Bill > HB4326

This bill proposes changes to how certain state funds are allocated and how school district property taxes are calculated. Specifically, the bill modifies the state compression percentage for school property taxes, allowing it to be reduced to the lowest possible percentage based on appropriated funds. It also revises how constitutional transfers are allocated among the economic stabilization fund (also known as the "rainy day fund"), the state highway fund, and a newly created property tax reduction fund. Starting in 2043, these transfers will be split equally between the economic stabilization fund and the property tax reduction fund, with adjustments to ensure the economic stabilization fund does not exceed its statutory limit. The bill is contingent upon voter approval of a related constitutional amendment during the 2025 legislative session. The changes are designed to provide property tax relief by using state revenue to reduce school district maintenance and operations ad valorem (property-based) taxes. The bill will take effect on September 1, 2027, but only if the accompanying constitutional amendment is approved by voters.

Budget and Finance

https://capitol.texas.gov/BillLookup/History.aspx?LegSess=89R&Bill=HB4326