The bill 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 75,000. It introduces new formulas for calculating the voter-approval tax rate, which now includes provisions for an "unused increment rate" and adjusts the multiplier for the maintenance and operations rate based on the type of taxing unit. Specifically, the voter-approval tax rate for municipalities or counties with populations under 75,000 is set at a maintenance and operations rate multiplied by 1.035, while other taxing units will use a multiplier of 1.025.

Additionally, the bill clarifies the calculation of the no-new-revenue tax rate and voter-approval tax rate in scenarios where an additional sales and use tax is imposed or ceased. It specifies that the voter-approval tax rate for special taxing units will be calculated differently than for other taxing units, with adjustments for sales tax gain or loss rates. The changes are set to 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)