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House Bill 3983 |
House Author: Rodriguez |
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Effective: Vetoed |
Senate Sponsor: Watson |
House Bill 3983 amends the Local Government Code to change the share that a county pays into the tax increment fund for a homestead preservation reinvestment zone as part of its partnership with a municipality in supporting the purposes of the zone. Under the bill, the county pays the same percentage of its tax increment that the municipality pays, whereas under previous law the county paid the same dollar amount as the tax increment that the municipality paid under the county's order agreeing to creation of the zone. The bill includes provisions establishing the composition of the zone's board of directors. It confers on that board some of the same powers and duties as apply to the board of directors of a reinvestment zone under the Tax Increment Financing Act.
The bill requires the comptroller of public accounts to conduct a study of circuit breaker programs as a means of expanding and protecting the homestead interests of low-income and moderate-income families. It defines them as programs that limit the amount of property taxes that may be imposed on a residence homestead based on the owner's annual income. The bill requires the comptroller to establish an advisory committee to assist in conducting the study and sets out the required elements of the study and a resultant report that must be submitted to the governor, lieutenant governor, and speaker of the house not later than December 1, 2010. The bill's provisions relating to circuit breaker programs expire September 1, 2011.
Reason Given for Veto: "I am vetoing House Bill No. 3983 because I have serious concerns about language in the bill that requires the comptroller to conduct a study of 'circuit breaker' property tax programs used in other states.
'''Circuit breaker' programs are designed to provide property tax relief to certain individuals based upon their income. The cost of this type of program is usually borne by the state, while the local governments still receive their full share of the property tax. In some states, renters are also eligible for rebates despite the fact that they do not directly pay the property tax.
"These programs have several negative effects. One negative effect is that it breaks the link between what taxpayers pay and what they receive in local services. Under a 'circuit breaker,' some taxpayers will effectively pay no tax but receive the same services and amenities as other taxpayers who do not benefit from the program.
"Such a program would also have a significant cost to the state, since the purpose of the program is to allow local governments to enjoy the political benefits of a tax break without having to carry the cost. This allows them to avoid tough decisions about the level of taxation that the community can bear and what services the voters want them to provide.
"Finally, if such a program were to be adopted in Texas, it would make the distribution of the property tax burden less equitable by shifting it to middle-class property owners. This would make the property tax function more like a progressive income tax, in that the tax burden would slowly be pushed upwards until only the owners of the most valuable property paid any actual tax.
"Texas property owners could use additional tax relief, and I have worked hard to ensure that they receive relief; however, any solution must be one that makes all property owners better off. This study would undermine all the efforts made to ensure that the property tax has a low rate, is broad-based and is equitable for all Texans."