H.B. No. 39 proposes amendments to the Texas Education Code and Government Code regarding the public school finance system, specifically focusing on how property values are assessed in relation to 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, Chapter 46. Additionally, it modifies Section 403.302(d) of the Government Code to redefine "taxable value" by removing the provision that allowed for the deduction of one-half of the total dollar amount of certain residence homestead exemptions, thereby adjusting the calculation of taxable property values.

Furthermore, the bill repeals Section 48.259 of the Education Code and establishes that the amendments to Section 403.302 will only apply to school district property value studies conducted for tax years beginning on or after January 1, 2026. The act is set to take effect on September 1, 2025. These changes aim to ensure that the funding distribution under the public school finance system more accurately reflects the impact of homestead exemptions on property values, thereby potentially benefiting school districts in their funding allocations.

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