The bill, HB 1300, establishes a biennial local tax cap question for school districts, mandating that every town and ward in a city conduct a vote on this question during even-numbered years at the state general election. This question will automatically appear on the ballot without requiring a warrant article or separate local legislative approval. If adopted, the local tax cap will limit the amount raised by local school district taxes to the prior fiscal year's amount, adjusted for inflation and new construction, while excluding costs for bonded capital projects. Additionally, the central office administrative budget of the school administrative unit (SAU) is capped at 6% of the combined appropriations of the school districts within the SAU, also excluding bonded capital costs. The bill removes the requirement for the name of the municipality to be included in the ballot question, streamlining the voting process.

The legislation also introduces provisions for a maximum allowable levy based on prior fiscal year property tax levies adjusted for inflation and new taxable property growth, while excluding market appreciation. It allows for a three-fifths majority vote to override the caps and mandates that no municipal tax rate can exceed certified limits. The Department of Revenue Administration will ensure compliance with these caps and may reduce certified budgets that exceed established limits. The bill clarifies that it does not repeal or diminish any existing property tax limitations that are more restrictive and specifies that bonded capital costs will only include principal or interest on bonds for real property acquisition or major renovations. The act is set to take effect on November 1, 2026.