88R2827 RDS-D

By: Allison H.B. No. 1566

A BILL TO BE ENTITLED

AN ACT

relating to the ad valorem taxation of residential real property.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 1.12(d), Tax Code, is amended to read as follows:

(d) For purposes of this section, the appraisal ratio of real property [a homestead] to which Section 23.23 applies is the ratio of the property's market value as determined by the appraisal district or appraisal review board, as applicable, to the market value of the property according to law. The appraisal ratio is not calculated according to the appraised value of the property as limited by Section 23.23.

SECTION 2. Section 11.13, Tax Code, is amended by amending Subsection (i) and adding Subsection (s) to read as follows:

(i) The assessor and collector for a taxing unit may disregard the exemptions authorized by Subsection (b), (c), (d), [or] (n), or (s) [of this section] and assess and collect a tax pledged for payment of debt without deducting the amount of the exemption if:

(1) prior to adoption of the exemption, the taxing unit pledged the taxes for the payment of a debt; and

(2) granting the exemption would impair the obligation of the contract creating the debt.

(s) In addition to any other exemptions provided by this section, an individual who purchases property and qualifies the property as the individual's residence homestead is entitled to an exemption from taxation of the total appraised value of the property for the first tax year the individual qualifies the property as the individual's residence homestead if the property:

(1) is the first property the individual has ever qualified as the individual's residence homestead; and

(2) has an appraised value of less than $300,000 for that first tax year.

SECTION 3. Subchapter B, Chapter 11, Tax Code, is amended by adding Section 11.262 to read as follows:

Sec. 11.262. LIMITATION OF TAXES ON HOMESTEADS FOLLOWING CERTAIN PERIOD. (a) In this section, "residence homestead" has the meaning assigned by Section 11.13.

(b) The chief appraiser shall appraise, and the tax assessor for each taxing unit shall calculate the taxes on, each residence homestead in the manner provided by law for other property.

(c) Except as provided by Subsection (h), if an individual qualifies property as the individual's residence homestead for at least 25 consecutive tax years, a taxing unit may not impose taxes on that residence homestead in a subsequent tax year in an amount that exceeds the lesser of the following amounts:

(1) the amount of taxes calculated for the taxing unit for the current tax year under Subsection (b); or

(2) the amount of taxes imposed by the taxing unit for that 25th tax year.

(d) For purposes of this section, if the first tax year an individual qualified property as the individual's residence homestead was a tax year before the 2000 tax year, the individual is considered to have qualified the property as the individual's residence homestead for the first time in the 2000 tax year.

(e) If an individual who qualifies for a limitation under this section dies, the surviving spouse of the individual is entitled to continue receiving the limitation applicable to the residence homestead of the individual if the property:

(1) is the residence homestead of the surviving spouse on the date that the individual dies; and

(2) remains the residence homestead of the surviving spouse.

(f) Except as provided by Subsection (e) or (g), a limitation under this section expires on January 1 if the property is not the residence homestead of the individual entitled to the limitation for the preceding tax year.

(g) A limitation under this section does not expire if:

(1) an owner of an interest in the residence homestead conveys the interest to a qualifying trust as defined by Section 11.13(j) and the owner or the owner's spouse is:

(A) a trustor of the trust; and

(B) entitled to occupy the property; or

(2) the owner of the structure qualifies for an exemption under Section 11.13 under the circumstances described by Section 11.135(a).

(h) Except as provided by Subsection (i), a taxing unit may increase the tax on a residence homestead subject to a limitation under this section in the first year the appraised value of the property is increased as the result of an improvement made to the property in the preceding tax year. The amount of the tax increase is determined by applying the current tax rate of the taxing unit to the difference in the taxable value of the property with the improvement and the taxable value the property would have had without the improvement. A limitation imposed by this section then applies to the increased amount of tax until another improvement is made to the property.

(i) An improvement to a residence homestead is not treated as an improvement under Subsection (h) if the improvement is:

(1) a repair;

(2) required to be made to comply with a governmental requirement; or

(3) subject to Subsection (j), a replacement structure for a structure that was rendered uninhabitable or unusable by a casualty or by wind or water damage.

