H.B. No. 279 proposes significant amendments to the Texas Tax Code concerning the calculation of ad valorem tax rates for certain taxing units, including junior college districts and hospital districts, while excluding school districts. The bill introduces a new provision allowing these units to consider their foregone revenue as zero if their proposed maintenance and operations tax rate is 2.5 cents or less per $100 of taxable value for tax years before 2026, with this provision set to expire on December 31, 2028. Additionally, it modifies the formulas for calculating the no-new-revenue tax rate and the voter-approval tax rate, specifically adjusting the multiplier for the latter from 1.035 to 1.025 for certain taxing units.

The bill also includes conforming changes to clarify how taxing units can calculate their voter-approval tax rates, particularly in disaster situations, and amends notice requirements for public hearings on proposed tax rates to enhance transparency for property owners. It further modifies the definition of the "voter-approval tax rate" to limit increases in operation and maintenance tax rates to 1.025 times the previous year's amount, replacing the previous limit of 1.08, and mandates an election if a district adopts a tax rate exceeding this threshold. The bill repeals outdated sections of the Water Code and Tax Code and updates the heading of Section 49.23601 to remove references to "low tax rate districts," aiming to provide taxpayers with greater control and clarity regarding property tax increases. The provisions will take effect for ad valorem taxes imposed for tax years beginning on or after January 1, 2026.

Statutes affected:
Introduced: Tax Code 26.013, Tax Code 26.04, Tax Code 26.041, Tax Code 26.042, Tax Code 26.063, Tax Code 26.07, Tax Code 26.075, Water Code 49.057, Water Code 49.236, Water Code 49.23601 (Tax Code 26, Water Code 49)