Texas 2025 - 89th Regular

Texas House Bill HB250 Compare Versions

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1	1	89R1306 RDS-D
2	2	By: Harrison H.B. No. 250
3	3
4	4
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the calculation of certain ad valorem tax rates of a
10	10	taxing unit and the manner in which a proposed ad valorem tax rate
11	11	that exceeds the voter-approval tax rate is approved; making
12	12	conforming changes.
13	13	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
14	14	SECTION 1. Section 48.202(f), Education Code, is amended to
15	15	read as follows:
16	16	(f) For a school year in which the dollar amount guaranteed
17	17	level of state and local funds per weighted student per cent of tax
18	18	effort ("GL") under Subsection (a-1)(2) exceeds the dollar amount
19	19	guaranteed level of state and local funds per weighted student per
20	20	cent of tax effort ("GL") under Subsection (a-1)(2) for the
21	21	preceding school year, a school district shall reduce the
22	22	district's tax rate under Section 45.0032(b)(2) for the tax year
23	23	that corresponds to that school year to a rate that results in the
24	24	amount of state and local funds per weighted student per cent of tax
25	25	effort available to the district at the dollar amount guaranteed
26	26	level for the preceding school year. A school district is not
27	27	entitled to the amount equal to the increase of revenue described by
28	28	this subsection for the school year for which the district must
29	29	reduce the district's tax rate. For [Unless Section 26.042(e), Tax
30	30	Code, applies to the district, for] a tax year in which a district
31	31	must reduce the district's tax rate under this subsection, the
32	32	district may not increase the district's maintenance and operations
33	33	tax rate to a rate that exceeds the maximum maintenance and
34	34	operations tax rate permitted under Section 45.003(d) or (f), as
35	35	applicable, minus the reduction of tax effort required under this
36	36	subsection. This subsection does not apply if the amount of state
37	37	funds appropriated for a school year specifically excludes the
38	38	amount necessary to provide the dollar amount guaranteed level of
39	39	state and local funds per weighted student per cent of tax effort
40	40	under Subsection (a-1)(2).
41	41	SECTION 2. Section 3828.157, Special District Local Laws
42	42	Code, is amended to read as follows:
43	43	Sec. 3828.157. INAPPLICABILITY OF CERTAIN TAX CODE
44	44	PROVISIONS. Sections 26.04, [26.042,] 26.05, and 26.07, [and
45	45	26.075,] Tax Code, do not apply to a tax imposed under Section
46	46	3828.153 or 3828.156.
47	47	SECTION 3. Section 8876.152(a), Special District Local Laws
48	48	Code, is amended to read as follows:
49	49	(a) Sections 26.04, [26.042,] 26.05, 26.06, 26.061, and
50	50	26.07, [and 26.075,] Tax Code, do not apply to a tax imposed by the
51	51	district.
52	52	SECTION 4. Section 26.012(3), Tax Code, is amended to read
53	53	as follows:
54	54	(3) "Current debt service" means the minimum dollar
55	55	amount required to be expended for debt service for the current
56	56	year.
57	57	SECTION 5. Section 26.04(c), Tax Code, is amended to read as
58	58	follows:
59	59	(c) After the assessor for the taxing unit submits the
60	60	appraisal roll for the taxing unit to the governing body of the
61	61	taxing unit as required by Subsection (b), an officer or employee
62	62	designated by the governing body shall calculate the no-new-revenue
63	63	tax rate and the voter-approval tax rate for the taxing unit, where:
64	64	(1) "No-new-revenue tax rate" means a rate expressed
65	65	in dollars per $100 of taxable value calculated according to the
66	66	following formula:
67	67	NO-NEW-REVENUE TAX RATE = (LAST YEAR'S LEVY - LOST PROPERTY
68	68	LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)
69	69	; and
70	70	(2) "Voter-approval tax rate" means a rate expressed
71	71	in dollars per $100 of taxable value calculated according to the
72	72	following [applicable] formula:
73	73	[(A) for a special taxing unit:]
74	74	VOTER-APPROVAL TAX RATE = [(]NO-NEW-REVENUE MAINTENANCE AND
75	75	OPERATIONS RATE [x 1.08)] + CURRENT DEBT RATE
76	76	[; or
77	77	[(B) for a taxing unit other than a special taxing
78	78	unit:
