H.B. No. 136
AN ACT
relating to limiting the amount of county, municipal, or junior
college district ad valorem taxes that may be imposed on the
residence homesteads of the disabled and of the elderly and their
surviving spouses.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by
adding Section 11.261 to read as follows:
Sec. 11.261. LIMITATION OF COUNTY, MUNICIPAL, OR JUNIOR
COLLEGE DISTRICT TAX ON HOMESTEADS OF DISABLED AND ELDERLY. (a)
This section applies only to a county, municipality, or junior
college district that has established a limitation on the total
amount of taxes that may be imposed by the county, municipality, or
junior college district on the residence homestead of a disabled
individual or an individual 65 years of age or older under Section
1-b(h), Article VIII, Texas Constitution.
(b) The tax officials shall appraise the property to which
the limitation applies and calculate taxes as on other property,
but if the tax so calculated exceeds the limitation provided by this
section, the tax imposed is the amount of the tax as limited by this
section, except as otherwise provided by this section. The county,
municipality, or junior college district may not increase the total
annual amount of ad valorem taxes the county, municipality, or
junior college district imposes on the residence homestead of a
disabled individual or an individual 65 years of age or older above
the amount of the taxes the county, municipality, or junior college
district imposed on the residence homestead in the first tax year,
other than a tax year preceding the tax year in which the county,
municipality, or junior college district established the
limitation described by Subsection (a), in which the individual
qualified that residence homestead for the exemption provided by
Section 11.13(c) for a disabled individual or 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 county, municipal, or junior college
district taxes imposed on the residence homestead in the next year
are less than the amount of taxes imposed in that first year, a
county, municipality, or junior college district may not
subsequently increase the total annual amount of ad valorem taxes
it imposes on the residence homestead above the amount it imposed on
the residence homestead in the year immediately following the first
year, other than a tax year preceding the tax year in which the
county, municipality, or junior college district established the
limitation described by Subsection (a), for which the individual
qualified that residence homestead for the exemption.
(c) If an individual makes improvements to the individual's
residence homestead, other than repairs and other than improvements
required to comply with governmental requirements, the county,
municipality, or junior college district may increase the amount of
taxes 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
between the appraised value of the homestead with the improvements
and the appraised value it would have had without the improvements.
A limitation provided by this section then applies to the increased
amount of county, municipal, or junior college district taxes on
the residence homestead until more improvements, if any, are made.
(d) A limitation on county, municipal, or junior college
district tax increases provided by this section expires if on
January 1:
(1) none of the owners of the structure who qualify for
the exemption provided by Section 11.13(c) for a disabled
individual or an individual 65 years of age or older and who owned
the structure when the limitation provided by this section first
took effect is using the structure as a residence homestead; or
(2) none of the owners of the structure qualifies for
the exemption provided by Section 11.13(c) for a disabled
individual or an individual 65 years of age or older.
(e) If the appraisal roll provides for taxation of appraised
value for a prior year because a residence homestead exemption for
disabled individuals or individuals 65 years of age or older was
erroneously allowed, the tax assessor for the applicable county,
municipality, or junior college district shall add, as back taxes
due as provided by Section 26.09(d), 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.
(f) A limitation on tax increases provided 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 (c), if an individual
who receives a limitation on county, municipal, or junior college
district tax increases provided by this section subsequently
qualifies a different residence homestead in the same county,
municipality, or junior college district for an exemption under
Section 11.13, the county, municipality, or junior college 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 county, municipality, or junior college 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 provided by this section not been in effect, multiplied
by a fraction the numerator of which is the total amount of taxes
the county, municipality, or junior college district 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 taxes the county, municipality, or
junior college district would have 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 provided
by this section not been in effect.
(h) An individual who receives a limitation on county,
municipal, or junior college district tax increases under this
section and who subsequently qualifies a different residence
homestead in the same county, municipality, or junior college
district 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 county, municipality, or junior
college district may impose on the subsequently qualified
homestead.
(i) If an individual who qualifies for a limitation on
county, municipal, or junior college district tax increases under
this section dies, the surviving spouse of the individual is
entitled to the limitation on taxes imposed by the county,
municipality, or junior college district on the residence homestead
of the individual if:
(1) the surviving spouse is disabled or 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 is 65 years of age or older and
qualifies for a limitation on county, municipal, or junior college
district tax increases for the elderly under this section dies in
the first year in which the individual qualified for the limitation
and the individual first qualified for the limitation after the
beginning of that year, except as provided by Subsection (k), the
amount to which the surviving spouse's county, municipal, or junior
college district taxes are limited under Subsection (i) is the
amount of taxes imposed by the county, municipality, or junior
college district, as applicable, 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 who is 65 years of age or older dies under the
circumstances described by Subsection (j) the amount of taxes
imposed by a county, municipality, or junior college district on
the residence homestead of the surviving spouse is less than the
amount of taxes imposed by the county, municipality, or junior
college district in the preceding year as limited by Subsection
(j), in a subsequent tax year the surviving spouse's taxes imposed
by the county, municipality, or junior college district on that
residence homestead are limited to the amount of taxes imposed by
the county, municipality, or junior college district in that first
tax year after the year in which the individual dies.
