The bill amends the Election Code and Tax Code in Texas to establish new procedures for calculating the voter-approval tax rate for certain taxing units and outlines the process for voter approval of proposed ad valorem tax rate increases. A key insertion is the requirement that elections for tax rate increases must occur on the November uniform election date, prohibiting emergency elections for this purpose. Additionally, if at least 60 percent of voters approve a tax rate increase, the governing body is restricted from disapproving the rate or budget based solely on the approved tax rate. The bill also modifies the voter approval threshold from "a majority" to "at least 60 percent," reinforcing the need for greater voter support for tax increases.

Moreover, the bill introduces a new method for calculating the no-new-revenue tax rate and the voter-approval tax rate, ensuring accurate communication of these rates to the public. It also allows taxing units to impose additional penalties on delinquent taxes due after June 1, with penalties capped at attorney contract compensation. The bill clarifies the definition of a "developed district" and mandates the inclusion of specific financial documents in annual budgets. It modifies public hearing requirements for proposed tax rates, enhancing transparency for property owners. Several sections of existing law are repealed to streamline the tax rate approval process, with the bill set to take effect on January 1, 2026, for ad valorem taxes for tax years beginning on or after that date.

Statutes affected:
Introduced: Health and Safety Code 281.124, Special District Local Laws Code 1101.254, Special District Local Laws Code 26.07, Special District Local Laws Code 8876.152, Tax Code 26.04, Tax Code 26.041, Tax Code 26.07, Tax Code 26.08, 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 31, Special District Local Laws Code 1101, Special District Local Laws Code 26, Tax Code 26, Special District Local Laws Code 8876, Health and Safety Code 281)