78R6151 JD-D
By: Bohac H.B. No. 3223
A BILL TO BE ENTITLED
AN ACT
relating to limiting the maximum average annual increase in the
appraised value of real property for ad valorem tax purposes to five
percent.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1.12(d), Tax Code, is amended to read as
follows:
(d) For purposes of this section, the appraisal ratio of
real property [a homestead] to which Section 23.23 applies is the
ratio of the property's market value as determined by the appraisal
district or appraisal review board, as applicable, to the market
value of the property according to law. The appraisal ratio is not
calculated according to the appraised value of the property as
limited by Section 23.23.
SECTION 2. The heading to Section 23.23, Tax Code, is
amended to read as follows:
Sec. 23.23. LIMITATION ON APPRAISED VALUE OF REAL PROPERTY
[RESIDENCE HOMESTEAD].
SECTION 3. Section 23.23, Tax Code, is amended by amending
Subsections (a)-(c) and adding Subsections (c-1)-(c-3) to read as
follows:
(a) The appraised value of real property [a residence
homestead] for a tax year may not exceed the lesser of:
(1) the market value of the property; or
(2) the sum of:
(A) five [10] percent of the appraised value of
the property for the last year in which the property was appraised
for taxation times the number of years since the property was last
appraised;
(B) the appraised value of the property for the
last year in which the property was appraised; and
(C) the market value of all new improvements to
the property.
(b) When appraising real property [a residence homestead],
the chief appraiser shall:
(1) appraise the property at its market value; and
(2) include in the appraisal records both the market
value of the property and the amount computed under Subsection
(a)(2).
(c) Except as provided by Subsection (c-1), the [The]
limitation provided by Subsection (a) takes effect on January 1 of
the tax year following the first tax year in which the owner owns
the property on January 1, or, if the property is [as to] a
residence homestead, on January 1 of the tax year following the
first tax year in which the owner qualifies the property for an
exemption under Section 11.13. Except as provided by Subsection
(c-1), (c-2), or (c-3), the [The] limitation expires on January 1 of
the first tax year following the year in which [that neither] the
owner of the property sells or otherwise transfers ownership of the
property.
(c-1) If on January 1, 2003, the property was a residence
homestead and qualified for a limitation under Subsection (a), as
that subsection existed on that date, the limitation is continued
in effect and does not expire until January 1 of the first tax year
following the year in which the owner sells or otherwise transfers
ownership of the property, except as provided by Subsection (c-2).
(c-2) If property subject to a limitation under this section
qualifies for an exemption under Section 11.13 when the ownership
of the property is transferred to the owner's spouse or surviving
spouse, the limitation expires on January 1 of the first tax year
following the year in which [when the limitation took effect nor]
the owner's spouse or surviving spouse sells the property or
transfers ownership of the property, unless the limitation is
continued under this subsection [qualifies for an exemption under
Section 11.13].
(c-3) If property subject to a limitation under Subsection
(a), other than a residence homestead, is owned by two or more
persons, the limitation expires on January 1 of the first tax year
following the year in which the ownership of at least a 50 percent
interest in the property is sold or otherwise transferred.
