79S20289 SMH-D



By:  Bohac                                                        H.B. No. 54 





A BILL TO BE ENTITLED
AN ACT
relating to the limitation on the maximum average annual percentage 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 Subsections (g) and (h) to read as follows: (a) Except as provided under Subsection (g), [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) for purposes of taxation by a school district other than a junior college district, five percent of the appraised value of the property for the last year in which the property was appraised for taxation, and for purposes of taxation by any other taxing unit, 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 governing body of a taxing unit other than a school district but including a junior college district, in the manner required by law for official action, may at any time provide that for purposes of taxation by the taxing unit in the following and each subsequent tax year 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 five percent in place of 10 percent in Subsection (a)(2)(A) will apply to the taxation of residence homesteads by the taxing unit. (h) Subsection (g) does not affect the appraised value of a residence homestead for taxation by a taxing unit other than the taxing unit whose governing body provides for the application of a limitation on appraised value under that subsection. If the governing body of the taxing unit sets the tax rate for more than one taxing unit, an action by the governing body under Subsection (g) does not apply to a taxing unit other than the taxing unit whose governing body takes that action. 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 establish for purposes of ad valorem taxation by a school district a limit on the annual increase in the appraised value of residence homesteads of five percent or more, and to permit other political subdivisions to adopt a limit on those appraisal increases of less than 10 percent but not less than five percent, is approved by the voters. If that amendment is not approved by the voters, this Act has no effect.