78R766 JD-D
By: Brown of Brazos H.B. No. 136
A BILL TO BE ENTITLED
AN ACT
relating to limiting the amount of county or municipal ad valorem
taxes that may be imposed on the residence homesteads 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 OR MUNICIPAL TAX ON
HOMESTEADS OF ELDERLY. (a) This section applies only to a county
or municipality that has established a limitation on the total
amount of taxes that may be imposed by the county or municipality on
the residence homestead of 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
or municipality may not increase the total annual amount of ad
valorem taxes the county or municipality imposes on the residence
homestead of an individual 65 years of age or older above the amount
of the taxes the county or municipality imposed on the residence
homestead in the first tax year, other than a tax year preceding the
tax year in which the county or municipality 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 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 or municipal taxes imposed on the residence homestead in the
next year are less than the amount of taxes imposed in that first
year, a county or municipality 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 or municipality
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 or
municipality 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 or municipal taxes on the residence homestead
until more improvements, if any, are made.
(d) A limitation on county or municipal 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 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 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
persons 65 years of age or older was erroneously allowed, the tax
assessor for the applicable county or municipality 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 or municipal tax increases
provided by this section subsequently qualifies a different
residence homestead in the same county or municipality for an
exemption under Section 11.13, the county or municipality 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 or
municipality 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 or municipality 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 or municipality 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 or
municipal tax increases under this section and who subsequently
qualifies a different residence homestead in the same county or
municipality 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 or municipality may impose
on the subsequently qualified homestead.
(i) If an individual who qualifies for a limitation on
county or municipal tax increases under this section dies, the
surviving spouse of the individual is entitled to the limitation on
taxes imposed by the county or municipality on 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 a limitation on
county or municipal tax increases 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 or municipal taxes
are limited under Subsection (i) is the amount of taxes imposed by
the county or municipality, 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 dies under the circumstances described by Subsection (j)
the amount of taxes imposed by a county or municipality on the
residence homestead of the surviving spouse is less than the amount
of taxes imposed by the county or municipality in the preceding year
as limited by Subsection (j), in a subsequent tax year the surviving
spouse's taxes imposed by the county or municipality on that
residence homestead are limited to the amount of taxes imposed by
the county or municipality 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, or municipality
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 or
municipality 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 or
municipality 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 or
municipality 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 or
municipality to establish an ad valorem tax freeze on residence
homesteads 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.