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Signed Into Law
Signed May 24, 2025Effective 2026-01-01
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.

Government Affairs & Regulatory Compliance Analysis

SB1502: Government Affairs Overview

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.

Sen. Paul Bettencourt·Senate Bill·Regular Session

Low
Low Cost
Effective:2026-01-01
Enforcing Agencies

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

Business Impact

Who SB1502 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: low

Standard regulatory changes (effective 2026-01-01). Review during normal business planning.

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Education

Affected business types:

  • School districts
  • Charter schools
  • Private schools
  • Education service providers
View all education legislation

Key Operational Considerations

  • 1No 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.

Estimated Cost Impact

lowMinimal cost impact anticipated.

Enforcing Agencies

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SB1502
Low
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 ra...
Low Compliance Urgency
Requires routine attention
Cost Impact
Low
Effective
2026-01-01
Enforcing Agencies
Local Independent School Distric...Texas Comptroller of Public Acco...
Primary Author: Sen. Paul Bettencourt
89th Texas Legislature
jdkey.com
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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.

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Legislative Timeline

This bill's path through the Texas Legislature

Filed
Feb 20, 2025
Passed Senate
May 5, 2025
Passed House
May 10, 2025
Signed
May 24, 2025
Effective
Jan 1, 2026
TopicsDisaster Preparedness & ReliefEducationEducation--primary & SecondaryEducation--primary & Secondary--financeEducation--school DistrictsTaxationTaxation--property-assessment & CollectionTaxation--property-tax RateTaxation--school District
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Senate Authors

Sen. Paul BettencourtRepublican · Primary Author
Coauthors (1)

House Sponsor

Rep. Ellen TroxclairRepublican · Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

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Quick Reference

Frequently Asked Questions

Common questions about SB1502

Q

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.

Q

Who authored SB1502?

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

Q

When was SB1502 signed into law?

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

Q

Which agencies enforce SB1502?

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

Q

How significant are the changes in SB1502?

The regulatory priority for SB1502 is rated as "low". Businesses and organizations should review the legislation to understand potential impacts.

Q

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.

Q

What topics does SB1502 address?

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

Q

What are the key dates for SB1502?

Key dates for SB1502: Effective date is 2026-01-01. Consult with legal counsel regarding applicability.

Q

Which Texas businesses are affected by SB1502?

SB1502 primarily affects property owners and real estate professionals. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026