Relating to reducing school district maintenance and operations ad valorem taxes through the use of certain surplus state revenue.

Requires the commissioner of education to reduce the state compression percentage each school year to the lowest percentage possible using money deposited to the property tax relief fund and any additional appropriations.

If the state compression percentage is zero, a school district may not impose a tier one M&O tax and instead is entitled to state funding as if it had a maximum compressed tax rate and no local share.

Directs the comptroller to allocate for deposit to the property tax relief fund general revenue equal to 90% of identified surplus general revenue for each biennium and to make periodic deposits, with final deposit no later than the 90th day of the next biennium.

Limits how money deposited under this process may be appropriated: generally only to the Texas Education Agency for reducing the state compression percentage, with a legislative exception if deposits exceed estimated M&O taxes payable.