A bill tightening regulations on the ability of counties and cities to raise tax rates after natural disasters was sent to Gov. Greg Abbott’s desk for consideration on May 20, according to Texas Legislature Online.

In a nutshell

House Bill 30, by Rep. Ellen Troxclair, R-Lakeway, was passed by the Texas House on May 8 and by the Texas Senate on May 15. Should Abbott sign the bill into law, it would be implemented beginning Jan. 1, according to the bill.

Abbott urged lawmakers to make it harder “for local taxing jurisdictions to increase property taxes" in a February interview with Community Impact, although he has not publicly commented on HB 30.

The bill would offer two new options for county and city governments to use when calculating tax rates after state- or federally-declared disasters, Troxclair said during the House’s Ways & Means Committee’s April 21 hearing. She said the bill would also:

• Give entities the option to collect the voter-approved tax rate or charge a tax rate calculated using the federal standard for the cost of debris removal after disasters
• Prevent entities from reusing a disaster declaration again for tax adjustments, if a different disaster has been used more recently
• Limit how tax rates used during disasters can be used to calculate future tax rates

“There has been very limited need, luckily, for the disaster exemption to begin with,” Troxclair said. “However, there have been cases where it has been wildly abused, and so we want to make sure that entities that are truly experiencing disasters, and need help in recouping those expenses, have the ability to do so, but that taxpayers have accountability in what that money is really going toward.”

Zooming in

HB 30 would amend Section 26.042 of Texas Tax Code, which was last adjusted in 2021 and allows cities and counties freedom to utilize voter-approved tax rates after a disaster, according to the TLO.

When the bill was initially filed March 14, it would have banned municipalities from raising tax rates after disasters completely, Troxclair said. The bill was adjusted, however, after hearing from county and city leaders across the state, she said.

“This natural disaster exception is not a loophole for the city of Galveston,” said Sally Bakko, the director of policy and governmental relations for Galveston, during the April 21 Ways & Means Committee meeting. “It is a critical, critical safety net.”

Public input

Multiple individuals voiced support for the bill during the April 21 committee meeting, including James Quintero, a tax policy director for the Texas Public Policy Foundation, a conservative think tank. He said counties and school districts across the state have misused the current tax rate disaster law.

“Under current law, some local governmental entities are abusing the disaster tax loophole to raise taxes excessively without voter approval,” Quintero said.

Other individuals expressed concern about HB 30 during the committee meeting, including Adam Haynes, the policy director for nonprofit advocacy group the Conference of Urban Counties. Haynes said while he appreciates the changes made to HB 30, the bill would not help entities to be compensated for disaster expenses such as emergency personnel overtime and running emergency shelters.

“There’s a lot more that goes into the cleanup of disasters other than just debris removal,” Haynes said.