79S20083 SMH-D



By:  Riddle                                                       H.B. No. 19 







A BILL TO BE ENTITLED



AN ACT



relating to the authorization of a local option election in a county 

to set a limit of less than 10 percent but not less than three 

percent on the maximum average annual increase in the appraised 

value of residence homesteads for ad valorem tax purposes.

	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        

	SECTION 1.  Section 23.23, Tax Code, is amended by amending 

Subsection (a) and adding Subsection (g) to read as follows:

	(a)  Except as provided by Subsection (g), the [The] 

appraised value of 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)  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.             

	(g)  The commissioners court of a county may call an election 

in the county to permit the voters of the county to determine 

whether a lower limitation on appraised value determined in the 

manner provided by Subsection (a)(2) using a percentage of less 

than 10 percent but not less than three percent in place of 10 

percent in Subsection (a)(2)(A) will apply to the taxation of 

residence homesteads in the county by each taxing unit having 

territory in the county.  The election shall be held on the date of 

the next general election for state and county officers.  The ballot 

proposition shall specify the proposed percentage limitation on 

increases in appraised value.  If a majority of the votes cast at 

the election favor the establishment of the proposed limitation, 

the limitation applies beginning with the tax year following the 

year in which the election is held and remains in effect until 

amended or repealed by the voters of the county at a subsequent 

election called by the commissioners court of the county.  An 

election to amend or repeal a limitation shall be held on the date 

of the next general election for state and county officers.  If the 

voters of a county amend or repeal a limitation, the amendment or 

repeal applies beginning with the tax year after the year in which 

the election is held.  If a taxing unit has territory in more than 

one county, the highest percentage limitation on appraised value 

otherwise applicable in any portion of the territory of the taxing 

unit applies to the taxation of residence homesteads by the taxing 

unit throughout that taxing unit's territory.

	SECTION 2.  Section 42.26(d), Tax Code, is amended to read as 

follows:       

	(d)  For purposes of this section, the value of the property 

subject to the suit and the value of a comparable property or sample 

property that is used for comparison must be the market value 

determined by the appraisal district when the property is a 

residence homestead subject to the limitation on appraised value 

imposed by or authorized under Section 23.23.

	SECTION 3.  This Act takes effect January 1, 2006, and 

applies only to the appraisal of a residence homestead for ad 

valorem tax purposes for a tax year that begins on or after January 

1, 2006, but only if the constitutional amendment proposed by the 

79th Legislature, 2nd Called Session, 2005, authorizing the 

legislature to provide for a local option election in a county to 

set a limit of less than 10 percent but not less than three percent 

on the maximum average annual increase in the appraised value of 

residence homesteads for ad valorem tax purposes is approved by the 

voters.  If that amendment is not approved by the voters, this Act 

has no effect.