Texas 2025 - 89th Regular

Texas Senate Bill SB3026 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	89R12980 RDS-D
2	2	By: Bettencourt S.B. No. 3026
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(18), Tax Code, is amended to read
53	53	as follows:
54	54	(18) "No-new-revenue maintenance and operations rate"
55	55	means a rate expressed in dollars per $100 of taxable value
56	56	calculated as follows:
57	57	(A) for a taxing unit other than a school
58	58	district, the rate calculated according to the following formula:
59	59	NO-NEW-REVENUE MAINTENANCE AND OPERATIONS RATE = (LAST
60	60	YEAR'S LEVY - LAST YEAR'S DEBT LEVY - LAST YEAR'S JUNIOR COLLEGE
61	61	LEVY) / (CURRENT TOTAL VALUE [- NEW PROPERTY VALUE])
62	62	; or
63	63	(B) for a school district, the rate calculated as
64	64	provided by Section 44.004(c)(5)(A)(ii)(a), Education Code.
65	65	SECTION 5. Section 26.04(c), Tax Code, is amended to read as
66	66	follows:
67	67	(c) After the assessor for the taxing unit submits the
68	68	appraisal roll for the taxing unit to the governing body of the
69	69	taxing unit as required by Subsection (b), an officer or employee
70	70	designated by the governing body shall calculate the no-new-revenue
71	71	tax rate and the voter-approval tax rate for the taxing unit, where:
72	72	(1) "No-new-revenue tax rate" means a rate expressed
73	73	in dollars per $100 of taxable value calculated according to the
74	74	following formula:
75	75	NO-NEW-REVENUE TAX RATE = (LAST YEAR'S LEVY [- LOST PROPERTY
76	76	LEVY]) / (CURRENT TOTAL VALUE [- NEW PROPERTY VALUE])
77	77	; and
78	78	(2) "Voter-approval tax rate" means a rate expressed
79	79	in dollars per $100 of taxable value calculated according to the
80	80	following [applicable] formula:
81	81	[(A) for a special taxing unit:]
82	82	VOTER-APPROVAL TAX RATE = [(]NO-NEW-REVENUE MAINTENANCE AND
83	83	OPERATIONS RATE [x 1.08)] + CURRENT DEBT RATE
84	84	[; or
85	85	[(B) for a taxing unit other than a special taxing
86	86	unit:
87	87	[VOTER-APPROVAL TAX RATE = (NO-NEW-REVENUE MAINTENANCE AND
88	88	OPERATIONS RATE x 1.035) + (CURRENT DEBT RATE + UNUSED INCREMENT
89	89	RATE)]
90	90	SECTION 6. Sections 26.041(a), (b), (c), (g), and (h), Tax
91	91	Code, are amended to read as follows:
92	92	(a) In the first year in which an additional sales and use
93	93	tax is required to be collected, the no-new-revenue tax rate and
94	94	voter-approval tax rate for the taxing unit are calculated
95	95	according to the following formulas:
96	96	NO-NEW-REVENUE TAX RATE = [(LAST YEAR'S LEVY [-
97	97	LOST PROPERTY LEVY]) / (CURRENT TOTAL VALUE [- NEW
98	98	PROPERTY VALUE])] - SALES TAX GAIN RATE
99	99	and
100	100	VOTER-APPROVAL TAX RATE [FOR SPECIAL TAXING UNIT]
101	101	= [(]NO-NEW-REVENUE MAINTENANCE AND OPERATIONS RATE [x
102	102	1.08)] + [(]CURRENT DEBT RATE - SALES TAX GAIN RATE[)
103	103	[or
104	104	[VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER
105	105	THAN SPECIAL TAXING UNIT = (NO-NEW-REVENUE MAINTENANCE
106	106	AND OPERATIONS RATE x 1.035) + (CURRENT DEBT RATE +
107	107	UNUSED INCREMENT RATE - SALES TAX GAIN RATE)]
108	108	where "sales tax gain rate" means a number expressed in dollars per
109	109	$100 of taxable value, calculated by dividing the revenue that will
110	110	be generated by the additional sales and use tax in the following
111	111	year as calculated under Subsection (d) by the current total value.
