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 multipliers for maintenance and operations rates. Specifically, the voter-approval tax rate for these smaller municipalities will be calculated using a multiplier of 1.035, while other taxing units will use a multiplier of 1.025. The bill also clarifies the definitions and calculations related to sales tax gain and loss rates, which impact the overall tax rate calculations.

Additionally, the bill specifies 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 smaller municipalities. 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. Overall, the bill aims to provide a more equitable and clear framework for tax rate calculations, particularly benefiting smaller taxing units.

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