H.B. No. 177 proposes significant amendments to the Texas Tax Code and Water Code concerning the calculation of ad valorem tax rates for specific 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 definitions and calculations related to voter-approval tax rates, particularly in disaster areas, and establishes that the governing body of a taxing unit may direct the calculation of the voter-approval tax rate under specific conditions. It amends public notice requirements for tax rate hearings to enhance transparency in the tax rate adoption process. Furthermore, the bill modifies the definition of the "voter-approval tax rate" to limit the operation and maintenance tax rate increase 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. Overall, H.B. No. 177 aims to streamline tax rate calculations while providing greater transparency and control for taxpayers regarding property tax increases.

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)