The bill, S.B. No. 2644, 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 for grants to school districts, with a cap of $20 million per fiscal year, while also ensuring that these funds are utilized only if they do not reduce the total state funds allocated to school districts. Additionally, it revises the definition of "taxable value" in Section 403.302(d) of the Government Code to exclude certain exemptions, including the total dollar amount of residence homestead exemptions, thereby impacting how property values are assessed for school funding purposes.

Furthermore, the bill repeals Section 48.259 of the Education Code and specifies that the amendments to Section 403.302 will only apply to property value studies conducted for tax years beginning on or after January 1, 2026. The changes aim to create a more equitable funding structure for public schools by ensuring that property values reflect the impact of homestead exemptions, ultimately influencing the distribution of state funds to school districts. The act is set to take effect on September 1, 2025.

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