The Interim has arrived
If you were sleeping last night, you missed a lot. The members of the Texas Legislature were hard at work passing bills and resolutions to conclude their business and adjourn the 3rd (and hopefully final) called session of the 87th Legislature sine die. And this time they mean that whole "without a day to meet again" part. The interim has finally arrived.

Legislators successfully adopted new redistricted maps for the State Board of Education, Texas Congressional delegation, Texas Senate, and Texas House. Those maps have been sent to the Governor.

Legislators also ensured that they tended to some other business that will help those members planning to run for election in those legislative districts drawn on the new maps: namely, property tax relief through increased homestead exemptions and appropriations exceeding $13 billion in coronavirus relief federal funds.

We've updated details on the Bills on the Move - 3rd Special Session if you would like to see the full list of bills that made it to the finish line. Here are the details you need to know:

Property Tax Relief
As you recall, SB 1 (Bettencourt/Meyer) was always a bill that was intended to provide property tax relief. It ended quite different than it began. The Senate version would have provided temporary additional tax rate compression. The House version would have sent all homeowners a one-time check from federal funds. And where they ended up after hashing out the differences was to provide a $15,000 increase to the homestead exemption for school property taxpayers, changing the current $25,000 homestead exemption to $40,000 instead. This proposal was approved unanimously in both chambers. In order for it to take effect, voters must first approve a constitutional amendment (as proposed by SJR 2 (Bettencourt/Button), which was introduced, heard, and passed in both chambers Monday evening) during the May 2022 election.

School districts will be held harmless on both M&O and I&S when the homestead exemption is increased. We're still working through the details, but upon initial read of the language that was not available for public inspection before being voted upon in both chambers, we can say that while it may be well-intended, it is not quite perfect. As written, bonds approved by voters in November 2021 and debt already authorized by voters but not yet issued as of September 1, 2021 would not be included in the hold harmless. We will provide more information on this hold harmless in the coming days.

The Texas School Coalition testified on SB 1 throughout the process asking that tax relief be sustainable and not temporary. We also asked that voters be allowed to decide whether rates should increase (with no prohibitions against elections). All those requests were granted in the compromise reached. The bill does not include additional limits to school district tax rate elections. Also, there are no prohibitions against changing local option homestead exemptions currently in place in certain local districts. The amount of tax relief provided is less than initial proposals and therefore much closer to what may be sustainable in the long run.

The Legislative Budget Board reports that this change to the homestead exemption will cost the state $355 million in the first year it is implemented, climbing to a $436 million annual cost in 2026. That state cost includes an estimated $84 million reduction in recapture in 2023, compared to current law. It was reported by the bill's author that the average homeowner can expect a $176 decrease in their tax payment in 2022 due to this change.

UIL Athletics
HB 25 (Swanson/Perry) requires that participants in UIL athletic competitions compete according to their sex at birth. This bill was finally sent to the Governor after it failed to pass during the regular, first, and second special sessions.

SB 8 (Nelson/Bonnen) appropriates $13.3 billion in coronavirus relief federal funds. These were the funds from the American Rescue Plan Act (ARPA) that were not appropriated or otherwise dispersed during the regular session in the same manner that ESSER dollars were to schools. Over half of the total amount will go towards unemployment compensation, and another $2 billion was appropriated to the Department of State Health Services. Broadband infrastructure received $500 million, and higher education is set to receive over $600 million. Also, TRS-Care and TRS-ActiveCare received $286 million so that health care premiums do not increase due to coronavirus-related claims. Additionally, TEA received $3 million for the Big Brothers and Big Sisters program.

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