Relating to the provision of state aid to certain local governments disproportionately affected by the granting of ad valorem tax relief to disabled veterans and surviving spouses of certain armed services members.

HB 5217 amends Texas Local Government Code §140.011 to provide state aid to local governments (cities, counties) that experience significant revenue loss from granting property tax exemptions to disabled veterans and surviving spouses of military members killed in action. A local government qualifies if the lost tax revenue from these exemptions equals or exceeds 2% of its general fund revenue for the fiscal year. The state calculates aid by subtracting 1% of the local government’s general fund revenue from the total lost tax revenue, with applications due annually by May 1. This policy directly compensates affected localities for revenue shortfalls caused by existing tax relief programs, not by creating new exemptions.