H.B. No. 299 introduces significant changes to the fiscal management of political subdivisions in Texas, particularly those that can impose ad valorem taxes or issue bonds. The bill establishes a new Section 140.015 in the Local Government Code, which sets a limit on annual expenditures based on the greater of the previous year's expenditures or a calculated amount that factors in population growth and inflation. It allows for exceeding this limit only with the approval of at least two-thirds of voters in an election. Additionally, the bill modifies the process for adopting ad valorem tax rates, raising the voting requirement from a simple majority to two-thirds of registered voters, thereby enhancing voter control over local taxation.

Moreover, the bill amends various sections of the Health and Safety Code, Tax Code, and other relevant statutes to clarify definitions and streamline the tax rate approval process. It establishes a new threshold for voter approval, requiring elections if proposed tax rates exceed certain limits, and allows voters to petition for elections to potentially reduce tax rates. The bill also includes provisions for public hearings on proposed tax rates and mandates the comptroller of public accounts to create a form for information publication. The new regulations will take effect on January 1, 2026, and will apply to fiscal years beginning on or after December 1, 2025, aiming to promote fiscal responsibility and transparency in local government spending.

Statutes affected:
Introduced: Health and Safety Code 281.124, Special District Local Laws Code 1101.254, Special District Local Laws Code 3828.157, Special District Local Laws Code 8876.152, Tax Code 26.04, Tax Code 26.041, Tax Code 26.05, Tax Code 26.07, Tax Code 31.112, Water Code 49.107, Water Code 49.108, Water Code 49.236, Water Code 49.23601, Water Code 49.23602, Water Code 49.23603 (Special District Local Laws Code 1101, Tax Code 26, Tax Code 31, Special District Local Laws Code 3828, Water Code 49, Health and Safety Code 281, Special District Local Laws Code 8876)