TPTRP - The Transition Board, The Transition Fund, and the Transition Plan
By Will Campbell · July 22, 2026 · Texas Property Tax Replacement Plan
The Transition Board, the Transition Fund, and the Transition Plan
How Texas moves from a property-tax-based revenue system to a tiered sales-and-use tax system across 6,148 taxing entities — without a single missed bond payment, a single failed school district, or a single service cut — through a six-year, sunset-bound transition governed by a dedicated fund, a three-officer executive board, and a bright-line eligibility test.
Why a Transition Board and Fund Are Necessary
The core problem the Board solves, the Total Replacement Obligation, and the three-part eligibility test
The Core Problem the Board Solves
Texas has approximately 6,148 active taxing entities. (Texas Comptroller of Public Accounts, 2025) When property taxes are abolished, every one of them must cover its Total Replacement Obligation (TRO) — its final-year property tax revenue plus final-year sales tax revenue plus a 10% structural buffer — from its share of the new tiered sales and use tax collections at its tier’s Starting Cap Rate (SCR). (Campbell, 2026a)
TRO = (Entity Property Tax Revenue [Final Year] + Entity Sales Tax Revenue [Final Year] [State only: + All Other Final Year Tax Revenue]) × 1.10
Learn more about this aspect of the TPTRP Here: The Sales Tax Tier Structure of the TPTRP. →
The “Final Year” is the last fiscal or calendar year in which each entity collected property taxes before the constitutional amendment’s prohibition takes effect, as certified by the Texas Comptroller of Public Accounts based on actual revenues reported by each entity and verified by supporting evidence. (Campbell, 2026a) This is a deliberate citizen protection: every entity’s obligations and entitlements are tied to what it actually collected, never to budget projections or planning estimates. The 2025 data used throughout this article and the underlying models reflects the most current complete dataset available; the certified figures will govern at implementation.
The 1.10 multiplier embeds a 10% structural buffer directly into every entity’s TRO, sitting above the Final Year Baseline (each entity’s actual final-year combined revenue). Applied system-wide, this buffer totals approximately $18.5 billion. (Campbell, 2026a) The system-wide SCR of 3.25% generates approximately $231.6 billion in annual revenue against an aggregate 2025-modeled Baseline of approximately $185.1 billion — well above the system-wide TRO of roughly $203.6 billion (baseline × 1.10). The resulting $46.55 billion difference, comprising the $18.5 billion TRO buffer plus a further $28.05 billion above-TRO surplus, flows to the Transition Fund in Transition Year One through full-baseline capture. From Transition Year Three forward, every entity retains its full TRO — including its buffer — and all surplus above it, as a permanent operational cushion. Part 2 details exactly how this capture-and-retention mechanism works.
A Further Cushion: The Final Year of Property Tax Collections
For every taxing entity currently operating on property taxes, one final levy and collection will occur before the constitutional prohibition takes effect. The implementing sales tax laws may take effect before the constitutional amendment’s effective date, but the amendment’s prohibition on property tax collection does not activate until its specified implementation date. That final year’s property tax revenue provides a direct, immediate cushion as every entity enters Transition Year One of the new system on April 1, 2028, after the Board’s first year began on January 2:
- M&O obligations: the final year’s M&O property tax collections seed each entity’s Stabilization Fund, providing the buffer needed before the 6-month minimum balance requirement fully phases in.
- I&S obligations: the final year’s I&S levy collections flow directly into each entity’s bond service fund and remain available to service debt while the new sales tax revenue stream ramps up.
Every entity begins Transition Year One holding its final property tax collections — a known, certain amount — alongside its new quarterly sales tax distributions. This is cash on hand, already collected and already appropriated, not a projection. For the large majority of entities, the final year’s property tax collections plus the first quarterly sales tax distribution will collectively exceed the entity’s first-quarter operational need.
Because the aggregate math strongly favors sufficiency — 6,015 of 6,148 entities are projected to be fully covered at SCR rates — the pre-launch analytical picture gives the Board a head start on which entities to prioritize and what structural tools to prepare before Day 1. But the actual quarterly distributions are the governing fact once collections begin; the pre-launch confidence tiers are a compass, not a contract.
The combined estimated annual shortfall for the 133 possible BOTHSHORT entities is approximately $6.81 billion per year at SCR launch rates. (Campbell, 2026a) Against the roughly $46.55 billion Transition Fund capitalized in Transition Year One, coverage is 6.8 times the possible annual shortfall — more than adequate even under a fully passive disbursement scenario. The Transition Board’s mandate is therefore not to find money; the money already exists. Its mandate is to determine the right permanent structural solution for each shortfall entity so it becomes self-sustaining and no longer requires Transition Fund support.
Defining an Eligible Entity
Before describing the Fund’s authorized uses, the eligibility standard must be established, because it governs every disbursement category. An entity is eligible for Transition Fund assistance if and only if:
- The entity’s governing body has put a rate increase to its citizens in a voter election.
- The voters within the entity’s jurisdiction approved a rate increase, up to and including the entity’s tier-level Constitutional Cap Rate (CCR).
- Even at the voter-approved CCR, the entity’s quarterly sales and use tax distributions remain below what the entity collected in combined property and sales taxes in the Final Year (the Comptroller-certified Final Year Baseline).
This is the final four-part statutory eligibility standard. An entity that has not yet sought a voter election is not eligible. An entity whose voters denied a rate increase is not eligible — the voters have directed the entity to reduce its budget to fit its revenue, and it must implement its Mandatory Expenditure Reduction Plan accordingly. This is an intentional citizen protection: no entity gets Transition Fund help simply by asking. It must first take the question to its own voters, and if the voters say no, the entity’s obligation is to shrink its budget to match its actual revenue — not to seek a state bailout instead of respecting that vote. An entity collecting more at its voter-approved rate or at the SCR than its Final Year Baseline is not eligible, because it is already whole.
If City A collected $1,000,000 in combined property and sales taxes in the Final Year, and the new sales and use tax at the CCR generates $1,050,000 for City A’s jurisdiction, City A has no shortfall and receives no Transition Fund assistance. If City B’s CCR generates only $800,000 and its voters approved the CCR, City B is eligible for assistance to cover the $200,000 annual gap while it builds its permanent tax base.
The Constitutional Cap Rate is an absolute ceiling for every tier under the TPTRP — not merely a threshold that triggers a voter election. No entity, no Board action, and no future statute can authorize a rate above the CCR applicable to that entity’s tier under any circumstance. Voters may approve any rate up to the CCR; they may never be asked to approve, and no governing body may ever request, a rate beyond it.
Two-Phase Determination: Separating Development Assistance from a Reduction Plan
Passing the final four-part statutory eligibility standard only establishes that an entity may seek Transition Fund help — it does not by itself determine what kind of help the entity receives. The law draws a second, sharper line based on the size of the entity’s certified shortfall, because a modest gap and a severe one call for very different responses.
- Preliminary Eligibility (Transition Year One, in progress). At any quarterly distribution during an eligible entity’s first full fiscal year collecting at its voter-approved CCR, if that quarter’s actual distribution — annualized — projects a shortfall of 10% or more against the entity’s Final Year Baseline, the entity and the Board begin joint planning for an economic development pathway immediately. This is preparation only; no development capital is disbursed at this stage. The Board and entity are getting ready, so that if the shortfall is possible, they can move without delay.
- Final Determination (after a full certified fiscal year). Once the Comptroller
certifies the entity’s actual distributions for a complete fiscal year at the CCR, the
real shortfall percentage is known — and it, not any projection or budget figure, governs
what happens next:
- If the certified full-year shortfall is 10% or greater, the prepared development plan activates, and the Board may deploy Transition Fund capital toward building the entity’s permanent commercial tax base.
