H.B. No. 250 proposes significant amendments to the calculation of ad valorem tax rates for taxing units in Texas, particularly focusing on the approval process for proposed tax rates that exceed the voter-approval tax rate. Key changes include a requirement for school districts to lower their tax rates when state and local funding surpass previous levels, and a prohibition on increasing maintenance and operations tax rates beyond a specified maximum during such years. The bill also clarifies definitions related to "current debt service" and modifies the formulas for calculating the no-new-revenue tax rate and voter-approval tax rate, ensuring these calculations reflect changes in property values and sales tax revenues.

Additionally, the bill makes conforming changes to various sections of the Tax Code and Water Code, including the repeal of outdated provisions related to special taxing units. It raises the threshold for when an election is required for tax rate increases from 3.5 percent to eight percent for the average residence homestead and updates the definition of the "voter-approval tax rate" to incorporate the current year's debt service tax rate and revised operation and maintenance tax rate. These changes aim to streamline the tax rate determination process and enhance transparency and accountability in taxation, with the bill set to take effect on January 1, 2026, for ad valorem taxes imposed for tax years beginning on or after that date.

Statutes affected:
Introduced: Education Code 48.202, Special District Local Laws Code 3828.157, Special District Local Laws Code 8876.152, Tax Code 26.012, Tax Code 26.04, Tax Code 26.041, Tax Code 26.07, Tax Code 31.12, Tax Code 31.112, Water Code 49.057, Water Code 49.107, Water Code 49.108, Water Code 49.236, Water Code 49.23601 (Education Code 48, Tax Code 31, Tax Code 26, Special District Local Laws Code 8876, Water Code 49, Special District Local Laws Code 3828)