H.B. No. 5502 seeks to amend the Texas Tax Code and Education Code to modify the calculation of ad valorem tax rates, particularly for school districts. The bill mandates that school districts must lower their tax rates if the guaranteed level of state and local funding per weighted student surpasses the previous year's amount. It also restricts districts from increasing their maintenance and operations tax rate beyond a specified maximum during such reductions. Additionally, the bill clarifies that certain sections of the Tax Code regarding voter-approval tax rates do not apply to specific taxes under the Special District Local Laws Code.

The legislation includes several deletions and insertions aimed at refining the definitions and calculations for no-new-revenue and voter-approval tax rates. It removes terms like "lost property" and "new property value" from the rate calculation formulas, potentially simplifying the process for taxing units. The bill also modifies the requirements for voter approval when a taxing unit adopts a tax rate exceeding the voter-approval threshold, ensuring that registered voters can participate in these decisions. Furthermore, it introduces a new definition of "developed district," updates notification requirements for public hearings on proposed tax rates, and streamlines existing provisions related to tax rates and voter approval processes. The bill is set to take effect on January 1, 2026, and will apply to ad valorem taxes 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 44.004, Tax Code 26.041, Tax Code 26.044, Tax Code 26.0441, Tax Code 26.0442, Tax Code 26.0443, Tax Code 26.0444, 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 (Water Code 49, Tax Code 31, Special District Local Laws Code 3828, Tax Code 44, Education Code 48, Tax Code 26, Special District Local Laws Code 8876)