Untitled Texas Attorney General Opinion, KP-0144

2015 legislation raised the state homestead exemption from $15,000 to $25,000 and included Tax Code § 11.13(n-1), which forbids a taxing unit from reducing or repealing a local option homestead exemption (LOHE) below its 2014 level for the 2014 tax year.
Attorney General Opinion KP-0072 concluded § 11.13(n-1) prohibits school districts from repealing or reducing LOHEs adopted for 2014 and is not constitutionally retroactive.
The Education Code provides additional state aid for tax reduction (ASATR) under Tex. Educ. Code § 42.2516 to hold districts harmless for revenue lost from rate compression; ASATR calculations adjust a district’s local revenue when a district eliminates or reduces an LOHE (see § 42.2516(f-1)).
Commissioner Morath asked whether ASATR computation must reflect LOHE repeals or reductions that were adopted in 2015 but are prohibited by § 11.13(n-1).
The statutes (Tax Code § 11.13(n-1) and Educ. Code § 42.2516(f-1)) must be read together in the context of the school-finance scheme and the Legislature’s dual objectives of preserving district funding levels and protecting taxpayer relief.
The Attorney General concluded that an LOHE repeal or reduction that violates § 11.13(n-1) must not be recognized or used in the ASATR calculation under § 42.2516(f-1).

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether ASATR computation must reflect a district’s LOHE repeal or reduction made in 2015	The Commissioner (requestor) argues Education Code § 42.2516(f-1) requires adjusting local revenue when a district eliminates or reduces an LOHE, so repeals/reductions should be included	Tax Code § 11.13(n-1) prohibits repeal/reduction of 2014 LOHEs; prohibited actions cannot trigger the condition in § 42.2516(f-1) and therefore should not be recognized	Held: Do not use or recognize LOHE repeals or reductions made in violation of § 11.13(n-1) for ASATR calculations

City of Houston v. Bates, 406 S.W.3d 539 (Tex. 2013) (statutory interpretation focuses on legislative intent and plain meaning)
CHCA Women's Hosp. L.P. v. Lidge, 403 S.W.3d 228 (Tex. 2013) (analyze statutory language in context of the whole statute)
Hohenberg Bros. Co. v. Gibbons & Co., 537 S.W.2d 1 (Tex. 1976) (interpretation of conditional words like "if")
Crosstex Energy Servs. L.P. v. Pro Plus, Inc., 430 S.W.3d 384 (Tex. 2014) (avoid interpretations that render statutory language meaningless)
Neeley v. West Orange‑Cove Consol. Indep. Sch. Dist., 176 S.W.3d 746 (Tex. 2005) (context for ASATR created after school-property-tax decision)
Morath v. Texas Taxpayer & Student Fairness Coal., 490 S.W.3d 826 (Tex. 2016) (describing legislative changes to maintenance and operations tax rates)
Valdez v. Hollenbeck, 465 S.W.3d 217 (Tex. 2015) (consider statutes within comprehensive statutory schemes)