By Hilbert H.B. No. 1776
75R7272 SMH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to ad valorem taxation.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 1.12, Tax Code, is amended by adding
1-5 Subsection (d) to read as follows:
1-6 (d) For purposes of this section, the appraisal ratio of a
1-7 residence homestead to which Section 23.21 applies is the ratio of
1-8 the property's market value as determined by the appraisal district
1-9 or appraisal review board, as applicable, to the market value of
1-10 the property according to law. The appraisal ratio is not
1-11 calculated according to the appraised value of the property as
1-12 limited by Section 23.21.
1-13 SECTION 2. Section 5.12(b), Tax Code, is amended to read as
1-14 follows:
1-15 (b) At the written request of the governing bodies of a
1-16 majority of all the taxing units participating in an appraisal
1-17 district or of a majority of the group of taxing units composed of
1-18 the participating municipalities, school districts, and the county
1-19 [entitled to vote on the appointment of appraisal district
1-20 directors], the comptroller shall audit the performance of the
1-21 appraisal district. The governing bodies may request a general
1-22 audit of the performance of the appraisal district or may request
1-23 an audit of only one or more particular duties, practices,
1-24 functions, departments, or other appraisal district matters.
2-1 SECTION 3. Section 5.13(h), Tax Code, is amended to read as
2-2 follows:
2-3 (h) At any time after the request for an audit is made, the
2-4 comptroller may discontinue the audit in whole or part if requested
2-5 to do so by:
2-6 (1) the governing bodies of a majority of all the
2-7 taxing units participating in the district, if the audit was
2-8 requested by a majority of those units;
2-9 (2) the governing bodies of a majority of the group of
2-10 taxing units composed of the participating municipalities, school
2-11 districts, and the county [entitled to vote on the appointment of
2-12 appraisal district directors], if the audit was requested by a
2-13 majority of those units; or
2-14 (3) if the audit was requested under Section 5.12(c)
2-15 of this code, by the taxpayers who requested the audit.
2-16 SECTION 4. Section 6.03, Tax Code, is amended to read as
2-17 follows:
2-18 Sec. 6.03. Board of Directors. (a) The appraisal district
2-19 is governed by a board of five directors. One director is elected
2-20 from each of the four commissioners precincts in the county for
2-21 which the appraisal district is established and one director is
2-22 elected at large from the county. The directors are elected at the
2-23 general election for state and county officers and serve two-year
2-24 terms beginning on January 1 of odd-numbered years.
2-25 (b) To be eligible to serve on the board of directors, an
2-26 individual must:
2-27 (1) be a resident of the precinct from which the
3-1 office is elected or, in the case of the director-at-large, a
3-2 resident of the county; [district] and
3-3 (2) [must] have resided in the district for at least
3-4 two years immediately preceding the date the individual takes
3-5 office.
3-6 (c) A [To be eligible to serve on the board of an appraisal
3-7 district established for a county having a population of at least
3-8 200,000 bordering a county having a population of at least
3-9 2,000,000 and the Gulf of Mexico, an individual must be a member of
3-10 the governing body or an elected officer of a taxing unit entitled
3-11 to vote on the appointment of board members under this section.
3-12 However, an employee of a taxing unit that participates in the
3-13 district is not eligible to serve on the board unless the
3-14 individual is also a member of the governing body or an elected
3-15 official of a taxing unit that participates in the district.]
3-16 [(b) Members of the board of directors serve two-year terms
3-17 beginning on January 1 of even-numbered years.]
3-18 [(c) Members of the board of directors are appointed by vote
3-19 of the governing bodies of the incorporated cities and towns, the
3-20 school districts, and, if entitled to vote, the conservation and
3-21 reclamation districts that participate in the district and of the
3-22 county. A governing body may cast all its votes for one candidate
3-23 or distribute them among candidates for any number of
3-24 directorships. Conservation and reclamation districts are not
3-25 entitled to vote unless at least one conservation and reclamation
3-26 district in the district delivers to the chief appraiser a written
3-27 request to nominate and vote on the board of directors by June 1 of
4-1 each odd-numbered year. On receipt of a request, the chief
4-2 appraiser shall certify a list by June 15 of all eligible
4-3 conservation and reclamation districts that are imposing taxes and
4-4 that participate in the district.]
4-5 [(d) The voting entitlement of a taxing unit that is
4-6 entitled to vote for directors is determined by dividing the total
4-7 dollar amount of property taxes imposed in the district by the
4-8 taxing unit for the preceding tax year by the sum of the total
4-9 dollar amount of property taxes imposed in the district for that
4-10 year by each taxing unit that is entitled to vote, by multiplying
4-11 the quotient by 1,000, and by rounding the product to the nearest
4-12 whole number. That number is multiplied by the number of
4-13 directorships to be filled. A taxing unit participating in two or
4-14 more districts is entitled to vote in each district in which it
4-15 participates, but only the taxes imposed in a district are used to
4-16 calculate voting entitlement in that district.]
4-17 [(e) The chief appraiser shall calculate the number of votes
4-18 to which each taxing unit other than a conservation and reclamation
4-19 district is entitled and shall deliver written notice to each of
4-20 those units of its voting entitlement before October 1 of each
4-21 odd-numbered year. The chief appraiser shall deliver the notice:]
4-22 [(1) to the county judge and each commissioner of the
4-23 county served by the appraisal district;]
4-24 [(2) to the presiding officer of the governing body of
4-25 each city or town participating in the appraisal district, to the
4-26 city manager of each city or town having a city manager, and to the
4-27 city secretary or clerk, if there is one, of each city or town that
5-1 does not have a city manager; and]
5-2 [(3) to the presiding officer of the governing body of
5-3 each school district participating in the district and to the
5-4 superintendent of those school districts.]
5-5 [(f) The chief appraiser shall calculate the number of votes
5-6 to which each conservation and reclamation district entitled to
5-7 vote for district directors is entitled and shall deliver written
5-8 notice to the presiding officer of each conservation and
5-9 reclamation district of its voting entitlement and right to
5-10 nominate a person to serve as a director of the district before
5-11 July 1 of each odd-numbered year.]
5-12 [(g) Each taxing unit other than a conservation and
5-13 reclamation district that is entitled to vote may nominate by
5-14 resolution adopted by its governing body one candidate for each
5-15 position to be filled on the board of directors. The presiding
5-16 officer of the governing body of the unit shall submit the names of
5-17 the unit's nominees to the chief appraiser before October 15.]
5-18 [(h) Each conservation and reclamation district entitled to
5-19 vote may nominate by resolution adopted by its governing body one
5-20 candidate for the district's board of directors. The presiding
5-21 officer of the conservation and reclamation district's governing
5-22 body shall submit the name of the district's nominee to the chief
5-23 appraiser before July 15 of each odd-numbered year. Before August
5-24 1, the chief appraiser shall prepare a nominating ballot, listing
5-25 all the nominees of conservation and reclamation districts
5-26 alphabetically by surname, and shall deliver a copy of the
5-27 nominating ballot to the presiding officer of the board of
6-1 directors of each district. The board of directors of each
6-2 district shall determine its vote by resolution and submit it to
6-3 the chief appraiser before August 15. The nominee on the ballot
6-4 with the most votes is the nominee of the conservation and
6-5 reclamation districts in the appraisal district if the nominee
6-6 received more than 10 percent of the votes entitled to be cast by
6-7 all of the conservation and reclamation districts in the appraisal
6-8 district, and shall be named on the ballot with the candidates
6-9 nominated by the other taxing units. The chief appraiser shall
6-10 resolve a tie vote by any method of chance.]
6-11 [(i) If no nominee of the conservation and reclamation
6-12 districts receives more than 10 percent of the votes entitled to be
6-13 cast under Subsection (h), the chief appraiser, before September 1,
6-14 shall notify the presiding officer of the board of directors of
6-15 each conservation and reclamation district of the failure to select
6-16 a nominee. Each conservation and reclamation district may submit a
6-17 nominee by September 15 to the chief appraiser as provided by
6-18 Subsection (h). The chief appraiser shall submit a second
6-19 nominating ballot by October 1 to the conservation and reclamation
6-20 districts as provided by Subsection (h). The conservation and
6-21 reclamation districts shall submit their votes for nomination
6-22 before October 15 as provided by Subsection (h). The nominee on
6-23 the second nominating ballot with the most votes is the nominee of
6-24 the conservation and reclamation districts in the appraisal
6-25 district and shall be named on the ballot with the candidates
6-26 nominated by the other taxing units. The chief appraiser shall
6-27 resolve a tie vote by any method of chance.]
7-1 [(j) Before October 30, the chief appraiser shall prepare a
7-2 ballot, listing the candidates alphabetically according to the
7-3 first letter in each candidate's surname, and shall deliver a copy
7-4 of the ballot to the presiding officer of the governing body of
7-5 each taxing unit that is entitled to vote.]
7-6 [(k) The governing body of each taxing unit entitled to vote
7-7 shall determine its vote by resolution and submit it to the chief
7-8 appraiser before November 15. The chief appraiser shall count the
7-9 votes, declare the five candidates who receive the largest
7-10 cumulative vote totals elected, and submit the results before
7-11 December 1 to the governing body of each taxing unit in the
7-12 district and to the candidates. For purposes of determining the
7-13 number of votes received by the candidates, the candidate receiving
7-14 the most votes of the conservation and reclamation districts is
7-15 considered to have received all of the votes cast by conservation
7-16 and reclamation districts and the other candidates are considered
7-17 not to have received any votes of the conservation and reclamation
7-18 districts. The chief appraiser shall resolve a tie vote by any
7-19 method of chance.]
7-20 [(l) If a] vacancy [occurs] on the board of directors is
7-21 filled for the remainder of the unexpired term by appointment by
7-22 the commissioners court of the county for which the appraisal
7-23 district is established[, each taxing unit that is entitled to vote
7-24 by this section may nominate by resolution adopted by its governing
7-25 body a candidate to fill the vacancy. The unit shall submit the
7-26 name of its nominee to the chief appraiser within 10 days after
7-27 notification from the board of directors of the existence of the
8-1 vacancy, and the chief appraiser shall prepare and deliver to the
8-2 board of directors within the next five days a list of the
8-3 nominees. The board of directors shall elect by majority vote of
8-4 its members one of the nominees to fill the vacancy].
8-5 (d) If as a result of a change in the boundaries of
8-6 commissioners precincts an individual serving as a director no
8-7 longer resides in the precinct from which the office is elected,
8-8 the individual is not for that reason disqualified from office
8-9 during the remainder of the term of office being served at the time
8-10 the boundary change takes effect. If as a result of a change in
8-11 the boundaries of commissioners precincts an individual elected as
8-12 a director before the boundary change to a term that begins after
8-13 the boundary change no longer resides in the precinct from which
8-14 elected, the individual is not for that reason disqualified from
8-15 serving the term to which elected.
8-16 [(m) If a school district participates in an appraisal
8-17 district in which the only property of the school district located
8-18 in the appraisal district is property annexed to the school
8-19 district under Subchapter C or G, Chapter 36, Education Code, an
8-20 individual who does not meet the residency requirements of
8-21 Subsection (a) is eligible to be appointed to the board of
8-22 directors of the appraisal district if:]
8-23 [(1) the individual is a resident of the school
8-24 district; and]
8-25 [(2) the individual is nominated as a candidate for
8-26 the board of directors by the school district or, if the taxing
8-27 units have adopted a change in the method of appointing board
9-1 members that does not require a nomination, the school district
9-2 appoints or participates in the appointment of the individual.]
