By Siebert                                       H.B. No. 347

      75R1020 SMH-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to limitations on increases in the appraised value of real

 1-3     property for ad valorem taxation.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Subchapter B, Chapter 23, Tax Code, is amended by

 1-6     adding Section 23.21 to read as follows:

 1-7           Sec. 23.21.  REAL PROPERTY.  (a)  Real property may not be

 1-8     appraised at more than the lesser of the following amounts:

 1-9                 (1)  the market value of the real property for the

1-10     current year; or

1-11                 (2)  the sum of:

1-12                       (A)  110 percent of the appraised value of the

1-13     property for the preceding year; and

1-14                       (B)  the market value of all new improvements to

1-15     the property.

1-16           (b)  In this section, "new improvement" means an improvement

1-17     to real property that is made after the appraisal of the property

1-18     for the preceding year and that increases the market value of the

1-19     property.  The term does not include ordinary maintenance of an

1-20     existing structure or the grounds or another feature of the

1-21     property.

1-22           (c)  An application is not required for real property to be

1-23     appraised under this section.

1-24           (d)  The chief appraiser shall include in the appraisal

 2-1     records both the market value of real property and its appraised

 2-2     value as determined by this section.

 2-3           (e)  This section does not apply to property appraised under

 2-4     Subchapter C, D, E, F, or G.

 2-5           SECTION 2.  Section 1.12, Tax Code, is amended by adding

 2-6     Subsection (d) to read as follows:

 2-7           (d)  For purposes of this section, the appraisal ratio of

 2-8     real property appraised under Section 23.21 is the ratio of the

 2-9     property's market value as determined by the appraisal district or

2-10     appraisal review board, as applicable, to the market value of the

2-11     property according to law.  The appraisal ratio is not calculated

2-12     according to the appraised value of the property as provided by

2-13     Section 23.21.

2-14           SECTION 3.  Subchapter C, Chapter 41, Tax Code, is amended by

2-15     adding Section 41.414 to read as follows:

2-16           Sec. 41.414.  PROTEST OF APPRAISED VALUE OF REAL PROPERTY.

2-17     In a protest of the appraised value of real property, if the

2-18     appraised value for the current year is the value calculated as

2-19     provided by Section 23.21(a)(2), the property owner is not entitled

2-20     to protest the appraised value for the preceding year that is used

2-21     in the calculation of the appraised value for the current year.

2-22           SECTION 4.  Section 403.302(d), Government Code, is amended

2-23     to read as follows:

2-24           (d)  For the purposes of this section, "taxable value" means

2-25     market value less:

2-26                 (1)  the total dollar amount of any exemptions of part

2-27     but not all of the value of taxable property required by the

 3-1     constitution or a statute that a district lawfully granted in the

 3-2     year that is the subject of the study;

 3-3                 (2)  the total dollar amount of any exemptions granted

 3-4     before May 31, 1993, within a reinvestment zone under agreements

 3-5     authorized by Chapter 312, Tax Code;

 3-6                 (3)  the total dollar amount of any captured appraised

 3-7     value of property that is located in a reinvestment zone and that

 3-8     is eligible for tax increment financing under Chapter 311, Tax

 3-9     Code;

3-10                 (4)  the total dollar amount of any exemptions granted

3-11     under Section 11.251, Tax Code;

3-12                 (5)  the difference between the market value and the

3-13     productivity value of land that qualifies for appraisal on the

3-14     basis of its productive capacity, except that the productivity

3-15     value may not exceed the fair market value of the land;

3-16                 (6)  the portion of the appraised value of residence

3-17     homesteads of the elderly on which school district taxes are not

3-18     imposed in the year that is the subject of the study, calculated as

3-19     if the residence homesteads were appraised at the full value

3-20     required by law;

3-21                 (7)  a portion of the market value of property not

3-22     otherwise fully taxable by the district at market value because of

3-23     action required by statute or the constitution of this state that,

3-24     if the tax rate adopted by the district is applied to it, produces

3-25     an amount equal to the difference between the tax that the district

3-26     would have imposed on the property if the property were fully

3-27     taxable at market value and the tax that the district is actually

 4-1     authorized to impose on the property; [and]

 4-2                 (8)  the market value of all tangible personal

 4-3     property, other than manufactured homes, owned by a family or

 4-4     individual and not held or used for the production of income; and

 4-5                 (9)  the amount by which the market value of real

 4-6     property to which Section 23.21, Tax Code, applies exceeds the

 4-7     appraised value of that property as calculated under that section.

 4-8           SECTION 5.  This Act takes effect January 1, 1998, but only

 4-9     if the constitutional amendment proposed by the 75th Legislature,

4-10     Regular Session, 1997, to authorize the legislature to limit

4-11     increases in the appraised value of real property for ad valorem

4-12     tax purposes is approved by the voters.  If the proposed

4-13     constitutional amendment is not approved by the voters, this Act

4-14     has no effect.

4-15           SECTION 6.  The importance of this legislation and the

4-16     crowded condition of the calendars in both houses create an

4-17     emergency and an imperative public necessity that the

4-18     constitutional rule requiring bills to be read on three several

4-19     days in each house be suspended, and this rule is hereby suspended.