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 levels surpass previous years, along with a prohibition on increasing maintenance and operations tax rates beyond a specified maximum during these reductions. 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 they reflect changes in property values and sales tax revenues.

Additionally, the bill makes conforming changes to the Tax Code and Water Code, including the removal of outdated provisions related to special taxing units. It raises the threshold for requiring an election on tax rate increases from 3.5 percent to 8 percent for combined debt service, operation and maintenance, and contract tax rates, while updating the definition of "voter-approval tax rate" accordingly. The bill aims to enhance transparency and accountability in the taxation process and is set to take effect on January 1, 2026, applying only to ad valorem taxes imposed for tax years beginning on or after this 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 (Tax Code 31, Education Code 48, Special District Local Laws Code 8876, Special District Local Laws Code 3828, Tax Code 26, Water Code 49)