79(2) SB 31 - Introduced version




                                                                                



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.