H.B. No. 105 proposes significant amendments to the calculation of ad valorem tax rates for taxing units in Texas, particularly focusing on the approval process for proposed tax rates that exceed the voter-approval tax rate. The bill mandates that school districts must lower their tax rates when state and local funding surpass previous levels and restricts them from increasing their maintenance and operations tax rates beyond a specified maximum during these reductions. It also clarifies definitions related to "current debt service" and modifies the formulas for calculating the no-new-revenue tax rate and voter-approval tax rate, ensuring that certain sections of the Tax Code do not apply to specific taxes imposed by special districts.

Furthermore, the bill repeals outdated provisions and introduces new definitions and requirements for public hearings on proposed tax rates, enhancing transparency for taxpayers. It eliminates previous thresholds for tax rate increases, such as the 3.5 percent and 8 percent limits for average residence homesteads, and establishes a new definition for the "voter-approval tax rate" based on current debt service and revised operation and maintenance tax rates. The bill requires that if a district's adopted tax rate exceeds the voter-approval tax rate, an election must be held for approval. Overall, H.B. No. 105 aims to create a more equitable and structured framework for tax rate calculations and approvals, ultimately limiting property tax growth in Texas.

Statutes affected:
Introduced: Education Code 48.202, Special District Local Laws Code 3828.157, Special District Local Laws Code 8876.152, Tax Code 26.012, Tax Code 26.04, Tax Code 26.041, Tax Code 26.07, Tax Code 31.12, Tax Code 31.112, Water Code 49.057, Water Code 49.107, Water Code 49.108, Water Code 49.236, Water Code 49.23601 (Special District Local Laws Code 3828, Tax Code 26, Tax Code 31, Water Code 49, Education Code 48, Special District Local Laws Code 8876)