HB5596 - Relating to the calculation of the voter-approval tax rate for certain municipalities that receive municipal hotel occupancy tax revenue and other money from a local park board of trustees.

      By: Leo Wilson (Senate Sponsor - Middleton) H.B. No. 5596          (In the Senate - Received from the House May 19, 2025;   May 21, 2025, read first time and referred to Committee on Economic   Development; May 22, 2025, reported adversely, with favorable   Committee Substitute by the following vote:  Yeas 3, Nays 2;   May 22, 2025, sent to printer.) Click here to see the committee vote     COMMITTEE SUBSTITUTE FOR H.B. No. 5596 By:  Sparks     A BILL TO BE ENTITLED   AN ACT     relating to the calculation of the voter-approval tax rate for   certain municipalities that receive municipal hotel occupancy tax   revenue and other money from a local park board of trustees.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 26.012, Tax Code, is amended by adding   Subdivisions (9-a), (16-a), and (16-b) to read as follows:                 (9-a)     "Eligible coastal municipality" means a   municipality described by Section 351.001(3)(A) that has created a   park board of trustees under Section 306.011, Local Government   Code.                 (16-a) "Misspent hotel occupancy tax revenue" means an   amount equal to the sum of:                       (A)     the amount of revenue received under Chapter   351 by an eligible coastal municipality during the preceding tax   year that was spent by the municipality for a purpose not authorized   by Chapter 351; and                         (B)     the amount of money not described by   Paragraph (A) that was received by an eligible coastal municipality   from the municipality's park board of trustees and spent by the   municipality during the preceding tax year.                 (16-b)     "Misspent hotel occupancy tax revenue rate"   means the rate expressed in dollars per $100 of taxable value   calculated according to the following formula:           MISSPENT HOTEL OCCUPANCY TAX REVENUE RATE = MISSPENT   HOTEL OCCUPANCY TAX REVENUE / CURRENT TOTAL VALUE          SECTION 2.  Section 26.04(c), Tax Code, is amended to read as   follows:          (c)  After the assessor for the taxing unit submits the   appraisal roll for the taxing unit to the governing body of the   taxing unit as required by Subsection (b), an officer or employee   designated by the governing body shall calculate the no-new-revenue   tax rate and the voter-approval tax rate for the taxing unit, where:                (1)  "No-new-revenue tax rate" means a rate expressed   in dollars per $100 of taxable value calculated according to the   following formula:          NO-NEW-REVENUE TAX RATE = (LAST YEAR'S LEVY - LOST   PROPERTY LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY   VALUE)          ; and                (2)  "Voter-approval tax rate" means a rate expressed   in dollars per $100 of taxable value calculated according to the   following applicable formula:                      (A)  for a special taxing unit:          VOTER-APPROVAL TAX RATE = (NO-NEW-REVENUE MAINTENANCE   AND OPERATIONS RATE x 1.08) + CURRENT DEBT RATE          ; [ or ]                      (B)   for an eligible coastal municipality:           VOTER-APPROVAL TAX RATE = (NO-NEW-REVENUE MAINTENANCE   AND OPERATIONS RATE x 1.035) + (CURRENT DEBT RATE +   UNUSED INCREMENT RATE - MISSPENT HOTEL OCCUPANCY TAX   REVENUE RATE)           ; or                       (C)   for a taxing unit other than a special taxing   unit or eligible coastal municipality :          VOTER-APPROVAL TAX RATE = (NO-NEW-REVENUE MAINTENANCE   AND OPERATIONS RATE x 1.035) + (CURRENT DEBT RATE +   UNUSED INCREMENT RATE)          SECTION 3.  