H.B. No. 43 proposes significant amendments to the calculation of ad valorem tax rates for taxing units in Texas, particularly targeting school districts and special districts. The bill requires school districts to reduce their tax rates if their guaranteed funding level exceeds that of the previous year and prohibits increases in the maintenance and operations tax rate beyond a specified maximum. It also clarifies that certain sections of the Tax Code regarding voter-approval tax rates do not apply to taxes imposed under specific sections of the Special District Local Laws Code. Additionally, the bill introduces new definitions and modifies existing formulas for calculating the no-new-revenue tax rate and voter-approval tax rate, ensuring these calculations reflect changes in property values and sales tax revenues while enhancing transparency through public hearings and notifications about proposed tax rates.

Furthermore, the bill amends the Water Code to revise the procedures for voter approval of tax rates in certain districts. It redefines "voter-approval tax rate" to include the current year's debt service tax rate, contract tax rate, and a revised operation and maintenance tax rate, eliminating the previous threshold of 1.08 times the amount imposed in the preceding year. If a district adopts a tax rate exceeding the voter-approval tax rate, an election must be held for approval. The bill also repeals several existing provisions related to tax rate approvals and modifies the heading of Section 49.23601 to remove references to "low tax rate districts." The new provisions will apply only to ad valorem taxes imposed for tax years beginning on or after the bill's effective date, which will take effect immediately with a two-thirds vote or 91 days after the legislative session concludes.

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