89R18111 CJC-F
By: Phelan H.J.R. No. 202
A JOINT RESOLUTION
proposing a constitutional amendment to provide for an exemption
from ad valorem taxation of the total market value of real property
on which the ad valorem taxes have been prepaid and to establish the
prepaid property tax trust fund to provide annual distributions to
political subdivisions affected by the exemption.
BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Article III, Texas Constitution, is amended by
adding Section 49-s to read as follows:
Sec. 49-s. (a) The prepaid property tax trust fund is
established as a trust fund outside the state treasury to be held
and administered by the comptroller of public accounts as trustee
for eligible political subdivisions.
(b) The fund consists of prepayments of ad valorem taxes on
real property received by the comptroller for the purpose of
exempting the real property from ad valorem taxation under a
general law authorized by Section 1-z, Article VIII, of this
constitution.
(c) The comptroller shall make annual disbursements from
the fund to eligible political subdivisions. A political
subdivision is eligible for a disbursement from the fund in any year
in which real property subject to ad valorem taxation by the
political subdivision receives an exemption under a general law
authorized by Section 1-z, Article VIII, of this constitution.
(d) The comptroller shall determine the amount available
for distribution from the fund each year in accordance with a
distribution policy adopted by the comptroller that is designed to
provide as nearly as practicable an annual distribution from the
fund to each eligible political subdivision in an amount equal to a
reimbursement amount determined by the comptroller in the manner
provided by general law. The comptroller may proportionally reduce
the distributions made from the fund in any year to prevent the fund
from becoming insolvent.
(e) In managing the assets of the fund the comptroller may
acquire, exchange, sell, supervise, manage, or retain any kind of
investment that a prudent investor, exercising reasonable care,
skill, and caution, would acquire or retain in light of the
purposes, terms, distribution requirements, and other
circumstances of the fund then prevailing, taking into
consideration the investment of all the assets of the fund rather
than a single investment.
SECTION 2. Article VIII, Texas Constitution, is amended by
adding Section 1-z to read as follows:
Sec. 1-z. The legislature by general law may exempt from ad
valorem taxation by a political subdivision the total market value
of real property for which the property owner prepays an estimate of
the property's future ad valorem tax liability, as determined
pursuant to a formula adopted by the comptroller of public
accounts. The general law may require additional prepayments to
exempt any portion of the value of the property attributable to
improvements made after the initial prepayment of taxes on the
property. A general law adopted under this section may provide
additional eligibility requirements for the exemption.
SECTION 3. This proposed constitutional amendment shall be
submitted to the voters at an election to be held November 4, 2025.
The ballot shall be printed to permit voting for or against the
proposition: "The constitutional amendment to provide for an
exemption from ad valorem taxation of the total market value of real
property on which the ad valorem taxes have been prepaid and to
establish the prepaid property tax trust fund to provide annual
distributions to political subdivisions affected by the
exemption."