SB1502

Regular Session

Relating to the authority of the governing body of a school district to adopt an ad valorem tax rate that exceeds the district's voter-approval tax rate.

LowStandard timeline

Low Cost

Effective:2026-01-01

Enforcing Agencies

Texas Comptroller of Public Accounts (Truth-in-Taxation oversight) • Local Independent School District Governing Bodies (Restricted entity)

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

Effective Date: January 1, 2026
Compliance Deadline: N/A for business operations; however, tax liability models for FY2026 must be updated immediately to reflect capped risk.
Agency Rulemaking: The Texas Comptroller of Public Accounts is expected to update Truth-in-Taxation calculation worksheets and guidance for school districts prior to Summer 2026.

Immediate Action Plan

1. Update Financial Models: Adjust 2026 pro forma tax projections to remove "disaster override" risk contingencies in districts with historically contentious tax elections.
2. Monitor November 2026 Elections: Track VATRE results in your operating districts. If a measure fails, note that the tax rate is legally capped for that cycle.
3. Prepare Protest Protocols: Instruct legal counsel to draft a standard objection letter citing Texas Tax Code Section 26.042(e-1) to deploy immediately if a district attempts to levy a non-compliant rate after January 1, 2026.

Operational Changes Required

Contracts

Triple Net (NNN) Leases: Landlords estimating Common Area Maintenance (CAM) charges for 2026 should review tax escrow calculations. If a local Voter-Approval Tax Rate Election (VATRE) fails, you may operationally assume the lower rate will hold, allowing for more precise (and potentially lower) estimated tax payments for tenants.

Hiring/Training

Tax Liability Management: Corporate Tax Directors and external property tax consultants must be briefed on the new Texas Tax Code Section 26.042(e-1). They must be trained to cross-reference tax rates against election results; if a VATRE failed, any attempt by the district to use the disaster exception is invalid.

Reporting & Record-Keeping

Election Monitoring: Corporate tax departments must maintain a log of VATRE results for all districts where the company holds significant assets. This log will serve as the primary audit tool to verify 2026 tax levies.

Fees & Costs

No New Fees: This legislation imposes no new fees on business. Conversely, it acts as a cost-stabilization measure by preventing unexpected property tax increases following a disaster declaration.

Strategic Ambiguities & Considerations

Timing of Disaster vs. Election: The statute prohibits the exception if the district "held an election... and the voters did not approve." It is currently ambiguous how the Comptroller will adjudicate a scenario where a disaster is declared *before* the election, but the final rate adoption occurs *after* a failed election. We anticipate Comptroller guidance will clarify that a failed vote supersedes any disaster authority for that tax year, regardless of the declaration sequence.

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

Legislative Timeline

This bill's path through the Texas Legislature

TopicsDisaster Preparedness & Relief Education Education--primary & Secondary Education--primary & Secondary--finance Education--school Districts Taxation Taxation--property-assessment & Collection Taxation--property-tax Rate Taxation--school District

Official Analysis

View HRO Analysis View All Bill Documents

BILL ANALYSIS

Senate Research Center	S.B. 1502
89R10467 TJB-D	By: Bettencourt
	Local Government
	3/14/2025
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

Interested parties have expressed concerns that some independent school districts (ISD) are not respecting the will of the voters after a taxpayer ratification election (TRE). It has been determined that after a failed TRE, certain school districts adopted a tax rate greater than the voter-approval tax rate. There have been situations where an ISD utilized a disaster exemption to adopt a tax rate several pennies higher than the voter-approval rate after the failed TRE.

S.B. 1502 will ensure that if voters reject a TRE, the ISD will only be able to adopt the voter approval tax rate.

