89R13978 RDS-D
By: Hinojosa of Nueces S.B. No. 2775
A BILL TO BE ENTITLED
AN ACT
relating to the calculation of certain ad valorem tax rates of a
taxing unit and the manner in which a proposed ad valorem tax rate
that exceeds the voter-approval tax rate is approved; making
conforming changes.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 48.202(f), Education Code, is amended to
read as follows:
(f) For a school year in which the dollar amount guaranteed
level of state and local funds per weighted student per cent of tax
effort ("GL") under Subsection (a-1)(2) exceeds the dollar amount
guaranteed level of state and local funds per weighted student per
cent of tax effort ("GL") under Subsection (a-1)(2) for the
preceding school year, a school district shall reduce the
district's tax rate under Section 45.0032(b)(2) for the tax year
that corresponds to that school year to a rate that results in the
amount of state and local funds per weighted student per cent of tax
effort available to the district at the dollar amount guaranteed
level for the preceding school year. A school district is not
entitled to the amount equal to the increase of revenue described by
this subsection for the school year for which the district must
reduce the district's tax rate. For [Unless Section 26.042(e), Tax
Code, applies to the district, for] a tax year in which a district
must reduce the district's tax rate under this subsection, the
district may not increase the district's maintenance and operations
tax rate to a rate that exceeds the maximum maintenance and
operations tax rate permitted under Section 45.003(d) or (f), as
applicable, minus the reduction of tax effort required under this
subsection. This subsection does not apply if the amount of state
funds appropriated for a school year specifically excludes the
amount necessary to provide the dollar amount guaranteed level of
state and local funds per weighted student per cent of tax effort
under Subsection (a-1)(2).
SECTION 2. Section 3828.157, Special District Local Laws
Code, is amended to read as follows:
Sec. 3828.157. INAPPLICABILITY OF CERTAIN TAX CODE
PROVISIONS. Sections 26.04, [26.042,] 26.05, 26.07, and 26.075,
Tax Code, do not apply to a tax imposed under Section 3828.153 or
3828.156.
SECTION 3. Section 8876.152(a), Special District Local Laws
Code, is amended to read as follows:
(a) Sections 26.04, [26.042,] 26.05, 26.06, 26.061, 26.07,
and 26.075, Tax Code, do not apply to a tax imposed by the district.
SECTION 4. Section 26.04(c), Tax Code, is amended to read as
follows:
(c) After the assessor for the taxing unit submits the
appraisal roll for the taxing unit to the governing body of the
taxing unit as required by Subsection (b), an officer or employee
designated by the governing body shall calculate the no-new-revenue
tax rate and the voter-approval tax rate for the taxing unit, where:
(1) "No-new-revenue tax rate" means a rate expressed
in dollars per $100 of taxable value calculated according to the
following formula:
NO-NEW-REVENUE TAX RATE = (LAST YEAR'S LEVY - LOST PROPERTY
LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)
; and
(2) "Voter-approval tax rate" means a rate expressed
in dollars per $100 of taxable value calculated according to the
following [applicable] formula:
[(A) for a special taxing unit:]
VOTER-APPROVAL TAX RATE = [(]NO-NEW-REVENUE MAINTENANCE AND
OPERATIONS RATE [x 1.08)] + CURRENT DEBT RATE
[; or
[(B) for a taxing unit other than a special taxing
unit:
[VOTER-APPROVAL TAX RATE = (NO-NEW-REVENUE MAINTENANCE AND
OPERATIONS RATE x 1.035) + (CURRENT DEBT RATE + UNUSED INCREMENT
RATE)]
SECTION 5. Sections 26.041(a), (b), and (c), Tax Code, are
amended to read as follows:
(a) In the first year in which an additional sales and use
tax is required to be collected, the no-new-revenue tax rate and
voter-approval tax rate for the taxing unit are calculated
according to the following formulas:
NO-NEW-REVENUE TAX RATE = [(LAST YEAR'S LEVY -
LOST PROPERTY LEVY) / (CURRENT TOTAL VALUE - NEW
PROPERTY VALUE)] - SALES TAX GAIN RATE
and
VOTER-APPROVAL TAX RATE [FOR SPECIAL TAXING UNIT]
= [(]NO-NEW-REVENUE MAINTENANCE AND OPERATIONS RATE [x
1.08)] + [(]CURRENT DEBT RATE - SALES TAX GAIN RATE[)
[or
[VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER
THAN SPECIAL TAXING UNIT = (NO-NEW-REVENUE MAINTENANCE
AND OPERATIONS RATE x 1.035) + (CURRENT DEBT RATE +
UNUSED INCREMENT RATE - SALES TAX GAIN RATE)]
where "sales tax gain rate" means a number expressed in dollars per
$100 of taxable value, calculated by dividing the revenue that will
be generated by the additional sales and use tax in the following
year as calculated under Subsection (d) by the current total value.
