bond and tax hike elections only in November

The text as introduced · 1,858 words

89R12978 RDS-F

By: Troxclair
H.B. No. 5490

A BILL TO BE ENTITLED

AN ACT

relating to the requirements regarding an election to authorize the

issuance of general obligation bonds or to approve an increase in an

ad valorem tax rate.

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

SECTION 1. Subchapter A, Chapter 41, Election Code, is

amended by adding Section 41.0051 to read as follows:

Sec. 41.0051. ELECTION TO ISSUE BONDS OR INCREASE AD

VALOREM TAX RATE. (a) An election to authorize the issuance of

general obligation bonds or to approve an increase in an ad valorem

tax rate shall be held on the November uniform election date.

(b) Notwithstanding Section 41.0011, an election described

by Subsection (a) may not be held as an emergency election under

that section.

(c) If a law outside this code requires an election

described by Subsection (a) to be held on a date other than the

November uniform election date, the authority administering the

election shall set the election date to comply with this section.

SECTION 2. Chapter 1253, Government Code, is amended by

adding Section 1253.004 to read as follows:

Sec. 1253.004. SUPERMAJORITY VOTE OF VOTERS REQUIRED TO

APPROVE GENERAL OBLIGATION BONDS. Notwithstanding any other law, a

political subdivision may not issue general obligation bonds unless

at least two-thirds of the voters voting at the election called to

authorize the issuance vote in favor of the issuance.

SECTION 3. Sections 281.124(d) and (f), Health and Safety

Code, are amended to read as follows:

(d) If at least two-thirds [ a majority ] of the votes cast in

the election favor the proposition, the tax rate for the specified

tax year is the rate approved by the voters, and that rate is not

subject to Section 26.07, Tax Code. The board shall adopt the tax

rate as provided by Chapter 26, Tax Code.

(f) Notwithstanding any other law, if at least two-thirds [ a

majority ] of the votes cast in the election favor the proposition, a

governing body with approval authority over the district's budget

or tax rate may not disapprove the tax rate approved by the voters

or disapprove the budget based solely on the tax rate approved by

the voters.

SECTION 4. Section 1101.254(f), Special District Local Laws

Code, is amended to read as follows:

(f) This section does not affect the applicability of

Section 26.07, Tax Code, to the district's tax rate, except that if

at least two-thirds of the district voters approve a tax rate

increase under this section, Section 26.07, Tax Code, does not

apply to the tax rate for that year.

SECTION 5. Sections 26.06(b-1) and (b-3), Tax Code, are

amended to read as follows:

(b-1) If the proposed tax rate exceeds the no-new-revenue

tax rate and the voter-approval tax rate of the taxing unit, the

notice must contain a statement in the following form:

"NOTICE OF PUBLIC HEARING ON TAX INCREASE

"PROPOSED TAX RATE $__________ per $100

"NO-NEW-REVENUE TAX RATE $__________ per $100

"VOTER-APPROVAL TAX RATE $__________ per $100

"The no-new-revenue tax rate is the tax rate for the (current

tax year) tax year that will raise the same amount of property tax

revenue for (name of taxing unit) from the same properties in both

the (preceding tax year) tax year and the (current tax year) tax

year.

"The voter-approval tax rate is the highest tax rate that

(name of taxing unit) may adopt without holding an election to seek

voter approval of the rate.

"The proposed tax rate is greater than the no-new-revenue tax

rate. This means that (name of taxing unit) is proposing to

increase property taxes for the (current tax year) tax year.

"A public hearing on the proposed tax rate will be held on

(date and time) at (meeting place).

"The proposed tax rate is also greater than the

voter-approval tax rate. If (name of taxing unit) adopts the

proposed tax rate, (name of taxing unit) is required to hold an

election so that the voters may accept or reject the proposed tax

rate. Unless at least two-thirds [ If a majority ] of the voters

accept [ reject ] the proposed tax rate, the tax rate of the (name of

taxing unit) will be the voter-approval tax rate. The election will

be held on (date of election). You may contact the (name of office

responsible for administering the election) for information about

voting locations. The hours of voting on election day are (voting

hours).

"Your taxes owed under any of the tax rates mentioned above

can be calculated as follows:

"Property tax amount = tax rate x taxable value of your

property / 100

"(Names of all members of the governing body, showing how

each voted on the proposal to consider the tax increase or, if one

or more were absent, indicating the absences.)

"Visit Texas.gov/PropertyTaxes to find a link to your local

property tax database on which you can easily access information

regarding your property taxes, including information about

proposed tax rates and scheduled public hearings of each entity

that taxes your property.

"The 86th Texas Legislature modified the manner in which the

voter-approval tax rate is calculated to limit the rate of growth of

property taxes in the state."

