School Property Tax Cut Waits Until 2027, If Voters Approve

The text as introduced · 657 words

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.