(j) A replacement structure described by Subsection (i)(3) is considered to be an improvement under Subsection (h) only if:

(1) the square footage of the replacement structure exceeds the square footage of the replaced structure as the replaced structure existed before the casualty or damage occurred; or

(2) the exterior of the replacement structure is of higher quality construction and composition than that of the replaced structure.

(k) If the appraisal roll provides for taxation of appraised value for a prior year because a limitation under this section was erroneously allowed, the tax assessor for the taxing unit shall add as back taxes due, as provided by Section 26.09(d), the positive difference, if any, between the tax that should have been imposed for that tax year and the tax that was imposed because of the provisions of this section.

(l) For each school district in an appraisal district, the chief appraiser shall determine the portion of the appraised value of residence homesteads of individuals on which school district taxes are not imposed in a tax year because of the limitation under this section. That portion is calculated by determining the taxable value that, if multiplied by the tax rate adopted by the school district for the tax year, would produce an amount equal to the amount of tax that would have been imposed by the school district on those properties if the limitation under this section were not in effect, but that was not imposed because of that limitation. The chief appraiser shall determine that taxable value and certify it to the comptroller as soon as practicable for each tax year.

SECTION 4. Sections 23.19(b) and (g), Tax Code, are amended to read as follows:

(b) If an appraisal district receives a written request for the appraisal of real property and improvements of a cooperative housing corporation according to the separate interests of the corporation's stockholders, the chief appraiser shall separately appraise the interests described by Subsection (d) if the conditions required by Subsections (e) and (f) have been met. Separate appraisal under this section is for the purposes of administration of tax exemptions, determination of applicable limitations of taxes under Section 11.26, [or] 11.261, or 11.262, and apportionment by a cooperative housing corporation of property taxes among its stockholders but is not the basis for determining value on which a tax is imposed under this title. A stockholder whose interest is separately appraised under this section may protest and appeal the appraised value in the manner provided by this title for protest and appeal of the appraised value of other property.

(g) A tax bill or a separate statement accompanying the tax bill to a cooperative housing corporation for which interests of stockholders are separately appraised under this section must state, in addition to the information required by Section 31.01, the appraised value and taxable value of each interest separately appraised. Each exemption claimed as provided by this title by a person entitled to the exemption shall also be deducted from the total appraised value of the property of the corporation. The total tax imposed by a school district, county, municipality, or junior college district shall be reduced by any amount that represents an increase in taxes attributable to separately appraised interests of the real property and improvements that are subject to the limitation of taxes prescribed by Section 11.26, [or] 11.261, or 11.262. The corporation shall apportion among its stockholders liability for reimbursing the corporation for property taxes according to the relative taxable values of their interests.

SECTION 5. The heading to Section 23.23, Tax Code, is amended to read as follows:

Sec. 23.23. LIMITATION ON APPRAISED VALUE OF RESIDENTIAL REAL PROPERTY [RESIDENCE HOMESTEAD].

SECTION 6. Section 23.23, Tax Code, is amended by amending Subsections (a), (b), (c), (e), and (f) and adding Subsections (c-2), (c-3), and (c-4) to read as follows:

(a) Notwithstanding the requirements of Section 25.18 and regardless of whether the appraisal office has appraised the property and determined the market value of the property for the tax year, an appraisal office may increase the appraised value of residential real property [a residence homestead] for a tax year to an amount not to exceed the lesser of:

(1) the market value of the property for the most recent tax year that the market value was determined by the appraisal office; or

(2) the sum of:

(A) five [10] percent of the appraised value of the property for the preceding tax year;

(B) the appraised value of the property for the preceding tax year; and

(C) the market value of all new improvements to the property.

(b) When appraising residential real property [a residence homestead], the chief appraiser shall:

(1) appraise the property at its market value; and

(2) include in the appraisal records both the market value of the property and the amount computed under Subsection (a)(2).

(c) The limitation provided by Subsection (a) takes effect on January 1 of the tax year following the first tax year in which the owner owns the property on January 1 [as to a residence homestead on January 1 of the tax year following the first tax year the owner qualifies the property for an exemption under Section 11.13]. Except as provided by Subsection (c-2) or (c-3), the [The] limitation expires on January 1 of the first tax year following the year in which [that neither] the owner of the property ceases to own the property.

