Relating to the effect of a disaster and associated costs on the calculation of certain tax rates and the procedure for adoption of a tax rate by a taxing unit.
ModeratePlan for compliance
Medium Cost
Effective:2026-01-01
Enforcing Agencies
Texas Division of Emergency Management (TDEM) • Local Taxing Unit Governing Bodies • County Tax Assessor-Collectors
01
Compliance Analysis
Key implementation requirements and action items for compliance with this legislation
Implementation Timeline
Effective Date: January 1, 2026 (Applies to tax years beginning on or after this date).
Compliance Deadline:January 1, 2026. While the tax rate is set later in the year, contracts and data collection systems must be in place by the start of the tax year to capture qualifying costs.
Agency Rulemaking: The Texas Division of Emergency Management (TDEM) will receive cost estimates from taxing units. While no specific rulemaking deadline is set, TDEM must establish intake procedures for these estimates prior to the 2026 tax cycle.
Immediate Action Plan
Immediate: Review all active government contracts extending into 2026 to ensure service descriptions align with federal "essential assistance" definitions.
Q4 2025: Update internal property tax projection models to include the "Disaster Relief Rate" variable for 2026 budgeting.
Post-Disaster Protocol: Establish a standing order for your legal team to monitor Section 11.35 exemption filings in your jurisdiction; a single filing triggers the taxing unit's ability to use the new rate formula.
Vendor Coordination: If you are a vendor, meet with municipal finance directors to agree on an invoicing format that supports their new reporting requirements.
Operational Changes Required
Contracts
Government Vendors & Contractors:
Update Master Service Agreements (MSAs): Amend Scope of Work definitions to mirror 42 U.S.C. Section 5170b. Replace generic terms like "site support" with specific federal categories such as "debris removal," "search and rescue," or "emergency medical care."
Data Provision Clauses: Insert clauses defining "practicable" timelines for providing detailed cost breakdowns to municipal clients, as they will need this data urgently to set tax rates.
Hiring/Training
Tax Departments: Train internal tax teams or external consultants on the new "Disaster Relief Rate" formula: `(Disaster Relief Cost) / (Current Total Value - New Property Value)`.
Accounts Receivable: Train billing staff to segregate disaster-related invoices from general services immediately upon deployment to a disaster zone.
Reporting & Record-Keeping
Public Information Act (PIA) Requests: In disaster years where the Governor (but not the President) declares a disaster, corporate tax teams must systematically file PIA requests for the cost estimates the taxing unit submits to TDEM.
Evidence of Essential Assistance: Taxing units must substantiate "essential assistance." Vendors must maintain granular logs of overtime, hazardous duty pay, and equipment usage to support the client's tax rate calculations.
Fees & Costs
Tax Liability: Commercial property owners should anticipate a specific "Disaster Relief" line item or component in their tax rate. This rate is uncapped but limited by the actual costs incurred.
Audit Costs: Budget for increased legal or consulting fees to challenge the mathematical basis of the tax rate if the taxing unit's cost estimates appear inflated.
Strategic Ambiguities & Considerations
"As Soon As Practicable": The law requires taxing units to submit estimates to TDEM "as soon as practicable," a vague standard that may lead to delayed filings, hindering a taxpayer's ability to audit the rate before tax bills are due.
Lack of Audit Authority: The bill mandates submission to TDEM but does not explicitly grant TDEM the authority to *reject* an inflated estimate. This leaves the validity of the "Disaster Relief Cost" as a matter for civil litigation rather than regulatory enforcement.
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The bill author has informed the committee that local taxing units in Texas must typically get voter approval for significant property tax increases, thus ensuring taxpayer input, and that under current law certain taxing units are permitted to bypass this requirement in the year after a declared disaster, but the author also informed the committee that, despite being intended to help communities recover quickly, this exception has drawn criticism for enabling tax hikes without voter consent, often catching residents off guard during already difficult times and leading to confusion and eroded public trust. C.S.H.B. 30 seeks to allow greater flexibility for certain taxing units responding to disasters by modifying how they calculate their voter-approval tax rate. The bill allows the taxing units located in federal and state declared disaster areas to use either the existing special taxing unit formula or a new formula set by the bill that incorporates a disaster debris rate.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
C.S.H.B. 30 repeals the Tax Code provision that authorizes a taxing unit other than a school district, in the year following the year in which a disaster occurs, to adopt a property tax rate that exceeds the voter-approval tax rate (VATR) or de minimis rate, as applicable, without holding an election to approve the adopted tax rate when increased expenditure of money by the taxing unit is necessary to respond to the disaster and the governor declares any part of the area in which the taxing unit is located as a disaster area.
C.S.H.B. 30 amends the Tax Code to establish that, with respect to a taxing unit that is wholly or partly located in an area declared a disaster area by the president of the United States and for which an estimate has been made under applicable federal law relating to the cost to remove debris or wreckage in the taxing unit, the VATR the governing body of the taxing unit may direct the designated officer or employee to calculate under state law is equal to the lesser of the VATR calculated in the manner provided for a special taxing unit or the VATR calculated according to the formula specified under the bill's provisions that incorporates a disaster debris rate, as defined by the bill. The bill clarifies that the governing body of such a taxing unit that does not meet the criteria relating to designation as a disaster area may direct the designated officer or employee to calculate the VATR in the manner provided for a special taxing unit.
