The bill proposes a temporary reduction in the maximum compressed tax rate for school districts for the 2026-2027 school year by adding Section 48.2554 to Subchapter F, Chapter 48 of the Education Code. Under this new section, the commissioner will calculate each district's maximum compressed tax rate and reduce it by an amount appropriated for this purpose. If a district's calculated rate falls below 90% of another district's rate, it will be adjusted to match that threshold. Additionally, the bill clarifies that references to maximum compressed tax rates in various legal provisions will now refer to the rates determined under this new section.

Furthermore, the bill appropriates federal funds received under the One Big Beautiful Bill Act to the Texas Education Agency for the fiscal year starting September 1, 2026, specifically for the purpose of reducing school district maximum compressed tax rates as outlined in the new section. The provisions of this section will expire on September 1, 2028, and the bill is set to take effect 91 days after the end of the legislative session.

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