shall compare the appropriation to the municipality's police
3036 department in that budget to the appropriation to that department
3137 in the budget of the preceding fiscal year or the second preceding
3238 fiscal year, whichever is greater. This section applies to the
3339 budget adopted for the municipality's first fiscal year beginning
3440 on or after September 1, 2021, regardless of the date of adoption.
3541 This section expires September 1, 2023.
3642 Sec. 109.004. EXCEPTIONS. (a) A municipality is not
3743 considered to be a defunding municipality under Section 109.003 if:
3844 (1) for a fiscal year in which the municipality adopts
3945 a budget that is less than the budget for the preceding fiscal year,
4046 the percentage reduction to the appropriation to the municipality's
4147 police department does not exceed the percentage reduction to the
4248 total budget; or
4349 (2) before the adoption of a budget, the municipality
4450 applies for and is granted approval from the division for a
4551 reduction to the appropriation to the municipality's police
4652 department to account for:
4753 (A) capital expenditures related to law
4854 enforcement during the preceding fiscal year;
4955 (B) the municipality's response to a state of
5056 disaster declared under Section 418.014, Government Code; or
5157 (C) another reason approved by the division.
5258 (b) For purposes of making a determination of whether a
5359 municipality is a defunding municipality under this chapter, a
5460 municipality's appropriation to the municipality's police
55- department does not include:
56- (1) any grant money received by the municipality
57- during any fiscal year; or
58- (2) any sales and use tax revenue received by the
59- municipality for the purpose of financing a crime control and
60- prevention district under Chapter 363.
61+ department does not include any grant money received by the
62+ municipality during any fiscal year.
6163 Sec. 109.005. TERMINATION OF DEFUNDING DETERMINATION. A
6264 municipality's defunding determination under Section 109.003
6365 continues until the division issues a written determination finding
6466 that the municipality has reversed the reduction, adjusted for
6567 inflation, described by Section 109.003(1).
6668 Sec. 109.006. DIVISION DUTIES. (a) The division shall:
6769 (1) compute the inflation rate used to make
6870 determinations under Section 109.005 each state fiscal year using a
6971 price index that accurately reports changes in the purchasing power
7072 of the dollar for municipalities in this state; and
7173 (2) publish the inflation rate in the Texas Register.
7274 (b) The division shall adopt rules establishing the
7375 criteria the division uses to approve reductions under Section
7476 109.004(2).
7577 ARTICLE 2. ANNEXATION BY AND DISANNEXATION FROM DEFUNDING
7678 MUNICIPALITIES
7779 SECTION 2.01. Subchapter A, Chapter 43, Local Government
7880 Code, is amended by adding Section 43.004 to read as follows:
7981 Sec. 43.004. ANNEXATION BY DEFUNDING MUNICIPALITY
80- PROHIBITED; EXCEPTION. (a) In this section, "defunding
81- municipality" means a home-rule municipality that is considered to
82- be a defunding municipality under Chapter 109.
83- (b) Except as provided by Subsection (c), a defunding
84- municipality may not annex an area during the period beginning on
85- the date that the criminal justice division of the governor's
86- office issues the written determination that the municipality is a
87- defunding municipality and ending on the 10th anniversary of the
88- date on which the criminal justice division of the governor's
89- office issues a written determination in accordance with Section
90- 109.005 finding that the defunding municipality has reversed the
91- reduction described by Section 109.003(1).
92- (c) This section does not apply to a defunding municipality
93- annexing all or part of an area under Section 43.0116 that was
94- designated an industrial district under Section 42.044(b) or the
95- subject of an agreement under Section 42.044(c) as of January 1,
96- 2021.
82+ PROHIBITED. (a) In this section, "defunding municipality" means a
83+ home-rule municipality that is considered to be a defunding
84+ municipality under Chapter 109.
85+ (b) A defunding municipality may not annex an area during
86+ the period beginning on the date that the criminal justice division
87+ of the governor's office issues the written determination that the
88+ municipality is a defunding municipality and ending on the 10th
89+ anniversary of the date on which the criminal justice division of
90+ the governor's office issues a written determination in accordance
91+ with Section 109.005 finding that the defunding municipality has
92+ reversed the reduction described by Section 109.003(1).
