HB 4194

relating to the calculation of the no-new-revenue tax rate for a
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Chapter 26, Tax Code, is amended by adding
Section 26.0431 to read as follows:
Sec. 26.0431.  NO-NEW-REVENUE TAX RATE ADJUSTMENT FOR
INFLATION.  (a)  In this section:
(1)  "Consumer price index" means the average over a
calendar year of the index that the comptroller considers to most
accurately report changes in the purchasing power of the dollar for
(2)  "Inflation rate" means the amount, expressed in
decimal form rounded to the nearest thousandth, computed by
determining the percentage increase or decrease in the consumer
price index for the preceding calendar year as compared to the
consumer price index for the calendar year preceding that calendar
(b)  The comptroller shall determine the inflation rate for
the current year and publish the rate in the Texas Register each
year on July 1 or as soon thereafter as practicable.
(c)  Each year, the officer or employee of a taxing unit
designated by the governing body of the taxing unit to calculate tax
rates for the taxing unit under Section 26.04(c) shall adjust the
taxing unit's no-new-revenue tax rate, calculated as otherwise
provided by that subsection or Section 26.041, as applicable, up or
down as appropriate to reflect the increase or decrease in the
(d)  Notwithstanding any other law, the no-new-revenue tax
rate as adjusted under Subsection (c) is the taxing unit's
no-new-revenue rate for the applicable tax year.
SECTION 2.  The change in law made by this Act applies to the
calculation of the no-new-revenue tax rate of a taxing unit
beginning with the 2026 tax year.
SECTION 3.  This Act takes effect January 1, 2026.