House Bill No. 55 aims to modify the public school finance system in Texas by adjusting the calculation of funding based on property values, specifically incorporating optional homestead exemptions. The bill amends 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 potentially increasing the taxable value for school funding calculations.

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 are set to take effect on September 1, 2025, allowing for a transition period for school districts to adapt to the new funding calculations. Overall, the bill seeks to ensure that property values used for school funding more accurately reflect the impact of homestead exemptions, thereby potentially increasing the financial resources available to school districts.

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