- If the certified full-year shortfall is less than 10%, the development plan is set aside. The entity must implement its Mandatory Expenditure Reduction Plan — reducing its budget to match its actual revenue at the voter-approved CCR. That entity may still apply for and receive Transition Fund bridge loans, but only to help meet payment obligations on existing, previously committed infrastructure projects and similar committed obligations while it right-sizes its budget — not for new development spending.
This threshold exists so that no budget figure — only the entity’s actual, Comptroller-certified revenue — determines whether a community receives development investment or must instead reduce its own spending. It is a second layer of the same citizen protection at the heart of the final four-part statutory eligibility standard: assistance is calibrated strictly to the severity of a verified shortfall, never to a request or a projection.
Voter Approval and Board Action
The eligibility framework above governs access to Transition Fund bridge loans and structural investment assistance. The Board’s day-to-day work with eligible entities — deploying bridge loans, executing development contracts, coordinating federal program stacking, issuing orders for special district rerouting — does not require additional voter elections. Voter elections are required only for decisions that directly alter the structure or territory of a taxing entity: dissolution or absorption of a special district, ISD consolidation, and voluntary annexation. For all other Board activities in support of eligible entities, the entity’s initial voter approval of the CCR is the democratic mandate on which the Board acts.
All voter-approved bond obligations are guaranteed regardless of M&O shortfall. Every entity’s I&S sub-rate is calculated and collected separately from its M&O rate, and bond debt is always paid first from collections before any M&O distribution is made — an unconditional priority built into the Bond Management Bill’s waterfall. Transition Fund assistance addresses operating budget (M&O) shortfalls only. No bond obligation goes unserviced as a result of the TPTRP transition, regardless of any entity’s eligibility status. See Section 7 for the full bond guarantee framework.
The Transition Fund: Structure, Capitalization, and Use
How the Fund is capitalized, the two-year capture window, the three-layer buffer stack, authorized uses, and the sunset
How the Fund Is Capitalized
The Transition Fund is capitalized entirely from the natural surplus the TPTRP system generates above each entity’s Final Year Baseline in its first two years — not from any new tax, not from bonded debt, and not from any general appropriation beyond the initial enabling statute. (Campbell, 2026a)
The Final Year Baseline for each entity is the sum of its actual final-year property tax collections plus final-year sales tax collections (plus all other final-year tax collections for the State of Texas), as certified by the Comptroller. This is what the entity was actually collecting — not a budget figure. The TRO is the baseline multiplied by 1.10. Collections above the baseline in Transition Years One and Two, including the 10% TRO buffer and any surplus above the TRO, are what flow to the Transition Fund.
Not later than March 1, 2028, before the Implementation Date, the Comptroller issues a formal Final Year Baseline Certification to every taxing entity in the state. The certification is based on tax year 2027 collections through a January 31, 2028 cutoff, with a true-up at the first distribution after switch-on. It establishes each entity’s certified final-year revenue figures and the resulting Final Year Baseline and TRO. Certification is based on actual reported revenues with supporting evidence, not budgets or projections, and governs all TRO calculations, Shortfall Percentage calculations, and eligibility determinations under the TPTRP. Entities may contest their certification through a formal Comptroller review process established by the enabling legislation.
The Two-Year Capture Window
Transition Year One — Full Baseline-Surplus Capture. In Transition Year One, the Comptroller captures every dollar each entity collects above its Final Year Baseline and deposits it into the Transition Fund. The entity’s Final Year Baseline flows back to it through quarterly distributions; everything above that baseline — the 10% TRO buffer (~$18.5B system-wide) and the above-TRO structural surplus (~$28.05B system-wide) — flows 100% to the Fund, for a total estimated Transition Year One capture of approximately $46.55 billion. Entities are fully protected during this capture period by their final year’s property tax collections (see the buffer-stack discussion below), which provide a complete prior-period revenue stream covering both M&O operations and I&S debt service while the Fund is being capitalized.
City A collected $1,000,000 in combined property and sales taxes in the Final Year. Its TRO is $1,100,000 (baseline × 1.10). In Transition Year One, if City A collects $1,200,000 under the new system, the full $200,000 above its $1,000,000 baseline — including the $100,000 that makes up its TRO buffer — goes to the Transition Fund. City A is protected during this period by its final year’s property tax collections.
Transition Year Two — Board-Discretionary Capture, Up to 50%. The Transition Year Two collection is conditional. The Board, in coordination with the Comptroller, assesses the financial stability of all taxing entities based on certified quarterly distribution data from the first three quarters of Transition Year One, and must make its Transition Year Two capture determination not later than 90 days before the end of Transition Year One — giving the Comptroller and all entities a clear projection before the second year begins.
If the Board determines the Fund is adequately capitalized and all entities are on track, it may waive Transition Year Two collection entirely, in which case every entity retains its full above-baseline surplus through its waterfall, including the minimum 5% citizen dividend. If the Board determines additional capitalization is needed, it may activate a Transition Year Two collection of up to 50% of each entity’s above-baseline surplus — the full 50%, a lower percentage, or a tier-selective partial activation targeting only unstable tiers. Any above-baseline surplus not captured flows to the entity’s waterfall. The Transition Year Two collection, when activated, flows to the Fund at each quarterly distribution as it is collected, giving all parties a continuously updated, Comptroller-certified view of Fund balance throughout the year.
In Transition Year Two, City A has a surplus of $150,000 above its Final Year Baseline. If the Board activates a 50% capture, $75,000 goes to the Transition Fund and $75,000 goes through City A’s waterfall. If the Board activates a 30% capture, $45,000 goes to the Fund and $105,000 goes through the waterfall. If the Board waives Transition Year Two collection, the full $150,000 goes through City A’s waterfall.
The citizen dividend. Whether in Transition Year Two (the entity’s waterfall portion) or from Transition Year Three forward (the full above-baseline surplus), the waterfall includes a minimum 5% citizen dividend — a constitutionally required direct return of surplus tax collections to the taxpaying residents of each district.
The final year’s property taxes in the waterfall. Any unused balance from each entity’s final year’s property tax collections at fiscal year-end flows through the entity’s Transition Year One waterfall: (1) Stabilization Fund top-up to the required 6-month minimum balance; (2) the Infrastructure Improvement Fund; (3) the First Responders Fund; and (4) the minimum 5% citizen dividend. By the end of Transition Year One, most entities will have their Stabilization Fund fully capitalized from the final year’s property taxes, their Infrastructure Improvement and First Responders Funds seeded, and a dividend paid directly to residents.
From Transition Year Three forward — and in Transition Year Two if the Board waives collection — all collections flow entirely to each entity and through its full waterfall. The Fund is then deployed from its accumulated balance over the remaining transition years.
Early Board dissolution. At any point during the 6-year period, if the Board determines — based on Comptroller-certified evidence — that all taxing entities are self-sufficient, all projects are underway or complete, and the Fund holds sufficient balance to cover remaining obligations, the Board may vote unanimously to dissolve early. Upon early dissolution: all remaining Fund balances transfer to the state-level waterfall (including the minimum 5% citizen dividend); all pending obligations, active contracts, and monitoring responsibilities transfer immediately to the Comptroller’s Transition Monitoring Division; and the Division continues assisting any taxing entity going forward through successor administration. Early dissolution requires a unanimous vote of all three appointed Board members on record.
