By Cain S.B. No. 1645
75R2098 SMH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to limitations on the appraised value of residence
1-3 homesteads for ad valorem tax purposes.
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. LIMITATION ON APPRAISED VALUE OF RESIDENCE
1-8 HOMESTEADS. (a) The appraised value of a residence homestead for
1-9 a tax year may not exceed the lesser of:
1-10 (1) the market value of the property; or
1-11 (2) the sum of:
1-12 (A) 105 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) When appraising a residence homestead, the chief
1-17 appraiser shall:
1-18 (1) appraise the property at its market value; and
1-19 (2) include in the appraisal records both the market
1-20 value of the property and the amount computed under Subsection
1-21 (a)(2).
1-22 (c) The limitation provided by Subsection (a) takes effect
1-23 as to a residence homestead on January 1 of the tax year following
1-24 the first tax year the owner qualifies the property for an
2-1 exemption under Section 11.13. The limitation expires on January 1
2-2 of the first tax year that neither the owner of the property when
2-3 the limitation took effect, the owner's spouse or surviving spouse,
2-4 nor a minor child of the owner qualifies for an exemption under
2-5 Section 11.13.
2-6 (d) This section does not apply to property appraised under
2-7 Subchapter C, D, E, F, or G.
2-8 (e) In this section, "new improvement" means an improvement
2-9 to a residence homestead that is made after the appraisal of the
2-10 property for the preceding year and that increases the market value
2-11 of the property. The term does not include ordinary maintenance of
2-12 an existing structure or the grounds or another feature of the
2-13 property.
2-14 SECTION 2. Section 1.12, Tax Code, is amended by adding
2-15 Subsection (d) to read as follows:
2-16 (d) For purposes of this section, the appraisal ratio of a
2-17 residence homestead to which Section 23.21 applies is the ratio of
2-18 the property's market value as determined by the appraisal district
2-19 or appraisal review board, as applicable, to the market value of
2-20 the property according to law. The appraisal ratio is not
2-21 calculated according to the appraised value of the property as
2-22 limited by Section 23.21.
2-23 SECTION 3. Subchapter C, Chapter 41, Tax Code, is amended by
2-24 adding Section 41.414 to read as follows:
2-25 Sec. 41.414. PROTEST OF APPRAISED VALUE OF RESIDENCE
2-26 HOMESTEAD. In a protest of the appraised value of a residence
2-27 homestead, if the appraised value for the current year is the value
3-1 calculated as provided by Section 23.21(a)(2), the property owner
3-2 is not entitled to protest the appraised value for the preceding
3-3 year that is used in the calculation of the appraised value for the
3-4 current year.
3-5 SECTION 4. Section 403.302(d), Government Code, is amended
3-6 to read as follows:
3-7 (d) For the purposes of this section, "taxable value" means
3-8 market value less:
3-9 (1) the total dollar amount of any exemptions of part
3-10 but not all of the value of taxable property required by the
3-11 constitution or a statute that a district lawfully granted in the
3-12 year that is the subject of the study;
3-13 (2) the total dollar amount of any exemptions granted
3-14 before May 31, 1993, within a reinvestment zone under agreements
3-15 authorized by Chapter 312, Tax Code;
3-16 (3) the total dollar amount of any captured appraised
3-17 value of property that is located in a reinvestment zone and that
3-18 is eligible for tax increment financing under Chapter 311, Tax
3-19 Code;
3-20 (4) the total dollar amount of any exemptions granted
3-21 under Section 11.251, Tax Code;
3-22 (5) the difference between the market value and the
3-23 productivity value of land that qualifies for appraisal on the
3-24 basis of its productive capacity, except that the productivity
3-25 value may not exceed the fair market value of the land;
3-26 (6) the portion of the appraised value of residence
3-27 homesteads of the elderly on which school district taxes are not
4-1 imposed in the year that is the subject of the study, calculated as
4-2 if the residence homesteads were appraised at the full value
4-3 required by law;
4-4 (7) a portion of the market value of property not
4-5 otherwise fully taxable by the district at market value because of
4-6 action required by statute or the constitution of this state that,
4-7 if the tax rate adopted by the district is applied to it, produces
4-8 an amount equal to the difference between the tax that the district
4-9 would have imposed on the property if the property were fully
4-10 taxable at market value and the tax that the district is actually
4-11 authorized to impose on the property; [and]
4-12 (8) the market value of all tangible personal
4-13 property, other than manufactured homes, owned by a family or
4-14 individual and not held or used for the production of income; and
4-15 (9) the amount by which the market value of a
4-16 residence homestead to which Section 23.21, Tax Code, applies
4-17 exceeds the appraised value of that property as calculated under
4-18 that section.
4-19 SECTION 5. This Act takes effect January 1, 1998, but only
4-20 if the constitutional amendment proposed by the 75th Legislature,
4-21 Regular Session, 1997, to authorize the legislature to limit the
4-22 appraised value of residence homesteads for ad valorem tax purposes
4-23 is approved by the voters. If the proposed constitutional
4-24 amendment is not approved by the voters, this Act has no effect.
4-25 SECTION 6. The importance of this legislation and the
4-26 crowded condition of the calendars in both houses create an
4-27 emergency and an imperative public necessity that the
5-1 constitutional rule requiring bills to be read on three several
5-2 days in each house be suspended, and this rule is hereby suspended.