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.

89(R) SB 23 - Enrolled version - Bill Text

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 a request under Section 49.0044. The district

shall hold the election on a Tuesday or Saturday on or before a date

specified by the commissioner. Section 41.001, Election Code, does

not apply to the election.

(c) This section expires September 1, 2026.

SECTION 2.05. Section 49.154, Education Code, is amended by

adding Subsections (a-4) and (a-5) to read as follows:

(a-4)

Notwithstanding Subsections (a) and (a-1), a district

that receives approval of a request under Section 49.0044 shall pay

for credit purchased:

(1)

in equal monthly payments as determined by the

commissioner beginning March 15, 2026, and ending August 15, 2026;

or

(2)

in the manner provided by Subsection (a)(2),

provided that the district notifies the commissioner of the

district's election to pay in that manner not later than March 15,

2026.

(a-5)

Subsection (a-4) and this subsection expire September

1, 2026.

SECTION 2.06. Section 49.308, Education Code, is amended by

adding Subsection (a-2) to read as follows:

(a-2)

Notwithstanding Subsection (a), for the 2025-2026

school year, the commissioner shall order any detachments and

annexations of property under this subchapter as soon as

practicable after the canvass of the votes on the constitutional

amendment proposed by S.J.R. 85, 89th Legislature, Regular Session,

2025.

This subsection expires September 1, 2026.

SECTION 2.07. Section 26.01, Tax Code, is amended by adding

Subsections (a-2) and (a-3) to read as follows:

(a-2)

This subsection applies only to the appraisal roll for

a school district for the 2025 tax year.

When the chief appraiser

delivers the appraisal roll to the assessor for the school

district, the chief appraiser shall include a provisional appraisal

roll to account for the changes in law made by S.B. 23, Acts of the

89th Legislature, Regular Session, 2025.

If the chief appraiser

delivers a supplemental appraisal roll or correction to the

appraisal roll to the assessor for the school district before the

effective date of Article 1 of that Act, the chief appraiser shall

include provisional appraisal roll entries to account for the

changes in law made by that article.

If Article 1 of that Act takes

effect:

(1)

on the effective date of that article, the

provisional appraisal roll, as supplemented and corrected, becomes

the appraisal roll for the school district; and

(2)

as soon as practicable after the effective date of

that article, the chief appraiser shall correct the school

district's appraisal roll as necessary to finally account for the

changes in law made by that article.

(a-3)

This subsection and Subsection (a-2) expire December

31, 2026.

SECTION 2.08. Section 26.04, Tax Code, is amended by adding

Subsections (a-1) and (c-1) to read as follows:

(a-1)

On receipt of the appraisal roll for the 2025 tax

year, the assessor for a school district shall determine the total

taxable value of property taxable by the district and the taxable

value of new property as if the changes in law made by S.B. 23, Acts

of the 89th Legislature, Regular Session, 2025, were in effect for

that tax year.

This subsection expires December 31, 2026.

(c-1)

An officer or employee designated by the governing

body of a school district shall calculate the no-new-revenue tax

rate and the voter-approval tax rate of the district for the 2025

tax year as if the changes in law made by S.B. 23, Acts of the 89th

Legislature, Regular Session, 2025, were in effect for that tax

year.

This subsection expires December 31, 2026.

SECTION 2.09. Section 26.08, Tax Code, is amended by adding

Subsection (q) to read as follows:

(q)

For purposes of this section, the voter-approval tax

rate of a school district for the 2025 tax year shall be calculated

as if the changes in law made by S.B. 23, Acts of the 89th

Legislature, Regular Session, 2025, were in effect for that tax

year.

This subsection expires December 31, 2026.

SECTION 2.10. Section 26.09, Tax Code, is amended by adding

Subsection (c-1) to read as follows:

(c-1)

The assessor for a school district shall calculate the

amount of tax imposed by the school district on a residence

homestead for the 2025 tax year as if the changes in law made by S.B.

23, Acts of the 89th Legislature, Regular Session, 2025, were in

effect for that tax year and also as if the changes in law made by

that Act were not in effect for that tax year.

This subsection

expires December 31, 2026.

SECTION 2.11. Section 26.15, Tax Code, is amended by adding

Subsection (h) to read as follows:

(h)

The assessor for a school district shall correct the tax

roll for the district for the 2025 tax year to reflect the results

of the election to approve the constitutional amendment proposed by

S.J.R. 85, 89th Legislature, Regular Session, 2025.

This

subsection expires December 31, 2026.

SECTION 2.12. Section 31.01, Tax Code, is amended by adding

Subsections (d-2), (d-3), (d-4), and (d-5) to read as follows:

(d-2)

This subsection and Subsections (d-3) and (d-4) apply

only to taxes imposed by a school district on a residence homestead

for the 2025 tax year and only if the changes in law made by S.B. 23,

Acts of the 89th Legislature, Regular Session, 2025, would lower

the taxes imposed by the district on the property for that tax year.

