89R15873 KJE-D

By: Noble H.B. No. 4326

A BILL TO BE ENTITLED

AN ACT

relating to reducing school district maintenance and operations ad valorem taxes through the use of certain state revenue and the allocation of certain constitutional transfers of money to the economic stabilization fund, the property tax reduction fund, and the state highway fund.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 48.255, Education Code, is amended by amending Subsection (b) and adding Subsection (d) to read as follows:

(b) Subject to Subsection (d), the [The] state compression percentage is the lower of:

(1) 93 percent, or a lower percentage set by appropriation for a school year;

(2) the percentage determined by the following formula:

SCP = PYCP X 1.025/(1 + ECPV); or

(3) the percentage determined under this section for the preceding school year.

(d) For each school year, the state compression percentage determined under Subsection (b) shall be reduced to the lowest percentage possible as a result of money appropriated for that purpose under Section 3-a, Article VII, Texas Constitution.

SECTION 2. The heading to Subchapter H, Chapter 316, Government Code, is amended to read as follows:

SUBCHAPTER H. ALLOCATION OF CONSTITUTIONAL TRANSFERS TO CERTAIN

FUNDS [ECONOMIC STABILIZATION FUND AND STATE HIGHWAY FUND]

SECTION 3. The heading to Section 316.092, Government Code, is amended to read as follows:

Sec. 316.092. DETERMINATION OF THRESHOLD FOR CONSTITUTIONAL TRANSFER TO CERTAIN FUNDS [STATE HIGHWAY FUND].

SECTION 4. Section 316.093, Government Code, is amended by amending Subsections (b), (c), and (d) and adding Subsection (e) to read as follows:

(b) If the sum described by Subsection (a) is less than the amount determined under Section 316.092 for that state fiscal biennium, the comptroller shall reduce proportionately the allocations [allocation] to the property tax reduction fund and the state highway fund as provided by Section 49-g(c-1) [49-g(c)], Article III, Texas Constitution, and increase the allocation to the economic stabilization fund[,] in an [equal] amount equal to the reduction of those allocations[,] until the amount determined under Section 316.092 for that state fiscal biennium would be achieved by the transfer to the fund or the total amount of the sum described by Section 49-g(c), Article III, Texas Constitution, is allocated to the fund, whichever occurs first.

(c) For the purposes of Section 49-g(c-2), Article III, Texas Constitution, the comptroller shall adjust the allocation provided by Section 49-g(c-1) of that article of amounts to be transferred to the fund, the property tax reduction fund, and [to] the state highway fund under Section 49-g(c) of that article in a state fiscal year beginning on or after September 1, 2043, so that half of the total of those amounts is transferred to the economic stabilization fund and half of the total of those amounts is transferred to the property tax reduction fund.

(d) The [, except that the] comptroller shall reduce a transfer to the economic stabilization fund required [made] under Subsection (c) of this section [this subsection] as necessary to prevent the amount in the fund from exceeding the limit in effect for the state fiscal [that] biennium under Section 49-g(g), Article III, Texas Constitution [of that article].

(e) [(d)] Subsections (a) and (b) and this subsection expire December 31, 2042.

SECTION 5. This Act takes effect September 1, 2027, but only if the constitutional amendment proposed by the 89th Legislature, Regular Session, 2025, establishing the property tax reduction fund to reduce school district maintenance and operations ad valorem taxes and dedicating certain unencumbered general revenue and certain general revenue that would otherwise be transferred to the economic stabilization fund to that fund is approved by the voters. If that amendment is not approved by the voters, this Act has no effect.