Texas 2025 - 89th Regular

Texas Senate Bill SB2775 Compare Versions

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1	1	89R13978 RDS-D
2	2	By: Hinojosa of Nueces S.B. No. 2775
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, 26.07, and 26.075,
45	45	Tax Code, do not apply to a tax imposed under Section 3828.153 or
46	46	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, 26.07,
50	50	and 26.075, Tax Code, do not apply to a tax imposed by the district.
51	51	SECTION 4. Section 26.04(c), Tax Code, is amended to read as
52	52	follows:
53	53	(c) After the assessor for the taxing unit submits the
54	54	appraisal roll for the taxing unit to the governing body of the
55	55	taxing unit as required by Subsection (b), an officer or employee
56	56	designated by the governing body shall calculate the no-new-revenue
57	57	tax rate and the voter-approval tax rate for the taxing unit, where:
58	58	(1) "No-new-revenue tax rate" means a rate expressed
59	59	in dollars per $100 of taxable value calculated according to the
60	60	following formula:
61	61	NO-NEW-REVENUE TAX RATE = (LAST YEAR'S LEVY - LOST PROPERTY
62	62	LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)
63	63	; and
64	64	(2) "Voter-approval tax rate" means a rate expressed
65	65	in dollars per $100 of taxable value calculated according to the
66	66	following [applicable] formula:
67	67	[(A) for a special taxing unit:]
68	68	VOTER-APPROVAL TAX RATE = [(]NO-NEW-REVENUE MAINTENANCE AND
69	69	OPERATIONS RATE [x 1.08)] + CURRENT DEBT RATE
70	70	[; or
71	71	[(B) for a taxing unit other than a special taxing
72	72	unit:
73	73	[VOTER-APPROVAL TAX RATE = (NO-NEW-REVENUE MAINTENANCE AND
74	74	OPERATIONS RATE x 1.035) + (CURRENT DEBT RATE + UNUSED INCREMENT
75	75	RATE)]
76	76	SECTION 5. Sections 26.041(a), (b), and (c), Tax Code, are
77	77	amended to read as follows:
78	78	(a) In the first year in which an additional sales and use
79	79	tax is required to be collected, the no-new-revenue tax rate and
80	80	voter-approval tax rate for the taxing unit are calculated
81	81	according to the following formulas:
82	82	NO-NEW-REVENUE TAX RATE = [(LAST YEAR'S LEVY -
83	83	LOST PROPERTY LEVY) / (CURRENT TOTAL VALUE - NEW
84	84	PROPERTY VALUE)] - SALES TAX GAIN RATE
85	85	and
86	86	VOTER-APPROVAL TAX RATE [FOR SPECIAL TAXING UNIT]
87	87	= [(]NO-NEW-REVENUE MAINTENANCE AND OPERATIONS RATE [x
88	88	1.08)] + [(]CURRENT DEBT RATE - SALES TAX GAIN RATE[)
89	89	[or
90	90	[VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER
91	91	THAN SPECIAL TAXING UNIT = (NO-NEW-REVENUE MAINTENANCE
92	92	AND OPERATIONS RATE x 1.035) + (CURRENT DEBT RATE +
93	93	UNUSED INCREMENT RATE - SALES TAX GAIN RATE)]
94	94	where "sales tax gain rate" means a number expressed in dollars per
95	95	$100 of taxable value, calculated by dividing the revenue that will
96	96	be generated by the additional sales and use tax in the following
97	97	year as calculated under Subsection (d) by the current total value.