9-3 SECTION 5. Section 6.051(b), Tax Code, is amended to read as
9-4 follows:
9-5 (b) The acquisition or conveyance of real property or the
9-6 construction or renovation of a building or other improvement by an
9-7 appraisal district must be approved by the governing bodies of
9-8 three-fourths of the group of taxing units composed of the
9-9 municipalities, school districts, and the county participating in
9-10 the appraisal district [entitled to vote on the appointment of
9-11 board members]. The board of directors by resolution may propose a
9-12 property transaction or other action for which this subsection
9-13 requires approval of those [the] taxing units. The chief appraiser
9-14 shall notify the presiding officer of each governing body entitled
9-15 to vote on the approval of the proposal by delivering a copy of the
9-16 board's resolution, together with information showing the costs of
9-17 other available alternatives to the proposal. On or before the
9-18 30th day after the date the presiding officer receives notice of
9-19 the proposal, the governing body of a taxing unit by resolution may
9-20 approve or disapprove the proposal. If a governing body fails to
9-21 act on or before that 30th day or fails to file its resolution with
9-22 the chief appraiser on or before the 10th day after that 30th day,
9-23 the proposal is treated as if it were disapproved by the governing
9-24 body.
9-25 SECTION 6. Sections 6.06(b) and (i), Tax Code, are amended
9-26 to read as follows:
9-27 (b) The board of directors shall hold a public hearing to
10-1 consider the budget. The secretary of the board shall deliver to
10-2 the presiding officer of the governing body of each taxing unit
10-3 participating in the district not later than the 10th day before
10-4 the date of the hearing a written notice of the date, time, and
10-5 place fixed for the hearing. The board shall complete its
10-6 hearings, make any amendments to the proposed budget it desires,
10-7 and finally approve a budget before September 15. If governing
10-8 bodies of a majority of the group of taxing units composed of the
10-9 municipalities, school districts, and the county participating in
10-10 the appraisal district [taxing units entitled to vote on the
10-11 appointment of board members] adopt resolutions disapproving a
10-12 budget and file them with the secretary of the board within 30 days
10-13 after its adoption, the budget does not take effect, and the board
10-14 shall adopt a new budget within 30 days of the disapproval.
10-15 (i) The fiscal year of an appraisal district is the calendar
10-16 year unless the governing bodies of three-fourths of the group of
10-17 taxing units composed of the municipalities, school districts, and
10-18 the county participating in the appraisal district [taxing units
10-19 entitled to vote on the appointment of board members] adopt
10-20 resolutions proposing a different fiscal year and file them with
10-21 the secretary of the board not more than 12 and not less than eight
10-22 months before the first day of the fiscal year proposed by the
10-23 resolutions. If the fiscal year of an appraisal district is
10-24 changed under this subsection, the chief appraiser shall prepare a
10-25 proposed budget for the fiscal year as provided by Subsection (a)
10-26 of this section before the 15th day of the seventh month preceding
10-27 the first day of the fiscal year established by the change, and the
11-1 board of directors shall adopt a budget for the fiscal year as
11-2 provided by Subsection (b) of this section before the 15th day of
11-3 the fourth month preceding the first day of the fiscal year
11-4 established by the change. Unless the appraisal district adopts a
11-5 different method of allocation under Section 6.061 of this code,
11-6 the allocation of the budget to each taxing unit shall be
11-7 calculated as provided by Subsection (d) of this section using the
11-8 amount of property taxes imposed by each participating taxing unit
11-9 in the most recent tax year preceding the fiscal year established
11-10 by the change for which the necessary information is available.
11-11 Each taxing unit shall pay its allocation as provided by Subsection
11-12 (e) of this section, except that the first payment shall be made
11-13 before the first day of the fiscal year established by the change
11-14 and subsequent payments shall be made quarterly. In the year in
11-15 which a change in the fiscal year occurs, the budget that takes
11-16 effect on January 1 of that year may be amended as necessary as
11-17 provided by Subsection (c) of this section in order to accomplish
11-18 the change in fiscal years.
11-19 SECTION 7. Sections 6.061(b) and (e), Tax Code, are amended
11-20 to read as follows:
11-21 (b) The taxing units participating in an appraisal district
11-22 may adopt a different method of allocating the costs of operating
11-23 the district if the governing bodies of three-fourths of the group
11-24 of taxing units composed of the municipalities, school districts,
11-25 and the county participating in the appraisal district [taxing
11-26 units that are entitled to vote on the appointment of board
11-27 members] adopt resolutions providing for the other method.
12-1 However, a change under this subsection is not valid if it requires
12-2 any taxing unit to pay a greater proportion of the appraisal
12-3 district's costs than the unit would pay under Section 6.06 of this
12-4 code without the consent of the governing body of that unit.
12-5 (e) A change in allocation of district costs made as
12-6 provided by this section remains in effect until changed in a
12-7 manner provided by this section or rescinded by resolution of a
12-8 majority of the governing bodies of the group of taxing units
12-9 composed of the municipalities, school districts, and the county
12-10 participating in the appraisal district [that are entitled to vote
12-11 on appointment of board members under Section 6.03 of this code].
12-12 SECTION 8. Section 6.063(b), Tax Code, is amended to read as
12-13 follows:
12-14 (b) The report of the audit is a public record. A copy of
12-15 the report shall be delivered to the presiding officer of the
12-16 governing body of each municipality, each school district, and the
12-17 county participating in the appraisal district [taxing unit
12-18 eligible to vote on the appointment of district directors], and a
12-19 reasonable number of copies shall be available for inspection at
12-20 the appraisal office.
12-21 SECTION 9. Section 11.13(h), Tax Code, is amended to read as
12-22 follows:
12-23 (h) Joint or community owners may not each receive the same
12-24 exemption provided by or pursuant to this section for the same
12-25 residence homestead in the same year. An eligible disabled person
12-26 who is 65 or older may not receive both a disabled and an elderly
12-27 residence homestead exemption but may choose either. A person may
13-1 not receive an exemption under this section for more than one
13-2 residence homestead in the same year.
