The bill amends the Texas Tax Code to establish new definitions and formulas for calculating the voter-approval tax rate specifically for "eligible coastal municipalities" that receive municipal hotel occupancy tax revenue. It introduces definitions for "eligible coastal municipality," "misspent hotel occupancy tax revenue," and "misspent hotel occupancy tax revenue rate." The bill specifies that the voter-approval tax rate for these municipalities will be calculated differently than for other taxing units, incorporating factors such as the unused increment rate and the misspent hotel occupancy tax revenue rate.

Additionally, the bill modifies existing tax rate calculations to include provisions for eligible coastal municipalities, ensuring that their voter-approval tax rate reflects the unique financial circumstances associated with hotel occupancy tax revenues. The changes will take effect on January 1, 2026, and apply to ad valorem taxes imposed for tax years beginning on or after that 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)