79	79	[VOTER-APPROVAL TAX RATE = (NO-NEW-REVENUE MAINTENANCE AND
80	80	OPERATIONS RATE x 1.035) + (CURRENT DEBT RATE + UNUSED INCREMENT
81	81	RATE)]
82	82	SECTION 6. Sections 26.041(a), (b), and (c), Tax Code, are
83	83	amended to read as follows:
84	84	(a) In the first year in which an additional sales and use
85	85	tax is required to be collected, the no-new-revenue tax rate and
86	86	voter-approval tax rate for the taxing unit are calculated
87	87	according to the following formulas:
88	88	NO-NEW-REVENUE TAX RATE = [(LAST YEAR'S LEVY -
89	89	LOST PROPERTY LEVY) / (CURRENT TOTAL VALUE - NEW
90	90	PROPERTY VALUE)] - SALES TAX GAIN RATE
91	91	and
92	92	VOTER-APPROVAL TAX RATE [FOR SPECIAL TAXING UNIT]
93	93	= [(]NO-NEW-REVENUE MAINTENANCE AND OPERATIONS RATE [x
94	94	1.08)] + [(]CURRENT DEBT RATE - SALES TAX GAIN RATE[)
95	95	[or
96	96	[VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER
97	97	THAN SPECIAL TAXING UNIT = (NO-NEW-REVENUE MAINTENANCE
98	98	AND OPERATIONS RATE x 1.035) + (CURRENT DEBT RATE +
99	99	UNUSED INCREMENT RATE - SALES TAX GAIN RATE)]
100	100	where "sales tax gain rate" means a number expressed in dollars per
101	101	$100 of taxable value, calculated by dividing the revenue that will
102	102	be generated by the additional sales and use tax in the following
103	103	year as calculated under Subsection (d) by the current total value.
104	104	(b) Except as provided by Subsections (a) and (c), in a year
105	105	in which a taxing unit imposes an additional sales and use tax, the
106	106	voter-approval tax rate for the taxing unit is calculated according
107	107	to the following formula, regardless of whether the taxing unit
108	108	levied a property tax in the preceding year:
109	109	VOTER-APPROVAL TAX RATE [FOR SPECIAL TAXING UNIT]
110	110	= [[(]LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE
111	111	[x 1.08)] / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)]
112	112	+ (CURRENT DEBT RATE - SALES TAX REVENUE RATE)
113	113	[or
114	114	[VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER
115	115	THAN SPECIAL TAXING UNIT = [(LAST YEAR'S MAINTENANCE
116	116	AND OPERATIONS EXPENSE x 1.035) / (CURRENT TOTAL VALUE
117	117	- NEW PROPERTY VALUE)] + (CURRENT DEBT RATE + UNUSED
118	118	INCREMENT RATE - SALES TAX REVENUE RATE)]
119	119	where "last year's maintenance and operations expense" means the
120	120	amount spent for maintenance and operations from property tax and
121	121	additional sales and use tax revenues in the preceding year, and
122	122	"sales tax revenue rate" means a number expressed in dollars per
123	123	$100 of taxable value, calculated by dividing the revenue that will
124	124	be generated by the additional sales and use tax in the current year
125	125	as calculated under Subsection (d) by the current total value.
126	126	(c) In a year in which a taxing unit that has been imposing
127	127	an additional sales and use tax ceases to impose an additional sales
128	128	and use tax, the no-new-revenue tax rate and voter-approval tax
129	129	rate for the taxing unit are calculated according to the following
130	130	formulas:
131	131	NO-NEW-REVENUE TAX RATE = [(LAST YEAR'S LEVY -
132	132	LOST PROPERTY LEVY) / (CURRENT TOTAL VALUE - NEW
133	133	PROPERTY VALUE)] + SALES TAX LOSS RATE
134	134	and
135	135	VOTER-APPROVAL TAX RATE [FOR SPECIAL TAXING UNIT]
136	136	= [[(]LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE
137	137	[x 1.08)] / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)]
138	138	+ CURRENT DEBT RATE
139	139	[or
140	140	[VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER
141	141	THAN SPECIAL TAXING UNIT = [(LAST YEAR'S MAINTENANCE
142	142	AND OPERATIONS EXPENSE x 1.035) / (CURRENT TOTAL VALUE
143	143	- NEW PROPERTY VALUE)] + (CURRENT DEBT RATE + UNUSED
144	144	INCREMENT RATE)]
145	145	where "sales tax loss rate" means a number expressed in dollars per
146	146	$100 of taxable value, calculated by dividing the amount of sales
147	147	and use tax revenue generated in the last four quarters for which
148	148	the information is available by the current total value and "last
149	149	year's maintenance and operations expense" means the amount spent
150	150	for maintenance and operations from property tax and additional
151	151	sales and use tax revenues in the preceding year.