13-3 SECTION 10. Section 11.26, Tax Code, is amended by amending
13-4 Subsection (b) and adding Subsection (g) to read as follows:
13-5 (b) If an individual makes improvements to the individual's
13-6 [his] residence homestead, other than improvements required to
13-7 comply with governmental requirements or repairs, the school
13-8 district may increase the tax on the homestead in the first year
13-9 the value of the homestead is increased on the appraisal roll
13-10 because of the enhancement of value by the improvements. The
13-11 amount of the tax increase is determined by applying the current
13-12 tax rate to the difference in the assessed value of the homestead
13-13 with the improvements and the assessed value it would have had
13-14 without the improvements. The limitations imposed by Subsection
13-15 (a) or (g), as applicable, [of this section] then apply to the
13-16 increased amount of tax until more improvements, if any, are made.
13-17 (g) Except as provided by Subsection (b), if an individual
13-18 who receives the limitation on tax increases imposed by this
13-19 section subsequently qualifies a different residence homestead for
13-20 an exemption under Section 11.13, a school district may not impose
13-21 ad valorem taxes on the subsequently qualified homestead in a year
13-22 in an amount that exceeds the amount of taxes the school district
13-23 would have imposed on the subsequently qualified homestead in the
13-24 first year in which the individual receives that exemption for the
13-25 subsequently qualified homestead had the limitation on tax
13-26 increases imposed by this section not been in effect, multiplied by
13-27 a fraction the numerator of which is the total amount of school
14-1 district taxes imposed on the former homestead in the last year in
14-2 which the individual received that exemption for the former
14-3 homestead and the denominator of which is the total amount of
14-4 school district taxes that would have been imposed on the former
14-5 homestead in the last year in which the individual received that
14-6 exemption for the former homestead had the limitation on tax
14-7 increases imposed by this section not been in effect.
14-8 SECTION 11. Subchapter B, Chapter 11, Tax Code, is amended
14-9 by adding Section 11.265 to read as follows:
14-10 Sec. 11.265. LIMITATION ON COUNTY AND MUNICIPAL TAXES ON
14-11 HOMESTEADS OF ELDERLY. (a) This section applies to property that
14-12 is subject to the tax increase limitation provided by Section
14-13 1-b(g), Article VIII, Texas Constitution.
14-14 (b) Each tax year the tax officials shall appraise the
14-15 property and calculate taxes on the property as on other property,
14-16 but if the tax exceeds the tax increase limitation provided by
14-17 Section 1-b(g), Article VIII, Texas Constitution, the tax imposed
14-18 is the tax permitted to be imposed by that section.
14-19 (c) The amount of a tax increase imposed because the person
14-20 has made taxable improvements to the person's residence homestead
14-21 is determined in the first tax year after completion of the
14-22 improvements by applying the current tax rate to the difference in
14-23 the appraised value of the homestead including the improvements and
14-24 the appraised value of the property without the improvements. The
14-25 tax increase limitation provided by Section 1-b(g), Article VIII,
14-26 Texas Constitution, then applies in subsequent tax years to the
14-27 increased amount of tax, subject to later improvements, if any.
15-1 (d) The tax increase limitation provided by Section 1-b(g),
15-2 Article VIII, Texas Constitution, expires if on January 1:
15-3 (1) none of the owners of the structure who qualify
15-4 for the limitation and who owned the structure when the limitation
15-5 first took effect is using the structure as a residence homestead;
15-6 or
15-7 (2) none of the owners of the structure qualifies for
15-8 the limitation.
15-9 (e) If the appraisal roll provides for taxation of appraised
15-10 value for a previous year because the tax increase limitation
15-11 provided by Section 1-b(g), Article VIII, Texas Constitution, was
15-12 erroneously allowed, the tax assessor shall add, as back taxes due
15-13 as provided by Section 26.09(d), the positive difference, if any,
15-14 between the tax that should have been imposed for that year and the
15-15 tax that was imposed because of Section 1-b(g), Article VIII, Texas
15-16 Constitution.
15-17 (f) The chief appraiser shall, for each county or
15-18 municipality in the appraisal district, determine the portion of
15-19 the appraised value of residence homesteads on which county or
15-20 municipal taxes are not imposed in a tax year because of the tax
15-21 increase limitation provided by Section 1-b(g), Article VIII, Texas
15-22 Constitution. That portion is calculated by determining the
15-23 taxable value that, if multiplied by the tax rate adopted by the
15-24 county or municipality for the tax year, would produce an amount
15-25 equal to the amount of tax that would have been imposed by the
15-26 county or municipality on residence homesteads subject to the
15-27 limitation if the limitation were not in effect. The chief
16-1 appraiser shall certify that taxable value to the comptroller as
16-2 soon as practicable for each tax year.
16-3 (g) The tax increase limitation provided by Section 1-b(g),
16-4 Article VIII, Texas Constitution, does not expire because the owner
16-5 of an interest in the structure conveys the interest to a
16-6 qualifying trust as defined by Section 11.13(j) if the owner or the
16-7 owner's spouse is a trustor of the trust and is entitled to occupy
16-8 the structure.
16-9 (h) The provisions of Subchapter C applicable to an
16-10 exemption provided by Section 11.13 apply to the tax increase
16-11 limitation provided by Section 1-b(g), Article VIII, Texas
16-12 Constitution.
16-13 (i) Notwithstanding Subsection (h), a person who received
16-14 the exemption provided by Section 11.13(c) in the 1997 tax year is
16-15 not required to apply for the tax increase limitation provided by
16-16 Section 1-b(g), Article VIII, Texas Constitution. Not later than
16-17 May 1, 1998, the appraisal district in which the school district
16-18 participates shall notify the appraisal district in which the
16-19 county or municipality participates, if the school district does
16-20 not participate in that appraisal district, that the person
16-21 received the exemption.
