Texas 2025 - 89th Regular

Texas Senate Bill SB2541 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
	1	+	89R12969 PRL-D
1	2		By: Bettencourt S.B. No. 2541
2		-	(In the Senate - Filed March 13, 2025; April 3, 2025, read
3		-	first time and referred to Committee on Local Government;
4		-	April 29, 2025, reported adversely, with favorable Committee
5		-	Substitute by the following vote: Yeas 4, Nays 2; April 29, 2025,
6		-	sent to printer.)
7		-	Click here to see the committee vote
8		-	COMMITTEE SUBSTITUTE FOR S.B. No. 2541 By: Paxton
9	3
10	4
11	5
12	6
13	7		A BILL TO BE ENTITLED
14	8		AN ACT
15		-	relating to the calculation of the unused increment rate of a taxing
16		-	unit.
	9	+	relating to the repeal of provisions providing for the calculation
	10	+	of an unused increment rate and the use of that rate in calculating
	11	+	certain other ad valorem tax rates.
17	12		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
18		-	SECTION 1. Sections 26.013(a)(3) and (4), Tax Code, are
	13	+	SECTION 1. Section 26.04(c), Tax Code, is amended to read as
	14	+	follows:
	15	+	(c) After the assessor for the taxing unit submits the
	16	+	appraisal roll for the taxing unit to the governing body of the
	17	+	taxing unit as required by Subsection (b), an officer or employee
	18	+	designated by the governing body shall calculate the no-new-revenue
	19	+	tax rate and the voter-approval tax rate for the taxing unit, where:
	20	+	(1) "No-new-revenue tax rate" means a rate expressed
	21	+	in dollars per $100 of taxable value calculated according to the
	22	+	following formula:
	23	+	NO-NEW-REVENUE TAX RATE = (LAST YEAR'S LEVY - LOST PROPERTY
	24	+	LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)
	25	+	; and
	26	+	(2) "Voter-approval tax rate" means a rate expressed
	27	+	in dollars per $100 of taxable value calculated according to the
	28	+	following applicable formula:
	29	+	(A) for a special taxing unit:
	30	+	VOTER-APPROVAL TAX RATE = (NO-NEW-REVENUE MAINTENANCE AND
	31	+	OPERATIONS RATE x 1.08) + CURRENT DEBT RATE
	32	+	; or
	33	+	(B) for a taxing unit other than a special taxing
	34	+	unit:
	35	+	VOTER-APPROVAL TAX RATE = (NO-NEW-REVENUE MAINTENANCE AND
	36	+	OPERATIONS RATE x 1.035) + [(]CURRENT DEBT RATE [+ UNUSED INCREMENT
	37	+	RATE)]
	38	+	SECTION 2. Sections 26.041(a), (b), and (c), Tax Code, are
19	39		amended to read as follows:
20		-	(3) "Year 1" means the second [third] tax year
21		-	preceding the current tax year.
22		-	(4) "Year 2" means the [second] tax year preceding the
23		-	current tax year.
24		-	SECTION 2. Section 26.013(b), Tax Code, is amended to read
25		-	as follows:
26		-	(b) In this chapter, "unused increment rate" means the
27		-	greater of:
28		-	(1) zero; or
29		-	(2) the rate expressed in dollars per $100 of taxable
30		-	value calculated according to the following formula:
31		-	UNUSED INCREMENT RATE = (YEAR 1 FOREGONE REVENUE AMOUNT +
32		-	YEAR 2 FOREGONE REVENUE AMOUNT [+ YEAR 3 FOREGONE REVENUE AMOUNT]) /
33		-	CURRENT TOTAL VALUE
34		-	SECTION 3. Section 26.013(a)(5), Tax Code, is repealed.
35		-	SECTION 4. The changes in law made by this Act apply only to
36		-	the calculation of the unused increment rate, as defined by Section
37		-	26.013, Tax Code, as amended by this Act, for a tax year that begins
38		-	on or after January 1, 2027. The calculation of the unused
39		-	increment rate for a tax year that begins before January 1, 2027, is
40		-	governed by the law in effect immediately before the effective date
41		-	of this Act, and the former law is continued in effect for that
42		-	purpose.
43		-	SECTION 5. This Act takes effect January 1, 2026.
44		-	* * * * *
	40	+	(a) In the first year in which an additional sales and use
	41	+	tax is required to be collected, the no-new-revenue tax rate and
	42	+	voter-approval tax rate for the taxing unit are calculated
	43	+	according to the following formulas:
	44	+	NO-NEW-REVENUE TAX RATE = [(LAST YEAR'S LEVY - LOST PROPERTY
	45	+	LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] - SALES TAX GAIN
	46	+	RATE
	47	+	and
	48	+	VOTER-APPROVAL TAX RATE FOR SPECIAL TAXING UNIT =
	49	+	(NO-NEW-REVENUE MAINTENANCE AND OPERATIONS RATE x 1.08) + (CURRENT
	50	+	DEBT RATE - SALES TAX GAIN RATE)
	51	+	or
	52	+	VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER THAN SPECIAL
	53	+	TAXING UNIT = (NO-NEW-REVENUE MAINTENANCE AND OPERATIONS RATE x
	54	+	1.035) + (CURRENT DEBT RATE [+ UNUSED INCREMENT RATE] - SALES TAX
	55	+	GAIN RATE)
	56	+	where "sales tax gain rate" means a number expressed in dollars per
	57	+	$100 of taxable value, calculated by dividing the revenue that will
	58	+	be generated by the additional sales and use tax in the following
	59	+	year as calculated under Subsection (d) by the current total value.
