Texas House Bill HB259

Texas 2025 - 89th 1st C.S.

• Filed: 8/4/25

Caption

Relating to the vote required in an election to approve an ad valorem tax rate that exceeds a taxing unit's voter-approval tax rate; making conforming changes.

Impact

The introduction of HB 259 is expected to have a considerable impact on local governance and property taxation in Texas. By raising the bar for tax increase approval, it could lead to more stringent requirements for local entities seeking to raise property tax rates, effectively limiting their ability to generate revenue in situations where public support isn't overwhelmingly in favor of these measures. This could lead municipalities and districts to reconsider their budget strategies and approach to funding local services, potentially leading to cuts in public services if they cannot secure sufficient voter support for necessary tax increases.

Summary

House Bill 259 addresses the voting requirements in elections concerning ad valorem tax rates that exceed a taxing unit's voter-approval tax rate. The bill proposes a significant change, altering the threshold for approval from a simple majority to a two-thirds requirement of the votes cast. This amendment is aimed at enhancing taxpayer protections and ensuring that any tax increases imposed by governing bodies have robust support from the electorate. Consequently, the bill seeks to modify several sections within the Health and Safety Code and the Tax Code to reflect these changes.

Contention

The bill is likely to generate debate among various stakeholders, particularly between proponents of fiscal responsibility and those advocating for the needs of local governments. Supporters may argue that the increase in voter approval requirements will enhance transparency and accountability in public finance, while opponents could claim it severely restricts the autonomy of local governments to generate necessary funds for public projects and services. This tension reflects broader concerns about the balance between taxpayer protections and the fiscal capacities of government entities.

Notable_points

The adoption of the de minimis rate in the bill is noteworthy as it defines a specific measure that could allow taxing units to raise certain amounts without exceeding voter-approval thresholds. The de minimis rate is calculated as the sum of the no-new-revenue maintenance and operations rate and a specified amount, potentially enabling some flexibility even under the higher voting threshold. This aspect may become a focal point in discussions surrounding the bill as stakeholders assess its repercussions on local budget management and property tax implications.

Texas Constitutional Statutes Affected

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

Tax Code

• Chapter 26. Assessment
  • Section: 06
  • Section: 07
  • Section: 08
  • Section: 063