SB23 - Relating to an increase in the amount of the exemption from ad valorem taxation by a school district of the appraised value of the residence homestead of a person who is elderly or disabled and the protection of school districts against certain losses in local revenue.

      S.B. No. 23         AN ACT   relating to an increase in the amount of the exemption from ad   valorem taxation by a school district of the appraised value of the   residence homestead of a person who is elderly or disabled and the   protection of school districts against certain losses in local   revenue.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:   ARTICLE 1.  PROVISIONS CONTINGENT ON CONSTITUTIONAL AMENDMENT          SECTION 1.01.  Section 11.13(c), Tax Code, is amended to   read as follows:          (c)  In addition to the exemption provided by Subsection (b)   [ of this section ], an adult who is disabled or is 65 or older is   entitled to an exemption from taxation by a school district of   $60,000 [ $10,000 ] of the appraised value of the person's [ his ]   residence homestead.          SECTION 1.02.  Section 46.071, Education Code, is amended by   amending Subsections (a-2) and (b-2) and adding Subsections (a-4),   (b-4), (c-4), (d-1), and (d-2) to read as follows:          (a-2)   For  [ Beginning with ] the 2023-2024 and 2024-2025   school years [ year ], a school district is 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, 2022,   if 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, had not   occurred.           (a-4)     Beginning with the 2025-2026 school year, a school   district is 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 January 1, 2025, if any increase in the residence   homestead exemption for a person who is elderly or disabled 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 for  [ beginning with ] the   2023-2024 and 2024-2025  school years  [ 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, is not offset by a gain in state aid under this   chapter.           (b-4)     Subject to Subsections (c-4), (d), and (e),   additional state aid under this section beginning with the   2025-2026 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 for a person who is   elderly or disabled 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-4)     For the purpose of determining state aid under   Subsections (a-4) and (b-4), local interest and sinking revenue for   debt service is limited to revenue required to service debt   eligible under this chapter as of September 1, 2025, including   refunding of 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 this section.           (d-1)     If the amount required to pay debt service on bonds   issued under Subchapter A, Chapter 45, is less than the sum of state   assistance provided under this chapter, including the amount of   additional state aid provided under this section, and the revenue   from the district's interest and sinking tax for a school year, the   commissioner shall, except as provided by Subsection (d-2), reduce   the amount of additional state aid provided under this section by   the difference between:                 (1)     the sum of state assistance provided under this   chapter, including the amount of additional state aid provided   under this section, and the revenue from the district's interest   and sinking tax for the school year; and                 (2)     the amount required to pay debt service on bonds   described by this subsection for the school year.           (d-2)     The amount of additional state aid provided under this   section may not be reduced under Subsection (d-1) to an amount below   the additional state aid provided under Subsection (a-4).          SECTION 1.03.  Section 48.2543, Education Code, is amended   by amending Subsections (a-1) and (b) and adding Subsection (a-3)   to read as follows:          (a-1)   For [ Beginning with ] the 2023-2024 and 2024-2025   school years [ year ], 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, 2022, if 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, had not occurred.           (a-3)     Beginning with the 2025-2026 school year, 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, 2024, if any increase in a residence   homestead exemption for a person who is elderly or disabled 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 2024 tax year is used for the purpose of   determining additional state aid under Subsection (a-3) .          SECTION 1.04.  Section 11.13, Tax Code, as amended by this   article, applies only to an ad valorem tax year that begins on or   after January 1, 2025.   ARTICLE 2.  PROVISIONS NOT CONTINGENT ON CONSTITUTIONAL AMENDMENT          SECTION 2.01.  Section 48.2551, Education Code, is amended   by adding Subsections (d-5) and (d-6) to read as follows:           (d-5)     In calculating and making available school districts'   maximum compressed rates under this section for the 2025-2026   school year, the agency shall calculate and make available the   rates as if the increase in the residence homestead exemption for a   person who is elderly or disabled under Section 1-b(c), Article   VIII, Texas Constitution, as proposed by the 89th Legislature,   Regular Session, 2025, took effect.   This subsection expires   September 1, 2026.           (d-6)     If the increase in the residence homestead exemption   for a person who is elderly or disabled under Section 1-b(c),   Article VIII, Texas Constitution, as proposed by the 89th   Legislature, Regular Session, 2025, does not take effect, the   commissioner may adjust school districts' maximum compressed rates   under this section for the 2025-2026 school year accordingly.     Before making an adjustment under this subsection, the commissioner   shall notify and must receive approval from the Legislative Budget   Board and the office of the governor.   This subsection expires   September 1, 2029.          SECTION 2.02.  Section 49.004, Education Code, is amended by   adding Subsections (a-2), (b-1), and (c-1) to read as follows:           (a-2)     This subsection applies only if the constitutional   amendment proposed by S.J.R. 85, 89th Legislature, Regular Session,   2025, is approved by the voters in an election held for that   purpose.   As soon as practicable after receiving revised property   values that reflect adoption of the constitutional amendment, the   commissioner shall review the local revenue level of districts in   the state and revise as necessary the notifications provided under   Subsection (a) for the 2025-2026 school year.   This subsection   expires September 1, 2026.           (b-1)     This subsection applies only to a district that has   not previously held an election under this chapter.       Notwithstanding Subsection (b), a district that enters into an   agreement to exercise an option to reduce the district's local   revenue level in excess of entitlement under Section 49.002(3),   (4), or (5) for the 2025-2026 school year may request and, as   provided by Section 49.0044(a), receive approval from the   commissioner to delay the date of the election otherwise required   to be ordered before September 1. This subsection expires   September 1, 2026.           (c-1)     Notwithstanding Subsection (c), a district that   receives approval from the commissioner to delay an election as   provided by Subsection (b-1) may adopt a tax rate for the 2025 tax   year before the commissioner certifies that the district has   reduced its local revenue level to the level established by Section   48.257.   This subsection expires September 1, 2026.          SECTION 2.03.  Subchapter A, Chapter 49, Education Code, is   amended by adding Section 49.0044 to read as follows:           Sec.   49.0044.     TRANSITIONAL PROVISIONS:   INCREASED   HOMESTEAD EXEMPTIONS FOR ELDERLY OR DISABLED PERSONS.   (a) The   commissioner shall approve a district's request under Section   49.004(b-1) to delay the date of an election required under this   chapter if the commissioner determines that the district would not   have a local revenue level in excess of entitlement if the   constitutional amendment proposed by S.J.R. 85, 89th Legislature,   Regular Session, 2025, were approved by the voters.           (b)     The commissioner shall set a date by which each district   that receives approval under this section must order the election.           (c)     Not later than the 2026-2027 school year, the   commissioner shall order detachment and annexation of property   under Subchapter G or consolidation under Subchapter H as necessary   to reduce the district's local revenue level to the level   established by Section 48.257 for a district that receives approval   under this section and subsequently:                 (1)  fails to hold the election; or                 (2)  does not receive voter approval at the election.           (d)  This section expires September 1, 2027.          SECTION 2.04.  Subchapter A, Chapter 49, Education Code, is   amended by adding Section 49.0122 to read as follows:           Sec.   49.0122.     TRANSITIONAL ELECTION DATES: INCREASED   HOMESTEAD EXEMPTIONS FOR ELDERLY OR DISABLED PERSONS. (a)     This   section applies only to an election under this chapter that occurs   during the 2025-2026 school year.           (b)     Section 49.012 does not apply to a district that   receives approval of [Text truncated for display. Full text available on LegiScan.]