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79S30385 JD-D

By:  Bohac                                                        H.B. No. 15 



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 [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 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 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, 2007.
	SECTION 4.  This Act takes effect January 1, 2007, but only 
if the constitutional amendment proposed by the 79th Legislature, 
3rd Called Session, 2006, 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 five percent limit on those appraisal increases is 
approved by the voters.  If that amendment is not approved by the 
voters, this Act has no effect.