16-22 SECTION 12. Section 11.41, Tax Code, is amended to read as
16-23 follows:
16-24 Sec. 11.41. PARTIAL OWNERSHIP OF EXEMPT PROPERTY. (a) If
16-25 [Except as provided by Subsection (b) of this section, if] a person
16-26 who qualifies for an exemption as provided by this chapter is not
16-27 the sole owner of the property to which the exemption applies, the
17-1 exemption shall be multiplied by a fraction, the numerator of which
17-2 is [limited to] the value of the property interest the person owns
17-3 and the denominator of which is the value of the property.
17-4 (b) [If a person who qualifies for an exemption as provided
17-5 by Section 11.13 or 11.22 of this code is not the sole owner of the
17-6 property to which the exemption applies, the amount of the
17-7 exemption is calculated on the basis of the value of the property
17-8 interest the person owns.]
17-9 [(c)] In the application of this section, community
17-10 ownership by a person who qualifies for the exemption and the
17-11 person's [his] spouse is treated as if the person owns the
17-12 community interest of the person's [his] spouse.
17-13 SECTION 13. Section 11.43, Tax Code, is amended by amending
17-14 Subsection (f) and adding Subsection (j) to read as follows:
17-15 (f) The comptroller, in prescribing the contents of the
17-16 application form for each kind of exemption, shall ensure that the
17-17 form requires an applicant to furnish the information necessary to
17-18 determine the validity of the exemption claim. The form must
17-19 require an applicant to provide the applicant's name and driver's
17-20 license number, personal identification certificate number, or
17-21 social security account number. The comptroller shall include on
17-22 the forms a notice of the penalties prescribed by Section 37.10,
17-23 Penal Code, for making or filing an application containing a false
17-24 statement. The comptroller shall include, on application forms for
17-25 exemptions that do not have to be claimed annually, a statement
17-26 explaining that the application need not be made annually and that
17-27 if the exemption is allowed, the applicant has a duty to notify the
18-1 chief appraiser when the applicant's [his] entitlement to the
18-2 exemption ends. In this subsection:
18-3 (1) "Driver's license" has the meaning assigned that
18-4 term by Section 521.001, Transportation Code.
18-5 (2) "Personal identification certificate" means a
18-6 certificate issued by the Department of Public Safety under
18-7 Subchapter E, Chapter 521, Transportation Code.
18-8 (j) An application for an exemption under Section 11.13
18-9 must:
18-10 (1) list each owner of the residence homestead and the
18-11 interest of each owner;
18-12 (2) state that the applicant does not claim an
18-13 exemption under that section on another residence homestead;
18-14 (3) state that each fact contained in the application
18-15 is true; and
18-16 (4) include a signed statement that the applicant has
18-17 read and understands the notice of the penalties required by
18-18 Subsection (f).
18-19 SECTION 14. Section 23.01, Tax Code, is amended by amending
18-20 Subsection (b) and adding Subsections (c) and (d) to read as
18-21 follows:
18-22 (b) The market value of property shall be determined by the
18-23 application of generally accepted appraisal methods and techniques,
18-24 including those recognized by the Uniform Standards of Professional
18-25 Appraisal Practice. The [and the] same or similar appraisal
18-26 techniques shall be used in appraising the same or similar kinds of
18-27 property. However, each property shall be appraised based upon the
19-1 individual characteristics that affect the property's market value.
19-2 (c) In determining the market value of real property, the
19-3 chief appraiser shall:
19-4 (1) employ the appropriate methods and techniques;
19-5 (2) consider each easement, restriction, encumbrance,
19-6 lease, reservation, covenant, contract, agreement of sale, listing,
19-7 option, declaration, ordinance, or closing statement to which the
19-8 property is subject;
19-9 (3) consider each sale of the property that occurred
19-10 not later than one year before the date of the determination if the
19-11 property is residential real property;
19-12 (4) consider each sale of the property that occurred
19-13 not later than three years before the date of the determination if
19-14 the property is not residential real property;
19-15 (5) consider, if appropriate, that the property is an
19-16 undivided interest rather than the entire interest;
19-17 (6) consider existing and probable land use
19-18 regulations, economic demand, the physical adaptability of the
19-19 property, neighborhood trends, and the highest and best use of the
19-20 property;
19-21 (7) consider any public or private improvement
19-22 proposed to be located on or near the property;
19-23 (8) appraise each improvement to the property
19-24 according to its contribution to the value of the property;
19-25 (9) employ the cost, income, or market data comparison
19-26 method for appraisal, or a combination of those methods, as
19-27 applicable; and
20-1 (10) avoid employing an average of the prices of
20-2 comparable sales of property.
20-3 (d) The chief appraiser shall:
20-4 (1) adequately identify the property appraised;
20-5 (2) state the effective date of the determination of
20-6 market value;
20-7 (3) state each date on which and the extent to which
20-8 the property was inspected; and
20-9 (4) if a recognized valuation method is omitted, state
20-10 the reason for the omission.
20-11 SECTION 15. Subchapter A, Chapter 23, Tax Code, is amended
20-12 by adding Sections 23.011-23.013 to read as follows:
20-13 Sec. 23.011. COST METHOD OF APPRAISAL. If the chief
20-14 appraiser uses the cost method of appraisal to determine the market
20-15 value of real property, the chief appraiser shall:
20-16 (1) use cost data obtained from generally accepted
20-17 sources;
20-18 (2) make any appropriate adjustment for physical,
20-19 functional, or economic obsolescence;
20-20 (3) make available to the public on request cost data
20-21 developed and used by the chief appraiser and may charge a
20-22 reasonable fee to the public for the data;
20-23 (4) clearly state the reason for any variation between
20-24 generally accepted cost data and locally produced cost data if the
20-25 data vary by more than 10 percent; and
20-26 (5) make available on request all applicable market
20-27 data that demonstrate the difference between the replacement cost
21-1 of the improvements to the property and the depreciated value of
21-2 the improvements.
