By Brown of Kaufman H.B. No. 2416
77R5201 JD-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to limiting the amount of county or municipal ad valorem
1-3 taxes that may be imposed on the residence homesteads of the
1-4 elderly and their surviving spouses.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by
1-7 adding Section 11.261 to read as follows:
1-8 Sec. 11.261. LIMITATION OF COUNTY OR MUNICIPAL TAX ON
1-9 HOMESTEADS OF ELDERLY. (a) This section applies only to a county
1-10 or municipality that has established a limitation on the total
1-11 amount of taxes that may be imposed by the county or municipality
1-12 on the residence homestead of an individual 65 years of age or
1-13 older under Section 1-b(h), Article VIII, Texas Constitution.
1-14 (b) The tax officials shall appraise the property to which
1-15 the limitation applies and calculate taxes as on other property,
1-16 but if the tax so calculated exceeds the limitation provided by
1-17 this section, the tax imposed is the amount of the tax as limited
1-18 by this section, except as otherwise provided by this section. The
1-19 county or municipality may not increase the total annual amount of
1-20 ad valorem taxes the county or municipality imposes on the
1-21 residence homestead of an individual 65 years of age or older above
1-22 the amount of the taxes the county or municipality imposed in the
1-23 first tax year, other than a tax year preceding the tax year in
1-24 which the county or municipality establishes the limitation
2-1 described by Subsection (a), in which the individual qualified that
2-2 residence homestead for the exemption provided by Section 11.13(c)
2-3 for an individual 65 years of age or older. If the individual
2-4 qualified that residence homestead for the exemption after the
2-5 beginning of that first year and the residence homestead remains
2-6 eligible for the exemption for the next year, and if the county or
2-7 municipal taxes imposed on the residence homestead in the next year
2-8 are less than the amount of taxes imposed in that first year, a
2-9 county or municipality may not subsequently increase the total
2-10 annual amount of ad valorem taxes it imposes on the residence
2-11 homestead above the amount it imposed in the year immediately
2-12 following the first year, other than a tax year preceding the tax
2-13 year in which the county or municipality establishes the limitation
2-14 described by Subsection (a), for which the individual qualified
2-15 that residence homestead for the exemption, except as provided by
2-16 Subsection (c).
2-17 (c) If an individual makes improvements to the individual's
2-18 residence homestead, other than improvements required to comply
2-19 with governmental requirements or repairs, the county or
2-20 municipality may increase the amount of taxes on the homestead in
2-21 the first year the value of the homestead is increased on the
2-22 appraisal roll because of the enhancement of value by the
2-23 improvements. The amount of the tax increase is determined by
2-24 applying the current tax rate to the difference between the
2-25 appraised value of the homestead with the improvements and the
2-26 appraised value it would have had without the improvements. A
2-27 limitation provided by this section then applies to the increased
3-1 amount of county or municipal taxes until more improvements, if
3-2 any, are made.
3-3 (d) A limitation on county or municipal tax increases
3-4 provided by this section expires if on January 1:
3-5 (1) none of the owners of the structure who qualify
3-6 for the exemption and who owned the structure when the limitation
3-7 first took effect is using the structure as a residence homestead;
3-8 or
3-9 (2) none of the owners of the structure qualifies for
3-10 the exemption.
3-11 (e) If the appraisal roll provides for taxation of appraised
3-12 value for a prior year because a residence homestead exemption for
3-13 persons 65 years of age or older was erroneously allowed, the tax
3-14 assessor for the applicable county or municipality shall add, as
3-15 back taxes due as provided by Section 26.09(d), the positive
3-16 difference if any between the tax that should have been imposed for
3-17 that year and the tax that was imposed because of the provisions of
3-18 this section.
3-19 (f) A limitation on tax increases provided by this section
3-20 does not expire because the owner of an interest in the structure
3-21 conveys the interest to a qualifying trust as defined by Section
3-22 11.13(j) if the owner or the owner's spouse is a trustor of the
3-23 trust and is entitled to occupy the structure.
3-24 (g) Except as provided by Subsection (c), if an individual
3-25 who receives a limitation on county or municipal tax increases
3-26 provided by this section subsequently qualifies a different
3-27 residence homestead in the same county or municipality for an
4-1 exemption under Section 11.13, the county or municipality may not
4-2 impose ad valorem taxes on the subsequently qualified homestead in
4-3 a year in an amount that exceeds the amount of taxes the county or
4-4 municipality would have imposed on the subsequently qualified
4-5 homestead in the first year in which the individual receives that
4-6 exemption for the subsequently qualified homestead had the
4-7 limitation on tax increases provided by this section not been in
4-8 effect, multiplied by a fraction the numerator of which is the
4-9 total amount of taxes the county or municipality imposed on the
4-10 former homestead in the last year in which the individual received
4-11 that exemption for the former homestead and the denominator of
4-12 which is the total amount of taxes the county or municipality would
4-13 have imposed on the former homestead in the last year in which the
4-14 individual received that exemption for the former homestead had the
4-15 limitation on tax increases provided by this section not been in
4-16 effect.
4-17 (h) An individual who receives a limitation on county or
4-18 municipal tax increases under this section and who subsequently
4-19 qualifies a different residence homestead in the same county or
4-20 municipality for an exemption under Section 11.13, or an agent of
4-21 the individual, is entitled to receive from the chief appraiser of
4-22 the appraisal district in which the former homestead was located a
4-23 written certificate providing the information necessary to
4-24 determine whether the individual may qualify for a limitation on
4-25 the subsequently qualified homestead under Subsection (g) and to
4-26 calculate the amount of taxes the county or municipality may impose
4-27 on the subsequently qualified homestead.
5-1 (i) If an individual who qualifies for a limitation on
5-2 county or municipal tax increases under this section dies, the
5-3 surviving spouse of the individual is entitled to the limitation on
5-4 taxes imposed by the county or municipality on the residence
5-5 homestead of the individual if:
5-6 (1) the surviving spouse is 55 years of age or older
5-7 when the individual dies; and
5-8 (2) the residence homestead of the individual:
5-9 (A) is the residence homestead of the surviving
5-10 spouse on the date that the individual dies; and
5-11 (B) remains the residence homestead of the
5-12 surviving spouse.
5-13 (j) If an individual who qualifies for a limitation on
5-14 county or municipal tax increases under this section dies in the
5-15 first year in which the individual qualified for the limitation and
5-16 the individual first qualified for the limitation after the
5-17 beginning of that year, except as provided by Subsection (k), the
5-18 amount to which the surviving spouse's county or municipal taxes
5-19 are limited under Subsection (i) is the amount of taxes imposed by
5-20 the county or municipality, as applicable, on the residence
5-21 homestead in that year determined as if the individual qualifying
5-22 for the exemption had lived for the entire year.
5-23 (k) If in the first tax year after the year in which an
5-24 individual dies under the circumstances described by Subsection (j)
5-25 the amount of taxes imposed by a county or municipality on the
5-26 residence homestead of the surviving spouse is less than the amount
5-27 of taxes imposed by the county or municipality in the preceding
6-1 year as limited by Subsection (j), in a subsequent tax year the
6-2 surviving spouse's taxes imposed by the county or municipality on
6-3 that residence homestead are limited to the amount of taxes imposed
6-4 by the county or municipality in that first tax year after the year
6-5 in which the individual dies.
6-6 SECTION 2. Sections 23.19(b) and (g), Tax Code, are amended
6-7 to read as follows:
6-8 (b) If an appraisal district receives a written request for
6-9 the appraisal of real property and improvements of a cooperative
6-10 housing corporation according to the separate interests of the
6-11 corporation's stockholders, the chief appraiser shall separately
6-12 appraise the interests described by Subsection (d) [of this
6-13 section] if the conditions required by Subsections (e) and (f) [of
6-14 this section] have been met. Separate appraisal under this section
6-15 is for the purposes of administration of tax exemptions,
6-16 determination of applicable limitations of taxes under Section
6-17 11.26 or 11.261 [of this code], and apportionment by a cooperative
6-18 housing corporation of property taxes among its stockholders but is
6-19 not the basis for determining value on which a tax is imposed under
6-20 this title. A stockholder whose interest is separately appraised
6-21 under this section may protest and appeal the appraised value in
6-22 the manner provided by this title for protest and appeal of the
6-23 appraised value of other property.
6-24 (g) A tax bill or a separate statement accompanying the tax
6-25 bill to a cooperative housing corporation for which interests of
6-26 stockholders are separately appraised under this section must
6-27 state, in addition to the information required by Section 31.01 [of
7-1 this code], the appraised value and taxable value of each interest
7-2 separately appraised. Each exemption claimed as provided by this
7-3 title by a person entitled to the exemption shall also be deducted
7-4 from the total appraised value of the property of the corporation.
7-5 The total tax imposed by a school district, county, or municipality
7-6 shall be reduced by any amount that represents an increase in taxes
7-7 attributable to separately appraised interests of the real property
7-8 and improvements that are subject to the limitation of taxes
7-9 prescribed by Section 11.26 or 11.261 [of this code]. The
7-10 corporation shall apportion among its stockholders liability for
7-11 reimbursing the corporation for property taxes according to the
7-12 relative taxable values of their interests.
7-13 SECTION 3. Sections 26.012(6), (13), and (14), Tax Code, are
7-14 amended to read as follows:
7-15 (6) "Current total value" means the total taxable
7-16 value of property listed on the appraisal roll for the current
7-17 year, including all appraisal roll supplements and corrections as
7-18 of the date of the calculation, less the taxable value of property
7-19 exempted for the current tax year for the first time under Section
7-20 11.31, except that:
7-21 (A) the current total value for a school
7-22 district excludes the total value of homesteads that qualify for a
7-23 tax limitation as provided by Section 11.26; and
7-24 (B) the current total value for a county or
7-25 municipality excludes the total value of homesteads that qualify
7-26 for a tax limitation as provided by Section 11.261.
7-27 (13) "Last year's levy" means the total of:
8-1 (A) the amount of taxes that would be generated
8-2 by multiplying the total tax rate adopted by the governing body in
8-3 the preceding year by the total taxable value of property on the
8-4 appraisal roll for the preceding year, including:
8-5 (i) taxable value that was reduced in an
8-6 appeal under Chapter 42; and
8-7 (ii) all appraisal roll supplements and
8-8 corrections other than corrections made pursuant to Section
8-9 25.25(d), as of the date of the calculation, except that last
8-10 year's taxable value for a school district excludes the total value
8-11 of homesteads that qualified for a tax limitation as provided by
8-12 Section 11.26 and last year's taxable value for a county or
8-13 municipality excludes the total value of homesteads that qualified
8-14 for a tax limitation as provided by Section 11.261; and
8-15 (B) the amount of taxes refunded by the taxing
8-16 unit in the preceding year for tax years before that year.
8-17 (14) "Last year's total value" means the total taxable
8-18 value of property listed on the appraisal roll for the preceding
8-19 year, including all appraisal roll supplements and corrections,
8-20 other than corrections made pursuant to Section 25.25(d) [of this
8-21 code], as of the date of the calculation, except that:
8-22 (A) last year's taxable value for a school
8-23 district excludes the total value of homesteads that qualified for
8-24 a tax limitation as provided by Section 11.26; and
8-25 (B) last year's taxable value for a county or
8-26 municipality excludes the total value of homesteads that qualified
8-27 for a tax limitation as provided by Section 11.261 [of this code].
9-1 SECTION 4. This Act takes effect January 1, 2002, and applies
9-2 only to ad valorem taxes imposed on or after that date, but only if
9-3 the constitutional amendment to permit a county or municipality to
9-4 establish an ad valorem tax freeze on residence homesteads of the
9-5 elderly and their spouses is approved by the voters. If that
9-6 amendment is not approved by the voters, this Act has no effect.