Texas House Bill HB231

Texas 2025 - 89th 1st C.S.

• Filed: 7/30/25

Caption

Relating to restrictions on the use of certain ad valorem tax revenue for the payment of public securities.

Impact

The bill is positioned to limit the financial flexibility of municipalities and counties by preventing the earmarking of tax revenues derived from ad valorem taxes for certain public securities. This could lead to significant changes in how local entities manage their budgets and finance public projects. If passed, it would require local governments to explore alternative funding sources for their public security obligations, which could impact the scale and scope of future municipal projects.

Summary

House Bill 231 proposes new restrictions on the use of ad valorem tax revenue specifically for the payment of public securities. The bill aims to amend existing sections of the Texas Tax Code and Government Code, particularly in how taxing units allocate their maintenance and operations tax revenue. It specifies that any increase in tax revenue resulting from elections cannot be used to repay public securities through local government corporations or any acting entity on behalf of the taxing units.

Contention

There may be points of contention surrounding HB 231, particularly from local governments that depend on ad valorem tax revenue for financial planning and public projects. Critics of the bill might argue that such restrictions could stifle local governance capabilities, limit financial options, and create challenges in fulfilling civic needs. Proponents, however, may contend that the bill enhances fiscal responsibility by ensuring that funds are used effectively and targeted to where they are most needed.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 26. Assessment
  • Section: New Section

Government Code

• Chapter 1253. General Obligation Bonds Issued By Political Subdivisions
  • Section: New Section