The bill, H.B. No. 176, proposes the repeal of provisions related to the calculation of an unused increment rate and its application in determining certain ad valorem tax rates. Specifically, it amends the Tax Code to remove references to the unused increment rate in the formulas for calculating the no-new-revenue tax rate and the voter-approval tax rate for both special and non-special taxing units. The bill also introduces a new term, "sales tax gain rate," which will be used in the calculation of these tax rates when an additional sales and use tax is imposed.

Additionally, the bill repeals several sections of the Local Government Code and the Tax Code that pertain to the unused increment rate, thereby streamlining the tax calculation process. 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. Overall, the bill aims to simplify the tax rate calculation process by eliminating the unused increment rate from the equations used by taxing units.

Statutes affected:
Introduced: Tax Code 26.04, Tax Code 26.041, Water Code 49.23602 (Tax Code 26, Water Code 49)