Texas House Bill HB279

Texas 2025 - 89th 1st C.S.

• Filed: 8/5/25

Caption

Relating to the calculation of certain ad valorem tax rates of a taxing unit and the manner in which a proposed ad valorem tax rate that exceeds the voter-approval tax rate is approved; making conforming changes.

Summary

HB 279 revises Texas property tax law governing how certain taxing units calculate their no-new-revenue tax rate and voter-approval tax rate. The bill changes the formulas in Tax Code Sections 26.04 and 26.041, including lowering the growth factor used in the voter-approval tax rate calculation for most taxing units from 1.035 to 1.025, and it makes related changes for units that levy additional sales and use taxes. It also adjusts disaster-related tax rate calculations and updates the rules for when a tax rate above the voter-approval threshold must go to the voters. The bill also makes significant changes to Water Code provisions governing certain water districts. It revises notice requirements for tax-rate hearings, updates the definition and treatment of “developed districts,” and changes the election trigger for some districts by lowering the allowable tax growth threshold from 8 percent to 2.5 percent in the affected provisions. It repeals several existing Water Code sections that created separate election rules for different categories of districts, replacing them with a simplified framework tied to the revised voter-approval tax rate structure. The bill applies to ad valorem taxes for tax years beginning on or after its effective date of January 1, 2026.

Impact

HB 279 would amend multiple sections of the Tax Code and Water Code to tighten and standardize the calculation of property tax limits for local taxing units, especially junior college districts, hospital districts, municipalities, and certain water districts. It would reduce the rate at which some local governments can grow maintenance and operations taxes before triggering voter approval, alter disaster and sales-tax-related adjustments, and revise public notice and election procedures for tax-rate adoption. The bill also repeals several Water Code provisions and makes conforming changes to align district election requirements with the new tax-rate framework.

Sentiment

No committee transcripts or recorded votes were provided, so there is no direct evidence of support or opposition from legislative debate in the materials supplied. Based on the bill text, the measure appears to be framed as a taxpayer-protection and transparency bill, with an emphasis on limiting property tax growth and simplifying election triggers. The absence of recorded discussion means the overall sentiment cannot be measured from the available context.

Contention

The main points of contention likely concern the lower tax-growth threshold and the reduced flexibility for local taxing units to raise maintenance and operations revenue without voter approval. Local governments, including junior college districts, hospital districts, municipalities, and water districts, may view the bill as constraining budgeting authority and complicating revenue planning, while taxpayer advocates would likely support the tighter limits and expanded election requirements. Another likely issue is the repeal of separate Water Code election regimes, which could be seen either as simplification or as the removal of tailored rules for different district types.