9793 SECTION 2.02. Subchapter G, Chapter 43, Local Government
9894 Code, is amended by adding Section 43.1465 to read as follows:
9995 Sec. 43.1465. DISANNEXATION FROM DEFUNDING MUNICIPALITY.
10096 (a) In this section, "defunding municipality" means a home-rule
10197 municipality that is considered to be a defunding municipality
10298 under Chapter 109.
10399 (b) On the next uniform election date that occurs after the
104100 date on which the criminal justice division of the governor's
105101 office issues a written determination that a municipality is a
106102 defunding municipality and the time required by Section 3.005,
107103 Election Code, the defunding municipality shall hold a separate
108104 election in each area annexed in the preceding 30 years by the
109105 defunding municipality on the question of disannexing the area.
110106 (c) The defunding municipality shall immediately by
111107 ordinance disannex an area for which a majority of the votes
112108 received in the election held under Subsection (b) favor
113109 disannexation.
114110 (d) If an area is disannexed under Subsection (c), the
115111 defunding municipality may not attempt to annex the area before the
116112 10th anniversary of the date on which the criminal justice division
117113 of the governor's office issues a written determination in
118114 accordance with Section 109.005 finding that the defunding
119115 municipality has reversed the reduction described by Section
120116 109.003(1).
121117 (e) A defunding municipality holding an election under
122118 Subsection (b) may not use public funds on informational campaigns
123119 relating to the election.
124120 ARTICLE 3. TAX REVENUE AND DEFUNDING MUNICIPALITIES
125121 SECTION 3.01. Chapter 26, Tax Code, is amended by adding
126122 Sections 26.0444 and 26.0501 to read as follows:
127123 Sec. 26.0444. TAX RATE ADJUSTMENT FOR DEFUNDING
128124 MUNICIPALITY. (a) In this section:
129125 (1) "Defunding municipality" means a municipality
130126 that is considered to be a defunding municipality for the current
131127 tax year under Chapter 109, Local Government Code.
132128 (2) "Municipal public safety expenditure adjustment"
133129 means an amount equal to the positive difference, if any, between:
134130 (A) the amount of money appropriated for public
135131 safety in the budget adopted by the municipality for the preceding
136132 fiscal year; and
137133 (B) the amount of money spent by the municipality
138134 for public safety during the period for which the budget described
139135 by Paragraph (A) is in effect.
140136 (b) The no-new-revenue maintenance and operations rate for
141137 a defunding municipality is decreased by the rate computed
142138 according to the following formula:
143139 Municipal Public Safety Expenditure Adjustment / (Current
144140 Total Value - New Property Value)
145141 (c) A defunding municipality shall provide a notice of the
146142 decrease in the no-new-revenue maintenance and operations rate
147143 provided by this section in the information published under Section
148144 26.04(e) and, as applicable, in the notice prescribed by Section
149145 26.06 or 26.061.
150146 (d) For purposes of Subsection (a)(2), the amount of money
151147 appropriated for public safety and the amount of money spent by the
152- municipality for public safety does not include:
153- (1) any grant money received by the municipality
154- during any fiscal year; or
155- (2) any sales and use tax revenue received by the
156- municipality for the purpose of financing a crime control and
157- prevention district under Chapter 363, Local Government Code,
158- during any fiscal year.
148+ municipality for public safety does not include any grant money
149+ received by the municipality during any fiscal year.
159150 Sec. 26.0501. LIMITATION ON TAX RATE OF DEFUNDING
160151 MUNICIPALITY. (a) In this section, "defunding municipality" means
161152 a municipality that is considered to be a defunding municipality
162153 for the current tax year under Chapter 109, Local Government Code.
163154 (b) Notwithstanding any other provision of this chapter or
164155 other law, the governing body of a defunding municipality may not
165156 adopt a tax rate for the current tax year that exceeds the lesser of
166157 the defunding municipality's no-new-revenue tax rate or
167158 voter-approval tax rate for that tax year.
