HB378 - 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.

  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.