SECTION 4. Sections 403.302(d) and (i), Government Code,
are amended to read as follows:
(d) For the purposes of this section, "taxable value" means
the market value of all taxable property less:
(1) the total dollar amount of any residence homestead
exemptions lawfully granted under Section 11.13(b) or (c), Tax
Code, in the year that is the subject of the study for each school
district;
(2) one-half of the total dollar amount of any
residence homestead exemptions granted under Section 11.13(n), Tax
Code, in the year that is the subject of the study for each school
district;
(3) the total dollar amount of any exemptions granted
before May 31, 1993, within a reinvestment zone under agreements
authorized by Chapter 312, Tax Code;
(4) subject to Subsection (e), the total dollar amount
of any captured appraised value of property that:
(A) is within a reinvestment zone created on or
before May 31, 1999, or is proposed to be included within the
boundaries of a reinvestment zone as the boundaries of the zone and
the proposed portion of tax increment paid into the tax increment
fund by a school district are described in a written notification
provided by the municipality or the board of directors of the zone
to the governing bodies of the other taxing units in the manner
provided by Section 311.003(e), Tax Code, before May 31, 1999, and
within the boundaries of the zone as those boundaries existed on
September 1, 1999, including subsequent improvements to the
property regardless of when made;
(B) generates taxes paid into a tax increment
fund created under Chapter 311, Tax Code, under a reinvestment zone
financing plan approved under Section 311.011(d), Tax Code, on or
before September 1, 1999; and
(C) is eligible for tax increment financing under
Chapter 311, Tax Code;
(5) the total dollar amount of any exemptions granted
under Section 11.251, Tax Code;
(6) the difference between the comptroller's estimate
of the market value and the productivity value of land that
qualifies for appraisal on the basis of its productive capacity,
except that the productivity value estimated by the comptroller may
not exceed the fair market value of the land;
(7) the portion of the appraised value of residence
homesteads of the elderly on which school district taxes are not
imposed in the year that is the subject of the study, calculated as
if the residence homesteads were appraised at the full value
required by law;
(8) a portion of the market value of property not
otherwise fully taxable by the district at market value because of:
(A) action required by statute or the
constitution of this state that, if the tax rate adopted by the
district is applied to it, produces an amount equal to the
difference between the tax that the district would have imposed on
the property if the property were fully taxable at market value and
the tax that the district is actually authorized to impose on the
property, if this subsection does not otherwise require that
portion to be deducted; or
(B) action taken by the district under Subchapter
B or C, Chapter 313, Tax Code;
(9) the market value of all tangible personal
property, other than manufactured homes, owned by a family or
individual and not held or used for the production of income;
(10) the appraised value of property the collection of
delinquent taxes on which is deferred under Section 33.06, Tax
Code;
(11) the portion of the appraised value of property
the collection of delinquent taxes on which is deferred under
Section 33.065, Tax Code; and
(12) the amount by which the market value of real
property [a residence homestead] to which Section 23.23, Tax Code,
applies exceeds the appraised value of that property as calculated
under that section.
(i) If the comptroller determines in the annual study that
the market value of property in a school district as determined by
the appraisal district that appraises property for the school
district, less the total of the amounts and values listed in
Subsection (d) as determined by that appraisal district, is valid,
the comptroller, in determining the taxable value of property in
the school district under Subsection (d), shall for purposes of
Subsection (d)(12) subtract from the market value as determined by
the appraisal district of real properties [residence homesteads] to
which Section 23.23, Tax Code, applies the amount by which that
amount exceeds the appraised value of those properties as
calculated by the appraisal district under Section 23.23, Tax Code.
If the comptroller determines in the annual study that the market
value of property in a school district as determined by the
appraisal district that appraises property for the school district,
less the total of the amounts and values listed in Subsection (d) as
determined by that appraisal district, is not valid, the
comptroller, in determining the taxable value of property in the
school district under Subsection (d), shall for purposes of
Subsection (d)(12) subtract from the market value as estimated by
the comptroller of real properties [residence homesteads] to which
Section 23.23, Tax Code, applies the amount by which that amount
exceeds the appraised value of those properties as calculated by
the appraisal district under Section 23.23, Tax Code.
SECTION 5. This Act takes effect January 1, 2004, and
applies only to the appraisal for ad valorem tax purposes of real
property for a tax year that begins on or after January 1, 2004, but
only if the constitutional amendment proposed by the 78th
Legislature, Regular Session, 2003, authorizing the legislature to
limit the maximum average annual increase in the appraised value of
real property for ad valorem tax purposes to five percent or more is
approved by the voters. If that amendment is not approved by the
voters, this Act has no effect.