21-3 Sec. 23.012. INCOME METHOD OF APPRAISAL. If the chief
21-4 appraiser uses the income method of appraisal to determine the
21-5 market value of real property, the chief appraiser shall:
21-6 (1) use rental income and expense data pertaining to
21-7 the property if possible and applicable;
21-8 (2) make any projections of future rental income and
21-9 expenses only from clear and appropriate evidence;
21-10 (3) use data from generally accepted sources in
21-11 determining an appropriate capitalization rate; and
21-12 (4) determine a capitalization rate for
21-13 income-producing property that includes a reasonable return on
21-14 investment, taking into account the risk associated with the
21-15 investment.
21-16 Sec. 23.013. MARKET DATA COMPARISON METHOD OF APPRAISAL. If
21-17 the chief appraiser uses the market data comparison method of
21-18 appraisal to determine the market value of real property, the chief
21-19 appraiser shall use comparable sales data if possible.
21-20 SECTION 16. Section 23.19(g), Tax Code, is amended to read
21-21 as follows:
21-22 (g) A tax bill or a separate statement accompanying the tax
21-23 bill to a cooperative housing corporation for which interests of
21-24 stockholders are separately appraised under this section must
21-25 state, in addition to the information required by Section 31.01 of
21-26 this code, the appraised value and taxable value of each interest
21-27 separately appraised. Each exemption claimed as provided by this
22-1 title by a person entitled to the exemption shall also be deducted
22-2 from the total appraised value of the property of the corporation.
22-3 The total tax imposed by a school district, county, or municipality
22-4 shall be reduced by any amount that represents an increase in taxes
22-5 attributable to separately appraised interests of the real property
22-6 and improvements that are subject to the limitation of taxes
22-7 prescribed by Section 11.26 of this code or Section 1-b(g), Article
22-8 VIII, Texas Constitution. The corporation shall apportion among
22-9 its stockholders liability for reimbursing the corporation for
22-10 property taxes according to the relative taxable values of their
22-11 interests.
22-12 SECTION 17. Subchapter B, Chapter 23, Tax Code, is amended
22-13 by adding Section 23.21 to read as follows:
22-14 Sec. 23.21. LIMITATION ON APPRAISED VALUE OF RESIDENCE
22-15 HOMESTEADS. (a) The appraised value of a residence homestead for
22-16 a tax year may not exceed the lesser of:
22-17 (1) the market value of the property; or
22-18 (2) the sum of:
22-19 (A) 105 percent of the appraised value of the
22-20 property for the preceding year; and
22-21 (B) the market value of all new improvements to
22-22 the property.
22-23 (b) When appraising a residence homestead, the chief
22-24 appraiser shall:
22-25 (1) appraise the property at its market value; and
22-26 (2) include in the appraisal records both the market
22-27 value of the property and the amount computed under Subsection
23-1 (a)(2).
23-2 (c) The limitation provided by Subsection (a) takes effect
23-3 as to a residence homestead on January 1 of the tax year following
23-4 the first tax year the owner qualifies the property for an
23-5 exemption under Section 11.13. The limitation expires on January 1
23-6 of the first tax year that neither the owner of the property when
23-7 the limitation took effect, the owner's spouse or surviving spouse,
23-8 nor a minor child of the owner qualifies for an exemption under
23-9 Section 11.13.
23-10 (d) This section does not apply to property appraised under
23-11 Subchapter C, D, E, F, or G.
23-12 (e) In this section, "new improvement" means an improvement
23-13 to a residence homestead that is made after the appraisal of the
23-14 property for the preceding year and that increases the market value
23-15 of the property. The term does not include ordinary maintenance of
23-16 an existing structure or the grounds or another feature of the
23-17 property.
23-18 SECTION 18. Section 25.19, Tax Code, is amended by amending
23-19 Subsections (b) and (i) and adding Subsection (j) to read as
23-20 follows:
23-21 (b) The chief appraiser shall separate real from personal
23-22 property and include in the notice for each:
23-23 (1) a list of the taxing units in which the property
23-24 is taxable;
23-25 (2) the appraised value of the property in the
23-26 preceding year;
23-27 (3) the assessed and taxable value of the property in
24-1 the preceding year for each taxing unit taxing the property;
24-2 (4) the appraised value of the property for the
24-3 current year and the kind and amount of each partial exemption, if
24-4 any, approved for the current year;
24-5 (5) if the appraised value is greater than it was in
24-6 the preceding year:
24-7 (A) the effective tax rate that would be
24-8 announced pursuant to Section 26.04 of this code if the total
24-9 values being submitted to the appraisal review board were to be
24-10 approved by the board with an explanation that that rate would
24-11 raise the same amount of revenue from property taxed in the
24-12 preceding year as the unit raised for those purposes in the
24-13 preceding year;
24-14 (B) the amount of tax that would be imposed on
24-15 the property on the basis of the rate described by Paragraph (A) of
24-16 this subdivision; and
24-17 (C) a statement that the governing body of the
24-18 unit may not adopt a rate that will increase tax revenues for
24-19 operating purposes from properties taxed in the preceding year
24-20 without publishing notice in a newspaper that it is considering a
24-21 tax increase and holding a hearing for taxpayers to discuss the tax
24-22 increase;
24-23 (6) in italic typeface, the following statement: "The
24-24 Texas Legislature does not set the amount of your local taxes.
