Texas House Bill HB121

Texas 2021 - 87th 3rd C.S.

Caption

Relating to prohibiting the imposition of municipal ad valorem taxes on property that does not receive full municipal services.

Impact

If enacted, HB 121 would significantly alter the way municipal services and their corresponding taxes are managed within the state. This legislation would prevent municipalities from levying property taxes in areas where residents do not benefit from standard municipal services such as waste collection, public safety, and infrastructure maintenance. The intent is to relieve tax burden on property owners and promote fairness in taxation for services not rendered.

Summary

House Bill 121 aims to prohibit municipalities from imposing ad valorem taxes on properties that do not receive full municipal services. The bill introduces a new section in the Local Government Code, stating that taxation cannot occur in areas lacking comprehensive municipal support. However, it allows for exceptions through written agreements between the municipalities and individual landowners, ensuring that any such agreements are limited to the specific property owned by the landowner involved.

Contention

The legislation could lead to contention between municipalities and property owners, as the bill centralizes power in the hands of local governments while restricting their ability to generate tax revenue in less serviced areas. Proponents believe it will protect property owners from unjust taxation, while opponents may argue that it undermines local fiscal capabilities and could lead to a reliance on alternative funding sources, such as higher taxes in better-serviced areas to compensate.