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A BILL TO BE ENTITLED
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AN ACT
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relating to the establishment of a limitation on the total amount of |
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ad valorem taxes that taxing units may impose on the residence |
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homesteads of individuals who are disabled or elderly and their |
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surviving spouses. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. The heading to Section 11.26, Tax Code, is |
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amended to read as follows: |
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Sec. 11.26. LIMITATION OF TAXES [SCHOOL TAX] ON HOMESTEADS |
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OF INDIVIDUALS WHO ARE ELDERLY OR DISABLED. |
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SECTION 2. Sections 11.26(a), (a-1), (a-2), (a-3), (b), |
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(c), (e), (g), (h), (i), (i-1), (j), (k), and (o), Tax Code, are |
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amended to read as follows: |
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(a) The tax officials shall appraise [the] property to which |
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this section applies and calculate taxes as on other property, but |
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if the tax [so] calculated exceeds the limitation imposed by this |
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section, the tax imposed is the amount of the tax as limited by this |
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section, except as otherwise provided by this section. A taxing |
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unit [school district] may not increase the total annual amount of |
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ad valorem tax it imposes on the residence homestead of an |
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individual 65 years of age or older or on the residence homestead of |
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an individual who is disabled, as defined by Section 11.13, above |
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the amount of the tax it imposed in the first tax year in which the |
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individual qualified that residence homestead for the applicable |
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exemption provided by Section 11.13(c) for an individual who is 65 |
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years of age or older or is disabled. If the individual qualified |
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that residence homestead for the exemption after the beginning of |
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that first year and the residence homestead remains eligible for |
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the same exemption for the next year, and if the [school district] |
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taxes imposed by a taxing unit on the residence homestead in the |
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next year are less than the amount of those taxes imposed in that |
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first year, the taxing unit [a school district] may not |
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subsequently increase the total annual amount of ad valorem taxes |
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it imposes on the residence homestead above the amount it imposed in |
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the year immediately following the first year for which the |
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individual qualified that residence homestead for the same |
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exemption, except as provided by Subsection (b). [If the first tax |
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year the individual qualified the residence homestead for the |
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exemption provided by Section 11.13(c) for individuals 65 years of |
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age or older or disabled was a tax year before the 2015 tax year, the |
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amount of the limitation provided by this section is the amount of |
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tax the school district imposed for the 2014 tax year less an amount |
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equal to the amount determined by multiplying $10,000 times the tax |
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rate of the school district for the 2015 tax year, plus any 2015 tax |
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attributable to improvements made in 2014, other than improvements |
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made to comply with governmental regulations or repairs.] |
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(a-1) If the first tax year the individual qualified the |
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residence homestead for the exemption provided by Section 11.13(c) |
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for individuals 65 years of age or older or disabled was a tax year |
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before the 2023 tax year, the amount of the limitation on school |
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district taxes provided by this section is the amount of those taxes |
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imposed for the 2022 tax year plus any 2023 tax attributable to |
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improvements made in 2022, other than improvements made to comply |
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with governmental regulations or repairs [Notwithstanding the |
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other provisions of this section, if in the 2007 tax year an |
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individual qualifies for a limitation on tax increases provided by |
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this section on the individual's residence homestead and the first |
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tax year the individual or the individual's spouse qualified for an |
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exemption under Section 11.13(c) for the same homestead was the |
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2006 tax year, the amount of the limitation provided by this section |
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on the homestead in the 2007 tax year is equal to the amount |
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computed by: |
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[(1) multiplying the amount of tax the school district |
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imposed on the homestead in the 2006 tax year by a fraction the |
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numerator of which is the tax rate of the district for the 2007 tax |
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year and the denominator of which is the tax rate of the district |
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for the 2006 tax year; and |
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[(2) adding any tax imposed in the 2007 tax year |
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attributable to improvements made in the 2006 tax year as provided |
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by Subsection (b) to the lesser of the amount computed under |
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Subdivision (1) or the amount of tax the district imposed on the |
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homestead in the 2006 tax year]. |
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(a-2) If the first tax year the individual qualified the |
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residence homestead for the exemption provided by Section 11.13(c) |
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for individuals 65 years of age or older or disabled was a tax year |
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before the 2023 tax year and the homestead qualified for a |
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limitation on county, municipal, or junior college district taxes |
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under former Section 11.261, the amount of the limitation on |
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county, municipal, or junior college district taxes, as applicable, |
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provided by this section is the amount of the tax imposed by the |
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applicable taxing unit for the 2022 tax year, plus any 2023 tax |
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attributable to improvements made in 2022, other than improvements |
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made to comply with governmental regulations or repairs |
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[Notwithstanding the other provisions of this section, if in the |
