Texas House Bill HB5032

Texas 2023 - 88th Regular

• Filed: 3/10/23

Caption

Relating to a credit against the ad valorem taxes imposed on property owned by a person who makes a donation to the state for the purpose of border security and reimbursement to taxing units for the revenue loss incurred as a result of the credit.

Impact

The implementation of HB 5032 will directly affect the Tax Code of Texas by integrating provisions for a border security tax credit. Property owners would need to apply annually for this credit, substantiating their donations from the previous year. The bill stipulates that the amount of credit awarded cannot exceed the total of their donations or their ad valorem taxes owed, whichever is less. This change in tax regulation is intended to bolster financial flows towards border security initiatives while ensuring that taxing units are reimbursed for the revenue loss caused by the introduction of these tax credits.

Summary

House Bill 5032 introduces a tax credit system aimed at fortifying border security in Texas. Specifically, the bill allows property owners, both citizens and business entities with their principal offices within the state, to receive credits against their ad valorem taxes when they donate funds to the state for border security efforts. This initiative seeks to incentivize donations to state programs designed to secure Texas' international border with Mexico. The legislation also establishes a reimbursement mechanism for local taxing units to compensate for lost revenue due to these tax credits, thereby aiming to mitigate financial impacts on local governments.

Sentiment

The sentiment surrounding HB 5032 is generally supportive among those prioritizing border security and viewing this tax credit as a necessary measure. Proponents argue that encouraging private donations could provide valuable funding to state-led security efforts, which they believe are essential for public safety and resource management. However, some critics express concerns about potential over-reliance on private donations to fulfill state responsibilities, questioning the adequacy and durability of such funding as a long-term solution to border security challenges.

Contention

One notable point of contention regarding HB 5032 is its long-term sustainability and potential unintended consequences. Critics argue that while the bill aims to enhance border security, it may set a precedent for using tax incentives as a substitute for direct state funding, which could erode accountability in public finance. Additionally, the requirement for annual applications and adherence to specific reporting guidelines might impose burdens on property owners, particularly smaller businesses. The effectiveness of this strategy in genuinely enhancing border security, as well as its implications on local governance and public resource allocation, are central themes of debate among legislators and stakeholders.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 31. Collections
  • Section: New Section

Government Code

• Chapter 481. Texas Economic Development And Tourism Office
  • Section: 078

Local Government Code

• Chapter 140. Miscellaneous Financial Provisions Affecting Municipalities, Counties, And Other Local Governments
  • Section: New Section