Harrison Tax Rate Bill Puts Debt Under The Voter-Approval Cap

The text as introduced · 913 words

By: Harrison
H.B. No. 5226

A BILL TO BE ENTITLED

AN ACT

relating to the calculation of the no-new-revenue tax rate.

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

SECTION 1. 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

TAX [ 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 TAX [ MAINTENANCE

AND OPERATIONS ] RATE x 1.035) + [ (CURRENT DEBT RATE + ] UNUSED

INCREMENT RATE[ ) ]

SECTION 2. 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 TAX [ 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 TAX

[ 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 3. This Act takes effect September 1, 2025.