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By: McClendon H.B. No. 86
A BILL TO BE ENTITLED
AN ACT
relating to taxes on the homesteads of the elderly.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 11.26, Tax Code, is amended to read as
follows:
Sec. 11.26. LIMITATION OF [SCHOOL] TAX ON HOMESTEADS OF
ELDERLY. (a) The tax officials shall appraise the property to
which this section applies and calculate taxes as on other
property, but if the tax so calculated exceeds the limitation
imposed by this section, the tax imposed is the amount of the tax as
limited by this section, except as otherwise provided by this
section. A taxing unit [school district] may not increase the total
annual amount of ad valorem tax it imposes on the residence
homestead of an individual 65 years or older above the amount of the
tax it imposed in the first tax year in which the individual
qualified that residence homestead for the exemption provided by
Section 11.13(c) for an individual 65 years of age or older. If the
individual qualified that residence homestead for the exemption
after the beginning of that first year and the residence homestead
remains eligible for the exemption for the next year, and if the
taxing unit [school district] taxes imposed on the residence
homestead in the next year are less than the amount of taxes imposed
in that first year, a taxing unit [school district] may not
subsequently increase the total annual amount of ad valorem taxes
it imposes on the residence homestead above the amount it imposed in
the year immediately following the first year for which the
individual qualified that residence homestead for the exemption,
except as provided by Subsection (b). If the first tax year the
individual qualified the residence homestead for the exemption
provided by Section 11.13(c) was a tax year before the 1997 tax
year, the amount of the limitation provided by this section is the
amount of tax the taxing unit [school district] imposed for the 1996
tax year less an amount equal to the amount determined by
multiplying $10,000 times the tax rate of the taxing unit [school
district] for the 1997 tax year, plus any 1997 tax attributable to
improvements made in 1996, other than improvements made to comply
with governmental regulations or repairs.
(b) If an individual makes improvements to the individual's
residence homestead, other than improvements required to comply
with governmental requirements or repairs, the taxing unit [school
district] may increase the tax on the homestead in the first year
the value of the homestead is increased on the appraisal roll
because of the enhancement of value by the improvements. The amount
of the tax increase is determined by applying the current tax rate
to the difference in the assessed value of the homestead with the
improvements and the assessed value it would have had without the
improvements. A limitation imposed by this section then applies to
the increased amount of tax until more improvements, if any, are
made.
(c) The limitation on tax increases required by this section
expires if on January 1:
(1) none of the owners of the structure who qualify for
the exemption and who owned the structure when the limitation first
took effect is using the structure as a residence homestead; or
(2) none of the owners of the structure qualifies for
the exemption.
(d) If the appraisal roll provides for taxation of appraised
value for a prior year because a residence homestead exemption for
persons 65 years or older was erroneously allowed, the tax assessor
shall add, as back taxes due as provided by Subsection (d) of
Section 26.09 of this code, the positive difference if any between
the tax that should have been imposed for that year and the tax that
was imposed because of the provisions of this section.
(e) For each taxing unit [school district] in an appraisal
district, the chief appraiser shall determine the portion of the
appraised value of residence homesteads of the elderly on which
taxing unit [school district] taxes are not imposed in a tax year
because of the limitation on tax increases imposed by this section.
That portion is calculated by determining the taxable value that,
if multiplied by the tax rate adopted by the taxing unit [school
district] for the tax year, would produce an amount equal to the
amount of tax that would have been imposed by the taxing unit
[school district] on residence homesteads of the elderly if the
limitation on tax increases imposed by this section were not in
effect, but that was not imposed because of that limitation. The
chief appraiser shall determine that taxable value and certify it
to the comptroller as soon as practicable for each tax year.
(f) The limitation on tax increases required by this section
does not expire because the owner of an interest in the structure
conveys the interest to a qualifying trust as defined by Section
11.13(j) if the owner or the owner's spouse is a trustor of the
trust and is entitled to occupy the structure.
(g) Except as provided by Subsection (b), if an individual
who receives a limitation on tax increases imposed by this section,
including a surviving spouse who receives a limitation under
Subsection (i), subsequently qualifies a different residence
homestead for an exemption under Section 11.13, a taxing unit
[school district] may not impose ad valorem taxes on the
subsequently qualified homestead in a year in an amount that
exceeds the amount of taxes the taxing unit [school district] would
have imposed on the subsequently qualified homestead in the first
year in which the individual receives that exemption for the
subsequently qualified homestead had the limitation on tax
increases imposed by this section not been in effect, multiplied by
a fraction the numerator of which is the total amount of taxing unit
[school district] taxes imposed on the former homestead in the last
year in which the individual received that exemption for the former
homestead and the denominator of which is the total amount of taxing
unit [school district] taxes that would have been imposed on the
former homestead in the last year in which the individual received
that exemption for the former homestead had the limitation on tax
increases imposed by this section not been in effect.
(h) An individual who receives a limitation on tax increases
under this section, including a surviving spouse who receives a
limitation under Subsection (i), and who subsequently qualifies a
different residence homestead for an exemption under Section 11.13,
or an agent of the individual, is entitled to receive from the chief
appraiser of the appraisal district in which the former homestead
was located a written certificate providing the information
necessary to determine whether the individual may qualify for a
limitation on the subsequently qualified homestead under
Subsection (g) and to calculate the amount of taxes the taxing unit
[school district] may impose on the subsequently qualified
homestead.
(i) If an individual who qualifies for the exemption
provided by Section 11.13(c) for an individual 65 years of age or
older dies, the surviving spouse of the individual is entitled to
the limitation applicable to the residence homestead of the
individual if:
(1) the surviving spouse is 55 years of age or older
when the individual dies; and
(2) the residence homestead of the individual:
(A) is the residence homestead of the surviving
spouse on the date that the individual dies; and
(B) remains the residence homestead of the
surviving spouse.
(j) If an individual who qualifies for an exemption provided
by Section 11.13(c) for an individual 65 years of age or older dies
in the first year in which the individual qualified for the
exemption and the individual first qualified for the exemption
after the beginning of that year, except as provided by Subsection
(k), the amount to which the surviving spouse's taxing unit [school
district] taxes are limited under Subsection (i) is the amount of
taxing unit [school district] taxes imposed on the residence
homestead in that year determined as if the individual qualifying
for the exemption had lived for the entire year.
(k) If in the first tax year after the year in which an
individual dies in the circumstances described by Subsection (j)
the amount of taxing unit [school district] taxes imposed on the
residence homestead of the surviving spouse is less than the amount
of taxing unit [school district] taxes imposed in the preceding
year as limited by Subsection (j), in a subsequent tax year the
surviving spouse's taxing unit [school district] taxes on that
residence homestead are limited to the amount of taxes imposed by
the district in that first tax year after the year in which the
individual dies.
(l) For purposes of the limitation on tax increases provided
by Subsection (g), the governing body of a taxing unit [school
district] in a county with a population of fewer than 75,000 in a
manner provided by law for official action by the governing body may
elect to apply the limitation provided by Subsection (g) to the
residence homestead of an individual as if that subsection were in
effect on January 1, 1993. The governing body must make the
election before January 1, 1999. The election applies only to taxes
imposed in a tax year that begins after the tax year in which the
election is made.
SECTION 2. This Act takes effect September 1, 2003.