The assessor for the district shall compute the amount of taxes

imposed and the other information required by this section as if the

changes in law made by S.B. 23, Acts of the 89th Legislature,

Regular Session, 2025, were in effect for that tax year.

The tax

bill or the separate statement must indicate that the bill is a

provisional tax bill and include a statement in substantially the

following form:

"If the Texas Legislature had not enacted property tax relief

legislation during the 2025 legislative session, your tax bill

would have been $____ (insert amount of tax bill if the changes in

law made by S.B. 23, Acts of the 89th Legislature, Regular Session,

2025, were not in effect for that tax year).

Because of action by

the Texas Legislature, your tax bill has been lowered by $____

(insert difference between amount of tax bill if the changes in law

made by S.B. 23, Acts of the 89th Legislature, Regular Session,

2025, were not in effect for that tax year and amount of tax bill if

that Act were in effect for that tax year), resulting in a lower tax

bill of $____ (insert amount of tax bill if the changes in law made

by S.B. 23, Acts of the 89th Legislature, Regular Session, 2025,

were in effect for that tax year), contingent on the approval by the

voters at an election to be held November 4, 2025, of the

constitutional amendment proposed by S.J.R. 85, 89th Legislature,

Regular Session, 2025.

If that constitutional amendment is not

approved by the voters at the election, a supplemental tax bill in

the amount of $____ (insert difference between amount of tax bill if

the changes in law made by S.B. 23, Acts of the 89th Legislature,

Regular Session, 2025, were not in effect for that tax year and

amount of tax bill if that Act were in effect for that tax year) will

be mailed to you."

(d-3)

A tax bill prepared by the assessor for a school

district as provided by Subsection (d-2) and mailed as provided by

Subsection (a) is considered to be a provisional tax bill until the

canvass of the votes on the constitutional amendment proposed by

S.J.R. 85, 89th Legislature, Regular Session, 2025.

If the

constitutional amendment is approved by the voters, the tax bill is

considered to be a final tax bill for the taxes imposed on the

property for the 2025 tax year, and no additional tax bill is

required to be mailed unless another provision of this title

requires the mailing of a corrected tax bill.

If the constitutional

amendment is not approved by the voters:

(1)

a tax bill prepared by the assessor as provided by

Subsection (d-2) is considered to be a final tax bill but only as to

the portion of the taxes imposed on the property for the 2025 tax

year that are included in the bill;

(2)

the amount of taxes imposed by each school

district on a residence homestead for the 2025 tax year is

calculated as if the changes in law made by S.B. 23, Acts of the 89th

Legislature, Regular Session, 2025, were not in effect for that tax

year; and

(3)

except as provided by Subsections (f), (i-1), and

(k), the assessor for each school district shall prepare and mail a

supplemental tax bill, by December 1 or as soon thereafter as

practicable, in an amount equal to the difference between the

amount of the tax bill if the changes in law made by S.B. 23, Acts of

the 89th Legislature, Regular Session, 2025, were not in effect for

that tax year and the amount of the tax bill if that Act were in

effect for that tax year.

(d-4)

Except as otherwise provided by Subsection (d-3), the

provisions of this section other than Subsection (d-2) apply to a

supplemental tax bill mailed under Subsection (d-3).

(d-5)

This subsection and Subsections (d-2), (d-3), and

(d-4) expire December 31, 2026.

SECTION 2.13. Section 31.02, Tax Code, is amended by adding

Subsection (a-1) to read as follows:

(a-1)

Except as provided by Subsection (b) of this section

and Sections 31.03 and 31.04, taxes for which a supplemental tax

bill is mailed under Section 31.01(d-3) are due on receipt of the

tax bill and are delinquent if not paid before March 1 of the year

following the year in which imposed.

This subsection expires

December 31, 2026.

ARTICLE 3. EFFECTIVE DATES

SECTION 3.01. Except as otherwise provided by this article:

(1) this Act takes effect immediately if this Act

receives a vote of two-thirds of all the members elected to each

house, as provided by Section 39, Article III, Texas Constitution;

and

(2) if this Act does not receive the vote necessary for

immediate effect, this Act takes effect September 1, 2025.

SECTION 3.02. Article 1 of this Act takes effect on the date

on which the constitutional amendment proposed by S.J.R. 85, 89th

Legislature, Regular Session, 2025, takes effect. If that

amendment is not approved by the voters, Article 1 of this Act has

no effect.

______________________________

______________________________

President of the Senate

Speaker of the House

I hereby certify that S.B. No. 23 passed the Senate on

April 23, 2025, by the following vote: Yeas 30, Nays 1; and that

the Senate concurred in House amendment on May 29, 2025, by the

following vote: Yeas 30, Nays 1.

______________________________

Secretary of the Senate

I hereby certify that S.B. No. 23 passed the House, with

amendment, on May 21, 2025, by the following vote: Yeas 141,

Nays 0, one present not voting.

______________________________

Chief Clerk of the House

Approved:

______________________________

Date

______________________________

Governor