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A BILL TO BE ENTITLED
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AN ACT
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relating to an increase in the amount of the exemption of residence |
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homesteads from ad valorem taxation by a school district and the |
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protection of school districts against the resulting loss in local |
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revenue. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 11.13(b), Tax Code, is amended to read as |
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follows: |
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(b) An adult is entitled to exemption from taxation by a |
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school district of $200,000 [$100,000] of the appraised value of |
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the adult's residence homestead, except that only $5,000 of the |
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exemption applies to an entity operating under former Chapter 17, |
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18, 25, 26, 27, or 28, Education Code, as those chapters existed on |
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May 1, 1995, as permitted by Section 11.301, Education Code. |
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SECTION 2. Section 46.071, Education Code, is amended by |
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adding Subsection (a-3) and amending Subsections (b-2) and (c-2) to |
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read as follows: |
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(a-3) Beginning with the 2026-2027 school year, in addition |
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to state aid a school district is entitled to under Subsection |
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(a-2), a school district is also entitled to additional state aid |
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under this subchapter to the extent that state and local revenue |
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used to service debt eligible under this chapter is less than the |
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state and local revenue that would have been available to the |
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district under this chapter as it existed on September 1, 2025, if |
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any increase in the residence homestead exemption under Section |
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1-b(c), Article VIII, Texas Constitution, as proposed by the 89th |
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Legislature, Regular Session, 2025, had not occurred. |
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(b-2) Subject to Subsections (c-2), (d), and (e), |
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additional state aid under this section beginning with the |
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2023-2024 school year is equal to the amount by which the loss of |
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local interest and sinking revenue for debt service attributable to |
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any increase in a residence homestead exemption under Section |
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1-b(c), Article VIII, Texas Constitution, and any additional |
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limitation on tax increases under Section 1-b(d) of that article as |
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proposed by the 88th Legislature, 2nd Called Session, 2023, and any |
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increase in the residence homestead exemption under Section 1-b(c), |
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Article VIII, Texas Constitution, as proposed by the 89th |
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Legislature, Regular Session, 2025, is not offset by a gain in state |
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aid under this chapter. |
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(c-2) For the purpose of determining state aid under |
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Subsection [Subsections] (a-2) or (a-3) [and (b-2)], local interest |
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and sinking revenue for debt service is limited to revenue required |
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to service debt eligible under this chapter as of September 1, 2023, |
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or as of September 1, 2025, respectively, or authorized by the |
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voters but not yet issued as of September 1, 2023, or as of |
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September 1, 2025, respectively, that later becomes eligible under |
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this chapter, including refunding of the applicable [that] debt, |
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subject to Section 46.061. The limitation imposed by Section |
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46.034(a) does not apply for the purpose of determining state aid |
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under Subsection (a-2) or (a-3) [this section]. |
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SECTION 3. Section 48.2543, Education Code, is amended by |
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adding Subsection (a-2) and amending Subsection (b) to read as |
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follows: |
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(a-2) Beginning with the 2026-2027 school year, in addition |
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to state aid a school district is entitled to under Subsection |
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(a-1), a school district is entitled to additional state aid to the |
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extent that state and local revenue under this chapter and Chapter |
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49 is less than the state and local revenue that would have been |
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available to the district under this chapter and Chapter 49 as those |
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chapters existed on September 1, 2025, if any increase in the |
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residence homestead exemption under Section 1-b(c), Article VIII, |
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Texas Constitution, as proposed by the 89th Legislature, Regular |
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Session, 2025, had not occurred. |
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(b) The lesser of the school district's currently adopted |
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maintenance and operations tax rate or the adopted maintenance and |
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operations tax rate for: |
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(1) the 2021 tax year is used for the purpose of |
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determining additional state aid under Subsection (a); [and] |
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(2) the 2022 tax year is used for the purpose of |
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determining additional state aid under Subsection (a-1); and |
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(3) the 2025 tax year is used for the purpose of |
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determining additional state aid under Subsection (a-2). |
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SECTION 4. Section 11.13, Tax Code, as amended by this Act, |
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applies only to an ad valorem tax year that begins on or after |
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January 1, 2026. |
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SECTION 5. This Act takes effect January 1, 2026, but only |
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if the constitutional amendment proposed by the 89th Legislature, |
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Regular Session, 2025, to increase the amount of the exemption of |
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residence homesteads from ad valorem taxation by a school district |
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is approved by the voters. If that amendment is not approved by the |
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voters, this Act has no effect. |