79S20074 SMH-D
By: Wentworth S.B. No. 31
A BILL TO BE ENTITLED
AN ACT
relating to increasing the amount of the residence homestead
exemption from ad valorem taxation for public school purposes to
$22,500, providing for an adjustment of the limitation on the total
amount of ad valorem taxes that may be imposed for those purposes on
the homesteads of the elderly or disabled to reflect the increased
exemption amount and changes in school district ad valorem tax
rates, and protecting school districts against the resulting loss
in local revenue.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 11.13(b), Tax Code, is amended to read as
follows:
(b) An adult is entitled to exemption from taxation by a
school district of $22,500 [$15,000] of the appraised value of the
adult's residence homestead, except that only $5,000 [$10,000] of
the exemption applies [does not apply] to an entity operating under
former Chapter 17, 18, 25, 26, 27, or 28, Education Code, as those
chapters existed on May 1, 1995, as permitted by Section 11.301,
Education Code.
SECTION 2. Section 11.26, Tax Code, is amended by amending
Subsection (a) and adding Subsection (a-1) to read as follows:
(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 school
district may not increase the total annual amount of ad valorem tax
it imposes on the residence homestead of an individual 65 years of
age or older or on the residence homestead of an individual who is
disabled, as defined by Section 11.13, above the amount of the tax
it imposed in the first tax year in which the individual qualified
that residence homestead for the applicable exemption provided by
Section 11.13(c) for an individual who is 65 years of age or older
or is disabled. If the individual qualified that residence
homestead for the exemption after the beginning of that first year
and the residence homestead remains eligible for the same exemption
for the next year, and if the school district taxes imposed on the
residence homestead in the next year are less than the amount of
taxes imposed in that first year, a school district may not
subsequently increase the total annual amount of ad valorem taxes
it imposes on the residence homestead above the amount it imposed in
the year immediately following the first year for which the
individual qualified that residence homestead for the same
exemption, except as provided by Subsection (b). If the first tax
year the individual qualified the residence homestead for the
exemption provided by Section 11.13(c) for individuals 65 years of
age or older or disabled was a tax year before the 2006 [1997] tax
year, the amount of the limitation provided by this section is the
amount of tax the school district imposed for the 2005 [1996] tax
year less an amount equal to the amount determined by multiplying
$7,500 [$10,000] times the tax rate of the school district for the
2006 [1997] tax year, plus any 2006 [1997] tax attributable to
improvements made in 2005 [1996], other than improvements made to
comply with governmental regulations or repairs. If an individual
receives the limitation provided by this section for the
individual's residence homestead and the individual or the
individual's spouse received the limitation in the preceding tax
year for that homestead and the tax rate of the school district for
the current tax year is higher or lower than the tax rate of the
district for the preceding tax year, the total amount of taxes that
may be imposed by the district on the homestead is equal to the
amount of tax the district imposed on the homestead for the
preceding tax year multiplied by a fraction, the numerator of which
is the tax rate of the district for the current tax year and the
denominator of which is the tax rate of the district for the
preceding tax year, plus any tax for the current tax year
attributable to improvements made in the preceding tax year, other
than improvements made to comply with governmental regulations or
repairs, except that the total amount of taxes that may be imposed
may not exceed the amount of taxes imposed by the district for the
later of the 2005 tax year or the tax year in which the limitation
took effect, as that limitation may have been increased in
subsequent tax years or may be increased for the current tax year
because of improvements as authorized by this section.
(a-1) Notwithstanding Subsection (a), if the first tax year
the individual qualified the residence homestead for the exemption
provided by Section 11.13(c) for individuals 65 years of age or
older or disabled was a tax year before the 2006 tax year and the tax
rate of the school district for the 2006 tax year is higher or lower
than the tax rate of the district for the 2005 tax year, the amount
of the limitation provided by this section for the 2006 tax year is
the amount of tax the school district imposed for the 2005 tax year,
increased or reduced, as applicable, in proportion to the increase
or reduction in the tax rate as provided by Subsection (a), less an
amount equal to the amount determined by multiplying $7,500 times
the tax rate of the school district for the 2006 tax year, plus any
2006 tax attributable to improvements made in 2005, other than
improvements made to comply with governmental regulations or
repairs. That limitation continues to apply to the property in
subsequent tax years, subject to the other provisions of this
section.
