H.B. No. 5502 seeks to amend the Texas Tax Code and Education Code to refine the calculation of ad valorem tax rates, particularly for school districts. The bill mandates that if a school district's guaranteed funding per weighted student surpasses the previous year's level, the district must lower its tax rate accordingly. It also restricts the maintenance and operations tax rate from exceeding a specified maximum during the year of the reduction. Additionally, the bill clarifies that certain provisions of the Tax Code will no longer apply to specific tax rates under the Special District Local Laws Code, ensuring a more streamlined approach to tax rate calculations.

Moreover, the bill introduces a new definition of "developed district" and requires these districts to include specific financial documents in their annual budgets. It modifies the conditions under which certain tax codes apply to debt service and contract taxes, removing outdated references. The bill also updates public hearing requirements for proposed tax rates, enhancing transparency regarding the impact on property taxes for residents. New thresholds for voter approval of tax rates are established, and several outdated provisions are repealed. These changes will 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 (Tax Code 31, Tax Code 44, Tax Code 26, Water Code 49, Education Code 48, Special District Local Laws Code 8876, Special District Local Laws Code 3828)