The bill, H.B. No. 5001, proposes the establishment of a new tax on the generation of electricity by certain electric generators in Texas, specifically targeting those that use energy sources other than natural gas or coal. This tax is intended to generate revenue that will be allocated for teacher pay raises in school districts and open-enrollment charter schools. The bill introduces Chapter 165 to the Tax Code, which includes definitions of key terms such as "electric generator," "affiliated power generation company," and "power generation company." It outlines the imposition and collection of the tax, detailing the responsibilities of electric generators to report their electricity production and remit taxes monthly.

Additionally, the bill specifies that the tax rate will be determined annually by the comptroller, based on previous revenue from a related tax and the average natural gas consumption for electricity generation. The proceeds from this tax will be deposited into the general revenue fund, with a stipulation that the funds can only be used for teacher pay increases. The first tax payment and report are due on March 25, 2026, and the act is set to take effect on January 1, 2026.

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