Texas Senate Bill SB9

Texas 2025 - 89th 1st C.S.

• Filed: 7/30/25
• Out of Senate Committee: 8/4/25
• Voted on by Senate: 8/6/25

Caption

Relating to the calculation of the voter-approval tax rate for certain taxing units.

Summary

SB 9 revises how Texas taxing units calculate the voter-approval tax rate and no-new-revenue tax rate under the Tax Code. The bill updates the formulas used by special taxing units, municipalities and counties under 75,000 population, and other taxing units, including how additional sales and use tax revenue is incorporated into those calculations. It also adjusts the treatment of sales tax gains and losses when a taxing unit begins or stops imposing an additional sales and use tax. The bill further amends a related provision added by H.B. 30 (89th Legislature, 2025) governing the voter-approval tax rate calculation, including the interaction with disaster relief rate adjustments. SB 9 applies only to ad valorem tax years beginning on or after its effective date and takes effect January 1, 2026.

Impact

SB 9 would change state property tax law by modifying Tax Code Sections 26.04, 26.041, and 26.042, which are central to local property tax rate-setting and voter-approval thresholds. The practical effect is to alter the maximum tax rates certain taxing units may adopt without triggering voter approval, while also changing how local sales tax revenue is credited in those calculations. Counties, municipalities, special taxing units, and other local taxing units would need to use the revised formulas beginning with tax years starting after the effective date.

Sentiment

The voting history suggests the bill had generally favorable support in the Senate, with multiple successful procedural and passage votes and relatively limited opposition. The bill advanced out of committee and was reported engrossed, indicating it moved forward through the chamber with enough support to clear procedural hurdles. The recorded nays show some minority opposition, but the overall pattern reflects a bill that was broadly supported by the majority.

Contention

The main point of contention appears to be the policy choice of how much room local governments should have to raise property taxes without voter approval, especially for larger taxing units where the bill changes the multiplier from the prior 1.035 figure to 1.025 in the text shown. Opponents are likely to view the bill as tightening local taxing authority, while supporters likely see it as strengthening taxpayer protections and limiting automatic tax growth. The inclusion of sales tax revenue offsets and disaster relief adjustments also affects how different local entities are treated, which may create differing views among municipalities, counties, and special districts.