HB 5596 Texas House · 89th Legislature (2025)

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.

HB 5596 modifies how certain coastal municipalities calculate their voter-approval tax rate. It specifically affects eligible coastal municipalities (those with park boards under Local Government Code) that receive hotel occupancy tax revenue. The bill adds a new "misspent hotel occupancy tax revenue rate" to the calculation, which accounts for funds spent on unauthorized purposes. This rate is subtracted from the standard voter-approval formula, potentially lowering the required tax rate for these municipalities. The change directly impacts how these cities determine the tax rate they need voter approval for.
Sub-Topics: Revenue
Bill status passed 3 of 5 stages cleared
Introduction
Apr 2025
Committee Review
May 2025
House Passage
May 2025
Senate Passage
Governor
Introduced Apr 7, 2025 Last action May 22, 2025
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What changed between versions

Introduced → Engrossed · 4 edits · May 16, 2025
MODERATE
This bill amends Texas Tax Code provisions to modify how voter-approval tax rates are calculated for municipalities receiving hotel occupancy tax revenue. The changes introduce a new definition for 'misspent hotel occupancy tax revenue' and adjust the formulas used to calculate tax rates for special taxing units, eligible coastal municipalities, and other taxing units. These modifications aim to ensure that unspent hotel occupancy tax funds are accounted for in future tax rate calculations.
Scope change
The bill applies to ad valorem taxes imposed for tax years beginning on or after January 1, 2026, and affects municipalities that receive municipal hotel occupancy tax revenue.
DEFINITION

Added new definition for 'misspent hotel occupancy tax revenue' to specify amounts not distributed to park board trustees or spent for purposes authorized by Chapter 351.

REQUIREMENT

Modified the formula for calculating voter-approval tax rates for eligible coastal municipalities to subtract the misspent hotel occupancy tax revenue rate from the calculation.

Updated tax rate calculation formulas for special taxing units and other taxing units to account for sales tax gain/loss rates when additional sales and use taxes are imposed or discontinued.

TIMELINE

Added Section 5 establishing that the Act takes effect January 1, 2026.

Floor votes · House May 15, 2025

How they voted

80–39
Passed · 29 other
Total votes 148
May 15, 2025
D Democratic62
34 Yea 11 Nay 17
54% Yea
R Republican86
46 Yea 28 Nay 12
53% Yea
Vote distribution
All Yea All Nay Mixed No data
Full legislative history

Actions timeline

Total actions
33
Key actions
2
Committee
10
May 22, 2025
Senate · Reported by committee
Committee report printed and distributed
May 22, 2025
Senate · Reported by committee
Reported favorably as substituted
May 21, 2025
Senate · Reported by committee
Vote taken in committee
May 21, 2025
Senate · Referred to committee
Referred to Economic Development
May 21, 2025
Senate · Introduced
Read first time
May 19, 2025
Senate · Introduced
Received from the House
May 16, 2025
House · Passed
Passed
May 15, 2025
House · Passed
Passed to engrossment
Apr 30, 2025
House · Reported by committee
Committee report sent to Calendars
Apr 29, 2025
House · Reported by committee
Committee report distributed
Apr 24, 2025
House · Reported by committee
Reported favorably as substituted
Apr 14, 2025
House · Reported by committee
Left pending in committee
Apr 14, 2025
House · Reported by committee
Testimony taken/registration(s) recorded in committee
Apr 7, 2025
House · Referred to committee
Referred to Ways & Means
Apr 7, 2025
House · Introduced
Read first time
2 primary · 0 co-sponsors

Sponsors