152	152	SECTION 7. Section 26.07(b), Tax Code, is amended to read as
153	153	follows:
154	154	(b) If the governing body of a [special] taxing unit [or a
155	155	municipality with a population of 30,000 or more] adopts a tax rate
156	156	that exceeds the taxing unit's voter-approval tax rate, [or the
157	157	governing body of a taxing unit other than a special taxing unit or
158	158	a municipality with a population of less than 30,000 regardless of
159	159	whether it is a special taxing unit adopts a tax rate that exceeds
160	160	the greater of the taxing unit's voter-approval tax rate or de
161	161	minimis rate,] the registered voters of the taxing unit at an
162	162	election held for that purpose must determine whether to approve
163	163	the adopted tax rate.
164	164	SECTION 8. Sections 31.12(a) and (b), Tax Code, are amended
165	165	to read as follows:
166	166	(a) If a refund of a tax provided by Section 11.431(b),
167	167	26.07(g), [26.075(k),] 26.15(f), 31.11, 31.111, or 31.112 is paid
168	168	on or before the 60th day after the date the liability for the
169	169	refund arises, no interest is due on the amount refunded. If not
170	170	paid on or before that 60th day, the amount of the tax to be refunded
171	171	accrues interest at a rate of one percent for each month or part of a
172	172	month that the refund is unpaid, beginning with the date on which
173	173	the liability for the refund arises.
174	174	(b) For purposes of this section, liability for a refund
175	175	arises:
176	176	(1) if the refund is required by Section 11.431(b), on
177	177	the date the chief appraiser notifies the collector for the taxing
178	178	unit of the approval of the late homestead exemption;
179	179	(2) if the refund is required by Section 26.07(g) [or
180	180	26.075(k)], on the date the results of the election to approve [or
181	181	reduce] the tax rate[, as applicable,] are certified;
182	182	(3) if the refund is required by Section 26.15(f):
183	183	(A) for a correction to the tax roll made under
184	184	Section 26.15(b), on the date the change in the tax roll is
185	185	certified to the assessor for the taxing unit under Section 25.25;
186	186	or
187	187	(B) for a correction to the tax roll made under
188	188	Section 26.15(c), on the date the change in the tax roll is ordered
189	189	by the governing body of the taxing unit;
190	190	(4) if the refund is required by Section 31.11, on the
191	191	date the auditor for the taxing unit determines that the payment was
192	192	erroneous or excessive or, if the amount of the refund exceeds the
193	193	applicable amount specified by Section 31.11(a), on the date the
194	194	governing body of the taxing unit approves the refund;
195	195	(5) if the refund is required by Section 31.111, on the
196	196	date the collector for the taxing unit determines that the payment
197	197	was erroneous; or
198	198	(6) if the refund is required by Section 31.112, on the
199	199	date required by Section 31.112(d) or (e), as applicable.
200	200	SECTION 9. Section 33.08(b), Tax Code, is amended to read as
201	201	follows:
202	202	(b) The governing body of the taxing unit or appraisal
203	203	district, in the manner required by law for official action, may
204	204	provide that taxes that become delinquent on or after June 1 under
205	205	Section [26.075(j),] 26.15(e), 31.03, 31.031, 31.032, 31.033,
206	206	31.04, or 42.42 incur an additional penalty to defray costs of
207	207	collection. The amount of the penalty may not exceed the amount of
208	208	the compensation specified in the applicable contract with an
209	209	attorney under Section 6.30 to be paid in connection with the
210	210	collection of the delinquent taxes.
211	211	SECTION 10. Section 49.057, Water Code, is amended by
212	212	amending Subsection (b) and adding Subsection (j) to read as
213	213	follows:
214	214	(b) The board shall adopt an annual budget. The board of a
215	215	developed district[, as defined by Section 49.23602,] shall include
216	216	as an appendix to the budget the district's:
217	217	(1) audited financial statements;
218	218	(2) bond transcripts; and
219	219	(3) engineer's reports required by Section 49.106.
220	220	(j) In this section, "developed district" means a district
221	221	that has financed, completed, and issued bonds to pay for all land,
222	222	works, improvements, facilities, plants, equipment, and appliances
223	223	necessary to serve at least 95 percent of the projected build-out of
224	224	the district in accordance with the purposes for its creation or the
225	225	purposes authorized by the constitution, this code, or any other
226	226	law.