SECTION 3. Subchapter H, Chapter 42, Education Code, as
added by ______ Bill No. __, Acts of the 79th Legislature, ___
Called Session, 2005, is amended by adding Section 42.3053 to read
as follows:
Sec. 42.3053. ADDITIONAL STATE AID FOR RESIDENCE HOMESTEAD
EXEMPTION AND TAX FREEZE. (a) Notwithstanding any other provision
of this chapter, a school district is entitled to additional state
aid to the extent that state aid under this chapter based on the
determination of the school district's taxable value of property as
provided under Subchapter M, Chapter 403, Government Code, does not
fully compensate the district for ad valorem tax revenue lost due
to:
(1) the increase in the amount of the residence
homestead exemption from ad valorem taxation for general elementary
and secondary public school purposes under Section 1-b(c), Article
VIII, Texas Constitution, and the corresponding reduction of the
limitation on the amount of ad valorem taxes that may be imposed for
those purposes on the homesteads of the elderly or disabled under
Section 1-b(d), Article VIII, Texas Constitution, as proposed by
__.J.R. No. __, 79th Legislature, ___ Called Session, 2005; and
(2) the adjustment of the limitation on the total
amount of ad valorem taxes imposed for general elementary and
secondary public school purposes on residence homesteads of the
elderly or disabled in proportion to any increase or decrease in the
tax rate for those purposes under Section 1-b(d), Article VIII,
Texas Constitution, as proposed by __.J.R. No. __, 79th
Legislature, ___ Called Session, 2005.
(b) The commissioner, using information provided by the
comptroller, shall compute the amount of any additional state aid
to which a district is entitled under this section. A determination
by the commissioner under this section is final and may not be
appealed.
(c) This section expires September 1, 2007.
SECTION 4. Section 403.302, Government Code, is amended by
amending Subsection (j) and adding Subsection (j-1) to read as
follows:
(j) For purposes of Section 42.3053 [42.2511], Education
Code, the comptroller shall certify to the commissioner of
education:
(1) a final value for each school district computed on
a residence homestead exemption under Section 1-b(c), Article VIII,
Texas Constitution, of $15,000 [$5,000]; and
(2) a final value for each school district computed
on:
(A) a residence homestead exemption from ad
valorem taxation for general elementary and secondary public school
purposes under Section 1-b(c), Article VIII, Texas Constitution, of
$22,500, and the corresponding reduction of the limitation on the
amount of ad valorem taxes that may be imposed for those purposes on
the homesteads of the elderly or disabled under Section 1-b(d),
Article VIII, Texas Constitution, as proposed by __.J.R. No. __,
79th Legislature, ___ Called Session, 2005 [$15,000]; and
(B) the effect of the adjustment of the
[additional] limitation on the total amount of ad valorem taxes
imposed for general elementary and secondary public school purposes
on residence homesteads of the elderly or disabled in proportion to
any increase or decrease in the tax rate for those purposes [tax
increases] under Section 1-b(d), Article VIII, Texas Constitution,
as proposed by __.J.R. No. __, 79th Legislature, ___ Called
Session, 2005.
(j-1) To the extent of a conflict between Subsection (j) and
a provision added by ______ Bill No. __, Acts of the 79th
Legislature, ___ Called Session, 2005, Subsection (j) prevails,
regardless of the relative dates of enactment.
SECTION 5. This Act takes effect January 1, 2006, and
applies only to an ad valorem tax year that begins on or after that
date, but only if the constitutional amendment proposed by __.J.R.
No. __, 79th Legislature, ___ Called Session, 2005, is approved by
the voters. If that constitutional amendment is not approved by the
voters, this Act has no effect.