168159 (b-1) Notwithstanding Subsection (b), if a municipality is
169160 determined to be a defunding municipality according to the budget
170161 adopted by the municipality for the first fiscal year beginning on
171162 or after September 1, 2021, the governing body of the defunding
172163 municipality may not adopt a tax rate for the current year that
173164 exceeds the least of the defunding municipality's no-new-revenue
174165 tax rate or voter-approval tax rate for that tax year, the preceding
175166 tax year, or the second preceding tax year. This subsection expires
176167 September 1, 2023.
177168 (c) For purposes of making the calculation required under
178169 Section 26.013, in a tax year in which a municipality is a defunding
179170 municipality, the difference between the municipality's actual tax
180171 rate and voter-approval tax rate is considered to be zero.
181172 SECTION 3.02. Subchapter F, Chapter 321, Tax Code, is
182173 amended by adding Section 321.5025 to read as follows:
183174 Sec. 321.5025. DISTRIBUTION OF TRUST FUNDS TO DEFUNDING
184175 MUNICIPALITY. (a) In this section, "defunding municipality" means
185176 a municipality that is considered to be a defunding municipality
186177 for the current state fiscal year under Chapter 109, Local
187178 Government Code.
188179 (b) Notwithstanding Section 321.502, the comptroller may
189180 not, before July 1 of each state fiscal year, send to a defunding
190181 municipality its share of the taxes collected by the comptroller
191182 under this chapter during the state fiscal year. Before sending the
192183 defunding municipality its share of the taxes, the comptroller
193184 shall deduct the amount reported to the comptroller for the
194185 defunding municipality under Subsection (c) and credit that
195186 deducted amount to the general revenue fund. Money credited to the
196187 general revenue fund under this subsection may be appropriated only
197188 to the Department of Public Safety.
198189 (c) Not later than August 1 of each state fiscal year, the
199190 criminal justice division of the governor's office shall report to
200191 the comptroller for each defunding municipality the amount of money
201192 the state spent in that state fiscal year to provide law enforcement
202193 services in that defunding municipality.
203194 ARTICLE 4. RETIREMENT FUNDING REQUIREMENTS FOR DEFUNDING
204195 MUNICIPALITIES
205196 SECTION 4.01. Chapter 810, Government Code, is amended by
206197 adding Section 810.006 to read as follows:
207198 Sec. 810.006. MINIMUM RETIREMENT FUNDING REQUIREMENTS FOR
208199 DEFUNDING MUNICIPALITIES. (a) In this section:
209200 (1) "Defunding municipality" means a municipality
210201 that is considered to be a defunding municipality under Chapter
211202 109, Local Government Code.
212203 (2) "Public retirement system" has the meaning
213204 assigned by Section 802.001.
214205 (b) This section applies only to a municipality that is:
215206 (1) an employer of active members of a public
216207 retirement system administering a defined benefit plan; and
217208 (2) a defunding municipality.
218209 (c) Notwithstanding any other law and as soon as practicable
219210 after the date the criminal justice division of the office of the
220211 governor issues a written determination under Section 109.003(2),
221212 Local Government Code, with respect to a municipality, the
222213 municipality shall for the purpose of funding retirement benefits
223214 increase municipal contributions to a public retirement system in
224215 which its employees participate as members in a manner that ensures
225216 that the total amount the municipality and members contribute to
226217 the system for the fiscal year on which the determination is based
227218 is not less than the total amount the municipality and members of
228219 the system contributed to the system for the fiscal year
229220 immediately preceding the fiscal year on which the determination is
230221 based.
231222 (d) A municipality subject to this section shall increase
232223 contributions in the manner provided by Subsection (c) for each
233224 fiscal year for which the municipality is considered a defunding
234225 municipality.
