tax break, but only if voters approve a tax increase

The text as introduced · 1,167 words

89R14370 CJC-D

By: Hinojosa of Hidalgo
S.B. No. 2665

A BILL TO BE ENTITLED

AN ACT

relating to the authority of a taxing unit to adopt an exemption or

a tax rate that is contingent on voter approval of the adoption of a

tax rate or the issuance of bonds by that taxing unit or another

taxing unit.

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

SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by

adding Section 11.136 to read as follows:

Sec. 11.136. CONDITIONAL ADOPTION OR INCREASE IN PERCENTAGE

OF LOCAL OPTION RESIDENCE HOMESTEAD EXEMPTION. (a) The governing

body of a taxing unit may condition the adoption of an exemption

under Section 11.13(n), or an increase in the percentage of an

exemption previously adopted by the governing body under that

subsection, on the outcome of an election ordered by the governing

body or the governing body of another taxing unit to approve:

(1) a tax rate under Section 26.07 or 26.08; or

(2) the issuance of bonds for which an election is

required to be held under:

(A) Section 45.003, Education Code; or

(B) Chapter 1251, Government Code.

(b) If the governing body of a taxing unit proposes to

conditionally adopt or increase the percentage of an exemption

under Section 11.13(n) under this section, the governing body must

include in the ordinance, resolution, or order adopting or

increasing the percentage of the exemption:

(1) a description of the specific condition that must

occur before the adoption or increase in the percentage of the

exemption may take effect; and

(2) a statement that the adoption or increase in the

percentage of the exemption:

(A) does not take effect unless the condition

described by Subdivision (1) occurs; and

(B) takes effect on January 1 of the first tax

year following the year in which the condition described by

Subdivision (1) occurs if that condition occurs.

SECTION 2. Chapter 26, Tax Code, is amended by adding

Section 26.0502 to read as follows:

Sec. 26.0502. CONDITIONAL TAX RATE. (a) At the time the

governing body of a taxing unit adopts a tax rate for the taxing

unit for the current tax year under Section 26.05(a), the governing

body may also adopt a conditional tax rate for the current tax year

that is lower than the tax rate adopted under that subsection,

conditioned on the outcome of an election ordered by the governing

body or the governing body of another taxing unit to approve:

(1) a tax rate under Section 26.07 or 26.08; or

(2) the issuance of bonds for which an election is

required to be held under:

(A) Section 45.003, Education Code; or

(B) Chapter 1251, Government Code.

(b) If the governing body of a taxing unit adopts a

conditional tax rate under Subsection (a) for a tax year, the

governing body shall:

(1) include the conditional tax rate and a description

of the specific condition that must occur for the conditional tax

rate to be the tax rate for the taxing unit in the ordinance,

resolution, or order adopted under Section 26.05;

(2) comply with the requirements of Section 26.05 as

to the conditional tax rate; and

(3) include in any tax rate notice the taxing unit is

required to provide under this chapter or Chapter 44, Education

Code:

(A) the conditional tax rate;

(B) a description of the specific condition that

must occur for the conditional tax rate to be the tax rate for the

taxing unit; and

(C) a statement that the conditional tax rate is

the tax rate for the taxing unit only if the specific condition

described by Paragraph (B) occurs.

(c) If the conditional tax rate becomes the tax rate for a

taxing unit for a tax year as the result of a specific condition

that occurs after the assessor for the taxing unit has mailed the

taxing unit's tax bills for that tax year, the assessor shall

prepare and mail corrected tax bills in the manner provided by

Chapter 31, and include with the corrected bill a brief explanation

of the reason for and effect of the corrected bill. A property

owner that paid the tax due as provided in the initial tax bill is

entitled to a refund in an amount equal to the difference between

the tax paid and the tax due as provided in the corrected bill. A

property owner is not required to apply for a refund under this

subsection to receive the refund. Section 31.11 does not apply to a

refund under this subsection.

SECTION 3. Sections 31.12(a) and (b), Tax Code, are amended

to read as follows:

(a) If a refund of a tax provided by Section 11.431(b),

26.07(g), 26.075(k), 26.0502(c), 26.15(f), 31.11, 31.111, or

31.112 is paid on or before the 60th day after the date the

liability for the refund arises, no interest is due on the amount

refunded. If not paid on or before that 60th day, the amount of the

tax to be refunded accrues interest at a rate of one percent for

each month or part of a month that the refund is unpaid, beginning

with the date on which the liability for the refund arises.

(b) For purposes of this section, liability for a refund

arises:

(1) if the refund is required by Section 11.431(b), on

the date the chief appraiser notifies the collector for the taxing

unit of the approval of the late homestead exemption;

(2) if the refund is required by Section 26.07(g) or

26.075(k), on the date the results of the election to approve or

reduce the tax rate, as applicable, are certified;

(2-a) if the refund is required by Section 26.0502(c),

on the date the conditional tax rate becomes the adopted tax rate

for the taxing unit;

(3) if the refund is required by Section 26.15(f):

(A) for a correction to the tax roll made under

Section 26.15(b), on the date the change in the tax roll is

certified to the assessor for the taxing unit under Section 25.25;

or

(B) for a correction to the tax roll made under

Section 26.15(c), on the date the change in the tax roll is ordered

by the governing body of the taxing unit;

(4) if the refund is required by Section 31.11, on the

date the auditor for the taxing unit determines that the payment was

erroneous or excessive or, if the amount of the refund exceeds the

applicable amount specified by Section 31.11(a), on the date the

governing body of the taxing unit approves the refund;

(5) if the refund is required by Section 31.111, on the

date the collector for the taxing unit determines that the payment

was erroneous; or

(6) if the refund is required by Section 31.112, on the

date required by Section 31.112(d) or (e), as applicable.

SECTION 4. This Act applies to an ad valorem tax year that

begins on or after the effective date of this Act.

SECTION 5. This Act takes effect January 1, 2026.