S.B. No. 10 proposes amendments to the Texas Tax Code regarding the calculation of the voter-approval tax rate for certain taxing units. The bill introduces new formulas for calculating the voter-approval tax rate specifically for municipalities or counties with populations under 75,000 that are not classified as special taxing units. The new formula includes a maintenance and operations rate multiplied by 1.035, along with the current debt rate and an unused increment rate. Additionally, for other taxing units, the maintenance and operations rate is adjusted to 1.025, with similar components included in the calculation.

The bill also modifies existing provisions related to the no-new-revenue tax rate and voter-approval tax rate in the context of additional sales and use taxes. It clarifies how these rates should be calculated when a taxing unit imposes or ceases to impose such taxes, incorporating a sales tax gain or loss rate into the formulas. The changes aim to provide clearer guidelines for tax calculations and ensure that smaller municipalities have a distinct method for determining their voter-approval tax rates. The act is set to take effect on January 1, 2026, and applies 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)
Senate Committee Report: Tax Code 26.04, Tax Code 26.041 (Tax Code 26)