112	112	(b) Except as provided by Subsections (a) and (c), in a year
113	113	in which a taxing unit imposes an additional sales and use tax, the
114	114	voter-approval tax rate for the taxing unit is calculated according
115	115	to the following formula, regardless of whether the taxing unit
116	116	levied a property tax in the preceding year:
117	117	VOTER-APPROVAL TAX RATE [FOR SPECIAL TAXING UNIT]
118	118	= [[(]LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE
119	119	[x 1.08)] / (CURRENT TOTAL VALUE [- NEW PROPERTY
120	120	VALUE])] + (CURRENT DEBT RATE - SALES TAX REVENUE RATE)
121	121	[or
122	122	[VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER
123	123	THAN SPECIAL TAXING UNIT = [(LAST YEAR'S MAINTENANCE
124	124	AND OPERATIONS EXPENSE x 1.035) / (CURRENT TOTAL VALUE
125	125	- NEW PROPERTY VALUE)] + (CURRENT DEBT RATE + UNUSED
126	126	INCREMENT RATE - SALES TAX REVENUE RATE)]
127	127	where "last year's maintenance and operations expense" means the
128	128	amount spent for maintenance and operations from property tax and
129	129	additional sales and use tax revenues in the preceding year, and
130	130	"sales tax revenue rate" means a number expressed in dollars per
131	131	$100 of taxable value, calculated by dividing the revenue that will
132	132	be generated by the additional sales and use tax in the current year
133	133	as calculated under Subsection (d) by the current total value.
134	134	(c) In a year in which a taxing unit that has been imposing
135	135	an additional sales and use tax ceases to impose an additional sales
136	136	and use tax, the no-new-revenue tax rate and voter-approval tax
137	137	rate for the taxing unit are calculated according to the following
138	138	formulas:
139	139	NO-NEW-REVENUE TAX RATE = [(LAST YEAR'S LEVY [-
140	140	LOST PROPERTY LEVY]) / (CURRENT TOTAL VALUE [- NEW
141	141	PROPERTY VALUE])] + SALES TAX LOSS RATE
142	142	and
143	143	VOTER-APPROVAL TAX RATE [FOR SPECIAL TAXING UNIT]
144	144	= [[(]LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE
145	145	[x 1.08)] / (CURRENT TOTAL VALUE [- NEW PROPERTY
146	146	VALUE])] + CURRENT DEBT RATE
147	147	[or
148	148	[VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER
149	149	THAN SPECIAL TAXING UNIT = [(LAST YEAR'S MAINTENANCE
150	150	AND OPERATIONS EXPENSE x 1.035) / (CURRENT TOTAL VALUE
151	151	- NEW PROPERTY VALUE)] + (CURRENT DEBT RATE + UNUSED
152	152	INCREMENT RATE)]
153	153	where "sales tax loss rate" means a number expressed in dollars per
154	154	$100 of taxable value, calculated by dividing the amount of sales
155	155	and use tax revenue generated in the last four quarters for which
156	156	the information is available by the current total value and "last
157	157	year's maintenance and operations expense" means the amount spent
158	158	for maintenance and operations from property tax and additional
159	159	sales and use tax revenues in the preceding year.
160	160	(g) If the rate of the additional sales and use tax is
161	161	increased, the designated officer or employee shall make two
162	162	projections, in the manner provided by Subsection (d), of the
163	163	revenue generated by the additional sales and use tax in the
164	164	following year. The first projection must take into account the
165	165	increase and the second projection must not take into account the
166	166	increase. The designated officer or employee shall then subtract
167	167	the amount of the result of the second projection from the amount of
168	168	the result of the first projection to determine the revenue
169	169	generated as a result of the increase in the additional sales and
170	170	use tax. In the first year in which an additional sales and use tax
171	171	is increased, the no-new-revenue tax rate for the taxing unit is the
172	172	no-new-revenue tax rate before the increase minus a number the
173	173	numerator of which is the revenue generated as a result of the
174	174	increase in the additional sales and use tax, as determined under
175	175	this subsection, and the denominator of which is the current total
176	176	value [minus the new property value].
177	177	(h) If the rate of the additional sales and use tax is
178	178	decreased, the designated officer or employee shall make two
179	179	projections, in the manner provided by Subsection (d), of the
180	180	revenue generated by the additional sales and use tax in the
181	181	following year. The first projection must take into account the
182	182	decrease and the second projection must not take into account the
183	183	decrease. The designated officer or employee shall then subtract
184	184	the amount of the result of the first projection from the amount of
185	185	the result of the second projection to determine the revenue lost as
186	186	a result of the decrease in the additional sales and use tax. In
187	187	the first year in which an additional sales and use tax is
188	188	decreased, the no-new-revenue tax rate for the taxing unit is the
189	189	no-new-revenue tax rate before the decrease plus a number the
190	190	numerator of which is the revenue lost as a result of the decrease
191	191	in the additional sales and use tax, as determined under this
192	192	subsection, and the denominator of which is the current total value
193	193	[minus the new property value].