The Transition Year One Buffer Stack: Three Layers of Protection
The transition period is designed so that no single funding source bears the full weight of protecting essential services. Three layers of protection apply in sequence, from most immediate to most systemic:
| Layer | Source | Amount / Mechanism | Role |
|---|---|---|---|
| 1 — Final Year’s Property Taxes | Each entity’s own final property tax levy | I&S portion seeds the bond service fund; M&O portion seeds the Stabilization Fund | First line of defense — the entity’s own cash, not a loan |
| 2 — 10% TRO Structural Buffer | Built into the TRO formula (baseline × 1.10) | ~$18.5B system-wide; captured to the Fund in Transition Years One–Two, retained by entities from Transition Year Three forward | Permanent operational cushion once retained |
| 3 — Transition Fund | Captured above-baseline surplus (buffer + additional surplus above TRO, ~$28.05B) | ~$46.55B total Transition Year One pool; deployed as bridge loans and development capital | Outermost layer — bridge capital, not first-dollar protection |
Layer 1 is a complete year’s worth of each entity’s own prior revenue stream, fully accessible to fill M&O and I&S gaps during the transition — it is not Transition Fund money. Layer 2 is the buffer embedded in every entity’s TRO; while captured system-wide during Transition Years One–Two, it becomes each entity’s permanent reserve against quarterly shortfalls from Transition Year Three forward, ahead of any need to draw on the Stabilization Fund or request Board assistance. Layer 3, the Fund itself — combining the $18.5 billion TRO buffer with the further $28.05 billion in additional surplus collected above the TRO — is deployed only once an entity’s actual sales tax receipts are insufficient to cover its Final Year Baseline and it has exhausted Layer 1.
The published TPTRP tax-base model establishes a Final Taxable Base of $7,126,243,896,502, producing a Transition Fund in Transition Year One of approximately $46.553 billion as reflected in the figures above. (Campbell, 2026b) The system-wide Starting Cap Rate (3.25%) and the tier-level Constitutional Cap Rate ceiling (6.00%) are the rates the plan carries into the implementing legislation. All “2025 Baseline” references throughout this article refer to the Final Year Baseline as it will be certified by the Comptroller at implementation, with 2025 actual revenue figures serving as the current best estimate until certification.
What the Fund Can Be Used For
The Transition Fund is a restricted, purpose-specific fund with three authorized uses.
1. Board Operations — Legislative Appropriation. The Legislature appropriates an operating budget to the Board for its 6-year term from the Transition Fund at the time of the enabling statute. This covers compensation and direct support costs for the three formally appointed Board members (Chair, Vice Chair, and Secretary), who serve as full-time state officers for the duration of the transition period; a modest personal-staff budget for each appointed member; and incidental Board administrative expenses not covered by departmental budgets. The bulk of Board support — analytical, administrative, technical, and coordination work — is provided by the Comptroller’s Transition Monitoring Division and by working members drawn from departments already budgeted for the relevant functions, so that Board activities draw primarily on existing state personnel and infrastructure rather than new Fund expenditures. The Legislature sets the Board’s personal-staff appropriation cap at the time of the enabling statute and may approve or deny subsequent budget-increase requests at its discretion.
2. Supplemental Distributions to Shortfall Entities. Upon application and Board approval, the Fund provides supplemental coverage payments to eligible entities, structured as low-interest loans at 1% to 3% per annum set by Board order — consistent with comparable Texas state financing programs such as the State Infrastructure Bank. (Texas Water Development Board, 2025) Repayment terms are set by the Board in coordination with each entity based on its projected path to self-sufficiency. Eligibility requires the final four-part statutory eligibility standard described in Section 1; an entity whose voters denied a rate increase is not eligible and must instead implement its Mandatory Expenditure Reduction Plan.
3. Structural Self-Sufficiency Investments. The Fund’s primary investment purpose is deploying capital to help eligible entities build the permanent revenue base needed to become self-sustaining at or above their Comptroller-certified Final Year Baseline — through commercial development programs, special district restructuring, ISD consolidation support, and leveraging of all available federal and state economic development programs. All disbursements under this use are low-interest loans at 1%–3% per annum, with repayment terms agreed between the Board, the entity, and any development participants. The Board may deploy this capital without requiring additional voter elections beyond the CCR approval that established eligibility; elections are required only for decisions that alter an entity’s structure or territory. Loan repayments flow back to the Transition Fund and, upon Fund termination, are administered as provided by the transition law and ultimately closed out through the statutory sunset process. All structural investments channel capital primarily through existing Texas legal frameworks: Local Government Code Chapters 380 and 381, Government Code Chapter 489 (Texas Economic Development Bank), and Government Code Chapter 2303 (Texas Enterprise Zone Act). (Tex. Local Gov’t Code chs. 380–381; Tex. Gov’t Code chs. 489, 2303) In practice, the Board’s role is to coordinate, accelerate, and co-finance eligible projects through those existing authorities, not to create a freestanding new state procurement regime.
The Board prioritizes structural investments that produce the fastest path to Final Year Baseline revenue sufficiency at the lowest cost to the Fund, using every available tool — federal program stacking, special zone leveraging, and targeted development financing — to maximize outcomes per dollar deployed.
Fund Duration and Sunset
The Transition Fund and the Board terminate on January 2, 2034 — the sixth anniversary of the date the Board is constituted. This 6-year term is firm; neither the Fund nor the Board may be continued beyond that date. If one or more individual assistance actions, loan agreements, or development obligations remain active at dissolution, general law may provide for their successor administration by the Comptroller’s Transition Monitoring Division, but that does not continue the Fund or the Board themselves.
At the end of the transition period, any remaining Fund balance is disposed of through the governing constitutional and statutory sunset provisions, with unobligated balances ultimately transferred to the Economic Stabilization Fund as provided by law. The Board is dissolved, and all pending obligations, records, and monitoring responsibilities transfer to the TPTRP Transition Monitoring Division — a permanent division of the Comptroller’s office.
The per-tier CCR schedule. The 6.00% combined constitutional ceiling is not a single flat cap. Each tier has its own Constitutional Cap Rate:
- Tier 1 (State): 2.0% CCR
- Tier 2 (County): 1.0% CCR
- Tier 3 (Municipal): 1.0% CCR
- Tier 4 (Independent School District): 1.5% CCR
- Tier 5 (Special Purpose Districts): 0.5% aggregate CCR
The sum equals the 6.00% combined constitutional ceiling at any Texas location. No taxing entity may raise its rate above its tier's CCR without voter approval, and no combination of entities at a location may exceed 6.00% under any circumstances.
The Transition Board: Composition, Authority, and Operating Structure
A temporary three-officer executive body with a fixed 6-year life — grounded in Tex. Const. Art. XVI, Sec. 30a
The Transition Board is established by its own dedicated piece of legislation — the TPTRP Transition Board, Fund, and Transition Plan Act — separate from the Bond Management Bill filed as part of the broader TPTRP package.
Governance Structure
Board composition. The Board consists of three formally appointed officers of state government and a set of department working members:
Board integrity and transparency safeguards. The Board is not an unchecked body. The completed Act builds in these accountability protections:
- The three appointees are full-time state officers subject to the same accountability standards as other state officers.
- Each files personal financial statements with the Texas Ethics Commission and must recuse on conflicts, under Chapter 572, Government Code.
- Board hiring and contracting is subject to nepotism rules under Chapter 573, Government Code.
- The Board is fully subject to the Open Meetings Act (Ch. 551, Government Code) and the Public Information Act (Ch. 552, Government Code) — not just for observer participation.
- The Board follows Sunset review standards where applicable, but its actual life is fixed by the constitution and cannot be extended by ordinary legislation.
- 1 Chair, appointed by the Governor — a full-time appointed state officer for the 6-year transition period.
- 1 Vice Chair, appointed by the Speaker of the Texas House of Representatives — a full-time appointed state officer for the 6-year transition period.
- 1 Secretary, appointed by the Texas Comptroller of Public Accounts — a full-time appointed state officer for the 6-year transition period.
- Department Working Members, selected by and from the relevant operating divisions of each state department required to coordinate on transition plans, ensuring the personnel who actually execute each plan are seated at the table where those plans are made. Working members participate fully in deliberations but are non-voting and hold full authority within their own departments to act on Board-coordinated plans.