227	227	SECTION 11. Section 49.107(g), Water Code, is amended to
228	228	read as follows:
229	229	(g) Sections 26.04, [26.042,] 26.05, 26.061, and 26.07,
230	230	[and 26.075,] Tax Code, do not apply to a tax levied and collected
231	231	under this section or an ad valorem tax levied and collected for the
232	232	payment of the interest on and principal of bonds issued by a
233	233	district.
234	234	SECTION 12. Section 49.108(f), Water Code, is amended to
235	235	read as follows:
236	236	(f) Sections 26.04, [26.042,] 26.05, 26.061, and 26.07,
237	237	[and 26.075,] Tax Code, do not apply to a tax levied and collected
238	238	for payments made under a contract approved in accordance with this
239	239	section.
240	240	SECTION 13. Section 49.236(a), Water Code, is amended to
241	241	read as follows:
242	242	(a) Before the board adopts an ad valorem tax rate for the
243	243	district for debt service, operation and maintenance purposes, or
244	244	contract purposes, the board shall give notice of each meeting of
245	245	the board at which the adoption of a tax rate will be considered.
246	246	The notice must:
247	247	(1) contain a statement in substantially the following
248	248	form:
249	249	"NOTICE OF PUBLIC HEARING ON TAX RATE
250	250	"The (name of the district) will hold a public hearing on a
251	251	proposed tax rate for the tax year (year of tax levy) on (date and
252	252	time) at (meeting place). Your individual taxes may increase at a
253	253	greater or lesser rate, or even decrease, depending on the tax rate
254	254	that is adopted and on the change in the taxable value of your
255	255	property in relation to the change in taxable value of all other
256	256	property. The change in the taxable value of your property in
257	257	relation to the change in the taxable value of all other property
258	258	determines the distribution of the tax burden among all property
259	259	owners.
260	260	"Visit Texas.gov/PropertyTaxes to find a link to your local
261	261	property tax database on which you can easily access information
262	262	regarding your property taxes, including information about
263	263	proposed tax rates and scheduled public hearings of each entity
264	264	that taxes your property.
265	265	"(Names of all board members and, if a vote was taken, an
266	266	indication of how each voted on the proposed tax rate and an
267	267	indication of any absences.)";
268	268	(2) contain the following information:
269	269	(A) the district's total adopted tax rate for the
270	270	preceding year and the proposed tax rate, expressed as an amount per
271	271	$100;
272	272	(B) the difference, expressed as an amount per
273	273	$100 and as a percent increase or decrease, as applicable, in the
274	274	proposed tax rate compared to the adopted tax rate for the preceding
275	275	year;
276	276	(C) the average appraised value of a residence
277	277	homestead in the district in the preceding year and in the current
278	278	year; the district's total homestead exemption, other than an
279	279	exemption available only to disabled persons or persons 65 years of
280	280	age or older, applicable to that appraised value in each of those
281	281	years; and the average taxable value of a residence homestead in the
282	282	district in each of those years, disregarding any homestead
283	283	exemption available only to disabled persons or persons 65 years of
284	284	age or older;
285	285	(D) the amount of tax that would have been
286	286	imposed by the district in the preceding year on a residence
287	287	homestead appraised at the average appraised value of a residence
288	288	homestead in that year, disregarding any homestead exemption
289	289	available only to disabled persons or persons 65 years of age or
290	290	older;
291	291	(E) the amount of tax that would be imposed by the
292	292	district in the current year on a residence homestead appraised at
293	293	the average appraised value of a residence homestead in that year,
294	294	disregarding any homestead exemption available only to disabled
295	295	persons or persons 65 years of age or older, if the proposed tax
296	296	rate is adopted;
297	297	(F) the difference between the amounts of tax
298	298	calculated under Paragraphs (D) and (E), expressed in dollars and
299	299	cents and described as the annual percentage increase or decrease,
300	300	as applicable, in the tax to be imposed by the district on the
301	301	average residence homestead in the district in the current year if
302	302	the proposed tax rate is adopted; and
303	303	(G) if the proposed combined debt service,
304	304	operation and maintenance, and contract tax rate requires [or
305	305	authorizes] an election to approve [or reduce] the tax rate, [as
