H.B. No. 139 proposes significant amendments to the Special District Local Laws Code and the Tax Code, focusing on the calculation and approval process for ad valorem tax rates. The bill removes references to Sections 26.042 and 26.075 of the Tax Code from the applicability of tax provisions for special districts and clarifies the formulas for determining the no-new-revenue tax rate and the voter-approval tax rate, including necessary adjustments for sales tax fluctuations. Importantly, it mandates that any taxing unit wishing to adopt a tax rate that exceeds the voter-approval tax rate must hold an election to secure voter approval.

Additionally, the bill introduces a new definition for "developed district" in the Water Code, indicating that such a district must have completed improvements to serve at least 95% of its projected build-out. It also modifies the notice requirements for public hearings on proposed tax rates to enhance transparency for property owners regarding potential tax increases. The amendments include changes to the calculation of the voter-approval tax rate, removing the previous cap on the operation and maintenance tax rate, and repealing outdated sections from various codes. These changes will take effect on January 1, 2026, and are intended to streamline the tax rate approval process while keeping property tax growth manageable for residents.

Statutes affected:
Introduced: Special District Local Laws Code 3828.157, Special District Local Laws Code 8876.152, Tax Code 26.04, Tax Code 26.041, Tax Code 26.07, Tax Code 31.112, Water Code 6.30, 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, Special District Local Laws Code 3828, Water Code 6)