H.B. No. 1153 amends the Education Code and Government Code to adjust the public school finance system by incorporating property values that account for optional homestead exemptions. Specifically, it modifies Section 7.062(c) of the Education Code to prioritize the use of excess funds, not exceeding $20 million in any state fiscal year, for grants to school districts when the appropriated amount exceeds the entitlement under Subchapters A and B of Chapter 46. Additionally, it amends Section 403.302(d) of the Government Code to redefine "taxable value" by removing the provision that previously deducted one-half of the total dollar amount of certain residence homestead exemptions, thereby ensuring a more accurate calculation of taxable property values.

Furthermore, the bill repeals Section 48.259 of the Education Code and establishes that the amendments to Section 403.302 will only apply to school district property value studies conducted for tax years beginning on or after January 1, 2026. The act is set to take effect on September 1, 2025. These changes aim to enhance the funding framework for public schools by better reflecting the impact of homestead exemptions on property values.

Statutes affected:
Introduced: Education Code 7.062, Education Code 11.35 (Education Code 11, Education Code 7)