The proposed bill would update current statutes by instituting a moratorium on municipalities and counties from July 1, 2026, to June 30, 2030, during which they cannot adopt, impose, or collect any fees, transaction privilege taxes, or utility rates that exceed those established in their FY 2026 budgets. This includes prohibiting any fee that surpasses the authorized amount in the fee schedule, any tax or surcharge increase beyond the rate in effect on June 30, 2026, and any utility service rate greater than what was authorized in the FY 2026 budget. Additionally, municipalities and counties would be barred from introducing new tax classifications or expanding the tax base during this period.

The bill also introduces specific exemptions for municipalities that have not raised utility rates by more than 12% in the previous four fiscal years, allowing them to increase rates only in line with inflation. It establishes that if a consolidated fee, tax, or utility rate schedule is not adopted as part of the FY 2026 budget, the rates will default to the highest rates imposed during that fiscal year. Violations of these prohibitions would render the adopted rates void, enabling enforcement actions by the attorney general and providing aggrieved taxpayers with legal recourse. The bill aims to offer temporary financial relief to residents and businesses while promoting operational efficiencies within local governments.

Statutes affected:
Introduced Version: 9-500.54, 9-500, 11-269.31, 2025-2026, 16-204, 41-194.01
House Engrossed Version: 9-500.54, 11-269.31, 2025-2026, 16-204, 9-463.05, 9-511.01, 41-194.01