C.S.H.B. 30, for purposes of provisions regarding the calculation and adoption of certain tax rates in a disaster area, defines the following terms:
·"disaster debris cost" as a taxing unit's share of the cost to remove debris or wreckage in the taxing unit as determined by an estimate made under applicable federal law; and
·"disaster debris rate" as a rate expressed in dollars per $100 of taxable value and calculated according to the formula specified under the bill's provisions.
C.S.H.B. 30 repeals Section 26.042(d), Tax Code.
C.S.H.B. 30 applies only to a property tax year that begins on or after the bill's effective date.
EFFECTIVE DATE
January 1, 2026.
COMPARISON OF INTRODUCED AND SUBSTITUTE
While C.S.H.B. 30 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.
The introduced repealed a Tax Code provision, which the substitute does not repeal, that authorizes a public school district in the year following the year in which a disaster occurs, to adopt a property tax rate that exceeds the VATR without holding an election to approve the adopted tax rate when increased expenditure of money by the district is necessary to respond to the disaster that has impacted the district and the governor has requested federal disaster assistance for the area in which the district is located. The introduced accordingly amended certain Education Code provisions and repealed the following provisions to conform to the repeal of the Tax Code provision, whereas the substitute does not:
·a Tax Code provision prohibiting, with respect to taxing unit or a school district that adopts a property tax rate that exceeds certain VATRs without holding an election due to a disaster, the amount by which that rate exceeds the taxing unit's VATR for that tax year from being considered when calculating the taxing unit's VATR for the tax year following the year in which the taxing unit adopts that VATR; and
·an Education Code provision establishing, with respect to a school district that adopts such a VATR due to a disaster, that the amount by which the district's maintenance tax rate exceeds the district's VATR for the preceding year is not considered in determining a district's tier one maintenance and operations tax rate or the district's enrichment tax rate for the current tax year.
The substitute includes the following Tax Code provisions absent from the introduced:
·a provision establishing that the VATR the governing body of a certain taxing unit located in an area declared a disaster area may direct the designated officer or employee to calculate is equal to the lesser of specified VATRs;
·a provision clarifying that the governing body of a taxing unit that does not meet the specified criteria relating to designation as a disaster area may direct the designated officer or employee to calculate the VATR in the manner provided for a special taxing unit; and
·a provision defining "disaster debris cost" and "disaster debris rate" for purposes of the calculation and adoption of certain tax rates in a disaster area.
The introduced specified that its provisions apply only to property taxes imposed for a property tax year that begins on or after the bill's effective date, whereas the substitute specifies that its provisions apply only to a property tax year that begins on or after such date.
Honorable Morgan Meyer, Chair, House Committee on Ways & Means
FROM:
Jerry McGinty, Director, Legislative Budget Board
IN RE:
HB30 by Troxclair (Relating to the repeal of provisions authorizing certain taxing units in the year following the year in which a disaster occurs to adopt an ad valorem tax rate that exceeds the voter-approval tax rate without holding an election to approve the adopted tax rate; making conforming changes.), As Introduced
Passage of the bill would prohibit school districts from adopting a tax rate with disaster pennies without a voter-approval tax rate election. As a result, state costs to the Foundation School Fund could be reduced.
The bill would repeal the authority of certain taxing units to adopt a property tax rate that exceeds the voter-approval tax rate without holding an election in the year after a disaster occurred. The bill makes conforming changes.
The bill would prohibit school districts from adopting a tax rate with disaster pennies without a voter-approval tax rate election (VATRE) for the current tax year. If the VATRE does not pass, districts could receive less tier two tax collections and would not receive additional tier two funding under the Foundation School Program, which could result in a savings to the state.
Local Government Impact
Passage of the bill would prohibit local governments in a disaster area from adopting a tax rate that exceed the voter-approval tax rate without holding an election in the year after a disaster occurred. As a result, local tax revenue for local governments in disaster areas could be reduced.
Source Agencies:
304 Comptroller of Public Accounts, 701 Texas Education Agency
LBB Staff:
JMc, KK, SD, BRI, SZ
Related Legislation
Explore more bills from this author and on related topics
HB30 repeals the automatic authority for taxing units to raise property tax rates without an election following a disaster, replacing it with a strict, formula-driven "Disaster Relief Rate" effective January 1, 2026. This legislation shifts the burden to commercial property owners to audit municipal "disaster cost" claims and requires government vendors to align invoicing strictly with federal definitions to ensure cost recoverability. Implementation Timeline Effective Date: January 1, 2026 (Applies to tax years beginning on or after this date).
Q
Who authored HB30?
HB30 was authored by Texas Representative Ellen Troxclair during the Regular Session.
Q
When was HB30 signed into law?
HB30 was signed into law by Governor Greg Abbott on May 28, 2025.
Q
Which agencies enforce HB30?
HB30 is enforced by Texas Division of Emergency Management (TDEM), Local Taxing Unit Governing Bodies and County Tax Assessor-Collectors.
Q
How urgent is compliance with HB30?
The compliance urgency for HB30 is rated as "moderate". Businesses and organizations should review the requirements and timeline to ensure timely compliance.
Q
What is the cost impact of HB30?
The cost impact of HB30 is estimated as "medium". This may vary based on industry and implementation requirements.
Q
What topics does HB30 address?
HB30 addresses topics including disaster preparedness & relief, taxation, taxation--property-assessment & collection and taxation--property-tax rate.
Legislative data provided by LegiScanLast updated: November 25, 2025
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