HB 5226

relating to the calculation of the no-new-revenue tax rate.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Section 26.04(c), Tax Code, is amended to read as
(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
NO-NEW-REVENUE TAX RATE = [(]LAST YEAR'S
LEVY [- LOST PROPERTY LEVY)] / [(]CURRENT TOTAL VALUE
(2)  "Voter-approval tax rate" means a rate expressed
in dollars per $100 of taxable value calculated according to the
(A)  for a special taxing unit:
VOTER-APPROVAL TAX RATE = [(]NO-NEW-REVENUE
TAX [MAINTENANCE AND OPERATIONS] RATE x 1.08[) +
(B)  for a taxing unit other than a special taxing
VOTER-APPROVAL TAX RATE = (NO-NEW-REVENUE TAX [MAINTENANCE
AND OPERATIONS] RATE x 1.035) + [(CURRENT DEBT RATE +] UNUSED
SECTION 2.  Sections 26.041(a), (b), and (c), Tax Code, are
(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
VOTER-APPROVAL TAX RATE FOR SPECIAL TAXING
UNIT = (NO-NEW-REVENUE TAX [MAINTENANCE AND
OPERATIONS] RATE x 1.08) [+ (CURRENT DEBT RATE] - SALES
VOTER-APPROVAL TAX RATE FOR TAXING UNIT
OTHER THAN SPECIAL TAXING UNIT = (NO-NEW-REVENUE TAX
[MAINTENANCE AND OPERATIONS] RATE x 1.035) + ([CURRENT
DEBT RATE +] UNUSED INCREMENT RATE - SALES TAX GAIN
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
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
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
NO-NEW-REVENUE TAX RATE = [[](LAST YEAR'S
LEVY [- LOST PROPERTY LEVY)] / [(]CURRENT TOTAL VALUE
[[- NEW PROPERTY VALUE]])[]] + SALES TAX LOSS RATE
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]
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
SECTION 3.  This Act takes effect September 1, 2025.