H.B. No. 5596 proposes amendments to the Texas Tax Code regarding the calculation of the voter-approval tax rate specifically for certain municipalities that receive municipal hotel occupancy tax revenue and funds from local park boards of trustees. The bill introduces new definitions, including "Eligible coastal municipality," which refers to municipalities that have established a park board of trustees, and "Misspent hotel occupancy tax revenue," which encompasses funds improperly spent by these municipalities. Additionally, it defines the "Misspent hotel occupancy tax revenue rate" and outlines the formula for calculating this rate based on the total value of the municipality.

The bill also modifies the existing formulas for calculating the voter-approval tax rate for eligible coastal municipalities, replacing the previous method with a new formula that accounts for the unused increment rate and the misspent hotel occupancy tax revenue rate. This change aims to provide a more accurate reflection of the financial situation of these municipalities. The act is set to take effect on January 1, 2026, and applies to ad valorem taxes imposed for tax years beginning on or after this date.

Statutes affected:
Introduced: Tax Code 26.012, Tax Code 26.04, Tax Code 26.041 (Tax Code 26)
House Committee Report: Tax Code 26.012, Tax Code 26.04, Tax Code 26.041 (Tax Code 26)
Engrossed: Tax Code 26.012, Tax Code 26.04, Tax Code 26.041 (Tax Code 26)
Senate Committee Report: Tax Code 26.012, Tax Code 26.04, Tax Code 26.041 (Tax Code 26)