Texas House Bill HB9

Texas 2025 - 89th 2nd C.S.

• Filed: 8/15/25
• Filed: 8/18/25

Summary

HB 9 amends the Texas Tax Code provisions that govern how taxing units calculate the no-new-revenue tax rate and the voter-approval tax rate. The bill revises the formulas used by certain taxing units, including special taxing units, municipalities and counties under 75,000 population, and other taxing units, to account for changes in sales and use tax revenue when an additional local sales tax is imposed or later discontinued. It also updates the related calculation for a voter-approval tax rate under Section 26.042(a-2), which allows the governing body to direct the calculation of the lower of two possible voter-approval rates. The practical effect is to change how local governments translate property tax and sales tax revenue into the tax rates used for truth-in-taxation notices and voter-approval thresholds. By adjusting the formulas, the bill affects the maximum property tax rate a taxing unit may adopt without triggering voter approval requirements, especially where local sales taxes are used to support maintenance and operations. The bill applies only to ad valorem tax years beginning on or after its effective date, January 1, 2026.

Impact

HB 9 would amend Sections 26.04, 26.041, and 26.042 of the Texas Tax Code, altering the statutory formulas used by local taxing units to calculate tax-rate limits and voter-approval thresholds. It changes how sales tax gains and losses are incorporated into the no-new-revenue and voter-approval tax rate calculations, and it updates the special rule added by H.B. 30 for certain voter-approval rate calculations. The bill would directly affect counties, municipalities, special taxing units, and other local taxing entities that levy ad valorem taxes and impose or discontinue additional sales and use taxes.

Sentiment

Based on the bill text and the absence of committee testimony or recorded votes in the provided materials, the overall sentiment appears procedural and technical rather than overtly partisan. The bill is framed as a formula adjustment to existing tax-rate calculations, suggesting a policy effort to refine local tax administration rather than a broad substantive tax increase or cut. No discussion record is available here to show support or opposition from specific stakeholders.

Contention

The main point of contention is likely to be the change in the multiplier used for certain taxing units in the voter-approval tax rate formula, where the bill preserves a 1.025 factor for some units and references a prior 1.035 factor in bracketed text, indicating a possible policy choice or drafting update affecting how quickly tax rates may grow. Another likely issue is how sales tax revenue is credited against property tax rate calculations, since local governments that rely on sales tax revenue may view the revised formulas as either helpful or restrictive depending on their fiscal situation. Because no committee transcript or vote history is provided, no specific legislators, local governments, or advocacy groups can be identified as holding these positions in the available record.