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
A BILL TO BE ENTITLED
AN ACT
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.