(c-2) If property subject to a limitation under this section qualifies for an exemption under Section 11.13 when the ownership of the property is transferred to the owner's spouse or surviving spouse, the limitation expires on January 1 of the first tax year following the year in which [when the limitation took effect nor] the owner's spouse or surviving spouse ceases to own the property, unless the limitation is further continued under this subsection on the subsequent transfer to a spouse or surviving spouse [qualifies for an exemption under Section 11.13].

(c-3) If property subject to a limitation under Subsection (a), other than a residence homestead, is owned by two or more persons, the limitation expires on January 1 of the first tax year following the year in which the ownership of at least a 50 percent interest in the property is sold or otherwise transferred.

(c-4) For purposes of applying the limitation provided by this section, a person who acquired residential real property in a tax year before the 2023 tax year, other than property that qualified as the residence homestead of the person under Section 11.13 in the 2023 tax year, is considered to have acquired the property on January 1, 2023.

(e) In this section:

(1) "New [, "new] improvement" means an improvement to real property [a residence homestead] made after the most recent appraisal of the property that increases the market value of the property and the value of which is not included in the appraised value of the property for the preceding tax year. The term does not include repairs to or ordinary maintenance of an existing structure or the grounds or another feature of the property.

(2) "Residential real property":

(A) means real property that:

(i) qualifies for an exemption under Section 11.13; or

(ii) is designed or adapted for residential purposes, including the residential portion, not to exceed 20 acres, of farm or ranch property; and

(B) does not include real property on which a hotel, motel, or similar structure is located that is designed to provide temporary lodging or accommodations.

(f) Notwithstanding Subsections (a) and (e)(1) [(e)] and except as provided by Subdivision (2) of this subsection, an improvement to property that would otherwise constitute a new improvement is not treated as a new improvement if the improvement is a replacement structure for a structure that was rendered uninhabitable or unusable by a casualty or by wind or water damage. For purposes of appraising the property under Subsection (a) in the tax year in which the structure would have constituted a new improvement:

(1) the appraised value the property would have had in the preceding tax year if the casualty or damage had not occurred is considered to be the appraised value of the property for that year, regardless of whether that appraised value exceeds the actual appraised value of the property for that year as limited by Subsection (a); and

(2) the replacement structure is considered to be a new improvement only if:

(A) the square footage of the replacement structure exceeds that of the replaced structure as that structure existed before the casualty or damage occurred; or

(B) the exterior of the replacement structure is of higher quality construction and composition than that of the replaced structure.

SECTION 7. Sections 26.012(6), (13), and (14), Tax Code, are amended to read as follows:

(6) "Current total value" means the total taxable value of property listed on the appraisal roll for the current year, including all appraisal roll supplements and corrections as of the date of the calculation, less the taxable value of property exempted for the current tax year for the first time under Section 11.31 or 11.315, except that:

(A) the current total value for a school district excludes:

(i) the total value of homesteads that qualify for a tax limitation as provided by Section 11.26; and

(ii) new property value of property that is subject to an agreement entered into under Chapter 313; [and]

(B) the current total value for a county, municipality, or junior college district excludes the total value of homesteads that qualify for a tax limitation provided by Section 11.261; and

(C) the current total value for a taxing unit excludes the total value of homesteads that qualify for a tax limitation as provided by Section 11.262.

(13) "Last year's levy" means the total of:

(A) the amount of taxes that would be generated by multiplying the total tax rate adopted by the governing body in the preceding year by the total taxable value of property on the appraisal roll for the preceding year, including:

(i) taxable value that was reduced in an appeal under Chapter 42;

(ii) all appraisal roll supplements and corrections other than corrections made pursuant to Section 25.25(d), as of the date of the calculation, except that last year's taxable value for a school district excludes the total value of homesteads that qualified for a tax limitation as provided by Section 11.26, [and] last year's taxable value for a county, municipality, or junior college district excludes the total value of homesteads that qualified for a tax limitation as provided by Section 11.261, and last year's taxable value for a taxing unit excludes the total value of homesteads that qualified for a tax limitation as provided by Section 11.262; and

(iii) the portion of taxable value of property that is the subject of an appeal under Chapter 42 on July 25 that is not in dispute; and

(B) the amount of taxes refunded by the taxing unit in the preceding year for tax years before that year.