(b) Except as provided by Subsections (a) and (c), in a year
in which a taxing unit imposes an additional sales and use tax, the
voter-approval tax rate for the taxing unit is calculated according
to the following formula, regardless of whether the taxing unit
levied a property tax in the preceding year:
VOTER-APPROVAL TAX RATE [FOR SPECIAL TAXING UNIT]
= [[(]LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE
[x 1.08)] / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)]
+ (CURRENT DEBT RATE - SALES TAX REVENUE RATE)
[or
[VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER
THAN SPECIAL TAXING UNIT = [(LAST YEAR'S MAINTENANCE
AND OPERATIONS EXPENSE x 1.035) / (CURRENT TOTAL VALUE
- NEW PROPERTY VALUE)] + (CURRENT DEBT RATE + UNUSED
INCREMENT RATE - SALES TAX REVENUE RATE)]
where "last year's maintenance and operations expense" means the
amount spent for maintenance and operations from property tax and
additional sales and use tax revenues in the preceding year, and
"sales tax revenue rate" means a number expressed in dollars per
$100 of taxable value, calculated by dividing the revenue that will
be generated by the additional sales and use tax in the current year
as calculated under Subsection (d) by the current total value.
(c) In a year in which a taxing unit that has been imposing
an additional sales and use tax ceases to impose an additional sales
and use tax, the no-new-revenue tax rate and voter-approval tax
rate for the taxing unit are calculated according to the following
formulas:
NO-NEW-REVENUE TAX RATE = [(LAST YEAR'S LEVY -
LOST PROPERTY LEVY) / (CURRENT TOTAL VALUE - NEW
PROPERTY VALUE)] + SALES TAX LOSS RATE
and
VOTER-APPROVAL TAX RATE [FOR SPECIAL TAXING UNIT]
= [[(]LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE
[x 1.08)] / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)]
+ CURRENT DEBT RATE
[or
[VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER
THAN SPECIAL TAXING UNIT = [(LAST YEAR'S MAINTENANCE
AND OPERATIONS EXPENSE x 1.035) / (CURRENT TOTAL VALUE
- NEW PROPERTY VALUE)] + (CURRENT DEBT RATE + UNUSED
INCREMENT RATE)]
where "sales tax loss rate" means a number expressed in dollars per
$100 of taxable value, calculated by dividing the amount of sales
and use tax revenue generated in the last four quarters for which
the information is available by the current total value and "last
year's maintenance and operations expense" means the amount spent
for maintenance and operations from property tax and additional
sales and use tax revenues in the preceding year.
SECTION 6. Section 26.063(a), Tax Code, is amended to read
as follows:
(a) This section applies only to a taxing unit:
(1) other than [that is:
[(A) a taxing unit other than a special taxing
unit; or
[(B)] a municipality with a population of [less
than] 30,000 or more [, regardless of whether it is a special taxing
unit];
(2) that is required to provide notice under Section
26.06(b-1) or (b-3); and
(3) for which the de minimis rate exceeds the
voter-approval tax rate.
