The bill, 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. It amends the Local Government Code to redefine "local government" to include municipalities adjacent to U.S. military installations and counties that contain such installations. Additionally, 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 must demonstrate a loss of at least 2% of their general fund revenue, while other municipalities must show a loss of at least 10%.

The bill also specifies that the amended definitions and eligibility criteria will apply only to local governments seeking assistance payments starting with the fiscal year ending in the 2025 tax year. The act is set to take effect on September 1, 2025.

Statutes affected:
Introduced: Local Government Code 140.011 (Local Government Code 140)