(14) "Last year's total value" means the total taxable value of property listed on the appraisal roll for the preceding year, including all appraisal roll supplements and corrections, other than corrections made pursuant to Section 25.25(d), as of the date of the calculation, except that:

(A) last year's taxable value for a school district excludes the total value of homesteads that qualified for a tax limitation as provided by Section 11.26; [and]

(B) last year's taxable value for a county, municipality, or junior college district excludes the total value of homesteads that qualified for a tax limitation as provided by Section 11.261; and

(C) last year's taxable value for a taxing unit excludes the total value of homesteads that qualified for a tax limitation as provided by Section 11.262.

SECTION 8. Section 42.26(d), Tax Code, is amended to read as follows:

(d) For purposes of this section, the value of the property subject to the suit and the value of a comparable property or sample property that is used for comparison must be the market value determined by the appraisal district when the property is [a residence homestead] subject to the limitation on appraised value imposed by Section 23.23.

SECTION 9. Section 44.004(c), Education Code, is amended to read as follows:

(c) The notice of public meeting to discuss and adopt the budget and the proposed tax rate may not be smaller than one-quarter page of a standard-size or a tabloid-size newspaper, and the headline on the notice must be in 18-point or larger type. Subject to Subsection (d), the notice must:

(1) contain a statement in the following form:

"NOTICE OF PUBLIC MEETING TO DISCUSS BUDGET AND PROPOSED TAX RATE

"The (name of school district) will hold a public meeting at (time, date, year) in (name of room, building, physical location, city, state). The purpose of this meeting is to discuss the school district's budget that will determine the tax rate that will be adopted. Public participation in the discussion is invited." The statement of the purpose of the meeting must be in bold type. In reduced type, the notice must state: "The tax rate that is ultimately adopted at this meeting or at a separate meeting at a later date may not exceed the proposed rate shown below unless the district publishes a revised notice containing the same information and comparisons set out below and holds another public meeting to discuss the revised notice." In addition, in reduced type, the notice must state: "Visit Texas.gov/PropertyTaxes to find a link to your local property tax database on which you can easily access information regarding your property taxes, including information about proposed tax rates and scheduled public hearings of each entity that taxes your property.";

(2) contain a section entitled "Comparison of Proposed Budget with Last Year's Budget," which must show the difference, expressed as a percent increase or decrease, as applicable, in the amounts budgeted for the preceding fiscal year and the amount budgeted for the fiscal year that begins in the current tax year for each of the following:

(A) maintenance and operations;

(B) debt service; and

(C) total expenditures;

(3) contain a section entitled "Total Appraised Value and Total Taxable Value," which must show the total appraised value and the total taxable value of all property and the total appraised value and the total taxable value of new property taxable by the district in the preceding tax year and the current tax year as calculated under Section 26.04, Tax Code;

(4) contain a statement of the total amount of the outstanding and unpaid bonded indebtedness of the school district;

(5) contain a section entitled "Comparison of Proposed Rates with Last Year's Rates," which must:

(A) show in rows the tax rates described by Subparagraphs (i)-(iii), expressed as amounts per $100 valuation of property, for columns entitled "Maintenance & Operations," "Interest & Sinking Fund," and "Total," which is the sum of "Maintenance & Operations" and "Interest & Sinking Fund":

(i) the school district's "Last Year's Rate";

(ii) the "Rate to Maintain Same Level of Maintenance & Operations Revenue & Pay Debt Service," which:

(a) in the case of "Maintenance & Operations," is the tax rate that, when applied to the current taxable value for the district, as certified by the chief appraiser under Section 26.01, Tax Code, and as adjusted to reflect changes made by the chief appraiser as of the time the notice is prepared, would impose taxes in an amount that, when added to state funds to be distributed to the district under Chapter 48, would provide the same amount of maintenance and operations taxes and state funds distributed under Chapter 48 per student in average daily attendance for the applicable school year that was available to the district in the preceding school year; and

