H.B. No. 222 aims to reduce school district maintenance and operations ad valorem taxes by utilizing certain surplus state revenue. The bill amends Section 48.255 of the Education Code, specifically modifying Subsection (b) and adding new Subsections (d) and (e). The amendments establish that the state compression percentage, which determines the tax rate, will be reduced to the lowest possible percentage based on funds deposited into the property tax relief fund and any additional appropriated funds. Furthermore, if the state compression percentage is determined to be zero, school districts will not be allowed to impose a tier one maintenance and operations tax for that school year or any subsequent years, while still receiving funding as if they had a maximum compressed tax rate.

Additionally, the bill amends Section 403.109 of the Government Code by adding Subsections (e) and (f). These new provisions require the comptroller to allocate a portion of general revenue that exceeds a certain threshold to the property tax relief fund, which can only be appropriated to the Texas Education Agency for the purpose of reducing the state compression percentage. The act is set to take effect on the 91st day after the legislative session concludes and will apply starting with the state fiscal biennium beginning September 1, 2025.

Statutes affected:
Introduced: Education Code 48.255, Government Code 403.109 (Education Code 48, Government Code 403)