235226 ARTICLE 5. MUNICIPALLY OWNED UTILITIES IN DEFUNDING MUNICIPALITIES
236227 SECTION 5.01. Subchapter B, Chapter 33, Utilities Code, is
237228 amended by adding Section 33.0211 to read as follows:
238229 Sec. 33.0211. RATES AND FEES CHARGED BY CERTAIN MUNICIPALLY
239230 OWNED UTILITIES. (a) This section applies only to a municipally
240231 owned utility that is located in a municipality that is considered
241232 to be a defunding municipality under Chapter 109, Local Government
242233 Code.
243234 (b) The governing body of a municipally owned utility may
244235 not charge a customer:
245236 (1) at a rate higher than the rate the customer was
246237 charged or would have been charged on January 1 of the year that the
247238 municipality was determined to be a defunding municipality;
248239 (2) any customer fees in amounts higher than the
249240 customer fees the customer was charged or would have been charged on
250241 January 1 of the year that the municipality was determined to be a
251242 defunding municipality; or
252243 (3) any types of customer fees that the customer was
253244 not charged or would not have been charged on January 1 of the year
254245 that the municipality was determined to be a defunding
255246 municipality.
256- (c) If a municipally owned utility has not transferred funds
257- to the defunding municipality described by Subsection (a) in the
258- immediately preceding 12 months, the municipally owned utility may
259- increase its rates to account for:
260- (1) pass-through charges imposed by a state regulatory
261- body or the independent organization certified under Section
262- 39.151;
263- (2) fuel, hedging, or wholesale power cost increases;
264- or
265- (3) to fulfill debt obligations or comply with Chapter
266- 1502, Government Code.
267- (d) A municipally owned utility that increases rates under
268- this Subsection (c) may not transfer funds to the defunding
269- municipality described by Subsection (a) until the date the
270- criminal justice division of the governor's office issues a written
271- determination in accordance with Section 109.005, Local Government
272- Code, finding that the municipality described by Subsection (a) has
273- reversed the reduction described by Section 109.003(1), Local
274- Government Code.
275247 ARTICLE 6. TRANSITION PROVISIONS; EFFECTIVE DATE
276248 SECTION 6.01. Chapter 109, Local Government Code, as added
277249 by this Act, applies only to a budget adopted for a fiscal year that
278250 begins on or after the effective date of this Act, regardless of the
279251 date of adoption.
280252 SECTION 6.02. Sections 26.0444 and 26.0501, Tax Code, as
281253 added by this Act, apply beginning with the 2021 tax year, except
282254 that Section 26.0444(c), Tax Code, as added by this Act, does not
283255 apply for the 2021 tax year.
284256 SECTION 6.03. Section 321.5025, Tax Code, as added by this
285257 Act, applies only to a distribution of municipal sales and use tax
286258 revenue to a municipality in a state fiscal year that begins on or
287259 after the effective date of this Act.
288260 SECTION 6.04. (a) Section 33.0211, Utilities Code, as
289261 added by this Act, applies only to a proceeding for the
290262 establishment of rates for which the governing body of a
291263 municipally owned utility has not issued a final order or decision
292264 before the effective date of this Act.
293265 (b) A proceeding for which the governing body of a
294266 municipally owned utility has issued a final order or decision
295267 before the effective date of this Act is governed by the law in
296268 effect immediately before that date, and that law is continued in
297269 effect for that purpose.
298270 SECTION 6.05. This Act takes effect September 1, 2021.
299- ______________________________ ______________________________
300- President of the Senate Speaker of the House
301- I certify that H.B. No. 1900 was passed by the House on May 7,
302- 2021, by the following vote: Yeas 90, Nays 49, 4 present, not
303- voting; and that the House concurred in Senate amendments to H.B.
304- No. 1900 on May 28, 2021, by the following vote: Yeas 88, Nays 57,
305- 1 present, not voting.
306- ______________________________
307- Chief Clerk of the House
308- I certify that H.B. No. 1900 was passed by the Senate, with
309- amendments, on May 24, 2021, by the following vote: Yeas 23, Nays
310- 3, 4 present, not voting.
311- ______________________________
312- Secretary of the Senate
313- APPROVED: __________________
314- Date
315- __________________
316- Governor
271+ * * * * *