79S30604 JD-D

By:  Wong                                                         H.B. No. 65 



A BILL TO BE ENTITLED

AN ACT

relating to authorizing the governing body of a taxing unit to 
establish for purposes of ad valorem taxation by the taxing unit a 
limit on increases in the appraised value of residence homesteads 
in the taxing unit of not less than five percent.
	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), (h), and (i) 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 governing body of a taxing unit, in the manner 
required by law for official action, may provide that for purposes 
of taxation by the taxing unit in the following and each subsequent 
tax year a limitation on appraised value determined in the manner 
provided by Subsection (a)(2) using a percentage of 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.  
The governing body may amend, repeal, or rescind the limitation, 
but the amendment, repeal, or rescission may not take effect before 
January 1 of the following tax year.
	(h)  If in any tax year the limitation on appraised value 
provided by Subsection (a)(2) applies to residence homesteads 
taxable by a taxing unit and the governing body of the taxing unit 
has provided for the application in that tax year of a limitation on 
appraised value under Subsection (g), the lower limitation applies 
to residence homesteads for purposes of taxation by the taxing 
unit.
	(i)  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 governing body of a 
political subdivision to establish for purposes of ad valorem 
taxation by the political subdivision a limit on the maximum 
average annual percentage increase in the appraised value of 
residence homesteads in the political subdivision of not less than 
five percent is approved by the voters.  If that amendment is not 
approved by the voters, this Act has no effect.