The bill, H.B. No. 166, proposes the elimination of school district maintenance and operations ad valorem taxes, effective January 1, 2028. It introduces a new section to the Tax Code, specifically Section 26.035, which prohibits school districts from imposing maintenance and operations taxes but allows for an enrichment tax not exceeding $0.17 per $100 of taxable property value. This enrichment tax is intended to provide additional revenue for enhancing educational opportunities for students and is separate from state funding.

Additionally, the bill establishes a joint interim committee tasked with evaluating the feasibility of using consumption taxes to support public schools in Texas. The committee will consist of ten members, five from the House of Representatives and five from the Senate, appointed by the respective leaders. They are required to report their findings and proposals by November 1, 2026, including a comprehensive plan for utilizing consumption tax revenue for public school support. The committee will be dissolved on January 1, 2027.

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