H.B. No. 2894 aims to provide state aid to local governments that are disproportionately affected by the ad valorem tax relief granted to disabled veterans. The bill amends the Local Government Code to redefine "local government" by removing the requirement that municipalities and counties must be adjacent to or contain a United States military installation. Instead, it establishes criteria for local governments to qualify for disabled veteran assistance payments based on the percentage of lost ad valorem tax revenue relative to their general fund revenue. Specifically, municipalities adjacent to military installations or counties with such installations can qualify for assistance if their lost revenue is at least 2% of their general fund revenue, while other municipalities and counties may qualify if the loss is 10%.

The bill also specifies that the new eligibility criteria will apply starting with the fiscal year ending in the 2025 tax year, and it is set to take effect on September 1, 2025. This legislative change is intended to ensure that the financial burden of tax relief for disabled veterans is equitably shared among local governments, thereby providing necessary support to those most impacted.

Statutes affected:
Introduced: Local Government Code 140.011 (Local Government Code 140)
House Committee Report: Local Government Code 140.011 (Local Government Code 140)
Engrossed: Local Government Code 140.011 (Local Government Code 140)
Senate Committee Report: Local Government Code 140.011 (Local Government Code 140)
Enrolled: Local Government Code 140.011 (Local Government Code 140)