Senate Bill No. 2775 aims to amend the calculation of certain ad valorem tax rates for taxing units in Texas and outlines the process for approving proposed tax rates that exceed the voter-approval tax rate. Key changes include the amendment of Section 48.202(f) of the Education Code, 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 and cannot increase its maintenance and operations tax rate beyond a specified limit. Additionally, the bill modifies various sections of the Tax Code, including the removal of certain provisions that previously applied to special taxing units and municipalities, thereby streamlining the tax rate calculation process.

The bill also introduces new definitions and formulas for calculating the no-new-revenue tax rate and voter-approval tax rate, particularly in relation to additional sales and use taxes. It repeals several existing provisions that are deemed unnecessary or redundant, such as Section 26.042 of the Tax Code. 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. Overall, the bill seeks to enhance clarity and efficiency in the taxation process while ensuring that tax rates remain within voter-approved limits.

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