194	194	SECTION 7. Sections 26.044(a) and (b), Tax Code, are
195	195	amended to read as follows:
196	196	(a) The first time that a county adopts a tax rate after
197	197	September 1, 1991, in which the state criminal justice mandate
198	198	applies to the county, the no-new-revenue maintenance and operation
199	199	rate for the county is increased by the rate calculated according to
200	200	the following formula:
201	201	(State Criminal Justice Mandate) / (Current Total
202	202	Value [- New Property Value])
203	203	(b) In the second and subsequent years that a county adopts
204	204	a tax rate, if the amount spent by the county for the state criminal
205	205	justice mandate increased over the previous year, the
206	206	no-new-revenue maintenance and operation rate for the county is
207	207	increased by the rate calculated according to the following
208	208	formula:
209	209	(This Year's State Criminal Justice Mandate -
210	210	Previous Year's State Criminal Justice Mandate) /
211	211	(Current Total Value [- New Property Value])
212	212	SECTION 8. Sections 26.0441(a) and (b), Tax Code, are
213	213	amended to read as follows:
214	214	(a) In the first tax year in which a taxing unit adopts a tax
215	215	rate after January 1, 2000, and in which the enhanced minimum
216	216	eligibility standards for indigent health care established under
217	217	Section 61.006, Health and Safety Code, apply to the taxing unit,
218	218	the no-new-revenue maintenance and operations rate for the taxing
219	219	unit is increased by the rate computed according to the following
220	220	formula:
221	221	Amount of Increase = Enhanced Indigent Health
222	222	Care Expenditures / (Current Total Value [- New
223	223	Property Value])
224	224	(b) In each subsequent tax year, if the taxing unit's
225	225	enhanced indigent health care expenses exceed the amount of those
226	226	expenses for the preceding year, the no-new-revenue maintenance and
227	227	operations rate for the taxing unit is increased by the rate
228	228	computed according to the following formula:
229	229	Amount of Increase = (Current Tax Year's Enhanced
230	230	Indigent Health Care Expenditures - Preceding Tax
231	231	Year's Indigent Health Care Expenditures) / (Current
232	232	Total Value [- New Property Value])
233	233	SECTION 9. Section 26.0442(b), Tax Code, is amended to read
234	234	as follows:
235	235	(b) If a county's indigent defense compensation
236	236	expenditures exceed the amount of those expenditures for the
237	237	preceding tax year, the no-new-revenue maintenance and operations
238	238	rate for the county is increased by the lesser of the rates computed
239	239	according to the following formulas:
240	240	(Current Tax Year's Indigent Defense
241	241	Compensation Expenditures - Preceding Tax Year's
242	242	Indigent Defense Compensation Expenditures) /
243	243	(Current Total Value [- New Property Value])
244	244	or
245	245	(Preceding Tax Year's Indigent Defense
246	246	Compensation Expenditures x 0.05) / (Current Total
247	247	Value [- New Property Value])
248	248	SECTION 10. Section 26.0443(b), Tax Code, is amended to
249	249	read as follows:
250	250	(b) If a county's or municipality's eligible county hospital
251	251	expenditures exceed the amount of those expenditures for the
252	252	preceding tax year, the no-new-revenue maintenance and operations
253	253	rate for the county or municipality, as applicable, is increased by
254	254	the lesser of the rates computed according to the following
255	255	formulas:
256	256	(Current Tax Year's Eligible County Hospital
257	257	Expenditures - Preceding Tax Year's Eligible County
258	258	Hospital Expenditures) / (Current Total Value [- New
259	259	Property Value])
260	260	or
261	261	(Preceding Tax Year's Eligible County Hospital
262	262	Expenditures x 0.08) / (Current Total Value [- New
263	263	Property Value])
264	264	SECTION 11. Section 26.0444(b), Tax Code, is amended to
265	265	read as follows:
266	266	(b) The no-new-revenue maintenance and operations rate for
267	267	a defunding municipality is decreased by the rate computed
268	268	according to the following formula:
269	269	Municipal Public Safety Expenditure Adjustment /
270	270	(Current Total Value [- New Property Value])
271	271	SECTION 12. Section 26.07(b), Tax Code, is amended to read
272	272	as follows:
273	273	(b) If the governing body of a [special] taxing unit [or a
274	274	municipality with a population of 30,000 or more] adopts a tax rate
275	275	that exceeds the taxing unit's voter-approval tax rate, [or the
276	276	governing body of a taxing unit other than a special taxing unit or
277	277	a municipality with a population of less than 30,000 regardless of
278	278	whether it is a special taxing unit adopts a tax rate that exceeds
279	279	the greater of the taxing unit's voter-approval tax rate or de
280	280	minimis rate,] the registered voters of the taxing unit at an
281	281	election held for that purpose must determine whether to approve
282	282	the adopted tax rate.
