89R2444 LHC/MM-D
By: Morales of Harris H.B. No. 378
A BILL TO BE ENTITLED
AN ACT
relating to an increase in the amount of the exemption of residence
homesteads from ad valorem taxation by a school district and the
protection of school districts against the resulting loss in local
revenue.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 11.13(b), Tax Code, is amended to read as
follows:
(b) An adult is entitled to exemption from taxation by a
school district of $200,000 [$100,000] of the appraised value of
the adult's residence homestead, except that only $5,000 of the
exemption applies to an entity operating under former Chapter 17,
18, 25, 26, 27, or 28, Education Code, as those chapters existed on
May 1, 1995, as permitted by Section 11.301, Education Code.
SECTION 2. Section 46.071, Education Code, is amended by
adding Subsection (a-3) and amending Subsections (b-2) and (c-2) to
read as follows:
(a-3) Beginning with the 2026-2027 school year, in addition
to state aid a school district is entitled to under Subsection
(a-2), a school district is also entitled to additional state aid
under this subchapter to the extent that state and local revenue
used to service debt eligible under this chapter is less than the
state and local revenue that would have been available to the
district under this chapter as it existed on September 1, 2025, if
any increase in the residence homestead exemption under Section
1-b(c), Article VIII, Texas Constitution, as proposed by the 89th
Legislature, Regular Session, 2025, had not occurred.
(b-2) Subject to Subsections (c-2), (d), and (e),
additional state aid under this section beginning with the
2023-2024 school year is equal to the amount by which the loss of
local interest and sinking revenue for debt service attributable to
any increase in a residence homestead exemption under Section
1-b(c), Article VIII, Texas Constitution, and any additional
limitation on tax increases under Section 1-b(d) of that article as
proposed by the 88th Legislature, 2nd Called Session, 2023, and any
increase in the residence homestead exemption under Section 1-b(c),
Article VIII, Texas Constitution, as proposed by the 89th
Legislature, Regular Session, 2025, is not offset by a gain in state
aid under this chapter.
(c-2) For the purpose of determining state aid under
Subsection [Subsections] (a-2) or (a-3) [and (b-2)], local interest
and sinking revenue for debt service is limited to revenue required
to service debt eligible under this chapter as of September 1, 2023,
or as of September 1, 2025, respectively, or authorized by the
voters but not yet issued as of September 1, 2023, or as of
September 1, 2025, respectively, that later becomes eligible under
this chapter, including refunding of the applicable [that] debt,
subject to Section 46.061. The limitation imposed by Section
46.034(a) does not apply for the purpose of determining state aid
under Subsection (a-2) or (a-3) [this section].
SECTION 3. Section 48.2543, Education Code, is amended by
adding Subsection (a-2) and amending Subsection (b) to read as
follows:
(a-2) Beginning with the 2026-2027 school year, in addition
to state aid a school district is entitled to under Subsection
(a-1), a school district is entitled to additional state aid to the
extent that state and local revenue under this chapter and Chapter
49 is less than the state and local revenue that would have been
available to the district under this chapter and Chapter 49 as those
chapters existed on September 1, 2025, if any increase in the
residence homestead exemption under Section 1-b(c), Article VIII,
Texas Constitution, as proposed by the 89th Legislature, Regular
Session, 2025, had not occurred.
(b) The lesser of the school district's currently adopted
maintenance and operations tax rate or the adopted maintenance and
operations tax rate for:
(1) the 2021 tax year is used for the purpose of
determining additional state aid under Subsection (a); [and]
(2) the 2022 tax year is used for the purpose of
determining additional state aid under Subsection (a-1); and
(3) the 2025 tax year is used for the purpose of
determining additional state aid under Subsection (a-2).
SECTION 4. Section 11.13, Tax Code, as amended by this Act,
applies only to an ad valorem tax year that begins on or after
January 1, 2026.
SECTION 5. This Act takes effect January 1, 2026, but only
if the constitutional amendment proposed by the 89th Legislature,
Regular Session, 2025, to increase the amount of the exemption of
residence homesteads from ad valorem taxation by a school district
is approved by the voters. If that amendment is not approved by the
voters, this Act has no effect.