	60	+	(b) Except as provided by Subsections (a) and (c), in a year
	61	+	in which a taxing unit imposes an additional sales and use tax, the
	62	+	voter-approval tax rate for the taxing unit is calculated according
	63	+	to the following formula, regardless of whether the taxing unit
	64	+	levied a property tax in the preceding year:
	65	+	VOTER-APPROVAL TAX RATE FOR SPECIAL TAXING UNIT = [(LAST
	66	+	YEAR'S MAINTENANCE AND OPERATIONS EXPENSE x 1.08) / (CURRENT TOTAL
	67	+	VALUE - NEW PROPERTY VALUE)] + (CURRENT DEBT RATE - SALES TAX
	68	+	REVENUE RATE)
	69	+	or
	70	+	VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER THAN SPECIAL
	71	+	TAXING UNIT = [(LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE x
	72	+	1.035) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + (CURRENT DEBT
	73	+	RATE [+ UNUSED INCREMENT RATE] - SALES TAX REVENUE RATE)
	74	+	where "last year's maintenance and operations expense" means the
	75	+	amount spent for maintenance and operations from property tax and
	76	+	additional sales and use tax revenues in the preceding year, and
	77	+	"sales tax revenue rate" means a number expressed in dollars per
	78	+	$100 of taxable value, calculated by dividing the revenue that will
	79	+	be generated by the additional sales and use tax in the current year
	80	+	as calculated under Subsection (d) by the current total value.
	81	+	(c) In a year in which a taxing unit that has been imposing
	82	+	an additional sales and use tax ceases to impose an additional sales
	83	+	and use tax, the no-new-revenue tax rate and voter-approval tax
	84	+	rate for the taxing unit are calculated according to the following
	85	+	formulas:
	86	+	NO-NEW-REVENUE TAX RATE = [(LAST YEAR'S LEVY - LOST PROPERTY
	87	+	LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + SALES TAX LOSS
	88	+	RATE
	89	+	and
	90	+	VOTER-APPROVAL TAX RATE FOR SPECIAL TAXING UNIT = [(LAST
	91	+	YEAR'S MAINTENANCE AND OPERATIONS EXPENSE x 1.08) / (CURRENT TOTAL
	92	+	VALUE - NEW PROPERTY VALUE)] + CURRENT DEBT RATE
	93	+	or
	94	+	VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER THAN SPECIAL
	95	+	TAXING UNIT = [(LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE x
	96	+	1.035) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + [(]CURRENT
	97	+	DEBT RATE [+ UNUSED INCREMENT RATE)]
	98	+	where "sales tax loss rate" means a number expressed in dollars per
	99	+	$100 of taxable value, calculated by dividing the amount of sales
	100	+	and use tax revenue generated in the last four quarters for which
	101	+	the information is available by the current total value and "last
	102	+	year's maintenance and operations expense" means the amount spent
	103	+	for maintenance and operations from property tax and additional
	104	+	sales and use tax revenues in the preceding year.
	105	+	SECTION 3. Sections 49.23602(a)(2) and (4), Water Code, are
	106	+	amended to read as follows:
	107	+	(2) "Mandatory tax election rate" means [the rate
	108	+	equal to the sum of the following tax rates for the district:
	109	+	[(A)] the rate that would impose 1.035 times the
	110	+	amount of tax imposed by the district in the preceding year on a
	111	+	residence homestead appraised at the average appraised value of a
	112	+	residence homestead in the district in that year, disregarding any
	113	+	homestead exemption available only to disabled persons or persons
	114	+	65 years of age or older[; and
	115	+	[(B) the unused increment rate].
	116	+	(4) "Voter-approval tax rate" means the rate equal to
	117	+	the sum of the following tax rates for the district:
	118	+	(A) the current year's debt service tax rate;
	119	+	(B) the current year's contract tax rate; and
	120	+	(C) the operation and maintenance tax rate that
	121	+	would impose 1.035 times the amount of the operation and
	122	+	maintenance tax imposed by the district in the preceding year on a
	123	+	residence homestead appraised at the average appraised value of a
	124	+	residence homestead in the district in that year, disregarding any
	125	+	homestead exemption available only to disabled persons or persons
	126	+	65 years of age or older[; and
	127	+	[(D) the unused increment rate].
	128	+	SECTION 4. The following provisions are repealed:
	129	+	(1) Section 120.007(d), Local Government Code;
	130	+	(2) Section 26.013, Tax Code;
	131	+	(3) Section 26.0501(c), Tax Code; and
	132	+	(4) Section 49.23602(a)(3), Water Code.
	133	+	SECTION 5. This Act applies only to ad valorem taxes imposed
	134	+	for an ad valorem tax year that begins on or after the effective
	135	+	date of this Act.
	136	+	SECTION 6. This Act takes effect January 1, 2026.