H.B. No. 299 introduces significant changes to the regulations governing annual expenditures and property tax rates for political subdivisions in Texas. The bill establishes a new section in the Local Government Code that sets a limit on annual expenditures, which cannot exceed the greater of the previous year's total expenditures or an amount calculated based on population growth and inflation. Political subdivisions may exceed this limit only with the approval of at least two-thirds of their voters in an election. Additionally, the bill modifies the voting requirements for adopting ad valorem tax rates, raising the threshold from a majority to two-thirds of registered voters, and clarifies the procedures for taxpayers to report non-compliance by taxing units to the attorney general.

The bill also amends various sections of the Tax Code and Water Code, updating definitions and calculations related to voter-approval tax rates and establishing new procedures for taxing units. It allows voters to petition for an election if a proposed tax rate exceeds certain thresholds and modifies the language regarding tax rate calculations. Several existing provisions from the Education Code, Local Government Code, and Tax Code are repealed, and the changes will take effect on January 1, 2026, applying to ad valorem taxes for tax years beginning on or after this date. The comptroller of public accounts is tasked with creating a form for the publication of information related to the new tax regulations.

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 8876, Tax Code 31, Health and Safety Code 281, Special District Local Laws Code 1101, Special District Local Laws Code 3828, Water Code 49, Tax Code 26)