As proposed, S.B. 1502 amends current law relating to the authority of the governing body of a school district to adopt an ad valorem tax rate that exceeds the district's voter-approval tax rate.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 26.042, Tax Code, by adding Subsection (e-1), as follows:

(e-1)� Prohibits the governing body of a school district from adopting a tax rate under Subsection (e) (relating to the response to certain natural disasters and lack of requirement for an election to approve a tax rate adopted by the governing body of a school district for that year) for a tax year in which the governing body previously adopted a tax rate that exceeded the school district's voter-approval tax rate, an election was held under Section 26.08 (Automatic Election to Approve Tax Rate of School District) for the purpose of determining whether to approve the district's adopted tax rate, and the proposition to approve the district's adopted tax rate was not approved by the voters of the district at the election.

SECTION 2.� Makes application of this Act prospective.

SECTION 3.� Effective date: January 1, 2026.

Senate Authors

Sen. Paul BettencourtRepublican · Primary Author

Coauthors (1)

Adam Hinojosa (R)

House Sponsor

Rep. Ellen TroxclairRepublican · Primary Sponsor

Bill Text(with markup)

S.B. No. 1502

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

	AN ACT
	relating to the authority of the governing body of a school district
	to adopt an ad valorem tax rate that exceeds the district's
	voter-approval tax rate.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Section 26.042, Tax Code, is amended by adding
	Subsection (e-1) to read as follows:
	(e-1) The governing body of a school district may not adopt
	a tax rate under Subsection (e) for a tax year in which:
	(1) the governing body previously adopted a tax rate
	that exceeded the district's voter-approval tax rate;
	(2) an election was held under Section 26.08 for the
	purpose of determining whether to approve the district's adopted
	tax rate; and
	(3) the proposition to approve the district's adopted
	tax rate was not approved by the voters of the district at the
	election.
	SECTION 2. The change in law made by this Act applies to an
	ad valorem tax year that begins on or after the effective date of
	this Act.
	SECTION 3. This Act takes effect January 1, 2026.

LEGISLATIVE BUDGET BOARD
Austin, Texas

FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION


March 16, 2025

TO:	Honorable Paul Bettencourt, Chair, Senate Committee on Local Government

FROM:	Jerry McGinty, Director, Legislative Budget Board

IN RE:	SB1502 by Bettencourt (Relating to the authority of the governing body of a school district to adopt an ad valorem tax rate that exceeds the district's voter-approval tax rate.), As Introduced

No significant fiscal implication to the State is anticipated.

It is assumed that any costs associated with the bill could be absorbed using existing resources.

Local Government Impact

The fiscal implications of the bill to independent school districts cannot be determined at this time.

Source Agencies:

304 Comptroller of Public Accounts, 701 Texas Education Agency

LBB Staff:

JMc, SZ, ASA, ANa

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Frequently Asked Questions

Common questions about SB1502

What does Texas SB1502 do?

SB1502 amends the Texas Tax Code to prohibit Independent School Districts (ISDs) from utilizing a "disaster declaration" to adopt a tax rate exceeding the voter-approval rate if voters have already rejected that rate in an election during the same tax year. This legislation effectively closes a procedural loophole that previously allowed districts to bypass election results, providing statutory tax certainty for commercial property owners starting in the 2026 tax year. Implementation Timeline Effective Date: January 1, 2026 Compliance Deadline: N/A for business operations; however, tax liability models for FY2026 must be updated immediately to reflect capped risk.

Who authored SB1502?

SB1502 was authored by Texas Senator Paul Bettencourt during the Regular Session.

When was SB1502 signed into law?

SB1502 was signed into law by Governor Greg Abbott on May 24, 2025.

Which agencies enforce SB1502?

SB1502 is enforced by Texas Comptroller of Public Accounts (Truth-in-Taxation oversight) and Local Independent School District Governing Bodies (Restricted entity).

How urgent is compliance with SB1502?

The compliance urgency for SB1502 is rated as "low". Businesses and organizations should review the requirements and timeline to ensure timely compliance.

What is the cost impact of SB1502?

The cost impact of SB1502 is estimated as "low". This may vary based on industry and implementation requirements.

What topics does SB1502 address?

SB1502 addresses topics including disaster preparedness & relief, education, education--primary & secondary, education--primary & secondary--finance and education--school districts.

Legislative data provided by LegiScanLast updated: November 25, 2025

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