Texas House Bill HB71

Texas 2025 - 89th 1st C.S.

• Filed: 7/14/25

Caption

Relating to reducing school district maintenance and operations ad valorem taxes through the use of certain surplus state revenue.

Impact

If enacted, HB71 would significantly affect how school funding is structured in Texas. Specifically, the bill provisions include a mandate for the state commissioner to adjust the state compression percentage to the lowest possible level when state revenue conditions are favorable. This could lead to zero maintenance and operations tax obligations for some school districts, allowing them to operate without certain tax levies for specific school years. The overall goal is to reduce the financial burden on both educational institutions and taxpayers.

Summary

House Bill 71 aims to reduce school district maintenance and operations ad valorem taxes by utilizing surplus state revenue. The bill includes amendments to the Education Code and the Government Code that focus on modifying the state compression percentage, which affects how school districts calculate certain property tax rates. Specifically, the bill stipulates that if surplus state revenue exceeds a certain threshold, then a portion of that revenue will be allocated to provide property tax relief for school districts, directly impacting their funding and tax obligations.

Contention

Discussions around HB71 may lead to points of contention among legislators, particularly in terms of how surplus funds are generated and distributed. Some members may argue the need for a more equitable distribution of funds among districts, while others may push back against substantial tax reductions, citing potential adverse impacts on educational quality or local governmental funding structures. The bill's provisions for the future allocation of funds and the implications for school operations are likely to be areas of debate, especially concerning fiscal responsibility and priorities in public education.

Texas Constitutional Statutes Affected

Education Code

• Chapter 48. Foundation School Program
  • Section: New Section

Government Code

• Chapter 403. Comptroller Of Public Accounts
  • Section: 109