(b) in the case of "Interest & Sinking Fund," is the tax rate that, when applied to the current taxable value for the district, as certified by the chief appraiser under Section 26.01, Tax Code, and as adjusted to reflect changes made by the chief appraiser as of the time the notice is prepared, and when multiplied by the district's anticipated collection rate, would impose taxes in an amount that, when added to state funds to be distributed to the district under Chapter 46 and any excess taxes collected to service the district's debt during the preceding tax year but not used for that purpose during that year, would provide the amount required to service the district's debt; and

(iii) the "Proposed Rate";

(B) contain fourth and fifth columns aligned with the columns required by Paragraph (A) that show, for each row required by Paragraph (A):

(i) the "Local Revenue per Student," which is computed by multiplying the district's total taxable value of property, as certified by the chief appraiser for the applicable school year under Section 26.01, Tax Code, and as adjusted to reflect changes made by the chief appraiser as of the time the notice is prepared, by the total tax rate, and dividing the product by the number of students in average daily attendance in the district for the applicable school year; and

(ii) the "State Revenue per Student," which is computed by determining the amount of state aid received or to be received by the district under Chapters 43, 46, and 48 and dividing that amount by the number of students in average daily attendance in the district for the applicable school year; and

(C) contain an asterisk after each calculation for "Interest & Sinking Fund" and a footnote to the section that, in reduced type, states "The Interest & Sinking Fund tax revenue is used to pay for bonded indebtedness on construction, equipment, or both. The bonds, and the tax rate necessary to pay those bonds, were approved by the voters of this district.";

(6) contain a section entitled "Comparison of Proposed Levy with Last Year's Levy on Average Residence," which must:

(A) show in rows the information described by Subparagraphs (i)-(iv), rounded to the nearest dollar, for columns entitled "Last Year" and "This Year":

(i) "Average Market Value of Residences," determined using the same group of residences for each year;

(ii) "Average Taxable Value of Residences," determined after taking into account the limitation on the appraised value of residences under Section 23.23, Tax Code, and after subtracting all homestead exemptions applicable in each year, other than exemptions available only to disabled persons or persons 65 years of age or older or their surviving spouses, and using the same group of residences for each year;

(iii) "Last Year's Rate Versus Proposed Rate per $100 Value"; and

(iv) "Taxes Due on Average Residence," determined using the same group of residences for each year; and

(B) contain the following information: "Increase (Decrease) in Taxes" expressed in dollars and cents, which is computed by subtracting the "Taxes Due on Average Residence" for the preceding tax year from the "Taxes Due on Average Residence" for the current tax year;

(7) contain the following statement in bold print: "Under state law, the dollar amount of school taxes imposed on the residence of a person 65 years of age or older or of the surviving spouse of such a person, if the surviving spouse was 55 years of age or older when the person died, may not be increased above the amount paid in the first year after the person turned 65, regardless of changes in tax rate or property value.";

(8) contain the following statement in bold print: "Notice of Voter-Approval Rate: The highest tax rate the district can adopt before requiring voter approval at an election is (the school district voter-approval rate determined under Section 26.08, Tax Code). This election will be automatically held if the district adopts a rate in excess of the voter-approval rate of (the school district voter-approval rate)."; [and]

(9) contain a section entitled "Fund Balances," which must include the estimated amount of interest and sinking fund balances and the estimated amount of maintenance and operation or general fund balances remaining at the end of the current fiscal year that are not encumbered with or by corresponding debt obligation, less estimated funds necessary for the operation of the district before the receipt of the first payment under Chapter 48 in the succeeding school year; and

(10) contain the following statement in bold print: "Under state law, the dollar amount of school taxes imposed on a residence homestead that qualifies as the owner's residence homestead for at least 25 consecutive years may not be increased above the amount of school taxes imposed on the property in that 25th consecutive year, regardless of changes in tax rate or property value."[.]

SECTION 10. Section 46.071, Education Code, is amended by adding Subsection (a-2) and amending Subsections (b-1) and (c-1) to read as follows:

(a-2) Beginning with the 2024-2025 school year, in addition to state aid a school district is entitled to under Subsection (a-1), a school district is also entitled to additional state aid under this subchapter to the extent that state and local revenue used to service debt eligible under this chapter is less than the state and local revenue that would have been available to the district under this chapter as it existed on September 1, 2023, if the exemption for an individual's first residence homestead under Section 1-b(w), Article VIII, Texas Constitution, as proposed by the 88th Legislature, Regular Session, 2023, had not been adopted.

