H.B. No. 279 proposes significant amendments to the Texas Tax Code concerning the calculation of ad valorem tax rates for junior college districts, hospital districts, and other non-school districts. A new subsection (c) is added to Section 26.013, establishing that if the proposed maintenance and operations tax rate is 2.5 cents or less per $100 of taxable value, the foregone revenue for the taxing unit will be considered zero for tax years leading up to 2026, with this provision expiring on December 31, 2028. The bill also modifies the formulas for calculating the no-new-revenue tax rate and the voter-approval tax rate, including a change in the multiplier from 1.035 to 1.025 for taxing units other than special taxing units.

Additionally, the bill amends the Water Code and Tax Code to adjust the threshold for when an election is required to approve a tax rate. Specifically, if a district's combined tax rate exceeds 1.025 times the previous year's amount on a residence homestead, an election must be held. The bill also repeals several existing provisions related to tax rates and elections, updates the language regarding the voter-approval tax rate, and is set to take effect on January 1, 2026, applying only to ad valorem taxes imposed for tax years beginning on or after that date.

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 (Water Code 49, Tax Code 26)