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2007 tax year an individual qualifies for a limitation on tax |
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increases provided by this section on the individual's residence |
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homestead and the first tax year the individual or the individual's |
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spouse qualified for an exemption under Section 11.13(c) for the |
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same homestead was a tax year before the 2006 tax year, the amount |
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of the limitation provided by this section on the homestead in the |
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2007 tax year is equal to the amount computed by: |
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[(1) multiplying the amount of tax the school district |
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imposed on the homestead in the 2005 tax year by a fraction the |
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numerator of which is the tax rate of the district for the 2006 tax |
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year and the denominator of which is the tax rate of the district |
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for the 2005 tax year; |
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[(2) adding any tax imposed in the 2006 tax year |
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attributable to improvements made in the 2005 tax year as provided |
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by Subsection (b) to the lesser of the amount computed under |
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Subdivision (1) or the amount of tax the district imposed on the |
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homestead in the 2005 tax year; |
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[(3) multiplying the amount computed under |
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Subdivision (2) by a fraction the numerator of which is the tax rate |
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of the district for the 2007 tax year and the denominator of which |
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is the tax rate of the district for the 2006 tax year; and |
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[(4) adding to the lesser of the amount computed under |
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Subdivision (2) or (3) any tax imposed in the 2007 tax year |
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attributable to improvements made in the 2006 tax year, as provided |
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by Subsection (b)]. |
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(a-3) Except as provided by Subsection (a-2), for the |
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purpose of calculating a limitation on tax increases by a taxing |
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unit other than a school district under this section, an individual |
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who qualified a residence homestead before January 1, 2023, for an |
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exemption under Section 11.13(c) for individuals 65 years of age or |
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older or disabled is considered to have qualified the homestead for |
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that exemption on January 1, 2023 [(b), a limitation on tax |
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increases provided by this section on a residence homestead |
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computed under Subsection (a-1) or (a-2) continues to apply to the |
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homestead in subsequent tax years until the limitation expires]. |
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(b) If an individual makes improvements to the individual's |
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residence homestead, other than improvements required to comply |
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with governmental requirements or repairs, a taxing unit [the |
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school district] may increase the tax on the homestead in the first |
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year the value of the homestead is increased on the appraisal roll |
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because of the enhancement of value by the improvements. The amount |
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of the tax increase is determined by applying the taxing unit's |
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current tax rate to the difference in the assessed value of the |
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homestead with the improvements and the assessed value it would |
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have had without the improvements. A limitation under [imposed by] |
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this section [then] applies to the increased amount of tax in |
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subsequent tax years until more improvements, if any, are made. |
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(c) The limitation on tax increases required by this section |
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expires if on January 1: |
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(1) none of the owners of the structure who qualify for |
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the exemption under Section 11.13(c) for individuals 65 years of |
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age or older or disabled and who owned the structure when the |
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limitation first took effect is using the structure as a residence |
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homestead; or |
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(2) none of the owners of the structure qualifies for |
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the exemption described by Subdivision (1). |
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(e) For each school district participating in an appraisal |
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district, the chief appraiser shall determine the portion of the |
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appraised value of residence homesteads of individuals on which |
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school district taxes are not imposed in a tax year because of the |
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limitation on tax increases imposed by this section. That portion |
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is calculated by determining the taxable value that, if multiplied |
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by the tax rate adopted by the school district for the tax year, |
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would produce an amount equal to the amount of tax that would have |
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been imposed by the school district on those residence homesteads |
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if the limitation on tax increases imposed by this section were not |
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in effect, but that was not imposed because of that limitation. The |
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chief appraiser shall determine that taxable value and certify it |
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to the comptroller as soon as practicable for each tax year. |
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(g) Except as provided by Subsection (b), if an individual |
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who receives a limitation on tax increases imposed by this section, |
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including a surviving spouse who receives a limitation under |
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Subsection (i), subsequently qualifies a different residence |
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homestead for the same exemption under Section 11.13, a taxing unit |
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[school district] may not impose ad valorem taxes on the |
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subsequently qualified homestead in a year in an amount that |
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exceeds the amount of taxes the taxing unit [school district] would |
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have imposed on the subsequently qualified homestead in the first |
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year in which the individual receives that same exemption for the |
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subsequently qualified homestead had the limitation on tax |
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increases imposed by this section not been in effect, multiplied by |
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a fraction the numerator of which is the total amount of [school |
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district] taxes imposed by a taxing unit of the same type on the |
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former homestead in the last year in which the individual received |