24-25 Your property tax burden is decided by your locally elected
24-26 officials, and all inquiries concerning your taxes should be
24-27 directed to those officials";
25-1 (7) a detailed [brief] explanation of the time and
25-2 procedure for protesting the value;
25-3 (8) the date and place the appraisal review board will
25-4 begin hearing protests; and
25-5 (9) a brief explanation that:
25-6 (A) the governing body of each taxing unit
25-7 decides whether or not taxes on the property will increase and the
25-8 appraisal district only determines the value of the property; and
25-9 (B) a taxpayer who objects to increasing taxes
25-10 and government expenditures should complain to the governing bodies
25-11 of the taxing units and only complaints about value should be
25-12 presented to the appraisal office and the appraisal review board.
25-13 (i) By May 15 or as soon thereafter as practicable, the
25-14 chief appraiser shall deliver a written notice to the owner of each
25-15 property not included in a notice required to be delivered under
25-16 Subsection (a), if the property was reappraised in the current tax
25-17 year, if the ownership of the property changed during the preceding
25-18 year, or if the property owner or the agent of a property owner
25-19 authorized under Section 1.111 makes a written request for the
25-20 notice. The chief appraiser shall separate real from personal
25-21 property and include in the notice for each property:
25-22 (1) the appraised value of the property in the
25-23 preceding year;
25-24 (2) the appraised value of the property for the
25-25 current year and the kind of each partial exemption, if any,
25-26 approved for the current year;
25-27 (3) a detailed [brief] explanation of the time and
26-1 procedure for protesting the value; and
26-2 (4) the date and place the appraisal review board will
26-3 begin hearing protests.
26-4 (j) Delivery with a notice required by Subsection (a) or (i)
26-5 of a copy of the pamphlet published by the comptroller under
26-6 Section 5.06 is sufficient to comply with the requirement that the
26-7 notice include the information specified by Subsection (b)(7) or
26-8 (i)(3), as applicable.
26-9 SECTION 19. Sections 26.012(6), (13), and (14), Tax Code,
26-10 are amended to read as follows:
26-11 (6) "Current total value" means the total taxable
26-12 value of property listed on the appraisal roll for the current
26-13 year, including all appraisal roll supplements and corrections as
26-14 of the date of the calculation, less the taxable value of property
26-15 exempted for the current tax year for the first time under Section
26-16 11.31, except that the current total value for a school district,
26-17 county, or municipality excludes the total value of homesteads that
26-18 qualify for a tax limitation as provided by Section 11.26 of this
26-19 code or Section 1-b(g), Article VIII, Texas Constitution.
26-20 (13) "Last year's levy" means the total of:
26-21 (A) the amount of taxes that would be generated
26-22 by multiplying the total tax rate adopted by the governing body in
26-23 the preceding year by the total taxable value of property on the
26-24 appraisal roll for the preceding year, including all appraisal roll
26-25 supplements and corrections other than corrections made pursuant to
26-26 Section 25.25(d) of this code, as of the date of the calculation,
26-27 except that last year's taxable value for a school district,
27-1 county, or municipality excludes the total value of homesteads that
27-2 qualified for a tax limitation as provided by Section 11.26 of
27-3 this code or Section 1-b(g), Article VIII, Texas Constitution; and
27-4 (B) the amount of taxes refunded by the taxing
27-5 unit in the preceding year for tax years before that year.
27-6 (14) "Last year's total value" means the total taxable
27-7 value of property listed on the appraisal roll for the preceding
27-8 year, including all appraisal roll supplements and corrections,
27-9 other than corrections made pursuant to Section 25.25(d) of this
27-10 code, as of the date of the calculation, except that last year's
27-11 taxable value for a school district, county, or municipality
27-12 excludes the total value of homesteads that qualified for a tax
27-13 limitation as provided by Section 11.26 of this code or Section
27-14 1-b(g), Article VIII, Texas Constitution.
27-15 SECTION 20. Section 33.01, Tax Code, is amended by adding
27-16 Subsections (d) and (e) to read as follows:
27-17 (d) In lieu of the penalty imposed under Subsection (a), a
27-18 delinquent tax incurs a penalty of 50 percent of the amount of the
27-19 tax without regard to the number of months the tax has been
27-20 delinquent if the tax is delinquent because the property owner
27-21 received an exemption under:
27-22 (1) Section 11.13 and the chief appraiser subsequently
27-23 cancels the exemption because the residence was not the principal
27-24 residence of the property owner and the property owner received an
27-25 exemption for another residence homestead for the tax year in which
27-26 the tax was imposed;
27-27 (2) Section 11.13(c) or (d) for a person who is 65 or
28-1 older and the chief appraiser subsequently cancels the exemption
28-2 because the property owner was younger than 65 on the exemption
28-3 qualification date; or
28-4 (3) Section 11.13(q) and the chief appraiser
28-5 subsequently cancels the exemption because the property owner was
28-6 younger than 55 when the property owner's spouse died.
28-7 (e) A penalty imposed under Subsection (d) does not apply
28-8 if, at any time before the date the tax becomes delinquent, the
28-9 property owner gives to the chief appraiser of the appraisal
28-10 district in which the property is located written notice of
28-11 circumstances that would disqualify the owner for the exemption.
28-12 SECTION 21. Subchapter C, Chapter 41, Tax Code, is amended
28-13 by adding Section 41.414 to read as follows:
28-14 Sec. 41.414. PROTEST OF APPRAISED VALUE OF RESIDENCE
28-15 HOMESTEAD. In a protest of the appraised value of a residence
28-16 homestead, if the appraised value for the current year is the value
28-17 calculated as provided by Section 23.21(a)(2), the property owner
28-18 is not entitled to protest the appraised value for the preceding
28-19 year that is used in the calculation of the appraised value for the
28-20 current year.
28-21 SECTION 22. Section 52.092(d), Election Code, is amended to
28-22 read as follows:
28-23 (d) District offices of the state government shall be listed
28-24 in the following order:
28-25 (1) member, State Board of Education;
28-26 (2) state senator;
28-27 (3) state representative;
29-1 (4) chief justice, court of appeals;
29-2 (5) justice, court of appeals;
29-3 (6) district judge;
29-4 (7) criminal district judge;
29-5 (8) family district judge;
29-6 (9) district attorney;
29-7 (10) criminal district attorney;
29-8 (11) appraisal district director.
