TX SB2541

Reduces the unused increment rate calculation period from three years to two years by redefining "Year 1" as the second (instead of third) tax year preceding the current tax year and "Year 2" as the immediately preceding tax year

Removes "Year 3 Foregone Revenue Amount" from the unused increment rate formula, which now equals (Year 1 Foregone Revenue Amount + Year 2 Foregone Revenue Amount) divided by Current Total Value

Repeals Section 26.013(a)(5) of the Tax Code, which previously defined "Year 3"

Changes apply only to unused increment rate calculations for tax years beginning on or after January 1, 2027

Takes effect January 1, 2026