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that same exemption for the former homestead and the denominator of |
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which is the total amount of [school district] taxes that would have |
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been imposed by the taxing unit of the same type on the former |
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homestead in the last year in which the individual received that |
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same exemption for the former homestead had the limitation on tax |
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increases imposed by this section not been in effect. A limitation |
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under this subsection does not apply to a taxing unit if the former |
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homestead was not subject to taxation by a taxing unit of the same |
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type in the last year in which the individual received the exemption |
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for the former homestead. |
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(h) An individual who receives a limitation on tax increases |
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under this section, including a surviving spouse who receives a |
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limitation under Subsection (i), and who subsequently qualifies a |
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different residence homestead for an exemption under Section 11.13, |
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or an agent of the individual, is entitled to receive from the chief |
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appraiser of the appraisal district in which the former homestead |
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was located a written certificate providing the information |
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necessary to determine whether the individual may qualify for that |
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same limitation on the subsequently qualified homestead under |
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Subsection (g) and to calculate the amount of taxes the taxing units |
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[school district] may impose on the subsequently qualified |
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homestead. |
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(i) If an individual who qualifies for the exemption |
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provided by Section 11.13(c) for individuals 65 years of age or |
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older or disabled dies, the surviving spouse of the individual is |
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entitled to the limitation applicable to the residence homestead of |
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the individual if: |
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(1) the surviving spouse is 55 years of age or older or |
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disabled when the individual dies; and |
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(2) the residence homestead of the individual: |
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(A) is the residence homestead of the surviving |
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spouse on the date that the individual dies; and |
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(B) remains the residence homestead of the |
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surviving spouse. |
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(i-1) A limitation on school district taxes under |
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Subsection (i) applicable to the residence homestead of the |
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surviving spouse of an individual who was disabled and who died |
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before January 1, 2020, is calculated as if the surviving spouse was |
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entitled to the limitation when the individual died. |
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(j) If an individual who qualifies for an exemption provided |
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by Section 11.13(c) for an individual 65 years of age or older dies |
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in the first year in which the individual qualified for the |
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exemption and the individual first qualified for the exemption |
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after the beginning of that year, except as provided by Subsection |
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(k), the amount to which the surviving spouse's [school district] |
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taxes imposed by a taxing unit are limited under Subsection (i) is |
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the amount of [school district] taxes imposed by the taxing unit on |
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the residence homestead in that year determined as if the |
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individual qualifying for the exemption had lived for the entire |
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year. |
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(k) If in the first tax year after the year in which an |
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individual dies in the circumstances described by Subsection (j) |
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the amount of [school district] taxes imposed by a taxing unit on |
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the residence homestead of the surviving spouse is less than the |
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amount of [school district] taxes imposed by the taxing unit in the |
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preceding year as limited by Subsection (j), in a subsequent tax |
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year the [surviving spouse's school district] taxes imposed by that |
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taxing unit on that residence homestead are limited to the amount of |
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taxes imposed by the district in that first tax year after the year |
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in which the individual dies. |
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(o) Notwithstanding Subsections (a)[, (a-3),] and (b), an |
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improvement to property that would otherwise constitute an |
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improvement under Subsection (b) is not treated as an improvement |
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under that subsection if the improvement is a replacement structure |
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for a structure that was rendered uninhabitable or unusable by a |
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casualty or by wind or water damage. For purposes of appraising the |
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property in the tax year in which the structure would have |
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constituted an improvement under Subsection (b), the replacement |
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structure is considered to be an improvement under that subsection |
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only if: |
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(1) the square footage of the replacement structure |
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exceeds that of the replaced structure as that structure existed |
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before the casualty or damage occurred; or |
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(2) the exterior of the replacement structure is of |
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higher quality construction and composition than that of the |
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replaced structure. |
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SECTION 3. Sections 23.19(b) and (g), Tax Code, are amended |
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to read as follows: |
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(b) If an appraisal district receives a written request for |
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the appraisal of real property and improvements of a cooperative |
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housing corporation according to the separate interests of the |
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corporation's stockholders, the chief appraiser shall separately |
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appraise the interests described by Subsection (d) if the |
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conditions required by Subsections (e) and (f) have been met. |
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Separate appraisal under this section is for the purposes of |
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administration of tax exemptions, determination of applicable |
