The bill amends various sections of the Texas Education Code and Tax Code to revise the calculation of ad valorem tax rates, particularly focusing on voter-approval tax rates. Key provisions include a requirement for school districts to lower their tax rates when state and local funding surpass previous levels, along with a restriction on increasing maintenance and operations tax rates beyond a specified maximum during these reductions. The bill also clarifies the definitions of "current debt service" and introduces new formulas for calculating the no-new-revenue tax rate and voter-approval tax rate, while eliminating references to outdated sections of the Tax Code.

Additionally, the bill modifies procedures for voter approval of tax rates in certain districts by changing the threshold for when an election is necessary for tax rate increases and establishing a new definition for "voter-approval tax rate." It repeals several existing provisions related to tax rate approvals and elections, aiming to streamline the process and potentially reduce the number of required elections. The changes are set to take effect on January 1, 2026, and will apply to ad valorem taxes for tax years beginning on or after that date, ultimately enhancing transparency and accountability in the taxation process while addressing concerns about rising property taxes.

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 (Special District Local Laws Code 8876, Tax Code 31, Special District Local Laws Code 3828, Education Code 48, Water Code 49, Tax Code 26)