House Bill No. 2878 amends the Texas Tax Code by adding Section 311.0086, which grants municipalities and counties the authority to utilize revenue from tax increment funds for specific reinvestment zones. These zones must meet certain criteria, including being created by a municipality after January 1, 2005, or by a county after January 1, 2022, being larger than 500 acres, containing a tract of land larger than 20 acres donated to a school district for educational facilities, and having a written agreement with the school district regarding tax increment payments. The bill allows municipalities or counties to enter into new agreements or amend existing ones with school districts to allocate funds for acquiring, constructing, or reconstructing educational facilities.

Additionally, the bill amends Section 48.253(a) of the Education Code to ensure that school districts receive state aid equivalent to the amount they are required to contribute to the tax increment fund under the new Section 311.0086. This change in law will take effect starting with the 2025-2026 school year. The bill is set to take effect immediately if it receives a two-thirds majority vote in both houses; otherwise, it will take effect on September 1, 2025.

Statutes affected:
Introduced: Education Code 48.253 (Education Code 48)