Sections 26.041(a), (b), and (c), Tax Code, are   amended to read as follows:          (a)  In the first year in which an additional sales and use   tax is required to be collected, the no-new-revenue tax rate and   voter-approval tax rate for the taxing unit are calculated   according to the following formulas:          NO-NEW-REVENUE TAX RATE = [(LAST YEAR'S LEVY - LOST   PROPERTY LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY   VALUE)] - SALES TAX GAIN RATE   and          VOTER-APPROVAL TAX RATE FOR SPECIAL TAXING UNIT =   (NO-NEW-REVENUE MAINTENANCE AND OPERATIONS RATE x   1.08) + (CURRENT DEBT RATE - SALES TAX GAIN RATE)   or           VOTER-APPROVAL TAX RATE FOR ELIGIBLE COASTAL   MUNICIPALITY = (NO-NEW-REVENUE MAINTENANCE AND   OPERATIONS RATE x 1.035) + (CURRENT DEBT RATE + UNUSED   INCREMENT RATE - SALES TAX GAIN RATE - MISSPENT HOTEL   OCCUPANCY TAX REVENUE RATE)   or          VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER THAN   SPECIAL TAXING UNIT OR ELIGIBLE COASTAL MUNICIPALITY =   (NO-NEW-REVENUE MAINTENANCE AND OPERATIONS RATE x   1.035) + (CURRENT DEBT RATE + UNUSED INCREMENT RATE -   SALES TAX GAIN RATE)   where "sales tax gain rate" means a number expressed in dollars per   $100 of taxable value, calculated by dividing the revenue that will   be generated by the additional sales and use tax in the following   year as calculated under Subsection (d) by the current total value.          (b)  Except as provided by Subsections (a) and (c), in a year   in which a taxing unit imposes an additional sales and use tax, the   voter-approval tax rate for the taxing unit is calculated according   to the following formula, regardless of whether the taxing unit   levied a property tax in the preceding year:          VOTER-APPROVAL TAX RATE FOR SPECIAL TAXING UNIT =   [(LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE x   1.08) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] +   (CURRENT DEBT RATE - SALES TAX REVENUE RATE)   or           VOTER-APPROVAL TAX RATE FOR ELIGIBLE COASTAL   MUNICIPALITY = [(LAST YEAR'S MAINTENANCE AND   OPERATIONS EXPENSE x 1.035) / (CURRENT TOTAL VALUE -   NEW PROPERTY VALUE)] + (CURRENT DEBT RATE + UNUSED   INCREMENT RATE - SALES TAX REVENUE RATE - MISSPENT   HOTEL OCCUPANCY TAX REVENUE RATE)   or          VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER THAN   SPECIAL TAXING UNIT OR ELIGIBLE COASTAL MUNICIPALITY =   [(LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE x   1.035) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] +   (CURRENT DEBT RATE + UNUSED INCREMENT RATE - SALES TAX   REVENUE RATE)   where "last year's maintenance and operations expense" means the   amount spent for maintenance and operations from property tax and   additional sales and use tax revenues in the preceding year, and   "sales tax revenue rate" means a number expressed in dollars per   $100 of taxable value, calculated by dividing the revenue that will   be generated by the additional sales and use tax in the current year   as calculated under Subsection (d) by the current total value.          (c)  In a year in which a taxing unit that has been imposing   an additional sales and use tax ceases to impose an additional sales   and use tax, the no-new-revenue tax rate and voter-approval tax   rate for the taxing unit are calculated according to the following   formulas:          NO-NEW-REVENUE TAX RATE = [(LAST YEAR'S LEVY - LOST   PROPERTY LEVY) / (CURRENT TOTAL VALUE - NEW PROPERTY   VALUE)] + SALES TAX LOSS RATE   and          VOTER-APPROVAL TAX RATE FOR SPECIAL TAXING UNIT =   [(LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE x   1.08) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] +   CURRENT DEBT RATE   or           VOTER-APPROVAL TAX RATE FOR ELIGIBLE COASTAL   MUNICIPALITY = [(LAST YEAR'S MAINTENANCE AND   OPERATIONS EXPENSE x 1.035) / (CURRENT TOTAL VALUE -   NEW PROPERTY VALUE)] + (CURRENT DEBT RATE + UNUSED   INCREMENT RATE - MISSPENT HOTEL OCCUPANCY TAX REVENUE   RATE)   or          VOTER-APPROVAL TAX RATE FOR TAXING UNIT OTHER THAN   SPECIAL TAXING UNIT OR ELIGIBLE COASTAL MUNICIPALITY =   [(LAST YEAR'S MAINTENANCE AND OPERATIONS EXPENSE x   1.035) / (CURRENT TOTAL VALUE - NEW PROPERTY VALUE)] +   (CURRENT DEBT RATE + UNUSED INCREMENT RATE)   where "sales tax loss rate" means a number expressed in dollars per   $100 of taxable value, calculated by dividing the amount of sales   and use tax revenue generated in the last four quarters for which   the information is available by the current total value and "last   year's maintenance and operations expense" means the amount spent   for maintenance and operations from property tax and additional   sales and use tax revenues in the preceding year.          SECTION 4.  This Act applies only to ad valorem taxes imposed   for an ad valorem tax year that begins on or after the effective   date of this Act.          SECTION 5.  This Act takes effect January 1, 2026.     * * * * *