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 modifies Section 48.202(f) of the Education Code, requiring school districts to reduce their tax rates if their guaranteed funding level surpasses the previous year's amount, while also placing limits on increases to their maintenance and operations tax rates. Additionally, the bill clarifies definitions and calculations related to no-new-revenue and voter-approval tax rates in the Tax Code, including the removal of outdated provisions that previously applied to special taxing units.

Moreover, H.B. No. 105 introduces new definitions and modifies existing ones, such as the definition of "current debt service," and specifies conditions under which certain tax code provisions do not apply to special districts. The bill also repeals several existing provisions from the Education Code, Local Government Code, and Tax Code to streamline the tax approval process. Notably, it changes the definition of "voter-approval tax rate" to incorporate the current year's debt service tax rate and eliminates the previous limit of 1.08 times the prior year's tax, allowing for a more straightforward calculation based on the average appraised value of a residence homestead. If a district's adopted tax rate exceeds the voter-approval tax rate, an election will be required to approve the new rate. The act is set to take effect immediately upon a two-thirds vote from both houses or on the 91st day after the legislative session if that vote is not achieved.

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 (Water Code 49, Tax Code 26, Tax Code 31, Special District Local Laws Code 8876, Education Code 48, Special District Local Laws Code 3828)