29-9 SECTION 23. Section 172.024, Election Code, is amended by
29-10 adding Subsection (c) to read as follows:
29-11 (c) For the office of appraisal district director, the
29-12 filing fee for a candidate for nomination in the general primary
29-13 election is:
29-14 (1) county with a population of 200,000 or more.. $400
29-15 (2) county with a population under 200,000 .... 200.
29-16 SECTION 24. Section 403.302(d), Government Code, is amended
29-17 to read as follows:
29-18 (d) For the purposes of this section, "taxable value" means
29-19 market value less:
29-20 (1) the total dollar amount of any exemptions of part
29-21 but not all of the value of taxable property required by the
29-22 constitution or a statute that a district lawfully granted in the
29-23 year that is the subject of the study;
29-24 (2) the total dollar amount of any exemptions granted
29-25 before May 31, 1993, within a reinvestment zone under agreements
29-26 authorized by Chapter 312, Tax Code;
29-27 (3) the total dollar amount of any captured appraised
30-1 value of property that is located in a reinvestment zone and that
30-2 is eligible for tax increment financing under Chapter 311, Tax
30-3 Code;
30-4 (4) the total dollar amount of any exemptions granted
30-5 under Section 11.251, Tax Code;
30-6 (5) the difference between the market value and the
30-7 productivity value of land that qualifies for appraisal on the
30-8 basis of its productive capacity, except that the productivity
30-9 value may not exceed the fair market value of the land;
30-10 (6) the portion of the appraised value of residence
30-11 homesteads of the elderly on which school district taxes are not
30-12 imposed in the year that is the subject of the study, calculated as
30-13 if the residence homesteads were appraised at the full value
30-14 required by law;
30-15 (7) a portion of the market value of property not
30-16 otherwise fully taxable by the district at market value because of
30-17 action required by statute or the constitution of this state that,
30-18 if the tax rate adopted by the district is applied to it, produces
30-19 an amount equal to the difference between the tax that the district
30-20 would have imposed on the property if the property were fully
30-21 taxable at market value and the tax that the district is actually
30-22 authorized to impose on the property; [and]
30-23 (8) the market value of all tangible personal
30-24 property, other than manufactured homes, owned by a family or
30-25 individual and not held or used for the production of income; and
30-26 (9) the amount by which the market value of a
30-27 residence homestead to which Section 23.21, Tax Code, applies
31-1 exceeds the appraised value of that property as calculated under
31-2 that section.
31-3 SECTION 25. The following provisions of the Tax Code are
31-4 repealed:
31-5 (1) Section 6.031;
31-6 (2) Section 6.033;
31-7 (3) Section 6.034;
31-8 (4) Section 6.037; and
31-9 (5) Section 6.10.
31-10 SECTION 26. (a) Except as otherwise provided by this
31-11 section, this Act takes effect January 1, 1998.
31-12 (b) This section and Sections 22 and 23 of this Act take
31-13 effect September 1, 1997.
31-14 (c) Sections 2-8 and 25 of this Act take effect January 1,
31-15 1999.
31-16 (d) Sections 1, 17, 21, and 24 of this Act take effect only
31-17 if the constitutional amendment proposed by the 75th Legislature,
31-18 Regular Session, 1997, to authorize the legislature to limit the
31-19 appraised value of residence homesteads for ad valorem tax purposes
31-20 is approved by the voters. If that amendment is not approved by
31-21 the voters, those sections of this Act have no effect.
31-22 (e) Section 10 of this Act takes effect only if the
31-23 constitutional amendment proposed by the 75th Legislature, Regular
31-24 Session, 1997, to provide for transferring the school tax freeze
31-25 for an elderly person from a former homestead to a newly acquired
31-26 homestead is approved by the voters. If that amendment is not
31-27 approved by the voters, that section of this Act has no effect.
32-1 (f) Sections 11, 16, and 19 of this Act take effect only if
32-2 the constitutional amendment proposed by the 75th Legislature,
32-3 Regular Session, 1997, to limit county and municipal ad valorem
32-4 taxes on the residence homestead of an elderly person is approved
32-5 by the voters. If that amendment is not approved by the voters,
32-6 those sections of this Act have no effect.
32-7 (g) The change in law made to Section 11.43(f), Tax Code, by
32-8 Section 13 of this Act applies only to an application for an
32-9 exemption from ad valorem taxation filed on or after the effective
32-10 date of this Act. An application for an exemption from ad valorem
32-11 taxation filed before the effective date of this Act is covered by
32-12 the law in effect on the date the application was filed, and that
32-13 law is continued in effect for that purpose.
32-14 (h) The change in law made by Section 20 of this Act applies
32-15 only to a penalty incurred on ad valorem taxes that become
32-16 delinquent on or after the effective date of this Act. A penalty
32-17 incurred on ad valorem taxes that became delinquent before the
32-18 effective date of this Act is covered by the law in effect when the
32-19 taxes became delinquent, and that law is continued in effect for
32-20 that purpose.
32-21 (i) Appraisal district directors shall be elected under this
32-22 Act beginning with the primary and general elections conducted in
32-23 1998. Members then elected take office January 1, 1999.
32-24 (j) The change in the manner of selection of appraisal
32-25 district directors made by this Act does not affect the selection
32-26 of directors who serve on the board before January 1, 1999.
32-27 (k) The term of an appraisal district director serving on
33-1 December 31, 1998, expires on January 1, 1999.
33-2 SECTION 27. The importance of this legislation and the
33-3 crowded condition of the calendars in both houses create an
33-4 emergency and an imperative public necessity that the
33-5 constitutional rule requiring bills to be read on three several
33-6 days in each house be suspended, and this rule is hereby suspended.