By Hilbert                                      H.B. No. 3499

      75R5293 SMH-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to transferring the school tax freeze on homesteads of the

 1-3     elderly.

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

 1-5           SECTION 1.  Section 11.26, Tax Code, is amended by amending

 1-6     Subsection (b) and adding Subsection (g) to read as follows:

 1-7           (b)  If an individual makes improvements to the individual's

 1-8     [his] residence homestead, other than improvements required to

 1-9     comply with governmental requirements or repairs, the school

1-10     district may increase the tax on the homestead in the first year

1-11     the value of the homestead is increased on the appraisal roll

1-12     because of the enhancement of value by the improvements.  The

1-13     amount of the tax increase is determined by applying the current

1-14     tax rate to the difference in the assessed value of the homestead

1-15     with the improvements and the assessed value it would have had

1-16     without the improvements.  The limitations imposed by Subsection

1-17     (a) or (g), as applicable, [of this section] then apply to the

1-18     increased amount of tax until more improvements, if any, are made.

1-19           (g)  Except as provided by Subsection (b), if an individual

1-20     who receives the limitation on tax increases imposed by this

1-21     section subsequently qualifies a different residence homestead for

1-22     the exemption provided by Section 11.13(c) for the residence

1-23     homestead of an individual 65 years of age or older, a school

1-24     district may not impose ad valorem taxes on the subsequently

 2-1     qualified homestead in a year in an amount that exceeds the amount

 2-2     of taxes the school district would have imposed on the subsequently

 2-3     qualified homestead in the first year in which the individual

 2-4     receives that exemption for the subsequently qualified homestead

 2-5     had the limitation on tax increases imposed by this section not

 2-6     been in effect, multiplied by a fraction the numerator of which is

 2-7     the total amount of school district taxes imposed on the former

 2-8     homestead in the last year in which the individual received that

 2-9     exemption for the former homestead and the denominator of which is

2-10     the total amount of school district taxes that would have been

2-11     imposed on the former homestead in the last year in which the

2-12     individual received that exemption for the former homestead had the

2-13     limitation on tax increases imposed by this section not been in

2-14     effect.

2-15           SECTION 2.  This Act takes effect January 1, 1998, but only

2-16     if the constitutional amendment to provide for transferring the

2-17     school tax freeze for an elderly person from a former homestead to

2-18     a newly acquired homestead is approved by the voters.  If that

2-19     amendment is not approved by the voters, this Act has no effect.

2-20           SECTION 3.  The importance of this legislation and the

2-21     crowded condition of the calendars in both houses create an

2-22     emergency and an imperative public necessity that the

2-23     constitutional rule requiring bills to be read on three several

2-24     days in each house be suspended, and this rule is hereby suspended.