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limitations of taxes under Section 11.26 [or 11.261], and |
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apportionment by a cooperative housing corporation of property |
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taxes among its stockholders but is not the basis for determining |
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value on which a tax is imposed under this title. A stockholder |
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whose interest is separately appraised under this section may |
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protest and appeal the appraised value in the manner provided by |
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this title for protest and appeal of the appraised value of other |
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property. |
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(g) A tax bill or a separate statement accompanying the tax |
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bill to a cooperative housing corporation for which interests of |
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stockholders are separately appraised under this section must |
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state, in addition to the information required by Section 31.01, |
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the appraised value and taxable value of each interest separately |
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appraised. Each exemption claimed as provided by this title by a |
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person entitled to the exemption shall also be deducted from the |
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total appraised value of the property of the corporation. The total |
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tax imposed by a taxing unit [school district, county, |
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municipality, or junior college district] shall be reduced by any |
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amount that represents an increase in taxes attributable to |
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separately appraised interests of the real property and |
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improvements that are subject to a [the] limitation of taxes |
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prescribed by Section 11.26 [or 11.261]. The corporation shall |
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apportion among its stockholders liability for reimbursing the |
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corporation for property taxes according to the relative taxable |
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values of their interests. |
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SECTION 4. Sections 26.012(6), (13), and (14), Tax Code, |
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are amended to read as follows: |
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(6) "Current total value" means the total taxable |
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value of property listed on the appraisal roll for the current year, |
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including all appraisal roll supplements and corrections as of the |
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date of the calculation, less the taxable value of property |
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exempted for the current tax year for the first time under Section |
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11.31 or 11.315, except that: |
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(A) the current total value for a school district |
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excludes: |
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(i) the total value of homesteads that |
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qualify for a tax limitation as provided by Section 11.26; and |
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(ii) new property value of property that is |
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subject to an agreement entered into under Chapter 313; and |
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(B) the current total value for a taxing unit |
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other than a school district [county, municipality, or junior |
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college district] excludes the total value of homesteads that |
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qualify for a tax limitation provided by Section 11.26 [11.261]. |
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(13) "Last year's levy" means the total of: |
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(A) the amount of taxes that would be generated |
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by multiplying the total tax rate adopted by the governing body in |
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the preceding year by the total taxable value of property on the |
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appraisal roll for the preceding year, including: |
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(i) taxable value that was reduced in an |
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appeal under Chapter 42; |
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(ii) all appraisal roll supplements and |
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corrections other than corrections made pursuant to Section |
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25.25(d), as of the date of the calculation but excluding[, except |
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that last year's taxable value for a school district excludes] the |
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total value of homesteads that qualified for a tax limitation as |
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provided by Section 11.26 [and last year's taxable value for a |
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county, municipality, or junior college district excludes the total |
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value of homesteads that qualified for a tax limitation as provided |
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by Section 11.261]; and |
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(iii) the portion of taxable value of |
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property that is the subject of an appeal under Chapter 42 on July |
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25 that is not in dispute; and |
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(B) the amount of taxes refunded by the taxing |
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unit in the preceding year for tax years before that year. |
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(14) "Last year's total value" means the total taxable |
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value of property listed on the appraisal roll for the preceding |
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year, including all appraisal roll supplements and corrections, |
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other than corrections made pursuant to Section 25.25(d), as of the |
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date of the calculation but excluding[, except that: |
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[(A) last year's taxable value for a school |
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district excludes] the total value of homesteads that qualified for |
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a tax limitation as provided by Section 11.26[; and |
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[(B) last year's taxable value for a county, |
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municipality, or junior college district excludes the total value |
|
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of homesteads that qualified for a tax limitation as provided by |
|
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Section 11.261]. |
|
|
SECTION 5. The following provisions of the Tax Code are |
|
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repealed: |
|
|
(1) Sections 11.26(l) and (m); and |
|
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(2) Section 11.261. |
|
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SECTION 6. Section 11.26, Tax Code, as amended by this Act, |
|
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applies only to ad valorem taxes imposed for a tax year beginning on |
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or after the effective date of this Act. |
|
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SECTION 7. This Act takes effect January 1, 2023, but only |
|
|
if the constitutional amendment proposed by the 87th Legislature, |
|
|
2nd Called Session, 2021, establishing a limitation on the total |
|
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amount of ad valorem taxes that political subdivisions may impose |
|
|
on the residence homesteads of individuals who are disabled or |
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elderly and their surviving spouses is approved by the voters. If |
|
|
that constitutional amendment is not approved by the voters, this |
|
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Act has no effect. |