79S20177 SMH-D



By:  Howard                                                       H.B. No. 48 







A BILL TO BE ENTITLED



AN ACT



relating to the establishment by the commissioners court of a 

county for purposes of ad valorem taxation of a limit of less than 

10 percent but not less than three percent on the maximum average 

annual percentage increase in the appraised value of residence 

homesteads in the county.

	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 under 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, in the manner 

required by law for official action, may provide that a lower 

limitation on appraised value determined in the manner provided by 

Subsection (a)(2) using a percentage specified by the commissioners 

court 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.  If the commissioners court of a 

county adopts a lower limitation on appraisal increases under this 

subsection, the limitation remains in effect until amended or 

rescinded by the commissioners court.  The adoption, amendment, or 

rescission of a limitation on appraisal increases under this 

subsection may not take effect before the fourth tax year following 

the tax year in which the most recent action of the commissioners 

court under this subsection to adopt, amend, or rescind a 

limitation on appraisal increases took effect.  The action of the 

commissioners court under this subsection takes effect beginning 

with the tax year following the tax year in which the action is 

taken, except that the commissioners court may provide for the 

action to take effect in the current tax year if the action is taken 

before May 1.

	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 permit the commissioners court of a county to 

establish for purposes of ad valorem taxation a limit of less than 

10 percent but not less than three percent on the maximum average 

annual percentage increase in the appraised value of residence 

homesteads in the county is approved by the voters.  If that 

amendment is not approved by the voters, this Act has no effect.