Senate Bill No. 2775 aims to modify the calculation of ad valorem tax rates for taxing units in Texas, particularly focusing on the voter-approval tax rate. The bill amends several sections of the Education Code and the Tax Code, including Section 48.202(f), which now stipulates that if a school district's guaranteed funding level exceeds that of the previous year, the district must reduce its tax rate accordingly. Additionally, the bill introduces new provisions that prevent districts from increasing their maintenance and operations tax rate beyond a specified maximum during such years. It also clarifies the applicability of certain tax code provisions to various taxing units, including special districts and municipalities.

The bill includes multiple deletions of existing legal language, particularly concerning the voter-approval tax rate calculations and the applicability of certain sections of the Tax Code. Notably, it removes references to special taxing units in various contexts and modifies the definitions and formulas used to calculate the no-new-revenue and voter-approval tax rates. Furthermore, the bill repeals several sections of the Tax Code and introduces new definitions related to unused increment rates and foregone revenue amounts. The changes are set to take effect on January 1, 2026, and will apply to 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 3828.153, Tax Code 26.04, Tax Code 26.041, Tax Code 26.063, Tax Code 26.07, Tax Code 26.075, Water Code 49.107, Water Code 49.108, Water Code 49.23602 (Water Code 49, Education Code 48, Tax Code 26, Special District Local Laws Code 3828)