306	306	applicable,] a description of the purpose of the proposed tax
307	307	increase;
308	308	(3) contain a statement in substantially the following
309	309	form[, as applicable:
310	310	[(A) if the district is a district described by
311	311	Section 49.23601]:
312	312	"NOTICE OF VOTE ON TAX RATE
313	313	"If the district adopts a combined debt service, operation
314	314	and maintenance, and contract tax rate that would result in the
315	315	taxes on the average residence homestead increasing from the
316	316	preceding year [by more than eight percent], an election must be
317	317	held to determine whether to approve the operation and maintenance
318	318	tax rate under Section 49.23601, Water Code.";
319	319	[(B) if the district is a district described by
320	320	Section 49.23602:
321	321	["NOTICE OF VOTE ON TAX RATE
322	322	["If the district adopts a combined debt service, operation
323	323	and maintenance, and contract tax rate that would result in the
324	324	taxes on the average residence homestead increasing by more than
325	325	3.5 percent, an election must be held to determine whether to
326	326	approve the operation and maintenance tax rate under Section
327	327	49.23602, Water Code."; or
328	328	[(C) if the district is a district described by
329	329	Section 49.23603:
330	330	["NOTICE OF TAXPAYERS' RIGHT TO ELECTION TO REDUCE TAX RATE
331	331	["If the district adopts a combined debt service, operation
332	332	and maintenance, and contract tax rate that would result in the
333	333	taxes on the average residence homestead increasing by more than
334	334	eight percent, the qualified voters of the district by petition may
335	335	require that an election be held to determine whether to reduce the
336	336	operation and maintenance tax rate to the voter-approval tax rate
337	337	under Section 49.23603, Water Code.";] and
338	338	(4) include the following statement: "The 86th Texas
339	339	Legislature modified the manner in which the voter-approval tax
340	340	rate is calculated to limit the rate of growth of property taxes in
341	341	the state.".
342	342	SECTION 14. The heading to Section 49.23601, Water Code, is
343	343	amended to read as follows:
344	344	Sec. 49.23601. AUTOMATIC ELECTION TO APPROVE TAX RATE [FOR
345	345	LOW TAX RATE DISTRICTS].
346	346	SECTION 15. Sections 49.23601(a) and (c), Water Code, are
347	347	amended to read as follows:
348	348	(a) In this section, "voter-approval tax rate" means the
349	349	rate equal to the sum of the following tax rates for the district:
350	350	(1) the current year's debt service tax rate;
351	351	(2) the current year's contract tax rate; and
352	352	(3) the operation and maintenance tax rate that would
353	353	impose [1.08 times] the amount of [the] operation and maintenance
354	354	tax imposed by the district in the preceding year on a residence
355	355	homestead appraised at the average appraised value of a residence
356	356	homestead in the district in that year, disregarding any homestead
357	357	exemption available only to disabled persons or persons 65 years of
358	358	age or older.
359	359	(c) If the board of a district adopts a combined debt
360	360	service, contract, and operation and maintenance tax rate that
361	361	would impose more than [1.08 times] the amount of tax imposed by the
362	362	district in the preceding year on a residence homestead appraised
363	363	at the average appraised value of a residence homestead in the
364	364	district in that year, disregarding any homestead exemption
365	365	available only to disabled persons or persons 65 years of age or
366	366	older, an election must be held in accordance with the procedures
367	367	provided by Sections 26.07(c)-(g), Tax Code, to determine whether
368	368	to approve the adopted tax rate. If the adopted tax rate is not
369	369	approved at the election, the district's tax rate is the
370	370	voter-approval tax rate.
371	371	SECTION 16. The following provisions are repealed:
372	372	(1) Section 45.0032(d), Education Code;
373	373	(2) Section 120.007(d), Local Government Code;
374	374	(3) Sections 26.012(8-a) and (19), Tax Code;
375	375	(4) Section 26.013, Tax Code;
376	376	(5) Section 26.042, Tax Code;
377	377	(6) Section 26.0501(c), Tax Code;
378	378	(7) Section 26.063, Tax Code;
379	379	(8) Section 26.075, Tax Code;
380	380	(9) Section 49.23601(b), Water Code;
381	381	(10) Section 49.23602, Water Code; and
382	382	(11) Section 49.23603, Water Code.
383	383	SECTION 17. This Act applies only to ad valorem taxes
384	384	imposed for an ad valorem tax year that begins on or after the
385	385	effective date of this Act.
386	386	SECTION 18. This Act takes effect January 1, 2026.