HB 4040 prohibits diversity, equity, and inclusion (DEI) practices in Texas public school districts. It bans DEI-based hiring preferences, special benefits based on race or ethnicity, and mandatory diversity statements. The bill also prohibits funding for DEI-related training, programs, and events, as well as student organizations that exclude participation based on race. Violations would result in financial penalties, loss of state funding, and potential legal action by the attorney general. The bill takes effect in the 2025-2026 school year​.