| 1 | 1 | | 89R18111 CJC-F |
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| 2 | 2 | | By: Phelan H.J.R. No. 202 |
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| 6 | 6 | | |
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| 7 | 7 | | A JOINT RESOLUTION |
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| 8 | 8 | | proposing a constitutional amendment to provide for an exemption |
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| 9 | 9 | | from ad valorem taxation of the total market value of real property |
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| 10 | 10 | | on which the ad valorem taxes have been prepaid and to establish the |
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| 11 | 11 | | prepaid property tax trust fund to provide annual distributions to |
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| 12 | 12 | | political subdivisions affected by the exemption. |
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| 13 | 13 | | BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 14 | 14 | | SECTION 1. Article III, Texas Constitution, is amended by |
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| 15 | 15 | | adding Section 49-s to read as follows: |
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| 16 | 16 | | Sec. 49-s. (a) The prepaid property tax trust fund is |
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| 17 | 17 | | established as a trust fund outside the state treasury to be held |
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| 18 | 18 | | and administered by the comptroller of public accounts as trustee |
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| 19 | 19 | | for eligible political subdivisions. |
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| 20 | 20 | | (b) The fund consists of prepayments of ad valorem taxes on |
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| 21 | 21 | | real property received by the comptroller for the purpose of |
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| 22 | 22 | | exempting the real property from ad valorem taxation under a |
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| 23 | 23 | | general law authorized by Section 1-z, Article VIII, of this |
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| 24 | 24 | | constitution. |
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| 25 | 25 | | (c) The comptroller shall make annual disbursements from |
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| 26 | 26 | | the fund to eligible political subdivisions. A political |
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| 27 | 27 | | subdivision is eligible for a disbursement from the fund in any year |
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| 28 | 28 | | in which real property subject to ad valorem taxation by the |
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| 29 | 29 | | political subdivision receives an exemption under a general law |
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| 30 | 30 | | authorized by Section 1-z, Article VIII, of this constitution. |
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| 31 | 31 | | (d) The comptroller shall determine the amount available |
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| 32 | 32 | | for distribution from the fund each year in accordance with a |
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| 33 | 33 | | distribution policy adopted by the comptroller that is designed to |
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| 34 | 34 | | provide as nearly as practicable an annual distribution from the |
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| 35 | 35 | | fund to each eligible political subdivision in an amount equal to a |
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| 36 | 36 | | reimbursement amount determined by the comptroller in the manner |
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| 37 | 37 | | provided by general law. The comptroller may proportionally reduce |
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| 38 | 38 | | the distributions made from the fund in any year to prevent the fund |
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| 39 | 39 | | from becoming insolvent. |
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| 40 | 40 | | (e) In managing the assets of the fund the comptroller may |
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| 41 | 41 | | acquire, exchange, sell, supervise, manage, or retain any kind of |
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| 42 | 42 | | investment that a prudent investor, exercising reasonable care, |
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| 43 | 43 | | skill, and caution, would acquire or retain in light of the |
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| 44 | 44 | | purposes, terms, distribution requirements, and other |
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| 45 | 45 | | circumstances of the fund then prevailing, taking into |
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| 46 | 46 | | consideration the investment of all the assets of the fund rather |
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| 47 | 47 | | than a single investment. |
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| 48 | 48 | | SECTION 2. Article VIII, Texas Constitution, is amended by |
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| 49 | 49 | | adding Section 1-z to read as follows: |
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| 50 | 50 | | Sec. 1-z. The legislature by general law may exempt from ad |
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| 51 | 51 | | valorem taxation by a political subdivision the total market value |
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| 52 | 52 | | of real property for which the property owner prepays an estimate of |
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| 53 | 53 | | the property's future ad valorem tax liability, as determined |
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| 54 | 54 | | pursuant to a formula adopted by the comptroller of public |
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| 55 | 55 | | accounts. The general law may require additional prepayments to |
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| 56 | 56 | | exempt any portion of the value of the property attributable to |
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| 57 | 57 | | improvements made after the initial prepayment of taxes on the |
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| 58 | 58 | | property. A general law adopted under this section may provide |
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| 59 | 59 | | additional eligibility requirements for the exemption. |
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| 60 | 60 | | SECTION 3. This proposed constitutional amendment shall be |
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| 61 | 61 | | submitted to the voters at an election to be held November 4, 2025. |
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| 62 | 62 | | The ballot shall be printed to permit voting for or against the |
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| 63 | 63 | | proposition: "The constitutional amendment to provide for an |
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| 64 | 64 | | exemption from ad valorem taxation of the total market value of real |
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| 65 | 65 | | property on which the ad valorem taxes have been prepaid and to |
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| 66 | 66 | | establish the prepaid property tax trust fund to provide annual |
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| 67 | 67 | | distributions to political subdivisions affected by the |
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| 68 | 68 | | exemption." |
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