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78R7686 JD-D

By:  Rose                                                         H.B. No. 3228



A BILL TO BE ENTITLED

AN ACT

relating to limiting the amount of county and municipal ad valorem 
taxes that may be imposed on the residence homestead of a disabled 
person.
	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 AND MUNICIPAL TAXES ON 
HOMESTEADS OF DISABLED INDIVIDUALS.  (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 county or municipality may not increase the total 
annual amount of ad valorem tax it imposes on the residence 
homestead of an individual who is disabled above the amount of the 
tax it imposed in the preceding tax year if the individual qualified 
that residence homestead in the preceding year for the exemption 
provided by Section 11.13(c) for an individual who is disabled.
	(b)  If an individual makes improvements to the individual's 
residence homestead, other than improvements required to comply 
with governmental requirements or repairs, the county or 
municipality 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 
an individual who is disabled was erroneously allowed, the tax 
assessor 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.
	(e)  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.
	(f)  If an individual who qualifies for the exemption 
provided by Section 11.13(c) for an individual who is disabled 
dies, the surviving spouse of the individual is entitled to the 
limitation applicable to the residence homestead under Subsection 
(a) in the same manner as Subsection (a) applies to the residence 
homestead of a disabled individual if:
		(1)  the surviving spouse is 55 years of age or older 
when the disabled individual dies; and
		(2)  the residence homestead of the disabled 
individual:             
			(A)  is the residence homestead of the surviving 
spouse on the date the individual dies; and
			(B)  remains the residence homestead of the 
surviving spouse.       
	SECTION 2.  (a)  This Act takes effect January 1, 2004, and 
applies only to taxes imposed for tax years that begin on or after 
that date, but only if the constitutional amendment proposed by the 
78th Legislature, Regular Session, 2003, to prohibit an increase in 
the total amount of county or municipal ad valorem taxes that may be 
imposed on the residence homestead of a disabled person is approved 
by the voters. If that amendment is not approved by the voters, this 
Act has no effect.
	(b)  The change in law made by this Act does not affect the 
amount of taxes imposed on the residence homestead of any 
individual for a tax year that begins before the effective date of 
this Act.