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A BILL TO BE ENTITLED
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AN ACT
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relating to the limitations on increases in the appraised value of |
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certain property for ad valorem tax purposes. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 23.23(a), Tax Code, is amended to read as |
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follows: |
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(a) Notwithstanding the requirements of Section 25.18 and |
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regardless of whether the appraisal office has appraised the |
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property and determined the market value of the property for the tax |
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year, an appraisal office may increase the appraised value of a |
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residence homestead for a tax year to an amount not to exceed the |
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lesser of: |
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(1) the market value of the property for the most |
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recent tax year that the market value was determined by the |
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appraisal office; or |
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(2) the sum of: |
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(A) 2.5 [10] percent of the appraised value of |
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the property for the preceding tax year; |
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(B) the appraised value of the property for the |
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preceding tax year; and |
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(C) the market value of all new improvements to |
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the property. |
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SECTION 2. Sections 23.231(a), (d), and (g), Tax Code, are |
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amended to read as follows: |
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(a) In this section: |
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(1) ["Consumer price index" means the average over a |
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state fiscal year of the Consumer Price Index for All Urban |
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Consumers (CPI-U), U.S. City Average, published monthly by the |
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United States Bureau of Labor Statistics, or its successor in |
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function. |
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[(2)] "Disaster recovery program" means a disaster |
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recovery program funded with community development block grant |
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disaster recovery money authorized by federal law. |
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(2) [(3)] "New improvement" means an improvement to |
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real property made after the most recent appraisal of the property |
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that increases the market value of the property and the value of |
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which is not included in the appraised value of the property for the |
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preceding tax year. The term does not include repairs to or |
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ordinary maintenance of an existing structure or the grounds or |
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another feature of the property. |
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(d) Notwithstanding the requirements of Section 25.18 and |
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regardless of whether the appraisal office has appraised the |
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property and determined the market value of the property for the tax |
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year, an appraisal office may increase the appraised value of real |
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property to which this section applies for a tax year to an amount |
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not to exceed the lesser of: |
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(1) the market value of the property for the most |
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recent tax year that the market value was determined by the |
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appraisal office; or |
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(2) the sum of: |
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(A) eight [20] percent of the appraised value of |
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the property for the preceding tax year; |
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(B) the appraised value of the property for the |
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preceding tax year; and |
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(C) the market value of all new improvements to |
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the property. |
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(g) For purposes of Subsection (f): |
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(1) [,] a person who, before the 2023 tax year, |
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acquired real property to which this section applied as this |
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section existed on January 1, 2024, [applies before the 2023 tax |
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year] is considered to have acquired the property on January 1, |
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2023; and |
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(2) a person who, before the 2025 tax year, acquired |
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real property, other than property described by Subdivision (1), to |
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which this section applies is considered to have acquired the |
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property on January 1, 2025. |
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SECTION 3. Section 25.19(o), Tax Code, is amended to read as |
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follows: |
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(o) A notice required under Subsection (a) or (g) to be |
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delivered to the owner of real property other than a single-family |
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residence that qualifies for an exemption under Section 11.13 must |
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include the following statement: "Under Section 23.231, Tax Code, |
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[for the 2024, 2025, and 2026 tax years,] the appraised value of |
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real property other than a residence homestead for ad valorem tax |
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purposes may not be increased by more than eight [20] percent each |
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year, with certain exceptions." [The circuit breaker limitation |
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provided under Section 23.231, Tax Code, expires December 31, 2026. |
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Unless this expiration date is extended by the Texas Legislature, |
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beginning in the 2027 tax year, the circuit breaker limitation |
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provided under Section 23.231, Tax Code, will no longer be in effect |
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and may result in an increase in ad valorem taxes imposed on real |
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property previously subject to the limitation." This subsection |
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expires December 31, 2027.] |
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SECTION 4. The following provisions are repealed: |
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(1) Sections 23.231(b), (j), and (k), Tax Code; |
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(2) Section 4.02, Chapter 1 (S.B. 2), Acts of the 88th |
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Legislature, 2nd Called Session, 2023, which amended Section |
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1.12(d), Tax Code, as effective January 1, 2027; |
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(3) Section 4.05, Chapter 1 (S.B. 2), Acts of the 88th |
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Legislature, 2nd Called Session, 2023, which amended Sections |
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25.19(b) and (g), Tax Code, as effective January 1, 2027; |
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(4) Section 4.08, Chapter 1 (S.B. 2), Acts of the 88th |
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Legislature, 2nd Called Session, 2023, which amended Section |
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41.41(a), Tax Code, as effective January 1, 2027; |
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(5) Section 4.10, Chapter 1 (S.B. 2), Acts of the 88th |
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Legislature, 2nd Called Session, 2023, which amended Section |
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42.26(d), Tax Code, as effective January 1, 2027; and |
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(6) Section 4.12, Chapter 1 (S.B. 2), Acts of the 88th |
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Legislature, 2nd Called Session, 2023, which amended Sections |
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403.302(d) and (i), Government Code, as effective January 1, 2027. |
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SECTION 5. This Act applies only to the appraisal of |
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property for ad valorem tax purposes for a tax year that begins on |
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or after the effective date of this Act. |
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SECTION 6. This Act takes effect January 1, 2026, but only |
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if the constitutional amendment proposed by the 89th Legislature, |
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Regular Session, 2025, to authorize the legislature to set lower |
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limits on the maximum appraised value of residence homesteads and |
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of real property other than a residence homestead for ad valorem tax |
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purposes and to make permanent the limit on the maximum appraised |
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value of real property other than a residence homestead is approved |
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by the voters. If that amendment is not approved by the voters, |
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this Act has no effect. |