(b-1) Subject to Subsections (c-1), (d), and (e), additional state aid under this section beginning with the 2022-2023 school year is equal to the amount by which the loss of local interest and sinking revenue for debt service attributable to any increase in the residence homestead exemption under Section 1-b(c), Article VIII, Texas Constitution, as proposed by the 87th Legislature, 3rd Called Session, 2021, and the residence homestead exemption under Section 1-b(w), Article VIII, Texas Constitution, as proposed by the 88th Legislature, Regular Session, 2023, is not offset by a gain in state aid under this chapter.

(c-1) For the purpose of determining state aid under Subsection [Subsections] (a-1) or (a-2) [and (b-1)], local interest and sinking revenue for debt service is limited to revenue required to service debt eligible under this chapter as of September 1, 2021, or as of September 1, 2023, respectively, including refunding of the applicable [that] debt, subject to Section 46.061. The limitation imposed by Section 46.034(a) does not apply for the purpose of determining state aid under Subsection (a-1) or (a-2) [this section].

SECTION 11. Section 48.2543, Education Code, is amended by adding Subsection (a-1) and amending Subsection (b) to read as follows:

(a-1) Beginning with the 2024-2025 school year, in addition to state aid a school district is entitled to under Subsection (a), a school district is entitled to additional state aid to the extent that state and local revenue under this chapter and Chapter 49 is less than the state and local revenue that would have been available to the district under this chapter and Chapter 49 as those chapters existed on September 1, 2023, if the exemption for an individual's first residence homestead under Section 1-b(w), Article VIII, Texas Constitution, as proposed by the joint resolution to add that subsection adopted by the 88th Legislature, Regular Session, 2023, had not been adopted.

(b) The lesser of the school district's currently adopted maintenance and operations tax rate or the adopted maintenance and operations tax rate for:

(1) the 2021 tax year is used for the purpose of determining additional state aid under Subsection (a); and

(2) the 2023 tax year is used for the purpose of determining additional state aid under Subsection (a-1).

SECTION 12. Sections 403.302(d), (d-1), and (i), Government Code, are amended to read as follows:

(d) For the purposes of this section, "taxable value" means the market value of all taxable property less:

(1) the total dollar amount of any residence homestead exemptions lawfully granted under Section 11.13(b) or (c), Tax Code, in the year that is the subject of the study for each school district;

(2) one-half of the total dollar amount of any residence homestead exemptions granted under Section 11.13(n), Tax Code, in the year that is the subject of the study for each school district;

(3) the total dollar amount of any exemptions granted before May 31, 1993, within a reinvestment zone under agreements authorized by Chapter 312, Tax Code;

(4) subject to Subsection (e), the total dollar amount of any captured appraised value of property that:

(A) is within a reinvestment zone created on or before May 31, 1999, or is proposed to be included within the boundaries of a reinvestment zone as the boundaries of the zone and the proposed portion of tax increment paid into the tax increment fund by a school district are described in a written notification provided by the municipality or the board of directors of the zone to the governing bodies of the other taxing units in the manner provided by former Section 311.003(e), Tax Code, before May 31, 1999, and within the boundaries of the zone as those boundaries existed on September 1, 1999, including subsequent improvements to the property regardless of when made;

(B) generates taxes paid into a tax increment fund created under Chapter 311, Tax Code, under a reinvestment zone financing plan approved under Section 311.011(d), Tax Code, on or before September 1, 1999; and

(C) is eligible for tax increment financing under Chapter 311, Tax Code;

(5) the total dollar amount of any captured appraised value of property that:

(A) is within a reinvestment zone:

(i) created on or before December 31, 2008, by a municipality with a population of less than 18,000; and

(ii) the project plan for which includes the alteration, remodeling, repair, or reconstruction of a structure that is included on the National Register of Historic Places and requires that a portion of the tax increment of the zone be used for the improvement or construction of related facilities or for affordable housing;

(B) generates school district taxes that are paid into a tax increment fund created under Chapter 311, Tax Code; and

(C) is eligible for tax increment financing under Chapter 311, Tax Code;