98	98	(b) Except as provided by Subsections (a) and (c), in a year
99	99	in which a taxing unit imposes an additional sales and use tax, the
100	100	voter-approval tax rate for the taxing unit is calculated according
101	101	to the following formula, regardless of whether the taxing unit
102	102	levied a property tax in the preceding year:
103	103	VOTER-APPROVAL TAX RATE [FOR SPECIAL TAXING UNIT]
104	104	= [[(]LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE
105	105	[x 1.08)] / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)]
106	106	+ (CURRENT DEBT RATE - SALES TAX REVENUE RATE)
107	107	[or
108	108	[VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER
109	109	THAN SPECIAL TAXING UNIT = [(LAST YEAR'S MAINTENANCE
110	110	AND OPERATIONS EXPENSE x 1.035) / (CURRENT TOTAL VALUE
111	111	- NEW PROPERTY VALUE)] + (CURRENT DEBT RATE + UNUSED
112	112	INCREMENT RATE - SALES TAX REVENUE RATE)]
113	113	where "last year's maintenance and operations expense" means the
114	114	amount spent for maintenance and operations from property tax and
115	115	additional sales and use tax revenues in the preceding year, and
116	116	"sales tax revenue rate" means a number expressed in dollars per
117	117	$100 of taxable value, calculated by dividing the revenue that will
118	118	be generated by the additional sales and use tax in the current year
119	119	as calculated under Subsection (d) by the current total value.
120	120	(c) In a year in which a taxing unit that has been imposing
121	121	an additional sales and use tax ceases to impose an additional sales
122	122	and use tax, the no-new-revenue tax rate and voter-approval tax
123	123	rate for the taxing unit are calculated according to the following
124	124	formulas:
125	125	NO-NEW-REVENUE TAX RATE = [(LAST YEAR'S LEVY -
126	126	LOST PROPERTY LEVY) / (CURRENT TOTAL VALUE - NEW
127	127	PROPERTY VALUE)] + SALES TAX LOSS RATE
128	128	and
129	129	VOTER-APPROVAL TAX RATE [FOR SPECIAL TAXING UNIT]
130	130	= [[(]LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE
131	131	[x 1.08)] / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)]
132	132	+ CURRENT DEBT RATE
133	133	[or
134	134	[VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER
135	135	THAN SPECIAL TAXING UNIT = [(LAST YEAR'S MAINTENANCE
136	136	AND OPERATIONS EXPENSE x 1.035) / (CURRENT TOTAL VALUE
137	137	- NEW PROPERTY VALUE)] + (CURRENT DEBT RATE + UNUSED
138	138	INCREMENT RATE)]
139	139	where "sales tax loss rate" means a number expressed in dollars per
140	140	$100 of taxable value, calculated by dividing the amount of sales
141	141	and use tax revenue generated in the last four quarters for which
142	142	the information is available by the current total value and "last
143	143	year's maintenance and operations expense" means the amount spent
144	144	for maintenance and operations from property tax and additional
145	145	sales and use tax revenues in the preceding year.
146	146	SECTION 6. Section 26.063(a), Tax Code, is amended to read
147	147	as follows:
148	148	(a) This section applies only to a taxing unit:
149	149	(1) other than [that is:
150	150	[(A) a taxing unit other than a special taxing
151	151	unit; or
152	152	[(B)] a municipality with a population of [less
153	153	than] 30,000 or more [, regardless of whether it is a special taxing
154	154	unit];
155	155	(2) that is required to provide notice under Section
156	156	26.06(b-1) or (b-3); and
157	157	(3) for which the de minimis rate exceeds the
158	158	voter-approval tax rate.
159	159	SECTION 7. Section 26.07(b), Tax Code, is amended to read as
160	160	follows:
161	161	(b) If the governing body of a [special taxing unit or a]
162	162	municipality with a population of 30,000 or more adopts a tax rate
163	163	that exceeds the taxing unit's voter-approval tax rate, or the
164	164	governing body of a taxing unit other than a [special taxing unit or
165	165	a] municipality with a population of [less than] 30,000 or more
166	166	[regardless of whether it is a special taxing unit] adopts a tax
167	167	rate that exceeds the greater of the taxing unit's voter-approval
168	168	tax rate or de minimis rate, the registered voters of the taxing
169	169	unit at an election held for that purpose must determine whether to
170	170	approve the adopted tax rate.
171	171	SECTION 8. Sections 26.075(a) and (b), Tax Code, are
172	172	amended to read as follows:
173	173	(a) This section applies only to a taxing unit other than:
174	174	(1) [a special taxing unit;
175	175	[(2)] a school district; or
176	176	(2) [(3)] a municipality with a population of 30,000
177	177	or more.