283	283	SECTION 13. Sections 31.12(a) and (b), Tax Code, are
284	284	amended to read as follows:
285	285	(a) If a refund of a tax provided by Section 11.431(b),
286	286	26.07(g), [26.075(k),] 26.15(f), 31.11, 31.111, or 31.112 is paid
287	287	on or before the 60th day after the date the liability for the
288	288	refund arises, no interest is due on the amount refunded. If not
289	289	paid on or before that 60th day, the amount of the tax to be refunded
290	290	accrues interest at a rate of one percent for each month or part of a
291	291	month that the refund is unpaid, beginning with the date on which
292	292	the liability for the refund arises.
293	293	(b) For purposes of this section, liability for a refund
294	294	arises:
295	295	(1) if the refund is required by Section 11.431(b), on
296	296	the date the chief appraiser notifies the collector for the taxing
297	297	unit of the approval of the late homestead exemption;
298	298	(2) if the refund is required by Section 26.07(g) [or
299	299	26.075(k)], on the date the results of the election to approve [or
300	300	reduce] the tax rate[, as applicable,] are certified;
301	301	(3) if the refund is required by Section 26.15(f):
302	302	(A) for a correction to the tax roll made under
303	303	Section 26.15(b), on the date the change in the tax roll is
304	304	certified to the assessor for the taxing unit under Section 25.25;
305	305	or
306	306	(B) for a correction to the tax roll made under
307	307	Section 26.15(c), on the date the change in the tax roll is ordered
308	308	by the governing body of the taxing unit;
309	309	(4) if the refund is required by Section 31.11, on the
310	310	date the auditor for the taxing unit determines that the payment was
311	311	erroneous or excessive or, if the amount of the refund exceeds the
312	312	applicable amount specified by Section 31.11(a), on the date the
313	313	governing body of the taxing unit approves the refund;
314	314	(5) if the refund is required by Section 31.111, on the
315	315	date the collector for the taxing unit determines that the payment
316	316	was erroneous; or
317	317	(6) if the refund is required by Section 31.112, on the
318	318	date required by Section 31.112(d) or (e), as applicable.
319	319	SECTION 14. Section 33.08(b), Tax Code, is amended to read
320	320	as follows:
321	321	(b) The governing body of the taxing unit or appraisal
322	322	district, in the manner required by law for official action, may
323	323	provide that taxes that become delinquent on or after June 1 under
324	324	Section [26.075(j),] 26.15(e), 31.03, 31.031, 31.032, 31.033,
325	325	31.04, or 42.42 incur an additional penalty to defray costs of
326	326	collection. The amount of the penalty may not exceed the amount of
327	327	the compensation specified in the applicable contract with an
328	328	attorney under Section 6.30 to be paid in connection with the
329	329	collection of the delinquent taxes.
330	330	SECTION 15. Section 49.057, Water Code, is amended by
331	331	amending Subsection (b) and adding Subsection (j) to read as
332	332	follows:
333	333	(b) The board shall adopt an annual budget. The board of a
334	334	developed district[, as defined by Section 49.23602,] shall include
335	335	as an appendix to the budget the district's:
336	336	(1) audited financial statements;
337	337	(2) bond transcripts; and
338	338	(3) engineer's reports required by Section 49.106.
339	339	(j) In this section, "developed district" means a district
340	340	that has financed, completed, and issued bonds to pay for all land,
341	341	works, improvements, facilities, plants, equipment, and appliances
342	342	necessary to serve at least 95 percent of the projected build-out of
343	343	the district in accordance with the purposes for its creation or the
344	344	purposes authorized by the constitution, this code, or any other
345	345	law.