Constitutional basis. Texas Constitution Article XVI, Section 30a, provides that boards established by statute — as opposed to those required by the constitution itself — may be composed of members serving terms up to six years, with composition and appointment procedures set by the Legislature. (Tex. Const. art. XVI, § 30a) This provision is permissive: the Legislature has full discretion to constitute a temporary statutory board with any composition it chooses, and no constitutional provision imposes a minimum member count for a temporarily constituted executive body of this kind. The 3-appointment model fully satisfies all applicable constitutional requirements.
Quorum. A quorum for Board action is 2 of the 3 appointed officers. All formal Board votes require a quorum; working members do not count toward quorum and do not vote.
Legislative oversight (observer seats). Each political party represented in the Texas House and Senate may designate one member of its caucus as a non-voting observer to the Board, entirely through the party’s own internal procedures. Observers may attend all open Board meetings and speak on any agenda item, but do not vote and are not Board members; they may be removed at any time by the designating caucus. A maximum of four observers may sit at any time — one per party per chamber — and observer seats are governed by the Texas Open Meetings Act, Government Code Chapter 551. (Tex. Gov’t Code, ch. 551)
Terms and continuity. The Chair, Vice Chair, and Secretary serve the full 6-year transition period unless removed by the Legislature upon a finding of cause — failure of duty, malfeasance, incapacity, or comparable grounds. The Board does not rotate membership during the transition; the same leadership team runs the operation from constitution through sunset, preserving the institutional knowledge of each entity’s situation and each resolution pathway’s progress as the Board’s most valuable operating asset.
Staff. The Board does not maintain an independent permanent staff. The Comptroller’s Transition Monitoring Division provides administrative and analytical support, and each participating state department assigns working members as needed — a structure that keeps the Board lean and prevents institutional entrenchment inconsistent with its temporary mandate.
Public transparency platform. The Board is responsible for establishing and maintaining, through the Transition Monitoring Division, a public-facing website and digital dashboard integrated with the Comptroller’s financial systems. The platform displays each entity’s status and resolution pathway, all Fund disbursements and loan repayments, Board votes on the record by member, Fund balance and deployment schedule, and a complete public financial ledger of all Board transactions in standard reporting format, alongside formal announcements of significant Board actions and entity status changes. The platform is operational from the Board’s first day and remains publicly accessible beyond the Board’s sunset.
Post-Sunset: Conversion to the Comptroller’s Department
When the 6-year transition period ends and the Board is dissolved, the transition function does not end — it converts. The Transition Monitoring Division, which operates in parallel with the Board throughout the transition period, assumes all of the Board’s pending obligations, active loan agreements, development contracts, and monitoring responsibilities. At that point it is no longer a Board; it is a permanent division of the Comptroller’s office, operating under the Comptroller’s direction and continuing to: administer remaining loan repayments and successor obligations; close out active projects and transfer completed projects to the relevant entities; report quarterly to the Legislature and Governor for at least two full years post-sunset; and maintain the public transparency dashboard and entity monitoring on an ongoing basis.
The Comptroller has full discretion over the Division’s internal structure, staffing, and operational procedures, and appoints the Division Director directly — a standard Comptroller office appointment requiring no Senate confirmation. Each state department that served as a working member of the Board must maintain at minimum one designated liaison to the Division for the duration of its active operations, so that any entity requiring post-transition assistance can access the full range of state resources through a single coordinated channel.
Board Powers and Duties
The Board exercises both advisory and full direct administrative and executive authority. It is not a purely advisory body — it holds executive power to act directly on structural issues requiring resolution within the 6-year window, in collaboration with eligible entities and their citizens. It can execute plans, issue orders, deploy funds, and hold parties accountable, but plan development for structural changes (dissolution, consolidation, annexation, rate increases) requires voter approval before execution. Once voter approval is obtained for a given course of action, the Board proceeds without needing further voter elections.
Core powers:
- Review applications for supplemental distributions from shortfall entities and certify approved amounts to the Comptroller.
- Provide rate analysis and voter-facing support. The Board holds no rate-setting authority over any entity at any tier. Rate changes require action by the entity’s own governing body and, for any increase, approval by its own voters. The Board’s role is analytical and advisory: it models what rate adjustment an entity would need and helps make that case to voters, but the decision remains entirely between the entity and its citizens. No state body may direct any county, city, school district, or special district to set a specific rate.
- Provide operational restructuring assistance and technical support to taxing entities.
- Report annually to the Legislature and the Governor, not later than December 1 of each year.
- Identify entities that may require assistance before shortfall conditions become acute.
ISD priority provision. The Board gives priority to ISD applications over other entity types and develops a multi-year financial plan for each assisted ISD, projecting its path to full self-funding under the Tier 4 mechanism.
No school district, county, municipality, or special district shall be placed in financial exigency solely as a result of the transition from the property-tax system to the TPTRP sales and use tax system, so long as the entity has timely applied for and is receiving Transition Fund assistance and is cooperating with restructuring recommendations.
Additional Resolution Powers in the Act
A. Special District Rerouting Authority. The Board has full direct administrative authority to review and confirm all special district tier absorption assignments and to issue administrative rerouting orders reassigning an absorbed special district from one tier to another. A rerouting order is effective upon Board certification to the Comptroller — it is not a legislative restructuring and requires no additional act of the Legislature. The Comptroller updates the tier assignment and TRO calculations for all affected entities, based on actual certified distributions, within 30 days of certification. Target: all rerouting decisions completed within Days 90–180 of Board operation.
B. Special District Dissolution and Absorption — Voter-Discretionary. The Board may identify special districts whose structural situation makes dissolution or absorption into the overlying entity the most appropriate long-term resolution, and may advise and facilitate conversations between the affected entities and their voters. No dissolution or absorption may be executed without voter consent, as required by applicable Texas law. The Board reserves Transition Fund bridge capital for affected entities while that voter-driven process proceeds. Upon voter-approved dissolution, all I&S bond obligations carry forward as obligations of the absorbing entity, and bondholders are fully protected without impairment.
C. Development Program Execution Authority. The Board is authorized to coordinate and support commercial development agreements and project financing backed by the Transition Fund, channeling capital through Local Government Code Chapters 380 and 381, Government Code Chapter 489 (Texas Economic Development Bank), and Government Code Chapter 2303 (Texas Enterprise Zone Act). (Tex. Local Gov’t Code chs. 380–381; Tex. Gov’t Code chs. 489, 2303) In practice, eligible local entities execute the underlying development agreements under those existing authorities, while the Board accelerates the work by supplying Fund capital, coordinating state participation, and directly executing the associated loan agreements that govern disbursement and repayment.
D. De Minimis Entity Track — Expedited Voter-Approved Resolution. The Board establishes by order a de minimis TRO threshold (not to exceed $25,000) for entities whose actual, Comptroller-certified sales and use tax distributions at the CCR are zero or negligible relative to their Final Year Baseline, publishing that threshold not later than 30 days after the Board’s constitution. No entity on the de minimis track is ever administratively dissolved or consolidated — the Texas Constitution flatly forbids using a modeled or estimated revenue figure as grounds for dissolving or consolidating any taxing entity without a vote. Instead, a de minimis entity receives enhanced priority for Transition Fund bridge loans, and the Board proactively prepares and presents to the entity’s governing body — within 60 days of designation — a proposed dissolution, consolidation, or annexation plan, complete with a transition budget and successor-entity assumption plan, for the governing body to bring to its own voters if it chooses. If the voters decline the plan, the entity remains on the de minimis track with its enhanced bridge-loan priority intact, and nothing about its structure or territory changes without its citizens’ consent.
