TX HB5596

Establishes a new category of "eligible coastal municipality" defined as a municipality located in a coastal area that has created a park board of trustees under Local Government Code

Creates the concept of "misspent hotel occupancy tax revenue" covering hotel tax revenue that was not properly distributed to the park board of trustees, was spent for unauthorized purposes, or was spent by the park board for general municipal purposes not allowed under Chapter 351

Requires eligible coastal municipalities to subtract a "misspent hotel occupancy tax revenue rate" from their voter-approval tax rate calculation, effectively reducing the tax rate they can set without triggering a voter approval election

Applies the standard 3.5% growth factor (rather than 8% for special taxing units) to eligible coastal municipalities when calculating their voter-approval tax rate

Takes effect January 1, 2026, and applies to ad valorem taxes imposed for tax years beginning on or after that date