H.B. No. 177 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 prior to 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.

Furthermore, the bill includes conforming changes to clarify how taxing units can calculate their voter-approval tax rates, particularly in disaster areas, and allows governing bodies to consider disaster relief rates in their calculations. It also amends public notice requirements for tax rate hearings to enhance transparency in the adoption process. The bill aims to streamline tax rate calculations and limit property tax growth in Texas, with the changes set to take effect on January 1, 2026, and applying 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 (Tax Code 26, Water Code 49)