E. Federal and State Development Program Leverage Authority. The Board is authorized and directed to identify, coordinate, and leverage all available federal and state economic development programs, special zone designations, and financing tools applicable to eligible shortfall entity jurisdictions, to accelerate construction of commercial economic centers and build a permanent sales tax base. The guiding standard is the fastest path to Final Year Baseline revenue sufficiency at the lowest cost to the Fund with the best long-term economic outcomes for the entity’s residents. Illustrative examples include federal opportunity zone programs, federal and state tax credit programs targeting low-income and blighted community development, USDA and SBA rural development programs, Texas state enterprise zone programs, federal contracting set-aside programs, and CDBG-style infrastructure grants. (U.S. federal development programs) Only entities meeting the final four-part statutory eligibility standard qualify. The Board maintains a public Special Zone Leverage Register identifying applicable programs in each shortfall entity’s jurisdiction and coordination status; formal MOUs are authorized but not required.
F. Legislative Oversight and Transparency. Quarterly interim reports to the House Appropriations Committee and Senate Finance Committee, not later than 45 days after each calendar quarter; the public transparency platform described above; and legislative notification 30 days prior to any single Fund deployment exceeding $500 million, with the Legislature able to delay by concurrent resolution for not more than 60 additional days.
Multi-Department Coordination
The Board’s effectiveness depends on written coordination agreements with each major state department serving Tier 2–5 entities. The agreements are due on April 1, 2028 — 90 days after the Board is constituted on January 2, 2028, and exactly the Implementation Date:
| Department | Role in Transition |
|---|---|
| Texas Comptroller of Public Accounts | Issues Final Year Baseline Certifications; distributes quarterly collections; certifies TRO, Shortfall Percentage, and ISD multi-year plans; operates the public transparency platform and Special Zone Leverage Register; houses the Transition Monitoring Division |
| Texas Education Agency (TEA) | Partners on ISD consolidation conversations (Ed. Code §13.054, §41.001); provides enrollment and budget data for Tier 4 revenue reallocation reviews |
| Texas Economic Development and Tourism Office / Governor’s Office | Coordinates Texas Enterprise Fund awards (Gov. Code Ch. 489) and Enterprise Zone designations (Gov. Code Ch. 2303); co-deploys development capital; identifies applicable federal program opportunities |
| Texas Bond Review Board | Provides bond registry data; coordinates I&S Reserve Fund compliance and bond-payoff acceleration tracking |
| Texas Water Development Board / TCEQ | Provides technical support for special district dissolution and absorption involving water-related districts |
| Texas Department of Housing and Community Affairs | Coordinates rural development programs, CDBG applications, and housing-adjacent commercial development in CCR-persistent rural entities |
| Federal and State Development Program Partners (Board discretion) | Informal coordination with any applicable federal agency (USDA Rural Development, SBA, HUD, Treasury/CDFI Fund) or state entity; no formal MOU required |
Three dates, three milestones. The TPTRP timeline distinguishes three critical dates:
Amendment Effective Date — January 1, 2028. The constitutional amendment takes effect. The Transition Board is constituted on January 2, 2028. The first quarter of 2028 is the transition-preparation period: the Board executes coordination agreements, the Comptroller certifies each entity’s Final Year Baseline by March 1, and entities prepare for the switch.
Implementation Date — April 1, 2028. The property tax prohibition becomes operative and the TPTRP sales and use tax system turns on. The Board is already in its first year, which began January 2; Transition Year One, the first capture year, begins April 1.
The two clocks are deliberately three months out of phase. The Board is stood up first because it must exist, execute its coordination agreements, and have the Baseline certified before the tax turns on. There are no collections to capture until April 1, 2028, so the capture years cannot start earlier. This sequence is by design, not a drafting error.
| Clock | Starts | Ends | What it governs |
|---|---|---|---|
| The Board’s six-year term | January 2, 2028 | January 2, 2034 | Board existence, assistance authority, Transition Fund life, sunset |
| The transition capture years | April 1, 2028 (Transition Year One) | March 31, 2029 (Year One); Year Two runs to March 31, 2030 | Above-baseline surplus capture into the Transition Fund |
The Transition Plan: Board Term and Capture Timeline
Board-year milestones, the first-quarter preparation sequence, and the resolution toolkit available to the Board
| Year | Phase | Key Milestones |
|---|---|---|
| Board Year 1 Jan. 2, 2028–Jan. 1, 2029 |
Preparation, Switch-On & First-Quarter Analysis | Board constituted January 2; coordination agreements due April 1; Comptroller certifies Final Year Baselines by March 1; the Implementation Date on April 1 begins Transition Year One; first distributions at the end of Q2 2028 begin Fund capitalization and provide the first collection data. |
| Board Year 2 | Eligibility Finalization & Development Launch | First-round eligible entities confirmed after voter elections; Ch. 380/381 development programs launched; ISD consolidation elections underway; Board makes the Transition Year Two capture determination. |
| Board Year 3 | Build Phase 1 | Major metro commercial corridors under construction; first ISD consolidations completed; rural bridge resolutions finalized; full above-baseline surplus flows to entities from Transition Year Three forward. |
| Board Year 4 | Build Phase 2 | Development programs accelerate; suburban ISD programs near completion; Fund repayments begin from Transition Year Two–Three projects. |
| Board Year 5 | Stabilization | 90%+ of eligible entities at or above SCR; loan repayments exceed new disbursements; Board may assess early dissolution eligibility. |
| Board Year 6 | Sunset & Handoff | Board dissolved on January 2, 2034, the sixth anniversary of Board constitution (or earlier by unanimous vote); remaining Fund balance transfers to the state waterfall/ESF; all obligations transfer to the Transition Monitoring Division. |
The First-Quarter Preparation and First-Distribution Sequence
The Board’s preparatory sequence begins when it is constituted on January 2, 2028, not at enactment. From January 2 through March 31, the Board and state agencies complete the work needed before collections begin. The Implementation Date on April 1 begins Transition Year One; the first distributions at the end of Q2 2028 supply the first actual revenue data for every entity.
Preparation priorities (January 2–March 31, 2028): constitute the Board on January 2; complete the work for required inter-agency coordination agreements due April 1; certify Final Year Baselines by March 1; prepare the Special Zone Leverage Register; and conduct the special-district rerouting audit.
Switch-on and first distributions (April 1–end of Q2 2028): the Implementation Date begins Transition Year One and activates the new tax. The first quarterly distribution begins Fund capitalization and supplies the first actual revenue data. The Comptroller then reports actual collections against each certified baseline, and the Board uses those reports to begin entity-specific planning, voter-election guidance, and the statutory eligibility process. No eligibility determination is based on collections before that distribution.
Transition Year Two capture determination (not later than 90 days before the end of Transition Year One): the Board votes to activate (up to 50%, per tier or in full), reduce, or waive Transition Year Two capture, publishing the determination on the public transparency platform immediately.
Resolution Tools Available to the Board
| Tool | Cost | Timeline | Best For |
|---|---|---|---|
| Special District Rerouting | Zero | Days 30–180 post-distribution | Absorbed special districts needing tier reassignment |
| Federal/State Development Program Leverage | Near zero | Pre-distribution through Transition Year Two+ | Blighted, food-desert, low-income, or rural jurisdictions |
| Voluntary Annexation | Low | 12–24 months | Small cities with adjacent ETJ commercial zones |
| Special District Dissolution/Absorption | Low-medium | 12–36 months (voter process) | Rural counties/cities with special district fragmentation |
| ISD Consolidation | Medium | 12–36 months | Small rural ISDs with minimal local commercial tax base |
| Commercial Development Program | High (developer-carried) | 24–60 months | High-growth suburban cities; large urban ISDs; rural counties |
| Transition Fund Bridge Loan | Ongoing capital (recoverable) | From first eligible-entity determination | All eligible entities pending structural resolution |
How the Board Approaches Each Entity’s Situation
No fixed formulas — each eligible entity receives its own individualized plan built from its own certified revenue data
No two shortfall entities look alike. A fast-growing suburban city with rapid residential growth outpacing its commercial base faces a fundamentally different problem than a small rural town with almost no existing commercial activity, an oil-and-gas county where production revenue is attributed to corporate structures headquartered elsewhere, or a school district whose enrollment and tax base can no longer support independent operation. Rather than prescribing a single resolution method in statute, the law gives the Board the discretion to classify each eligible entity by the general character of its shortfall and to select whichever combination of tools — commercial development agreements, special district rerouting, annexation, ISD consolidation, or federal and state program leverage — fits that entity’s actual circumstances.