346	346	SECTION 16. Section 49.107(g), Water Code, is amended to
347	347	read as follows:
348	348	(g) Sections 26.04, [26.042,] 26.05, 26.061, and 26.07,
349	349	[and 26.075,] Tax Code, do not apply to a tax levied and collected
350	350	under this section or an ad valorem tax levied and collected for the
351	351	payment of the interest on and principal of bonds issued by a
352	352	district.
353	353	SECTION 17. Section 49.108(f), Water Code, is amended to
354	354	read as follows:
355	355	(f) Sections 26.04, [26.042,] 26.05, 26.061, and 26.07,
356	356	[and 26.075,] Tax Code, do not apply to a tax levied and collected
357	357	for payments made under a contract approved in accordance with this
358	358	section.
359	359	SECTION 18. Section 49.236(a), Water Code, is amended to
360	360	read as follows:
361	361	(a) Before the board adopts an ad valorem tax rate for the
362	362	district for debt service, operation and maintenance purposes, or
363	363	contract purposes, the board shall give notice of each meeting of
364	364	the board at which the adoption of a tax rate will be considered.
365	365	The notice must:
366	366	(1) contain a statement in substantially the following
367	367	form:
368	368	"NOTICE OF PUBLIC HEARING ON TAX RATE
369	369	"The (name of the district) will hold a public hearing on a
370	370	proposed tax rate for the tax year (year of tax levy) on (date and
371	371	time) at (meeting place). Your individual taxes may increase at a
372	372	greater or lesser rate, or even decrease, depending on the tax rate
373	373	that is adopted and on the change in the taxable value of your
374	374	property in relation to the change in taxable value of all other
375	375	property. The change in the taxable value of your property in
376	376	relation to the change in the taxable value of all other property
377	377	determines the distribution of the tax burden among all property
378	378	owners.
379	379	"Visit Texas.gov/PropertyTaxes to find a link to your local
380	380	property tax database on which you can easily access information
381	381	regarding your property taxes, including information about
382	382	proposed tax rates and scheduled public hearings of each entity
383	383	that taxes your property.
384	384	"(Names of all board members and, if a vote was taken, an
385	385	indication of how each voted on the proposed tax rate and an
386	386	indication of any absences.)";
387	387	(2) contain the following information:
388	388	(A) the district's total adopted tax rate for the
389	389	preceding year and the proposed tax rate, expressed as an amount per
390	390	$100;
391	391	(B) the difference, expressed as an amount per
392	392	$100 and as a percent increase or decrease, as applicable, in the
393	393	proposed tax rate compared to the adopted tax rate for the preceding
394	394	year;
395	395	(C) the average appraised value of a residence
396	396	homestead in the district in the preceding year and in the current
397	397	year; the district's total homestead exemption, other than an
398	398	exemption available only to disabled persons or persons 65 years of
399	399	age or older, applicable to that appraised value in each of those
400	400	years; and the average taxable value of a residence homestead in the
401	401	district in each of those years, disregarding any homestead
402	402	exemption available only to disabled persons or persons 65 years of
403	403	age or older;
404	404	(D) the amount of tax that would have been
405	405	imposed by the district in the preceding year on a residence
406	406	homestead appraised at the average appraised value of a residence
407	407	homestead in that year, disregarding any homestead exemption
408	408	available only to disabled persons or persons 65 years of age or
409	409	older;
410	410	(E) the amount of tax that would be imposed by the
411	411	district in the current year on a residence homestead appraised at
412	412	the average appraised value of a residence homestead in that year,
413	413	disregarding any homestead exemption available only to disabled
414	414	persons or persons 65 years of age or older, if the proposed tax
415	415	rate is adopted;
416	416	(F) the difference between the amounts of tax
417	417	calculated under Paragraphs (D) and (E), expressed in dollars and
418	418	cents and described as the annual percentage increase or decrease,
419	419	as applicable, in the tax to be imposed by the district on the
420	420	average residence homestead in the district in the current year if
421	421	the proposed tax rate is adopted; and
422	422	(G) if the proposed combined debt service,
423	423	operation and maintenance, and contract tax rate requires [or
424	424	authorizes] an election to approve [or reduce] the tax rate, [as
