89R24457 LHC/KJE-D     By: Bettencourt S.B. No. 23       A BILL TO BE ENTITLED   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 January 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.