“This categorization is a working tool the Board uses internally to prioritize its efforts and match resources efficiently; it is not a fixed legal designation, and the law does not lock the Board into predetermined categories or outcomes.”— TPTRP Transition Board, Fund, and Plan Act, Explainer
Every eligible entity ultimately receives its own individualized plan, built from its own certified revenue data and its own community’s needs, reviewed and refined as actual conditions develop over the six-year transition period. The full toolkit available to the Board for building these plans is described above in Section 4.
What the Transition Board Means for Constituents
Five plain-language assurances every Texan in a shortfall jurisdiction should understand from Day 1
Every Texan in a shortfall jurisdiction should understand five things:
The Transition Fund is established before the property tax is eliminated. The first distributions at the end of Q2 2028 begin its capitalization; the Board then confirms eligible entities after the first quarter of collections and issues bridge letters of credit so that police, fire, schools, and county services continue without interruption.
The I&S sub-rate ring-fences bond debt service from all other collections, and it is always paid first. No entity’s shortfall status or Transition Board interaction affects bond repayment in any way — if voters approved a bond, it is paid.
Each taxing entity’s final year of property tax collections remains in its accounts on Day 1 of the new system — a full year’s prior-period revenue that seeds the Stabilization Fund and covers debt service while sales tax collections ramp up. It is not a loan; it is the entity’s own cash, already collected.
The roughly $46.55 billion Transition Fund, fully capitalized in Transition Year One, is approximately 6.8 times the total annual shortfall of all 133 possible shortfall entities. The money exists; the Board’s task is the structural question of what permanent commercial base each shortfall community needs so it no longer depends on Fund support — and building that base returns local jobs, wages, and economic activity well beyond the tax revenue itself, all funded through a repayable development loan rather than a tax subsidy.
On January 2, 2034, the Board is dissolved, but the work converts to a permanent department of the Comptroller’s office, which continues monitoring every entity’s collection performance, maintaining public dashboards, and reporting to the Legislature.
Learn more about the Texas Property Tax Replacement Plan See the impact on HD 109
Bond Management and the Transition Board’s Role in Debt Servicing
The unconditional bond guarantee, the Bond Management Bill, and the narrow cases where the Board becomes involved
Bond Obligations Are Unconditionally Guaranteed
Every voter-approved bond obligation in Texas carries forward under the TPTRP without modification or impairment. The funding source shifts from property tax to sales tax, but the payment schedule does not change by a single dollar or a single day. Bond debt service takes absolute priority over M&O distributions in every entity’s waterfall, and no entity’s eligibility status for Transition Fund M&O assistance affects the guarantee of its bond obligations.
How the Bond Management Bill Guides the Transition Board
The Bond Management Bill (H.B. ___, 90th Legislature) is the primary legal instrument governing Texas bond obligations under the TPTRP. The I&S sub-rate is calculated annually by the Comptroller as the certified annual debt service requirement for each entity divided by that entity’s certified local tax base share, and collections sufficient to service the I&S obligation are distributed before any M&O distribution is made. The Bond Management Bill establishes the I&S Rate framework, the Citizens First Bond Portal, the bond backstop cascade, and the statewide bond registry, and will be amended to cross-reference the standalone Transition Board Act, so that each bill governs its own domain while recognizing the other’s role.
When the Transition Board Gets Involved in Bond Service
For most entities, bond service is automatic and requires no Board involvement. The Board becomes involved when an entity faces a combined shortfall — where its total tier rate cannot cover both bond obligations and operational needs. In that case, the Board:
- Issues Transition Fund bridge loans to cover the M&O shortfall while the entity’s I&S Rate fully covers bond debt service, so bond service is never the item that gets cut;
- Coordinates with the Comptroller on I&S Reserve Fund backstop draws when collections fall short in a given quarter;
- Prioritizes development programs that grow the entity’s local commercial tax base fastest for high-bond-load entities, since a growing local tax base reduces the I&S Rate automatically as the bond obligation amortizes;
- Because it cannot change the I&S Rate itself, focuses on growing that local tax base as the only lever available to relieve CCR pressure on bond-heavy entities.
Civil penalties collected under the Bond Management Bill’s Article 6 (Citizens First Bond Portal violations) flow directly into the Transition Fund as an enumerated capitalization source. The Bond Management Bill governs the penalty structure and the portal; the Transition Board governs how those penalty inflows are used once they arrive in the Fund.
What Happens After the Board Sunsets?
The Board is temporary by design — it sunsets on January 2, 2034, six years after Board constitution. But TPTRP oversight and support for Texas taxing entities does not end there. The permanent TPTRP Transition Monitoring Division, established inside the Comptroller's office, succeeds the Board and carries forward its mission indefinitely.
The Division's permanent focus is the long-term success of every Texas taxing entity through sound economic growth policies. Its statutory mandate emphasizes:
- Economic growth policies that bring jobs to communities that need them most — especially rural counties, small cities, and shortfall entities that need commercial base expansion to become structurally self-sufficient at the Starting Cap Rate.
- Fully funding independent school districts and cities for the purposes Texans care about most: public safety, infrastructure development, and the essential services every Texan relies on every day.
- Continued monitoring and reporting, publishing annual performance metrics through the Texas Sales and Use Tax Portal so every Texan can see how each entity is performing, what jobs are being created, and how the plan is working.
- Coordinating post-sunset assistance, including collecting outstanding Fund loan repayments and continuing any structural investment work that extends beyond the Board's six-year window.
- Advising the Legislature on adjustments needed to preserve every entity's ability to fund the services their constituents depend on.
This matters because the point of the whole plan is not just ending property taxes — it is building a Texas where every community, from Sandbranch to San Antonio, has the funding it needs to thrive. The Board gets us through the six-year transition. The Division makes sure the years after that keep working for every Texan.
The Division cannot be sunset by ordinary legislative action — it is established as a permanent division within the Comptroller's office by Article VIII, Section 1-u of the Texas Constitution. Its functions are constitutionally protected against future political interference, and its reporting obligations continue in perpetuity.
Identifying Possible Eligible Entities for Transition Assistance
How pre-launch modeling classifies entities into planning categories — and why those categories are not legislative designations
The system is designed with a built-in aggregate surplus, but averages don’t protect every city and county. The statewide tax base generating that surplus is not evenly distributed across all 6,148 entities. (Campbell, 2026b) A fast-growing suburban city may have a large residential population but relatively little mature commercial development; a rural border county may have almost no attributable local economic activity; a small ISD serving a sparsely populated oil-field area may generate almost no local commercial tax base under the new system at all.
