Texas Senate Bill SB3026

Texas 2025 - 89th Regular

• Filed: 3/14/25

Caption

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.

Impact

The changes put forth by SB3026 are expected to significantly impact local governance and school district financing in Texas. By amending sections of the Education Code and the Tax Code, the bill seeks to reduce the complexity involved in calculating tax rates. This, supporters argue, could lead to decreased administrative burdens on taxing units and enhanced transparency in the approval process for tax increases. However, the implications for school funding could be profound, especially if the adjustments affect the revenue flow from property taxes, as many districts rely heavily on local tax revenues for operational costs.

Summary

SB3026 aims to amend the calculation methods for ad valorem tax rates in Texas, particularly affecting how proposed tax rates that exceed the voter-approval tax rate are approved. This bill proposes important changes to existing regulations regarding tax rates, specifically focusing on the procedures for school districts and other taxing units. By adjusting the formulae used to determine the no-new-revenue tax rate and the voter-approval tax rate, the bill aims to clarify and standardize the taxation processes across various districts, ensuring a more uniform application of tax laws statewide.

Contention

While the bill has garnered support for striving towards regulatory clarity, it has also faced criticism. Opponents are concerned that simplifying tax rate calculations could inadvertently lead to cuts in essential services, as districts might have less flexibility to respond to localized financial needs. Furthermore, detaching school financing from the previous year's revenue levels may spark debates about the adequacy of funding allocated to education, prompting discussions about whether the new methods could disadvantage certain districts financially.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 26. Assessment
  • Section: New Section

Special District Local Laws Code

• Chapter 3828. Lake View Management And Development Districtin Henderson County
  • Section: 157

• Chapter 8876. Reeves County Groundwater Conservation District
  • Section: 152

Water Code

• Chapter 49. Provisions Applicable To All Districts
  • Section: 23601
  • Section: 107
  • Section: 108