bill tightens tax rate growth for big counties

The text as introduced · 1,633 words

By: Muñoz
H.B. No. 4949

A BILL TO BE ENTITLED

AN ACT

relating to the calculation of the voter-approval tax rate of

certain counties and the procedure for the adoption by such a county

of a tax rate that exceeds that rate; making conforming changes.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 26.012(19), Tax Code, is amended to read

as follows:

(19) "Special taxing unit" means:

(A) a taxing unit, other than a school district

or a county with a population of 500,000 or more , for which the

maintenance and operations tax rate proposed for the current tax

year is 2.5 cents or less per $100 of taxable value;

(B) a junior college district; or

(C) a hospital district.

SECTION 2. 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 or a county with a population of 500,000 or more :

VOTER-APPROVAL TAX RATE = (NO-NEW-REVENUE

MAINTENANCE AND OPERATIONS RATE x 1.035) + (CURRENT

DEBT RATE + UNUSED INCREMENT RATE)

; or

(C) for a county with a population of 500,000 or

more:

VOTER-APPROVAL TAX RATE = NO-NEW-REVENUE

MAINTENANCE AND OPERATIONS RATE + CURRENT DEBT RATE

SECTION 3. 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 OR COUNTY WITH POPULATION OF

500,000 OR MORE = (NO-NEW-REVENUE MAINTENANCE AND

OPERATIONS RATE x 1.035) + (CURRENT DEBT

RATE + UNUSED INCREMENT RATE - SALES TAX GAIN RATE)

; or

VOTER-APPROVAL TAX RATE FOR COUNTY WITH

POPULATION OF 500,000 OR MORE = NO-NEW-REVENUE

MAINTENANCE AND OPERATIONS RATE + (CURRENT DEBT

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 OR COUNTY WITH POPULATION OF

500,000 OR MORE = [(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)

; or

VOTER-APPROVAL TAX RATE FOR COUNTY WITH

POPULATION OF 500,000 OR MORE = [LAST YEAR'S

MAINTENANCE AND OPERATIONS EXPENSE / (CURRENT TOTAL

VALUE - NEW PROPERTY VALUE)] + (CURRENT DEBT

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 OR COUNTY WITH POPULATION OF

500,000 OR MORE = [(LAST YEAR'S MAINTENANCE AND

OPERATIONS EXPENSE x 1.035) / (CURRENT TOTAL

VALUE - NEW PROPERTY VALUE)] + (CURRENT DEBT

RATE + UNUSED INCREMENT RATE)

; or

VOTER-APPROVAL TAX RATE FOR COUNTY WITH

POPULATION OF 500,000 OR MORE = [LAST YEAR'S

MAINTENANCE AND OPERATIONS EXPENSE / (CURRENT TOTAL

VALUE - NEW PROPERTY VALUE)] + CURRENT DEBT 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 4. Section 26.042(a), Tax Code, is amended to read

as follows:

(a) Notwithstanding Sections 26.04 and 26.041, the

governing body of a taxing unit other than a school district , [ or ] a

special taxing unit , or a county with a population of 500,000 or

more may direct the designated officer or employee to calculate the

voter-approval tax rate of the taxing unit in the manner provided

for a special taxing unit if any part of the taxing unit is located

in an area declared a disaster area during the current tax year by

the governor or by the president of the United States and at least

one person is granted an exemption under Section 11.35 for property

located in the taxing unit. The designated officer or employee

shall continue calculating the voter-approval tax rate in the

manner provided by this subsection until the earlier of:

(1) the first tax year in which the total taxable value

of property taxable by the taxing unit as shown on the appraisal

roll for the taxing unit submitted by the assessor for the taxing

unit to the governing body exceeds the total taxable value of

property taxable by the taxing unit on January 1 of the tax year in

which the disaster occurred; or

(2) the third tax year after the tax year in which the

disaster occurred.

SECTION 5. Section 26.063(a), Tax Code, is amended to read

as follows:

(a) This section applies only to a taxing unit:

(1) that is:

(A) a taxing unit other than :

(i) a special taxing unit; or

(ii) a county with a population of 500,000

or more; or

(B) a municipality with a population of less than

30,000, 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 6. Section 26.07(b), Tax Code, is amended to read as

follows:

(b) If the governing body of a special taxing unit , a county

with a population of 500,000 or more, 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 county with a

population of 500,000 or more or of a municipality with a population

of less than 30,000 regardless of whether the municipality [ 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 7. Section 26.075(a), Tax Code, is 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 ]

(3) a municipality with a population of 30,000 or

more ; or

(4) a county with a population of 500,000 or more .

SECTION 8. 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 9. This Act takes effect January 1, 2026.