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 definition of "local government" in Section 140.011(a)(2) of the Local Government Code 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.

The bill specifies that a local government qualifies for assistance if the lost revenue is equal to or greater than 2% of its general fund revenue for municipalities adjacent to military installations or counties containing them, and 10% for municipalities in certain counties or counties with populations under 25,000 adjacent to two other counties with specific characteristics. The changes will take effect starting with the fiscal year ending in the 2025 tax year, and the act is set to become effective on September 1, 2025.

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)