178	178	(b) This section applies to a taxing unit only in a tax year
179	179	in which the taxing unit's:
180	180	(1) de minimis rate exceeds the taxing unit's
181	181	voter-approval tax rate; and
182	182	(2) adopted tax rate is:
183	183	(A) equal to or lower than the taxing unit's de
184	184	minimis rate; and
185	185	(B) greater than the [greater of the] taxing
186	186	unit's[:
187	187	[(i)] voter-approval tax rate [calculated
188	188	as if the taxing unit were a special taxing unit; or
189	189	[(ii) voter-approval tax rate].
190	190	SECTION 9. Section 49.107(g), Water Code, is amended to
191	191	read as follows:
192	192	(g) Sections 26.04, [26.042,] 26.05, 26.061, 26.07, and
193	193	26.075, Tax Code, do not apply to a tax levied and collected under
194	194	this section or an ad valorem tax levied and collected for the
195	195	payment of the interest on and principal of bonds issued by a
196	196	district.
197	197	SECTION 10. Section 49.108(f), Water Code, is amended to
198	198	read as follows:
199	199	(f) Sections 26.04, [26.042,] 26.05, 26.061, 26.07, and
200	200	26.075, Tax Code, do not apply to a tax levied and collected for
201	201	payments made under a contract approved in accordance with this
202	202	section.
203	203	SECTION 11. Section 49.23602(a)(3), Water Code, is amended
204	204	to read as follows:
205	205	(3) "Unused increment rate" has the meaning assigned
206	206	by Section 49.23604 [26.013, Tax Code].
207	207	SECTION 12. Subchapter H, Chapter 49, Water Code, is
208	208	amended by adding Section 49.23604 to read as follows:
209	209	Sec. 49.23604. UNUSED INCREMENT RATE. (a) In this section:
210	210	(1) "Actual tax rate" means a district's actual tax
211	211	rate used to levy taxes in the applicable preceding tax year.
212	212	(2) "Current total value" has the meaning assigned by
213	213	Section 26.012, Tax Code.
214	214	(3) "Foregone revenue amount" means the greater of:
215	215	(A) zero; or
216	216	(B) the amount expressed in dollars calculated
217	217	according to the following formula:
218	218	FOREGONE REVENUE AMOUNT = (VOTER-APPROVAL TAX RATE - ACTUAL
219	219	TAX RATE) x PRECEDING TOTAL VALUE
220	220	(4) "Preceding total value" means a district's current
221	221	total value in the applicable preceding tax year.
222	222	(5) "Voter-approval tax rate" means a district's
223	223	voter-approval tax rate in the applicable preceding tax year, as
224	224	adopted by the district during the applicable preceding tax year,
225	225	less the unused increment rate for that preceding tax year.
226	226	(6) "Year 1" means the third tax year preceding the
227	227	current tax year.
228	228	(7) "Year 2" means the second tax year preceding the
229	229	current tax year.
230	230	(8) "Year 3" means the tax year preceding the current
231	231	tax year.
232	232	(b) In Section 49.23602, "unused increment rate" means the
233	233	greater of:
234	234	(1) zero; or
235	235	(2) the rate expressed in dollars per $100 of taxable
236	236	value calculated according to the following formula:
237	237	UNUSED INCREMENT RATE = (YEAR 1 FOREGONE REVENUE AMOUNT +
238	238	YEAR 2 FOREGONE REVENUE AMOUNT + YEAR 3 FOREGONE REVENUE AMOUNT) /
239	239	CURRENT TOTAL VALUE
240	240	SECTION 13. The following provisions are repealed:
241	241	(1) Section 45.0032(d), Education Code;
242	242	(2) Section 120.007(d), Local Government Code;
243	243	(3) Section 26.012(19), Tax Code;
244	244	(4) Section 26.013, Tax Code;
245	245	(5) Section 26.042, Tax Code; and
246	246	(6) Section 26.0501(c), Tax Code.
247	247	SECTION 14. This Act applies only to ad valorem taxes
248	248	imposed for an ad valorem tax year that begins on or after the
249	249	effective date of this Act.
250	250	SECTION 15. This Act takes effect January 1, 2026.