H.B. No. 378 proposes an increase in the exemption amount for residence homesteads from ad valorem taxation by school districts, raising the exemption from $100,000 to $200,000. This change is intended to provide greater financial relief to homeowners. Additionally, the bill includes provisions to protect school districts from revenue losses resulting from this increased exemption. Specifically, it establishes that beginning with the 2026-2027 school year, school districts will be entitled to additional state aid if their local revenue for servicing debt falls below the levels that would have been available prior to the exemption increase.

The bill also amends various sections of the Education Code to ensure that school districts receive adequate funding despite the changes in tax exemptions. It introduces new subsections that outline the conditions under which additional state aid will be provided, particularly in relation to the revenue that would have been available under previous laws. The effective date of the bill is set for January 1, 2026, contingent upon voter approval of a constitutional amendment to increase the homestead exemption. If the amendment is not approved, the bill will have no effect.

Statutes affected:
Introduced: Tax Code 11.13, Education Code 11.301, Education Code 48.2543 (Tax Code 11, Education Code 11, Education Code 48)