Bill > HB275

This bill aims to reduce school district maintenance and operations ad valorem taxes (property taxes) by modifying how surplus state revenue is used. The bill changes the state compression percentage calculation for school district property taxes, allowing the commissioner of education to reduce this percentage based on surplus state funds. If the state compression percentage reaches zero, school districts would be prohibited from imposing a tier one maintenance and operations tax and would instead receive full state funding as if they had a maximum compressed tax rate. The bill requires the comptroller to allocate 90 percent of excess general revenue to a property tax relief fund, with these funds primarily dedicated to reducing the state compression percentage. Money in this fund can only be used by the Texas Education Agency for property tax relief, with any surplus potentially available for other purposes. The changes would take effect September 1, 2025, and apply beginning with the state fiscal biennium starting September 1, 2027, potentially providing significant property tax relief for school districts if substantial surplus revenue is available.

Budget and Finance

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB275