By Nixon S.B. No. 587
76R5176 SMH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to a limitation on the maximum average annual increase in
1-3 the appraised value of real property for ad valorem tax purposes.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 1.12(d), Tax Code, is amended to read as
1-6 follows:
1-7 (d) For purposes of this section, the appraisal ratio of a
1-8 parcel of real property [homestead] to which Section 23.23 applies
1-9 is the ratio of the property's market value as determined by the
1-10 appraisal district or appraisal review board, as applicable, to the
1-11 market value of the property according to law. The appraisal ratio
1-12 is not calculated according to the appraised value of the property
1-13 as limited by Section 23.23.
1-14 SECTION 2. The heading to Section 23.23, Tax Code, is
1-15 amended to read as follows:
1-16 Sec. 23.23. LIMITATION ON APPRAISED VALUE OF REAL PROPERTY
1-17 [RESIDENCE HOMESTEAD]
1-18 SECTION 3. Sections 23.23(a)-(c) and (e), Tax Code, are
1-19 amended to read as follows:
1-20 (a) The appraised value of a parcel of real property
1-21 [residence homestead] for a tax year may not exceed the lesser of:
1-22 (1) the market value of the property; or
1-23 (2) the sum of:
1-24 (A) five [10] percent of the appraised value of
2-1 the property for the last year in which the property was appraised
2-2 for taxation times the number of years since the property was last
2-3 appraised;
2-4 (B) the appraised value of the property for the
2-5 last year in which the property was appraised; and
2-6 (C) the market value of all new improvements to
2-7 the property.
2-8 (b) When appraising a parcel of real property [residence
2-9 homestead], the chief appraiser shall:
2-10 (1) appraise the property at its market value; and
2-11 (2) include in the appraisal records both the market
2-12 value of the property and the amount computed under Subsection
2-13 (a)(2).
2-14 (c) The limitation provided by Subsection (a) takes effect
2-15 as to a parcel of real property [residence homestead] on January 1
2-16 of the tax year following the first tax year the owner acquires the
2-17 property [qualifies the property for an exemption under Section
2-18 11.13]. The limitation expires on January 1 of the first tax year
2-19 that:
2-20 (1) [neither] the owner of the property when the
2-21 limitation took effect no longer owns the property; and
2-22 (2) if the owner of the property when the limitation
2-23 took effect qualified the property for an exemption under Section
2-24 11.13, [nor] the owner's spouse or surviving spouse does not
2-25 qualify [qualifies] for an exemption under that section [Section
2-26 11.13].
2-27 (e) In this section, "new improvement" means an improvement
3-1 to a parcel of real property [residence homestead] that is made
3-2 after the appraisal of the property for the preceding year and that
3-3 increases the market value of the property. The term does not
3-4 include ordinary maintenance of an existing structure or the
3-5 grounds or another feature of the property.
3-6 SECTION 4. Section 403.302(d), Government Code, as amended
3-7 by Section 44, Chapter 1039, Section 63, Chapter 1040, and Section
3-8 27, Chapter 1071, Acts of the 75th Legislature, Regular Session,
3-9 1997, is reenacted and amended to read as follows:
3-10 (d) For the purposes of this section, "taxable value" means
3-11 the market value of all taxable property less:
3-12 (1) the total dollar amount of any residence homestead
3-13 exemptions lawfully granted under Section 11.13(b) or (c), Tax
3-14 Code, in the year that is the subject of the study for each school
3-15 district;
3-16 (2) the total dollar amount of any exemptions granted
3-17 before May 31, 1993, within a reinvestment zone under agreements
3-18 authorized by Chapter 312, Tax Code;
3-19 (3) the total dollar amount of any captured appraised
3-20 value of property that is located in a reinvestment zone on August
3-21 31, 1999, generates a tax increment paid into a tax increment fund,
3-22 and is eligible for tax increment financing under Chapter 311, Tax
3-23 Code, under a reinvestment zone financing plan approved under
3-24 Section 311.011(d), Tax Code, before September 1, 1999;
3-25 (4) the total dollar amount of any exemptions granted
3-26 under Section 11.251, Tax Code;
3-27 (5) the difference between the comptroller's estimate
4-1 of the market value and the productivity value of land that
4-2 qualifies for appraisal on the basis of its productive capacity,
4-3 except that the productivity value estimated by the comptroller may
4-4 not exceed the fair market value of the land;
4-5 (6) the portion of the appraised value of residence
4-6 homesteads of the elderly on which school district taxes are not
4-7 imposed in the year that is the subject of the study, calculated as
4-8 if the residence homesteads were appraised at the full value
4-9 required by law;
4-10 (7) a portion of the market value of property not
4-11 otherwise fully taxable by the district at market value because of
4-12 action required by statute or the constitution of this state that,
4-13 if the tax rate adopted by the district is applied to it, produces
4-14 an amount equal to the difference between the tax that the district
4-15 would have imposed on the property if the property were fully
4-16 taxable at market value and the tax that the district is actually
4-17 authorized to impose on the property, if this subsection does not
4-18 otherwise require that portion to be deducted;
4-19 (8) the market value of all tangible personal
4-20 property, other than manufactured homes, owned by a family or
4-21 individual and not held or used for the production of income;
4-22 (9) the appraised value of property the collection of
4-23 delinquent taxes on which is deferred under Section 33.06, Tax
4-24 Code;
4-25 (10) the portion of the appraised value of property
4-26 the collection of delinquent taxes on which is deferred under
4-27 Section 33.065, Tax Code; and
5-1 (11) the amount by which the market value of a parcel
5-2 of real property [residence homestead] to which Section 23.23, Tax
5-3 Code, applies exceeds the appraised value of that property as
5-4 calculated under that section.
5-5 SECTION 5. This Act takes effect January 1, 2000, but only
5-6 if the constitutional amendment proposed by the 76th Legislature,
5-7 Regular Session, 1999, to authorize the legislature to limit the
5-8 maximum average annual increase in the appraised value of real
5-9 property for ad valorem tax purposes is approved by the voters. If
5-10 that amendment is not approved by the voters, this Act has no
5-11 effect.
5-12 SECTION 6. The importance of this legislation and the
5-13 crowded condition of the calendars in both houses create an
5-14 emergency and an imperative public necessity that the
5-15 constitutional rule requiring bills to be read on three several
5-16 days in each house be suspended, and this rule is hereby suspended,
5-17 and that this Act take effect and be in force according to its
5-18 terms, and it is so enacted.