(b-3) If the proposed tax rate does not exceed the

no-new-revenue tax rate but exceeds the voter-approval tax rate of

the taxing unit, the notice must contain a statement in the

following form:

"NOTICE OF PUBLIC HEARING ON TAX RATE

"PROPOSED TAX RATE $__________ per $100

"NO-NEW-REVENUE TAX RATE $__________ per $100

"VOTER-APPROVAL TAX RATE $__________ per $100

"The no-new-revenue tax rate is the tax rate for the (current

tax year) tax year that will raise the same amount of property tax

revenue for (name of taxing unit) from the same properties in both

the (preceding tax year) tax year and the (current tax year) tax

year.

"The voter-approval tax rate is the highest tax rate that

(name of taxing unit) may adopt without holding an election to seek

voter approval of the rate.

"The proposed tax rate is not greater than the no-new-revenue

tax rate. This means that (name of taxing unit) is not proposing to

increase property taxes for the (current tax year) tax year.

"A public hearing on the proposed tax rate will be held on

(date and time) at (meeting place).

"The proposed tax rate is greater than the voter-approval tax

rate. If (name of taxing unit) adopts the proposed tax rate, (name

of taxing unit) is required to hold an election so that the voters

may accept or reject the proposed tax rate. Unless at least

two-thirds [ If a majority ] of the voters accept [ reject ] the

proposed tax rate, the tax rate of the (name of taxing unit) will be

the voter-approval tax rate. The election will be held on (date of

election). You may contact the (name of office responsible for

administering the election) for information about voting

locations. The hours of voting on election day are (voting hours).

"Your taxes owed under any of the tax rates mentioned above

can be calculated as follows:

"Property tax amount = tax rate x taxable value of your

property / 100

"(Names of all members of the governing body, showing how

each voted on the proposal to consider the tax rate or, if one or

more were absent, indicating the absences.)

"Visit Texas.gov/PropertyTaxes to find a link to your local

property tax database on which you can easily access information

regarding your property taxes, including information about

proposed tax rates and scheduled public hearings of each entity

that taxes your property.

"The 86th Texas Legislature modified the manner in which the

voter-approval tax rate is calculated to limit the rate of growth of

property taxes in the state."

SECTION 6. Section 26.063(b), Tax Code, is amended to read

as follows:

(b) This subsection applies only to a taxing unit that is

required to hold an election under Section 26.07. In the notice

required to be provided by the taxing unit under Section 26.06(b-1)

or (b-3), as applicable, the taxing unit shall:

(1) add the following to the end of the list of rates

included in the notice:

"DE MINIMIS RATE $__________ per $100";

(2) substitute the following for the definition of

"voter-approval tax rate": "The voter-approval tax rate is the

highest tax rate that (name of taxing unit) may adopt without

holding an election to seek voter approval of the rate, unless the

de minimis rate for (name of taxing unit) exceeds the

voter-approval tax rate for (name of taxing unit).";

(3) add the following definition of "de minimis rate":

"The de minimis rate is the rate equal to the sum of the

no-new-revenue maintenance and operations rate for (name of taxing

unit), the rate that will raise $500,000, and the current debt rate

for (name of taxing unit)."; and

(4) substitute the following for the provision that

provides notice that an election is required: "The proposed tax

rate is greater than the voter-approval tax rate and the de minimis

rate. If (name of taxing unit) adopts the proposed tax rate, (name

of taxing unit) is required to hold an election so that the voters

may accept or reject the proposed tax rate. Unless at least

two-thirds [ If a majority ] of the voters accept [ reject ] the

proposed tax rate, the tax rate of the (name of taxing unit) will be

the voter-approval tax rate of the (name of taxing unit). The

election will be held on (date of election). You may contact the

(name of office responsible for administering the election) for

information about voting locations. The hours of voting on

election day are (voting hours).".

SECTION 7. Section 26.07(d), Tax Code, is amended to read as

follows:

(d) If at least two-thirds [ a majority ] of the votes cast in

the election favor the proposition, the tax rate for the current

year is the rate that was adopted by the governing body.

SECTION 8. Section 26.08(c), Tax Code, is amended to read as

follows:

(c) If at least two-thirds [ a majority ] of the votes cast in

the election favor the proposition, the tax rate for the current

year is the rate that was adopted by the governing body.

SECTION 9. The changes in law made by this Act apply only to

an election ordered on or after the effective date of this Act. An

election ordered before the effective date of this Act is governed

by the law in effect on the date the election was ordered, and that

law is continued in effect for that purpose.

SECTION 10. (a) Except as provided by Subsection (b) of this

section, this Act takes effect January 1, 2026.

(b) Section 2 of this Act takes effect January 1, 2026, but

only if the constitutional amendment proposed by the 89th

Legislature, Regular Session, 2025, to require a supermajority vote

to authorize a political subdivision to issue general obligation

bonds is approved by the voters. If that amendment is not approved

by the voters, Section 2 of this Act has no effect.