87R18420 MP-F
By: Burns H.B. No. 3021
Substitute the following for H.B. No. 3021:
By: Sanford C.S.H.B. No. 3021
A BILL TO BE ENTITLED
AN ACT
relating to sales and use tax revenue of 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. Subchapter F, Chapter 321, Tax Code, is amended
by adding Section 321.5025 to read as follows:
Sec. 321.5025. DISTRIBUTION OF TRUST FUNDS TO DEFUNDING
MUNICIPALITY. (a) In this section, "defunding municipality" means
a municipality that is considered to be a defunding municipality
for the current state fiscal year under Chapter 109, Local
Government Code.
(b) Notwithstanding Section 321.502, the comptroller may
not, before July 1 of each state fiscal year, send to a defunding
municipality its share of the taxes collected by the comptroller
under this chapter during the state fiscal year. Before sending the
defunding municipality its share of the taxes, the comptroller
shall deduct the amount reported to the comptroller for the
defunding municipality under Subsection (c) and credit that
deducted amount to the general revenue fund. Money credited to the
general revenue fund under this subsection may be appropriated only
to the Department of Public Safety.
(c) Not later than August 1 of each state fiscal year, the
criminal justice division of the governor's office shall report to
the comptroller for each defunding municipality the amount of money
the state spent in that state fiscal year to provide law enforcement
services in that defunding municipality.
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 321.5025, Tax Code, as added by this Act,
applies only to a distribution of municipal sales and use tax
revenue to a municipality in a state fiscal year that begins on or
after the effective date of this Act.
SECTION 5. This Act takes effect September 1, 2021.