Texas House Bill HB176

Texas 2025 - 89th 2nd C.S.

• Filed: 8/15/25

Caption

Relating to the repeal of provisions providing for the calculation of an unused increment rate and the use of that rate in calculating certain other ad valorem tax rates.

Impact

The implications of HB176 are significant, particularly for local governments that rely on ad valorem taxes as a primary source of funding. The repeal will streamline the calculation of the no-new-revenue tax rate and voter-approval tax rate, potentially simplifying the budgeting process for various local entities. Moreover, the adjustment may influence how taxes are levied on real property, possibly resulting in a more consistent approach to tax calculations across different jurisdictions, fostering enhanced predictability for property owners and taxpayers alike.

Summary

House Bill 176 aims to amend the Texas Tax Code regarding the calculation of certain ad valorem tax rates. Specifically, the bill proposes the repeal of provisions related to the calculation of unused increment rates and how these rates influence the voter-approval tax rates. The primary urge for this bill stems from the belief that simplifying the tax rate calculation process can lead to greater transparency and efficiency in local government tax assessments. By eliminating the unused increment rate, this bill seeks to change the way tax revenues are projected and utilized within taxing units across the state.

Contention

Despite the potential benefits, there are points of contention associated with HB176. Stakeholders, particularly those representing local governments, may raise concerns about the removal of the unused increment rate, fearing it might reduce the flexibility and adaptability previously afforded in fiscal planning. Critics argue that removing these provisions could limit local governments' ability to respond effectively to changing economic circumstances and community needs, as well as potentially impacting funding for crucial services such as education and public safety.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 26. Assessment
  • Section: New Section
  • Section: 0501

Water Code

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

Local Government Code

• Chapter 120. Election For Reduction Of Funding Or Resources For Certain Primary Law Enforcement Agencies
  • Section: 007