Texas House Bill HB4170

Texas 2021 - 87th Regular

Caption

Relating to a requirement that the voter-approval tax rate of certain taxing units be adjusted to reflect changes in the amount of money received by the taxing unit directly from the federal government.

Note

The effective date of this bill is set for January 1, 2022, which indicates a prompt implementation intended to provide clarity in tax calculations for the upcoming fiscal year.

Impact

The bill modifies existing provisions in the Texas Tax Code, specifically adding Section 26.0444. By allowing for tax rate adjustments based on federal receipts, it aims to alleviate the tax burden on residents when local governments receive additional federal funding. The noteworthy aspect of this bill is that it explicitly excludes school districts from its provisions, which may indicate a conscientious effort to protect educational funding while still addressing fiscal concerns at the municipal and precinct levels.

Summary

House Bill 4170 proposes a new requirement that certain taxing units in Texas must adjust their voter-approval tax rate in response to federal funds received. Specifically, if a taxing unit's direct federal receipts exceed the amount received in the previous year, the bill mandates a corresponding decrease in the voter-approval tax rate. This adjustment is rooted in the principle of ensuring transparency and accountability in how local governments manage their tax rates against the influx of federal funds, providing taxpayers with clear information regarding funding sources.

Contention

Notable discussions may arise regarding the potential implications for local governments and their budgeting processes. By effectively lowering tax rates in light of federal receipts, there could be concerns about the long-term viability of local services reliant on stable funding from property taxes. Critics might argue this approach could lead to reductions in local services or infrastructure support, particularly if the reliance on federal funding fluctuates. Moreover, the exclusion of school districts raises questions about equitable treatment among various taxing units and how this bill might inadvertently create disparities in funding availability and tax burdens.