Relating to the provision of state aid to certain local governments disproportionately affected by the granting of ad valorem tax relief to disabled veterans.

HB 2894 creates a state-funded "disabled veteran assistance payment" for Texas local governments that grant property tax relief to disabled veterans and experience significant revenue loss. It specifically applies to municipalities adjacent to U.S. military installations or counties containing such installations, with eligibility based on losing at least 2% of their general fund revenue (or 10% for larger municipalities with populations between 370,000-380,000 or 83,000-84,000). Local governments meeting these thresholds can receive state aid to offset the lost tax revenue starting in the 2025 fiscal year. The bill takes effect September 1, 2025, and does not change existing tax relief policies for disabled veterans.