By: Harrison	H.B. No. 181

Statutes affected:
Introduced: ()

	A BILL TO BE ENTITLED
	AN ACT
	relating to the abolition of ad valorem taxes and the creation of a
	joint interim committee on the abolition of those taxes.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  (a)  In this section, "committee" means the joint
	interim committee on the abolition of ad valorem taxes.
	(b)  The joint interim committee on the abolition of ad
	valorem taxes is composed of:
	(1)  five members of the house of representatives
	appointed by the speaker of the house of representatives; and
	(2)  five senators appointed by the lieutenant
	governor.
	(c)  The speaker of the house of representatives and the
	lieutenant governor shall make the appointments under Subsection
	(b) of this section not later than February 1, 2024.
	(d)  The speaker of the house of representatives and the
	lieutenant governor shall each designate a co-chair from among the
	committee members.
	(e)  The committee shall convene at the joint call of the
	co-chairs.
	(f)  The committee has all other powers and duties provided
	to a special or select committee by the rules of the senate and
	house of representatives, by Subchapter B, Chapter 301, Government
	Code, and by policies of the senate and house committees on
	administration.
	(g)  The committee shall conduct a comprehensive study to
	determine how to replace local tax revenue that will be lost when ad
	valorem taxes are abolished with local sales and use tax revenue.
	(h)  The committee shall:
	(1)  consider whether political subdivisions that
	currently impose ad valorem taxes would have the authority to
	impose sales and use taxes;
	(2)  determine the average sales and use tax rate for
	each type of political subdivision that would be necessary to
	generate the same amount of tax revenue as the amount of tax revenue
	lost as a result of the abolition of ad valorem taxes;
	(3)  determine, if appropriate, the effect that
	broadening the application of sales and use taxes at the local level
	would have on the tax rates identified under Subdivision (2) of this
	subsection;
	(4)  identify whether tax revenue generated by sales
	and use taxes would require redistribution to offset disparities in
	available local tax revenue as a result of the abolition of ad
	valorem taxes and, if so, evaluate the different mechanisms of
	redistribution available; and
	(5)  identify and examine any other issue that would
	need to be addressed to implement the abolition of ad valorem taxes.
	(i)  On request of the committee, a state agency or political
	subdivision shall provide information for and assistance in
	conducting the study under this section.
	(j)  Not later than December 1, 2024, the committee shall
	prepare and submit to the legislature a written report containing
	the results of the study and any recommendations for legislative or
	other action.
	(k)  The committee is abolished and this section expires
	January 1, 2025.
	SECTION 2.  (a)  Title 1, Tax Code, is repealed.
	(b)  Notwithstanding any other law, this state or a political
	subdivision of this state may not impose an ad valorem tax.  To the
	extent of a conflict, this section controls over a conflicting
	provision in a general or special law.
	(c)  The change in law made by this section does not affect
	tax liability accruing before January 1, 2029.  That liability
	continues in effect as if this section had not been enacted, and the
	former law is continued in effect for the collection of taxes due
	and for civil and criminal enforcement of the liability for those
	taxes.
	SECTION 3.  (a)  This Act takes effect as provided by
	Subsections (b) and (c) of this section, but only if the
	constitutional amendment proposed by the 88th Legislature, 3rd
	Called Session, 2023, to abolish ad valorem taxes is approved by the
	voters.  If that amendment is not approved by the voters, this Act
	has no effect.
	(b)  This section and Section 1 of this Act takes effect
	immediately if it receives a vote of two-thirds of all the members
	elected to each house, as provided by Section 39, Article III, Texas