Pre-launch modeling identifies approximately 133 entities as possible, structural shortfall cases under current projections, with several hundred more requiring further review as actual data becomes available. (Campbell, 2026a) These entities will possibly face a Day-1 revenue shortfall relative to their TRO. Without a structured bridge, government services would fail before a structural fix could be deployed. The Fund provides the bridge money; the Board provides the structural solution.
| Planning Category | Approx. Count | Definition | Anticipated Day-1 Response |
|---|---|---|---|
| possible structural shortfall | 133 | Modeling under multiple methodologies confirms a shortfall — structural and certain | Mandatory pre-funded bridge |
| Likely shortfall, method-dependent | 244–256 | One allocation method flags a shortfall; an alternate method does not | Board review; many likely resolved by SD rerouting |
| Absorption-driven shortfall | 208 | Entity clears its rate alone; fails only once absorbed special district obligations are added | Special district rerouting — administrative, no capital needed |
| Shortfall persists at the CCR | 166 | Shortfall persists even at the entity's applicable CCR | Structural reorganization required — no rate solution exists |
What the legislation does is simpler and more objective: after the first quarterly distribution, every entity will know exactly what it received versus its Comptroller-certified Final Year Baseline, and any entity whose quarterly receipts are insufficient can immediately approach the Transition Board.
Learn about the tax base and Texas Living Essentials Subtraction
Legislative Architecture: Coordinated Instruments
The constitutional amendment, Transition Board Act, and Bond Management Act operate in coordination, each governing its own domain
The constitutional amendment authorizes the Transition Board, Transition Fund, and Transition Monitoring Division. The Transition Board Act provides the Board’s temporary six-year term, Fund, eligibility framework, capture rules, and sunset mechanics. The Bond Management Act governs how bond obligations are managed, restructured, and serviced under the TPTRP. The instruments operate in coordination while each governs its own domain.
Constitutional Amendment (H.J.R.) — Establishes the Transition Fund as a constitutionally dedicated special fund in Article III, authorizes the Transition Board and permanent Comptroller Transition Monitoring Division under Article VIII (grounded in Article XVI, Section 30a), and locks in the six-year sunset with anti-diversion protections.
Implementing Legislation (H.B., Gov. Code Ch. 490) — Provides the full statutory text: Board composition, Comptroller Transition Monitoring Division, final four-part statutory eligibility standard, two-phase 10% Shortfall Percentage determination, capture windows, authorized Fund uses, and sunset mechanics.
How This Model Compares to Other Transition Structures
California, Colorado TABOR, New Zealand GST, and Australia’s 2026 reform — where the TPTRP borrows and where it improves
No other U.S. state or comparable jurisdiction has attempted a full statewide abolition of property taxes replaced by a sales-and-use tax base, which makes the TPTRP Transition Board a novel institution. But several precedents inform its design, and comparing against them shows both the grounding of the approach in established public-finance practice and the specific improvements built in to protect Texans beyond what those precedents achieved.
California’s Redevelopment Agency Dissolution (2011–2012)
When California eliminated roughly 400 local redevelopment agencies and redirected their captured property tax increment back to cities, counties, and schools, the state created “successor agencies” and county-level Redevelopment Property Tax Trust Funds to manage the wind-down of existing obligations. (California Legislative Analyst’s Office, 2012) (Strauss, 2012) The successor-agency model demonstrates the core mechanic the Transition Board also relies on — a temporary, purpose-built administrative body managing a defined asset pool during a multi-year unwind, with an oversight board reviewing disbursements. California’s wind-down, however, ran for well over a decade with recurring litigation over enforceable obligations and disputed asset transfers, because the legislation did not establish clear, objective, data-driven eligibility criteria up front. (San Diego Independent Budget Analyst, 2016) The TPTRP’s final four-part statutory eligibility standard and Comptroller-certified Final Year Baseline are designed to avoid that ambiguity: eligibility is a bright-line, auditable test applied to actual certified revenue, not a negotiated determination subject to years of dispute.
Colorado’s TABOR Framework
Colorado’s Taxpayer’s Bill of Rights constitutionally caps government revenue growth and mandates refunds of revenue collected above the cap, a structure frequently cited nationally as the strongest citizen-protection precedent for constitutionally limiting government’s claim on surplus collections. (Ballotpedia, n.d.) (Jefferson County, CO, n.d.) TABOR’s refund mechanic is the closest existing analogue to the TPTRP’s minimum 5% citizen dividend, but TABOR operates as a blunt, uniform cap with no companion mechanism for managing a one-time systemic transition or for capitalizing a bridge fund — it simply returns money once a threshold is crossed. The Transition Board’s structure borrows TABOR’s citizen-first refund principle while adding a purpose-built, time-limited capture-and-deploy mechanism that TABOR was never designed to provide, because Colorado never had to fund a wholesale replacement of one entire tax base with another.
New Zealand’s 2010 GST Rate Transition
New Zealand’s increase of its Goods and Services Tax rate from 12.5% to 15% in 2010 included statutory transition provisions to smooth business compliance and adjust benefit payments and thresholds concurrently with the rate change, administered centrally by Inland Revenue with a defined compliance runway before the new rate took effect. (New Zealand Government, 2010) That transition offers a useful comparison point for the TPTRP’s first-quarter preparation period, but it was a single-rate adjustment within an already-existing GST system serving one national government — not a full replacement of a separate tax base (property tax) with a fundamentally different one (sales tax) spread across more than 6,000 independent local taxing entities. The scale and structural complexity the Transition Board must manage — multi-tier rates, thousands of independent budgets, bond obligations layered across entities, and voter-approval gates for structural changes — has no equivalent in the New Zealand precedent.
Australia’s 2026 Property and Housing Tax Overhaul
Australia’s federal government secured passage of legislation restructuring property market taxation and capital gains treatment in mid-2026, an active, ongoing reform effort most comparable in ambition to TPTRP among current global tax-reform initiatives. (Bloomberg Tax, 2026) That reform, however, operates within Australia’s existing federal-state revenue-sharing architecture and does not attempt to eliminate an entire class of subnational government’s primary funding source; state and local governments in Australia retain their own revenue tools throughout. The TPTRP Transition Board’s distinguishing feature — a dedicated, sunset-bound executive body with direct authority to certify eligibility, deploy capital, and execute development agreements, answerable to the Legislature on a fixed calendar — is not required in a reform of that scope, because no Australian government experiences a Day 1 funding cliff.
Every comparable transition effort examined shares two features the TPTRP explicitly builds on and improves: a temporary, purpose-specific administrative body (as in California), and a citizen-first refund or rebate principle (as in Colorado). None of them, however, had to solve the specific problem TPTRP creates — a hard, dated elimination of a primary local government revenue source across thousands of independent entities simultaneously, with bond obligations that must be guaranteed without interruption.
The Transition Board’s design choices that go beyond any single precedent are: (1) a bright-line, Comptroller-certified eligibility test rather than a negotiated or litigated one; (2) an unconditional, ring-fenced bond guarantee that never depends on an entity’s transition status; (3) a fixed, non-extendable 6-year sunset with automatic conversion to a permanent monitoring function rather than an indefinite wind-down; and (4) direct executive authority to deploy capital and execute development contracts without requiring a separate legislative act for each entity’s resolution, while still requiring voter approval for any structural change to a taxing entity itself. Taken together, these features are calibrated specifically to avoid the extended ambiguity that prolonged California’s redevelopment wind-down for over a decade, while preserving the citizen-protection principle at the heart of Colorado’s TABOR.
References
Sources organized by the sections of this article they principally inform. All sources are primary official government records, first-party project documentation, or recognized authoritative research institution publications. Every source is fully hyperlinked to its original URL for direct verification.
Entity Counts, TRO Formula & Final Year Baseline — Sections 1, 2, 8
Campbell, W. (2026a). Texas Property Tax Replacement Plan. Will Campbell for Texas. https://www.willcampbellfortexas.com/releases/we-can-end-property-taxes
This is the authoritative published overview of the Texas Property Tax Replacement Plan, produced by Rep. Will Campbell (HD-109). It establishes the plan’s core mechanics: the Total Replacement Obligation (TRO) formula, the Final Year Baseline concept, the 10% structural buffer multiplier, the Comptroller certification process, and the system-wide Starting Cap Rate (SCR) and Constitutional Cap Rate (CCR) rate architecture. The plan overview and its underlying rate and shortfall modeling are the controlling source for all rate, baseline, and shortfall figures referenced throughout this article.