(6) the total dollar amount of any exemptions granted under Section 11.251 or 11.253, Tax Code;

(7) the difference between the comptroller's estimate of the market value and the productivity value of land that qualifies for appraisal on the basis of its productive capacity, except that the productivity value estimated by the comptroller may not exceed the fair market value of the land;

(8) the portion of the appraised value of residence homesteads of individuals who receive a tax limitation under Section 11.26 or 11.262, Tax Code, on which school district taxes are not imposed in the year that is the subject of the study, calculated as if the residence homesteads were appraised at the full value required by law;

(9) a portion of the market value of property not otherwise fully taxable by the district at market value because of action required by statute or the constitution of this state, other than Section 11.311, Tax Code, that, if the tax rate adopted by the district is applied to it, produces an amount equal to the difference between the tax that the district would have imposed on the property if the property were fully taxable at market value and the tax that the district is actually authorized to impose on the property, if this subsection does not otherwise require that portion to be deducted;

(10) the market value of all tangible personal property, other than manufactured homes, owned by a family or individual and not held or used for the production of income;

(11) the appraised value of property the collection of delinquent taxes on which is deferred under Section 33.06, Tax Code;

(12) the portion of the appraised value of property the collection of delinquent taxes on which is deferred under Section 33.065, Tax Code;

(13) the amount by which the market value of real property [a residence homestead] to which Section 23.23, Tax Code, applies exceeds the appraised value of that property as calculated under that section; and

(14) the total dollar amount of any exemptions granted under Section 11.35, Tax Code.

(d-1) For purposes of Subsection (d), a residence homestead that receives an exemption under Section 11.13(s), 11.131, 11.133, or 11.134, Tax Code, in the year that is the subject of the study is not considered to be taxable property.

(i) If the comptroller determines in the study that the market value of property in a school district as determined by the appraisal district that appraises property for the school district, less the total of the amounts and values listed in Subsection (d) as determined by that appraisal district, is valid, the comptroller, in determining the taxable value of property in the school district under Subsection (d), shall for purposes of Subsection (d)(13) subtract from the market value as determined by the appraisal district of properties [residence homesteads] to which Section 23.23, Tax Code, applies the amount by which that amount exceeds the appraised value of those properties as calculated by the appraisal district under Section 23.23, Tax Code. If the comptroller determines in the study that the market value of property in a school district as determined by the appraisal district that appraises property for the school district, less the total of the amounts and values listed in Subsection (d) as determined by that appraisal district, is not valid, the comptroller, in determining the taxable value of property in the school district under Subsection (d), shall for purposes of Subsection (d)(13) subtract from the market value as estimated by the comptroller of properties [residence homesteads] to which Section 23.23, Tax Code, applies the amount by which that amount exceeds the appraised value of those properties as calculated by the appraisal district under Section 23.23, Tax Code.

SECTION 13. Section 23.23(c-1), Tax Code, is repealed.

SECTION 14. Section 11.13(s), Tax Code, as added by this Act, applies only to the appraisal for ad valorem tax purposes of residence homesteads for a tax year that begins on or after the effective date of this Act.

SECTION 15. Section 11.262, Tax Code, as added by this Act, applies only to ad valorem taxes imposed for a tax year that begins on or after the effective date of this Act.

SECTION 16. Section 23.23, Tax Code, as amended by this Act, applies only to the appraisal for ad valorem tax purposes of residential real property for a tax year that begins on or after the effective date of this Act.

SECTION 17. This Act takes effect January 1, 2024, but only if the constitutional amendment proposed by the 88th Legislature, Regular Session, 2023, authorizing the legislature to limit the maximum appraised value of residential real property for ad valorem tax purposes to 105 percent or more of the appraised value of the property for the preceding tax year, to exempt from ad valorem taxation the total appraised value of property purchased by an individual for the first tax year the individual qualifies the property as the individual's residence homestead if the property is the individual's first residence homestead and has an appraised value of less than $300,000, and to limit the total amount of ad valorem taxes that a political subdivision may impose on the residence homestead of an individual and the surviving spouse of the individual if the individual qualifies the property as the individual's residence homestead for at least 25 consecutive tax years is approved by the voters. If that constitutional amendment is not approved by the voters, this Act has no effect.