The bill, S.B. No. 9, amends the Texas Tax Code to revise the calculation of the voter-approval tax rate for certain taxing units, particularly municipalities and counties with populations under 30,000. Key changes include the introduction of specific formulas for calculating the voter-approval tax rate based on the type of taxing unit. For municipalities or counties with populations below 30,000, the voter-approval tax rate will be calculated using a maintenance and operations rate multiplied by 1.035, plus the current debt rate and unused increment rate. For other taxing units, the rate will be calculated using a maintenance and operations rate multiplied by 1.025, along with the current debt rate and unused increment rate.

Additionally, the bill specifies that in years when an additional sales and use tax is imposed, the voter-approval tax rate will account for a sales tax gain rate, while also providing a formula for when such a tax is no longer imposed. The legislation also clarifies that the governing body of a taxing unit may direct the calculation of the voter-approval tax rate based on the lesser of the rates calculated for special taxing units or those for municipalities and counties with smaller populations. The changes will take effect on January 1, 2026, and will apply to ad valorem taxes imposed for tax years beginning on or after that date.

Statutes affected:
Introduced: Tax Code 26.04, Tax Code 26.041 (Tax Code 26)