Texas House Bill HB3601

Texas 2025 - 89th Regular

• Filed: 3/3/25

Caption

Relating to the calculation of certain ad valorem tax rates of a taxing unit and the manner in which a proposed ad valorem tax rate that exceeds the voter-approval tax rate is approved.

Impact

If enacted, HB3601 would modify the methods through which local governing bodies calculate their respective tax rates, potentially reducing the ability of such bodies to unilaterally set tax rates above the no-new-revenue threshold without triggering a voter election. This could lead to a more gradual increase in the burden of property taxes on residents, as increases would be capped by the voter-approval tax rates unless citizens vote to approve higher rates. The bill's implementation may influence local budget planning, particularly for municipalities relying on property tax revenue for services.

Summary

House Bill 3601 pertains to the calculation of certain ad valorem tax rates imposed by taxing units in Texas. The bill aims to amend the tax code to clarify how no-new-revenue tax rates and voter-approval tax rates are established. This legislation seeks to create more transparency and consistency in the tax rate approval process, particularly in instances where proposed rates exceed the established voter-approval tax rate. The bill emphasizes the importance of public hearings and voter engagement when tax rates are proposed to ensure residents are informed about potential increases in their property taxes.

Contention

There may be points of contention surrounding HB3601. Proponents are likely to argue that the bill enhances transparency and gives local residents a stronger voice in tax matters, while critics may express concerns that it could create operational difficulties for local governments when they need to respond quickly to funding needs or adapt to changing economic conditions. Furthermore, discussions may arise regarding the adequacy of existing tax revenue to meet local service demands and whether additional constraints on taxation could impact service delivery, especially in underserved communities.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 26. Assessment
  • Section: New Section
  • Section: 063
  • Section: 075

Water Code

• Chapter 49. Provisions Applicable To All Districts
  • Section: 23601
  • Section: 23602
  • Section: 23603

Health And Safety Code

• Chapter 281. Hospital Districts In Counties Of At Least 190,000
  • Section: 124

Special District Local Laws Code

• Chapter 1101. Sutton County Hospital District
  • Section: 254