SECTION 2. Sections 23.19(b) and (g), Tax Code, are amended
to read as follows:
(b) If an appraisal district receives a written request for
the appraisal of real property and improvements of a cooperative
housing corporation according to the separate interests of the
corporation's stockholders, the chief appraiser shall separately
appraise the interests described by Subsection (d) [of this
section] if the conditions required by Subsections (e) and (f) [of
this section] have been met. Separate appraisal under this section
is for the purposes of administration of tax exemptions,
determination of applicable limitations of taxes under Section
11.26 or 11.261 [of this code], and apportionment by a cooperative
housing corporation of property taxes among its stockholders but is
not the basis for determining value on which a tax is imposed under
this title. A stockholder whose interest is separately appraised
under this section may protest and appeal the appraised value in the
manner provided by this title for protest and appeal of the
appraised value of other property.
(g) A tax bill or a separate statement accompanying the tax
bill to a cooperative housing corporation for which interests of
stockholders are separately appraised under this section must
state, in addition to the information required by Section 31.01 [of
this code], the appraised value and taxable value of each interest
separately appraised. Each exemption claimed as provided by this
title by a person entitled to the exemption shall also be deducted
from the total appraised value of the property of the corporation.
The total tax imposed by a school district, county, municipality,
or junior college district shall be reduced by any amount that
represents an increase in taxes attributable to separately
appraised interests of the real property and improvements that are
subject to the limitation of taxes prescribed by Section 11.26 or
11.261 [of this code]. The corporation shall apportion among its
stockholders liability for reimbursing the corporation for
property taxes according to the relative taxable values of their
interests.
SECTION 3. Sections 26.012(6), (13), and (14), Tax Code,
are amended to read as follows:
(6) "Current total value" means the total taxable
value of property listed on the appraisal roll for the current year,
including all appraisal roll supplements and corrections as of the
date of the calculation, less the taxable value of property
exempted for the current tax year for the first time under Section
11.31, except that:
(A) the current total value for a school district
excludes:
(i) [(A)] the total value of homesteads
that qualify for a tax limitation as provided by Section 11.26; and
(ii) [(B)] new property value of property
that is subject to an agreement entered into under Chapter 313; and
(B) the current total value for a county,
municipality, or junior college district excludes the total value
of homesteads that qualify for a tax limitation provided by Section
11.261.
(13) "Last year's levy" means the total of:
(A) the amount of taxes that would be generated
by multiplying the total tax rate adopted by the governing body in
the preceding year by the total taxable value of property on the
appraisal roll for the preceding year, including:
(i) taxable value that was reduced in an
appeal under Chapter 42; and
(ii) all appraisal roll supplements and
corrections other than corrections made pursuant to Section
25.25(d), as of the date of the calculation, except that last year's
taxable value for a school district excludes the total value of
homesteads that qualified for a tax limitation as provided by
Section 11.26 and last year's taxable value for a county,
municipality, or junior college district excludes the total value
of homesteads that qualified for a tax limitation as provided by
Section 11.261; and
(B) the amount of taxes refunded by the taxing
unit in the preceding year for tax years before that year.
(14) "Last year's total value" means the total taxable
value of property listed on the appraisal roll for the preceding
year, including all appraisal roll supplements and corrections,
other than corrections made pursuant to Section 25.25(d) [of this
code], as of the date of the calculation, except that:
(A) last year's taxable value for a school
district excludes the total value of homesteads that qualified for
a tax limitation as provided by Section 11.26; and
(B) last year's taxable value for a county,
municipality, or junior college district excludes the total value
of homesteads that qualified for a tax limitation as provided by
Section 11.261 [of this code].
SECTION 4. This Act takes effect January 1, 2004, and
applies only to ad valorem taxes imposed on or after that date, but
only if the constitutional amendment to permit a county,
municipality, or junior college district to establish an ad valorem
tax freeze on residence homesteads of the disabled and of the
elderly and their spouses is approved by the voters. If that
amendment is not approved by the voters, this Act has no effect.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 136 was passed by the House on May 5,
2003, by the following vote: Yeas 138, Nays 0, 1 present, not
voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 136 was passed by the Senate on May
28, 2003, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor