The commissioner must review school district local revenue levels each year and notify affected districts. Certain districts must act by deadlines, and some districts may not set a tax rate until the commissioner certifies compliance.
Sec. 49.004. ANNUAL REVIEW OF LOCAL REVENUES. (a) Not later than July 15 of each year, using the estimates of enrollment and taxable property value under Section 48.269, the commissioner shall review the local revenue level of school districts in the state and shall notify: (1) each district with a local revenue level in excess of entitlement; (2) each district to which the commissioner proposes to annex property detached from a district notified under Subdivision (1), if necessary, under Subchapter G; and (3) each district to which the commissioner proposes to consolidate a district notified under Subdivision (1), if necessary, under Subchapter H. (a-1) This subsection applies only if the constitutional amendment proposed by S.J.R. 2, 89th Legislature, Regular Session, 2025, is approved by the voters in an election held for that purpose. As soon as practicable after receiving revised property values that reflect adoption of the constitutional amendment, the commissioner shall review the local revenue level of districts in the state and revise as necessary the notifications provided under Subsection (a) for the 2025-2026 school year. This subsection expires September 1, 2026. (a-2) This subsection applies only if the constitutional amendment proposed by S.J.R. 85, 89th Legislature, Regular Session, 2025, is approved by the voters in an election held for that purpose. As soon as practicable after receiving revised property values that reflect adoption of the constitutional amendment, the commissioner shall review the local revenue level of districts in the state and revise as necessary the notifications provided under Subsection (a) for the 2025-2026 school year. This subsection expires September 1, 2026. (b) If, before the dates provided by this subsection, a district notified under Subsection (a)(1) has not successfully exercised one or more options under Section 49.002 that reduce the district's local revenue level to a level equal to or less than the level established under Section 48.257, the commissioner shall order the detachment of property from that district as provided by Subchapter G. If that detachment will not reduce the district's local revenue level to a level equal to or less than the level established under Section 48.257, the commissioner may not detach property under Subchapter G but shall order the consolidation of the district with one or more other districts as provided by Subchapter H. An agreement under Section 49.002(1) or (2) must be executed not later than September 1 immediately following the notice under Subsection (a). An election for an option under Section 49.002(3), (4), or (5) must be ordered before September 1 immediately following the notice under Subsection (a). (b-1) This subsection applies only to a district that has not previously held an election under this chapter. Notwithstanding Subsection (b), a district that enters into an agreement to exercise an option to reduce the district's local revenue level in excess of entitlement under Section 49.002(3), (4), or (5) for the 2025-2026 school year may request and, as provided by Section 49.0043(a), receive approval from the commissioner to delay the date of the election otherwise required to be ordered before September 1. This subsection expires September 1, 2026. (c) A district notified under Subsection (a) may not adopt a tax rate for the tax year in which the district receives the notice until the commissioner certifies that the district has reduced the district's local revenue level in excess of entitlement to the level established under Section 48.257. (c-1) Notwithstanding Subsection (c), a district that receives approval from the commissioner to delay an election as provided by Subsection (b-1) may adopt a tax rate for the 2025 tax year before the commissioner certifies that the district has reduced its local revenue level to the level established by Section 48.257. This subsection expires September 1, 2026. (d) A detachment and annexation or consolidation under this chapter: (1) is effective for Foundation School Program funding purposes for the school year that begins in the calendar year in which the detachment and annexation or consolidation is agreed to or ordered; and (2) applies to the ad valorem taxation of property beginning with the tax year in which the agreement or order is effective. Added by Acts 1995, 74th Leg., ch. 260, Sec. 1, eff. May 30, 1995. Amended by Acts 1999, 76th Leg., ch. 396, Sec. 1.05, eff. Sept. 1, 1999. Amended by: Acts 2015, 84th Leg., R.S., Ch. 465 (S.B. 1), Sec. 11, eff. June 15, 2015. Transferred, redesignated and amended from Education Code, Section 41.004 by Acts 2019, 86th Leg., R.S., Ch. 943 (H.B. 3), Sec. 1.049, eff. September 1, 2019. Amended by: Acts 2023, 88th Leg., 2nd C.S., Ch. 1 (S.B. 2), Sec. 3.09, eff. July 22, 2023. Acts 2025, 89th Leg., R.S., Ch. 338 (S.B. 4), Sec. 2.04, eff. June 16, 2025. Acts 2025, 89th Leg., R.S., Ch. 340 (S.B. 23), Sec. 2.02, eff. June 16, 2025.