Campbell, W. (2026b). Ending Texas Property Taxes — Tax Base and Texas Living Essentials Subtraction. Will Campbell for Texas. https://www.willcampbellfortexas.com/releases/tax-base-and-tles
Detailed companion publication documenting the full Texas taxable base calculation and the Texas Living Essentials Subtraction (TLES) carve-outs that produce the final taxable base used in the plan’s rate model. It establishes the corrected Final Taxable Base figure and the resulting Transition Fund pool of approximately $46.55 billion used in this article’s Section 2 and Section 8 tables.
Texas Comptroller of Public Accounts. (2025). Special Purpose District Directory and Local Government Entity Counts. Texas Comptroller of Public Accounts. https://comptroller.texas.gov/economy/local/spd/
Official state directory used to establish the approximately 6,148 active taxing entities figure that governs the scope of the TPTRP transition. It provides the entity-by-entity list of municipalities, counties, independent school districts, and special purpose districts referenced throughout this article’s calculations of transition scale and coverage.
Fund Loan Interest Rate Benchmark — Section 2
Texas Water Development Board. (2025). State Water Implementation Fund for Texas (SWIFT). Texas Water Development Board. https://www.twdb.texas.gov/financial/programs/SWIFT/index.asp
Comparable existing Texas state below-market financing program used as the benchmark for the 1%–3% per annum interest rate range applied to Transition Fund loans under the implementing legislation. The SWIFT program’s published loan rates and repayment terms provide the market comparability standard cited in Section 2.
Existing Development Authorities Leveraged by the Fund — Sections 2, 3
Tex. Local Gov’t Code chs. 380–381; Tex. Gov’t Code chs. 489, 2303. Texas Statutes. https://statutes.capitol.texas.gov/
The existing Texas statutory frameworks through which the Transition Board channels structural investment capital: Local Government Code Chapters 380 (municipal) and 381 (county) economic development agreements, and Government Code Chapter 489 (Texas Economic Development Bank) and Chapter 2303 (Texas Enterprise Zone Act). These are the authorities the Board leverages rather than creating a new state procurement regime.
Constitutional and Open Meetings Basis — Section 3
Tex. Const. art. XVI, § 30a. Texas Constitution. https://statutes.capitol.texas.gov/Docs/CN/htm/CN.16.htm
Constitutional provision authorizing statutorily created (non-constitutionally-mandated) boards to be composed of members serving terms up to six years, providing the constitutional basis for the Board’s 6-year, 3-member appointed structure described in Section 3 of this article.
Tex. Gov’t Code ch. 551. Texas Open Meetings Act, Texas Statutes. https://statutes.capitol.texas.gov/Docs/GV/htm/GV.551.htm
Governs the conduct of the Board’s public meetings and the legislative observer seat structure described in Section 3. The full Open Meetings Act applies to the Board in its entirety, not merely with respect to observer participation.
Federal & State Development Program Leverage — Section 3
U.S. Department of the Treasury, Community Development Financial Institutions Fund. (2025). Opportunity Zones program. U.S. Department of the Treasury. https://home.treasury.gov/policy-issues/community-programs/opportunity-zones
Federal development program cited as illustrative of the tools the Transition Board is authorized to identify, coordinate, and leverage in eligible shortfall entity jurisdictions under the Board’s Special Zone Leverage Register authority.
U.S. Department of Agriculture, Rural Development. (2025). Community & Economic Development Programs. U.S. Department of Agriculture. https://www.rd.usda.gov/
USDA rural development programs available to CCR-persistent rural shortfall entities. Cited as an illustrative federal program category the Board coordinates on behalf of eligible entities to accelerate commercial economic development in rural jurisdictions.
U.S. Small Business Administration. (2025). Lending and Loan Guarantee Programs. U.S. Small Business Administration. https://www.sba.gov/funding-programs
Federal small-business lending programs the Board is authorized to coordinate where applicable to shortfall-entity development plans, part of the broader federal program leverage framework in the implementing legislation.
U.S. Department of Housing and Urban Development. (2025). Community Development Block Grant (CDBG) Program. U.S. Department of Housing and Urban Development. https://www.hud.gov/program_offices/comm_planning/cdbg
CDBG-style infrastructure grants illustrated in the Board’s Special Zone Leverage Register authority. Cited as a representative federal infrastructure grant program applicable to eligible shortfall entity jurisdictions.
Comparative Transition Structures — Section 10
California Legislative Analyst’s Office. (2012, February 16). The 2012–13 Budget: Unwinding Redevelopment. California Legislative Analyst’s Office. https://lao.ca.gov/analysis/2012/general_govt/unwinding-redevelopment-021712.aspx
Describes the successor-agency and Redevelopment Property Tax Trust Fund model created to wind down California’s redevelopment agencies following AB 1X 26. As the closest existing U.S. analogue to a temporary, purpose-built fiscal transition authority, it informs the comparative analysis in Section 10 and specifically the case for the TPTRP’s bright-line eligibility test as a design improvement.
Strauss, B. (2012, January 15). Essential Elements of AB 1X 26 Successor Agencies. California City Finance. https://www.californiacityfinance.com/ABx1_26SuccessorAgencies.pdf
Details the mechanics of successor agency funding from property tax and transferred assets during California’s redevelopment dissolution. Informs the structural comparison in Section 10 between California’s asset-pool management approach and the TPTRP Transition Board’s dedicated-fund structure.
San Diego Independent Budget Analyst. (2016, October 19). Overview of Residual Redevelopment Property Tax Trust Fund. IBA Report 16-36. City of San Diego. https://www.sandiego.gov/sites/default/files/iba-16-36.pdf
Documents the extended, litigation-prone wind-down of California’s redevelopment dissolution over more than a decade. Cited in Section 10 to support the case for the TPTRP’s bright-line, Comptroller-certified eligibility test as a design improvement over California’s ambiguous, negotiated approach.
Ballotpedia. (n.d.). Colorado Taxpayer’s Bill of Rights (TABOR). Ballotpedia. https://ballotpedia.org/Colorado_Taxpayer%27s_Bill_of_Rights_(TABOR)
Overview of TABOR’s constitutional revenue cap and mandatory refund structure. Informs the comparative citizen-dividend analysis in Section 10 that positions the TPTRP’s minimum 5% citizen dividend as a mechanism inheriting TABOR’s citizen-first refund principle.
Jefferson County, Colorado. (n.d.). What is TABOR?. Jefferson County, Colorado. https://www.jeffco.us/3994/What-is-TABOR
Plain-language description of TABOR’s revenue limitation and refund mechanics from a county-government perspective. Used alongside Ballotpedia’s TABOR overview to confirm the refund-based comparison to the TPTRP’s minimum 5% citizen dividend cited in Section 10.
New Zealand Government. (2010, August 9). Govt smoothes way for GST rate transition. The Beehive. https://www.beehive.govt.nz/release/govt-smoothes-way-gst-rate-transition
Describes New Zealand’s transition provisions for its 2010 GST rate increase from 12.5% to 15%, including a defined business-compliance runway administered centrally by Inland Revenue. Used as an international comparison point for the TPTRP’s first-quarter preparation period in Section 10.
Bloomberg Tax. (2026, June 25). Australian Government Secures Passage of Housing Tax Overhaul. Bloomberg Tax. https://news.bloombergtax.com/daily-tax-report-international/australian-government-secures-passage-of-housing-tax-overhaul
Contemporaneous coverage of Australia’s mid-2026 property market taxation and capital gains restructuring. Used in Section 10 as the most comparable current global tax-reform effort, and to distinguish federal-state revenue-sharing contexts from the TPTRP’s elimination of a primary subnational revenue source.