| 1 | 1 | | By: Harrison H.B. No. 16 |
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| 2 | 2 | | |
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| 3 | 3 | | |
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| 4 | 4 | | A BILL TO BE ENTITLED |
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| 5 | 5 | | AN ACT |
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| 6 | 6 | | relating to the abolition of ad valorem taxes and the creation of a |
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| 7 | 7 | | joint interim committee on the abolition of those taxes. |
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| 8 | 8 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 9 | 9 | | SECTION 1. (a) In this section, "committee" means the joint |
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| 10 | 10 | | interim committee on the abolition of ad valorem taxes. |
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| 11 | 11 | | (b) The joint interim committee on the abolition of ad |
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| 12 | 12 | | valorem taxes is composed of: |
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| 13 | 13 | | (1) five members of the house of representatives |
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| 14 | 14 | | appointed by the speaker of the house of representatives; and |
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| 15 | 15 | | (2) five senators appointed by the lieutenant |
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| 16 | 16 | | governor. |
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| 17 | 17 | | (c) The speaker of the house of representatives and the |
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| 18 | 18 | | lieutenant governor shall make the appointments under Subsection |
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| 19 | 19 | | (b) of this section not later than February 1, 2024. |
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| 20 | 20 | | (d) The speaker of the house of representatives and the |
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| 21 | 21 | | lieutenant governor shall each designate a co-chair from among the |
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| 22 | 22 | | committee members. |
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| 23 | 23 | | (e) The committee shall convene at the joint call of the |
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| 24 | 24 | | co-chairs. |
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| 25 | 25 | | (f) The committee has all other powers and duties provided |
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| 26 | 26 | | to a special or select committee by the rules of the senate and |
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| 27 | 27 | | house of representatives, by Subchapter B, Chapter 301, Government |
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| 28 | 28 | | Code, and by policies of the senate and house committees on |
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| 29 | 29 | | administration. |
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| 30 | 30 | | (g) The committee shall conduct a comprehensive study to |
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| 31 | 31 | | determine how to replace local tax revenue that will be lost when ad |
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| 32 | 32 | | valorem taxes are abolished with local sales and use tax revenue. |
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| 33 | 33 | | (h) The committee shall: |
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| 34 | 34 | | (1) consider whether political subdivisions that |
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| 35 | 35 | | currently impose ad valorem taxes would have the authority to |
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| 36 | 36 | | impose sales and use taxes; |
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| 37 | 37 | | (2) determine the average sales and use tax rate for |
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| 38 | 38 | | each type of political subdivision that would be necessary to |
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| 39 | 39 | | generate the same amount of tax revenue as the amount of tax revenue |
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| 40 | 40 | | lost as a result of the abolition of ad valorem taxes; |
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| 41 | 41 | | (3) determine, if appropriate, the effect that |
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| 42 | 42 | | broadening the application of sales and use taxes at the local level |
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| 43 | 43 | | would have on the tax rates identified under Subdivision (2) of this |
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| 44 | 44 | | subsection; |
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| 45 | 45 | | (4) identify whether tax revenue generated by sales |
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| 46 | 46 | | and use taxes would require redistribution to offset disparities in |
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| 47 | 47 | | available local tax revenue as a result of the abolition of ad |
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| 48 | 48 | | valorem taxes and, if so, evaluate the different mechanisms of |
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| 49 | 49 | | redistribution available; and |
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| 50 | 50 | | (5) identify and examine any other issue that would |
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| 51 | 51 | | need to be addressed to implement the abolition of ad valorem taxes. |
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| 52 | 52 | | (i) On request of the committee, a state agency or political |
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| 53 | 53 | | subdivision shall provide information for and assistance in |
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| 54 | 54 | | conducting the study under this section. |
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| 55 | 55 | | (j) Not later than December 1, 2024, the committee shall |
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| 56 | 56 | | prepare and submit to the legislature a written report containing |
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| 57 | 57 | | the results of the study and any recommendations for legislative or |
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| 58 | 58 | | other action. |
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| 59 | 59 | | (k) The committee is abolished and this section expires |
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| 60 | 60 | | January 1, 2025. |
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| 61 | 61 | | SECTION 2. (a) Title 1, Tax Code, is repealed. |
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| 62 | 62 | | (b) Notwithstanding any other law, this state or a political |
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| 63 | 63 | | subdivision of this state may not impose an ad valorem tax. To the |
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| 64 | 64 | | extent of a conflict, this section controls over a conflicting |
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| 65 | 65 | | provision in a general or special law. |
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| 66 | 66 | | (c) The change in law made by this section does not affect |
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| 67 | 67 | | tax liability accruing before January 1, 2029. That liability |
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| 68 | 68 | | continues in effect as if this section had not been enacted, and the |
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| 69 | 69 | | former law is continued in effect for the collection of taxes due |
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| 70 | 70 | | and for civil and criminal enforcement of the liability for those |
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| 71 | 71 | | taxes. |
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| 72 | 72 | | SECTION 3. (a) This Act takes effect as provided by |
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| 73 | 73 | | Subsections (b) and (c) of this section, but only if the |
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| 74 | 74 | | constitutional amendment proposed by the 88th Legislature, 1st |
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| 75 | 75 | | Called Session, 2023, to abolish ad valorem taxes is approved by the |
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| 76 | 76 | | voters. If that amendment is not approved by the voters, this Act |
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| 77 | 77 | | has no effect. |
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| 78 | 78 | | (b) This section and Section 1 of this Act take effect |
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| 79 | 79 | | January 1, 2024. |
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| 80 | 80 | | (c) Section 2 of this Act takes effect January 1, 2029. |
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