H.B. No. 250 proposes significant amendments to the Special District Local Laws Code and the Tax Code, focusing on the calculation of ad valorem tax rates for taxing units. The bill introduces new formulas for determining the voter-approval tax rate and the no-new-revenue tax rate, while removing references to outdated sections of the Tax Code, specifically Sections 26.042 and 26.075. It clarifies the process for exceeding the voter-approval tax rate, mandating that such increases require voter approval through an election. The bill also emphasizes transparency by requiring public notices to inform residents about proposed tax rates and their potential impacts.

In addition, the bill modifies the Water Code to update the definition of the voter-approval tax rate, incorporating the current year's debt service tax rate, contract tax rate, and operation and maintenance tax rate. The previous threshold of "1.08 times" the amount of tax from the preceding year is eliminated, shifting the focus to the tax imposed on a residence homestead appraised at the average value in the district. Several provisions from the Education Code, Local Government Code, and Tax Code are repealed, streamlining the tax rate approval process. The changes will take effect for ad valorem taxes imposed for tax years beginning on or after January 1, 2026, ensuring that voters have a voice in significant tax increases.

Statutes affected:
Introduced: Special District Local Laws Code 3828.157, Special District Local Laws Code 8876.152, Tax Code 26.04, Tax Code 26.041, Tax Code 26.07, Tax Code 31.112, Water Code 6.30, Water Code 49.107, Water Code 49.108, Water Code 49.236, Water Code 49.23601 (Special District Local Laws Code 8876, Water Code 6, Tax Code 26, Water Code 49, Special District Local Laws Code 3828, Tax Code 31)