SECTION 7. Section 26.07(b), Tax Code, is amended to read as
follows:
(b) If the governing body of a [special taxing unit or a]
municipality with a population of 30,000 or more adopts a tax rate
that exceeds the taxing unit's voter-approval tax rate, or the
governing body of a taxing unit other than a [special taxing unit or
a] municipality with a population of [less than] 30,000 or more
[regardless of whether it is a special taxing unit] adopts a tax
rate that exceeds the greater of the taxing unit's voter-approval
tax rate or de minimis rate, the registered voters of the taxing
unit at an election held for that purpose must determine whether to
approve the adopted tax rate.
SECTION 8. Sections 26.075(a) and (b), Tax Code, are
amended to read as follows:
(a) This section applies only to a taxing unit other than:
(1) [a special taxing unit;
[(2)] a school district; or
(2) [(3)] a municipality with a population of 30,000
or more.
(b) This section applies to a taxing unit only in a tax year
in which the taxing unit's:
(1) de minimis rate exceeds the taxing unit's
voter-approval tax rate; and
(2) adopted tax rate is:
(A) equal to or lower than the taxing unit's de
minimis rate; and
(B) greater than the [greater of the] taxing
unit's[:
[(i)] voter-approval tax rate [calculated
as if the taxing unit were a special taxing unit; or
[(ii) voter-approval tax rate].
SECTION 9. Section 49.107(g), Water Code, is amended to
read as follows:
(g) Sections 26.04, [26.042,] 26.05, 26.061, 26.07, and
26.075, Tax Code, do not apply to a tax levied and collected under
this section or an ad valorem tax levied and collected for the
payment of the interest on and principal of bonds issued by a
district.
SECTION 10. Section 49.108(f), Water Code, is amended to
read as follows:
(f) Sections 26.04, [26.042,] 26.05, 26.061, 26.07, and
26.075, Tax Code, do not apply to a tax levied and collected for
payments made under a contract approved in accordance with this
section.
SECTION 11. Section 49.23602(a)(3), Water Code, is amended
to read as follows:
(3) "Unused increment rate" has the meaning assigned
by Section 49.23604 [26.013, Tax Code].
SECTION 12. Subchapter H, Chapter 49, Water Code, is
amended by adding Section 49.23604 to read as follows:
Sec. 49.23604. UNUSED INCREMENT RATE. (a) In this section:
(1) "Actual tax rate" means a district's actual tax
rate used to levy taxes in the applicable preceding tax year.
(2) "Current total value" has the meaning assigned by
Section 26.012, Tax Code.
(3) "Foregone revenue amount" means the greater of:
(A) zero; or
(B) the amount expressed in dollars calculated
according to the following formula:
FOREGONE REVENUE AMOUNT = (VOTER-APPROVAL TAX RATE - ACTUAL
TAX RATE) x PRECEDING TOTAL VALUE
(4) "Preceding total value" means a district's current
total value in the applicable preceding tax year.
(5) "Voter-approval tax rate" means a district's
voter-approval tax rate in the applicable preceding tax year, as
adopted by the district during the applicable preceding tax year,
less the unused increment rate for that preceding tax year.
(6) "Year 1" means the third tax year preceding the
current tax year.
(7) "Year 2" means the second tax year preceding the
current tax year.
(8) "Year 3" means the tax year preceding the current
tax year.
(b) In Section 49.23602, "unused increment rate" means the
greater of:
(1) zero; or
(2) the rate expressed in dollars per $100 of taxable
value calculated according to the following formula:
UNUSED INCREMENT RATE = (YEAR 1 FOREGONE REVENUE AMOUNT +
YEAR 2 FOREGONE REVENUE AMOUNT + YEAR 3 FOREGONE REVENUE AMOUNT) /
CURRENT TOTAL VALUE
SECTION 13. The following provisions are repealed:
(1) Section 45.0032(d), Education Code;
(2) Section 120.007(d), Local Government Code;
(3) Section 26.012(19), Tax Code;
(4) Section 26.013, Tax Code;
(5) Section 26.042, Tax Code; and
(6) Section 26.0501(c), Tax Code.
SECTION 14. This Act applies only to ad valorem taxes
imposed for an ad valorem tax year that begins on or after the
effective date of this Act.
SECTION 15. This Act takes effect January 1, 2026.