SB 2064

For tax years beginning on or after July 1, 2026, this bill prohibits a local government from increasing a real property tax rate by an amount that would cause the local government to realize an increase in total revenue exceeding inflation plus 2%, or t hat would cause the local government to realize an increase in total revenue exceeding inflation plus 2% over the preceding three years, except by a referendum election. As used in this bill, "total revenue"" means the gross revenue collected from ad valo re m real property taxes levied by a local government by category of real property during the immediately preceding tax year. However, total revenue does not include new gross tax revenue collected from new construction and collected during the immediately preceding tax year. As used in this bill ""new construction"" means an addition to real property, including as improvement or addition to an existing structure. This bill clarifies that its limitations do not apply to taxes levied or pledged to pay or secure the payment of the principal and interest on bonds, actions taken by the comptroller of the treasury, or a local government's authority to change rates for utilities that the local government owns or operates. REFERENDUM ELECTION This bill requires the governing body of a local government to direct the county election commission to hold a referendum election to raise a real property tax rate by an amount that exceeds the limitations described above, upon the adoption of a resolut ion or ordinance by a two-thirds majority vote. The resolution or ordinance must specify the tax rate, the date on which the tax rate would go into effect, the proposed date of the election, and that the referendum election is to be held at a general ele ct ion. This bill requires the referendum election to be held during a regular November election. Further, the referendum election must be advertised as provided by present law. If a majority of the qualified voters of a local government vote in favor of appro ving the tax rate, then the local government may increase the tax rate on the date specified in the resolution or ordinance. RESTRICTIONS ON MAXIMUM TAX RATE Present law repeals all limitations and restrictions imposed on a municipality or metropolitan government ad valorem tax levy. This bill clarifies that the limitations and restrictions provided in this bill must remain in full force and effect."