89S10283 PRL-D     By: Hickland H.B. No. 158       A BILL TO BE ENTITLED   AN ACT   relating to the repeal of provisions providing for the calculation   of an unused increment rate and the use of that rate in calculating   certain other ad valorem tax rates.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 26.04(c), Tax Code, is amended to read as   follows:          (c)  After the assessor for the taxing unit submits the   appraisal roll for the taxing unit to the governing body of the   taxing unit as required by Subsection (b), an officer or employee   designated by the governing body shall calculate the no-new-revenue   tax rate and the voter-approval tax rate for the taxing unit, where:                (1)  "No-new-revenue tax rate" means a rate expressed   in dollars per $100 of taxable value calculated according to the   following formula:          NO-NEW-REVENUE TAX RATE = (LAST YEAR'S LEVY - LOST PROPERTY   LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)          ; and                (2)  "Voter-approval tax rate" means a rate expressed   in dollars per $100 of taxable value calculated according to the   following applicable formula:                      (A)  for a special taxing unit:          VOTER-APPROVAL TAX RATE = (NO-NEW-REVENUE MAINTENANCE AND   OPERATIONS RATE x 1.08) + CURRENT DEBT RATE          ; or                      (B)  for a taxing unit other than a special taxing   unit:          VOTER-APPROVAL TAX RATE = (NO-NEW-REVENUE MAINTENANCE AND   OPERATIONS RATE x 1.035) + [(]CURRENT DEBT RATE [+ UNUSED INCREMENT   RATE)]          SECTION 2.  Sections 26.041(a), (b), and (c), Tax Code, are   amended to read as follows:          (a)  In the first year in which an additional sales and use   tax is required to be collected, the no-new-revenue tax rate and   voter-approval tax rate for the taxing unit are calculated   according to the following formulas:          NO-NEW-REVENUE TAX RATE = [(LAST YEAR'S LEVY - LOST PROPERTY   LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] - SALES TAX GAIN   RATE   and          VOTER-APPROVAL TAX RATE FOR SPECIAL TAXING UNIT =   (NO-NEW-REVENUE MAINTENANCE AND OPERATIONS RATE x 1.08) + (CURRENT   DEBT RATE - SALES TAX GAIN RATE)   or          VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER THAN SPECIAL   TAXING UNIT = (NO-NEW-REVENUE MAINTENANCE AND OPERATIONS RATE x   1.035) + (CURRENT DEBT RATE [+ UNUSED INCREMENT RATE] - SALES TAX   GAIN RATE)   where "sales tax gain rate" means a number expressed in dollars per   $100 of taxable value, calculated by dividing the revenue that will   be generated by the additional sales and use tax in the following   year as calculated under Subsection (d) by the current total value.          (b)  Except as provided by Subsections (a) and (c), in a year   in which a taxing unit imposes an additional sales and use tax, the   voter-approval tax rate for the taxing unit is calculated according   to the following formula, regardless of whether the taxing unit   levied a property tax in the preceding year:          VOTER-APPROVAL TAX RATE FOR SPECIAL TAXING UNIT = [(LAST   YEAR'S MAINTENANCE AND OPERATIONS EXPENSE x 1.08) / (CURRENT TOTAL   VALUE - NEW PROPERTY VALUE)] + (CURRENT DEBT RATE - SALES TAX   REVENUE RATE)   or          VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER THAN SPECIAL   TAXING UNIT = [(LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE x   1.035) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + (CURRENT DEBT   RATE [+ UNUSED INCREMENT RATE] - SALES TAX REVENUE RATE)   where "last year's maintenance and operations expense" means the   amount spent for maintenance and operations from property tax and   additional sales and use tax revenues in the preceding year, and   "sales tax revenue rate" means a number expressed in dollars per   $100 of taxable value, calculated by dividing the revenue that will   be generated by the additional sales and use tax in the current year   as calculated under Subsection (d) by the current total value.          (c)  In a year in which a taxing unit that has been imposing   an additional sales and use tax ceases to impose an additional sales   and use tax, the no-new-revenue tax rate and voter-approval tax   rate for the taxing unit are calculated according to the following   formulas:          NO-NEW-REVENUE TAX RATE = [(LAST YEAR'S LEVY - LOST PROPERTY   LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + SALES TAX LOSS   RATE   and          VOTER-APPROVAL TAX RATE FOR SPECIAL TAXING UNIT = [(LAST   YEAR'S MAINTENANCE AND OPERATIONS EXPENSE x 1.08) / (CURRENT TOTAL   VALUE - NEW PROPERTY VALUE)] + CURRENT DEBT RATE   or          VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER THAN SPECIAL   TAXING UNIT = [(LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE x   1.035) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] + [(]CURRENT   DEBT RATE [+ UNUSED INCREMENT RATE)]   where "sales tax loss rate" means a number expressed in dollars per   $100 of taxable value, calculated by dividing the amount of sales   and use tax revenue generated in the last four quarters for which   the information is available by the current total value and "last   year's maintenance and operations expense" means the amount spent   for maintenance and operations from property tax and additional   sales and use tax revenues in the preceding year.          SECTION 3.  Section 26.042(a-2), Tax Code, as added by H.B.   30, Acts of the 89th Legislature, Regular Session, 2025, and   effective January 1, 2026, is amended to read as follows:          (a-2)  The voter-approval tax rate the governing body of the   taxing unit may direct the designated officer or employee to   calculate under Subsection (a) is equal to the lesser of:                (1)  the voter-approval tax rate calculated in the   manner provided for a special taxing unit; or                (2)  the voter-approval tax rate calculated according   to the following formula:          VOTER-APPROVAL TAX RATE = (NO-NEW-REVENUE MAINTENANCE AND   OPERATIONS RATE X 1.035) + (CURRENT DEBT RATE + [UNUSED INCREMENT   RATE +] DISASTER RELIEF RATE)          SECTION 4.  Sections 49.23602(a)(2) and (4), Water Code, are   amended to read as follows:                (2)  "Mandatory tax election rate" means [the rate   equal to the sum of the following tax rates for the district:                      [(A)]  the rate that would impose 1.035 times the   amount of tax imposed by the district in the preceding year on a   residence homestead appraised at the average appraised value of a   residence homestead in the district in that year, disregarding any   homestead exemption available only to disabled persons or persons   65 years of age or older[; and                      [(B)  the unused increment rate].                (4)  "Voter-approval tax rate" means the rate equal to   the sum of the following tax rates for the district:                      (A)  the current year's debt service tax rate;                      (B)  the current year's contract tax rate; and                      (C)  the operation and maintenance tax rate that   would impose 1.035 times the amount of the operation and   maintenance tax imposed by the district in the preceding year on a   residence homestead appraised at the average appraised value of a   residence homestead in the district in that year, disregarding any   homestead exemption available only to disabled persons or persons   65 years of age or older[; and                      [(D)  the unused increment rate].          SECTION 5.  The following provisions are repealed:                (1)  Section 120.007(d), Local Government Code;                (2)  Section 26.013, Tax Code;                (3)  Section 26.0501(c), Tax Code; and                (4)  Section 49.23602(a)(3), Water Code.          SECTION 6.  This Act applies only to ad valorem taxes imposed   for an ad valorem tax year that begins on or after the effective   date of this Act.          SECTION 7.  This Act takes effect January 1, 2026.