425	425	applicable,] a description of the purpose of the proposed tax
426	426	increase;
427	427	(3) contain a statement in substantially the following
428	428	form[, as applicable:
429	429	[(A) if the district is a district described by
430	430	Section 49.23601]:
431	431	"NOTICE OF VOTE ON TAX RATE
432	432	"If the district adopts a combined debt service, operation
433	433	and maintenance, and contract tax rate that would result in the
434	434	taxes on the average residence homestead increasing from the
435	435	preceding year [by more than eight percent], an election must be
436	436	held to determine whether to approve the operation and maintenance
437	437	tax rate under Section 49.23601, Water Code.";
438	438	[(B) if the district is a district described by
439	439	Section 49.23602:
440	440	["NOTICE OF VOTE ON TAX RATE
441	441	["If the district adopts a combined debt service, operation
442	442	and maintenance, and contract tax rate that would result in the
443	443	taxes on the average residence homestead increasing by more than
444	444	3.5 percent, an election must be held to determine whether to
445	445	approve the operation and maintenance tax rate under Section
446	446	49.23602, Water Code."; or
447	447	[(C) if the district is a district described by
448	448	Section 49.23603:
449	449	["NOTICE OF TAXPAYERS' RIGHT TO ELECTION TO REDUCE TAX RATE
450	450	["If the district adopts a combined debt service, operation
451	451	and maintenance, and contract tax rate that would result in the
452	452	taxes on the average residence homestead increasing by more than
453	453	eight percent, the qualified voters of the district by petition may
454	454	require that an election be held to determine whether to reduce the
455	455	operation and maintenance tax rate to the voter-approval tax rate
456	456	under Section 49.23603, Water Code.";] and
457	457	(4) include the following statement: "The 86th Texas
458	458	Legislature modified the manner in which the voter-approval tax
459	459	rate is calculated to limit the rate of growth of property taxes in
460	460	the state.".
461	461	SECTION 19. The heading to Section 49.23601, Water Code, is
462	462	amended to read as follows:
463	463	Sec. 49.23601. AUTOMATIC ELECTION TO APPROVE TAX RATE [FOR
464	464	LOW TAX RATE DISTRICTS].
465	465	SECTION 20. Sections 49.23601(a) and (c), Water Code, are
466	466	amended to read as follows:
467	467	(a) In this section, "voter-approval tax rate" means the
468	468	rate equal to the sum of the following tax rates for the district:
469	469	(1) the current year's debt service tax rate;
470	470	(2) the current year's contract tax rate; and
471	471	(3) the operation and maintenance tax rate that would
472	472	impose [1.08 times] the amount of [the] operation and maintenance
473	473	tax imposed by the district in the preceding year on a residence
474	474	homestead appraised at the average appraised value of a residence
475	475	homestead in the district in that year, disregarding any homestead
476	476	exemption available only to disabled persons or persons 65 years of
477	477	age or older.
478	478	(c) If the board of a district adopts a combined debt
479	479	service, contract, and operation and maintenance tax rate that
480	480	would impose more than [1.08 times] the amount of tax imposed by the
481	481	district in the preceding year on a residence homestead appraised
482	482	at the average appraised value of a residence homestead in the
483	483	district in that year, disregarding any homestead exemption
484	484	available only to disabled persons or persons 65 years of age or
485	485	older, an election must be held in accordance with the procedures
486	486	provided by Sections 26.07(c)-(g), Tax Code, to determine whether
487	487	to approve the adopted tax rate. If the adopted tax rate is not
488	488	approved at the election, the district's tax rate is the
489	489	voter-approval tax rate.
490	490	SECTION 21. The following provisions are repealed:
491	491	(1) Section 45.0032(d), Education Code;
492	492	(2) Section 120.007(d), Local Government Code;
493	493	(3) Sections 26.012(8-a), (15), and (19), Tax Code;
494	494	(4) Section 26.013, Tax Code;
495	495	(5) Section 26.042, Tax Code;
496	496	(6) Section 26.0501(c), Tax Code;
497	497	(7) Section 26.063, Tax Code;
498	498	(8) Section 26.075, Tax Code;
499	499	(9) Section 49.23601(b), Water Code;
500	500	(10) Section 49.23602, Water Code; and
501	501	(11) Section 49.23603, Water Code.
502	502	SECTION 22. This Act applies only to ad valorem taxes
503	503	imposed for an ad valorem tax year that begins on or after the
504	504	effective date of this Act.
505	505	SECTION 23. This Act takes effect January 1, 2026.