79S31503 JD-D
By: Wong H.B. No. 152
A BILL TO BE ENTITLED
AN ACT
relating to authorizing the governing body of a school district to
establish for purposes of ad valorem taxation by the district a
limitation on increases in the appraised value of real property in
the district that is less than 10 percent but not less than five
percent.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1.12(d), Tax Code, is amended to read as
follows:
(d) For purposes of this section, the appraisal ratio of
real property [a homestead] to which Section 23.23 applies is the
ratio of the property's market value as determined by the appraisal
district or appraisal review board, as applicable, to the market
value of the property according to law. The appraisal ratio is not
calculated according to the appraised value of the property as
limited by Section 23.23.
SECTION 2. The heading to Section 23.23, Tax Code, is
amended to read as follows:
Sec. 23.23. LIMITATION ON APPRAISED VALUE OF REAL PROPERTY
[RESIDENCE HOMESTEAD].
SECTION 3. Section 23.23, Tax Code, is amended by amending
Subsection (a) and adding Subsections (g), (h), (i), (j), and (k) 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 school district, in the manner
required by law for official action, may provide that for purposes
of taxation by the district 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 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 real property by
the district. 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. The other
provisions of this section apply to a limitation established under
this subsection in the same manner as they apply to the limitation
provided by Subsection (a), except that a limitation established
under this subsection:
(1) takes effect:
(A) in the tax year following the first tax year
in which the owner owns the property on January 1; or
(B) in the tax year following the tax year in
which the owner acquires the property if the property qualifies for
an exemption as the residence homestead of the owner under Section
11.13 in the tax year in which the owner acquires the property; and
(2) except as provided by Subsections (h) and (i),
expires on January 1 of the first tax year following the tax year in
which the owner of the property when the limitation took effect
ceases to own the property.
(h) If real property subject to a limitation under
Subsection (g) qualifies for an exemption under Section 11.13 when
the ownership of the property is transferred to the owner's spouse
or surviving spouse, the limitation expires on January 1 of the tax
year following the year in which the owner's spouse or surviving
spouse ceases to own the property, unless the limitation is further
continued under this subsection on the subsequent transfer to a
spouse or surviving spouse.
(i) If real property subject to a limitation under
Subsection (g), other than a residence homestead, is owned by two or
more persons, the limitation expires on January 1 of the tax year
following the year in which the ownership of at least a 50 percent
interest in the property is sold or otherwise transferred to a
person other than those owners.
(j) If in any tax year the limitation on appraised value
provided by Subsection (a)(2) applies to residence homesteads
taxable by a school district and the governing body of the school
district 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 district.
(k) For purposes of applying a limitation established under
Subsection (g) in the first tax year after the tax year in which the
limitation is adopted in which the real property is appraised for
taxation:
(1) the property is considered to have been appraised
for taxation in the year in which the limitation is established at a
market value equal to the appraised value of the property for that
tax year;
(2) a person who acquired in a tax year before the year
in which the limitation is established real property that the
person owns in the year in which the limitation is established is
considered to have acquired the property on January 1 of the year in
which the limitation is established; and
(3) a person who qualified the property for an
exemption under Section 11.13 as the person's residence homestead
for any portion of the year in which the limitation is established
is considered to have acquired the property in the year in which the
limitation is established.
SECTION 4. 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 5. Sections 403.302(d) and (i), Government Code,
are amended to read as follows:
(d) For the purposes of this section, "taxable value" means
the market value of all taxable property less:
(1) the total dollar amount of any residence homestead
exemptions lawfully granted under Section 11.13(b) or (c), Tax
Code, in the year that is the subject of the study for each school
district;
(2) one-half of the total dollar amount of any
residence homestead exemptions granted under Section 11.13(n), Tax
Code, in the year that is the subject of the study for each school
district;
(3) the total dollar amount of any exemptions granted
before May 31, 1993, within a reinvestment zone under agreements
authorized by Chapter 312, Tax Code;
(4) subject to Subsection (e), the total dollar amount
of any captured appraised value of property that:
(A) is within a reinvestment zone created on or
before May 31, 1999, or is proposed to be included within the
boundaries of a reinvestment zone as the boundaries of the zone and
the proposed portion of tax increment paid into the tax increment
fund by a school district are described in a written notification
provided by the municipality or the board of directors of the zone
to the governing bodies of the other taxing units in the manner
provided by Section 311.003(e), Tax Code, before May 31, 1999, and
within the boundaries of the zone as those boundaries existed on
September 1, 1999, including subsequent improvements to the
property regardless of when made;
(B) generates taxes paid into a tax increment
fund created under Chapter 311, Tax Code, under a reinvestment zone
financing plan approved under Section 311.011(d), Tax Code, on or
before September 1, 1999; and
(C) is eligible for tax increment financing under
Chapter 311, Tax Code;
(5) the total dollar amount of any exemptions granted
under Section 11.251, Tax Code;
(6) the difference between the comptroller's estimate
of the market value and the productivity value of land that
qualifies for appraisal on the basis of its productive capacity,
except that the productivity value estimated by the comptroller may
not exceed the fair market value of the land;
(7) the portion of the appraised value of residence
homesteads of individuals who receive a tax limitation under
Section 11.26, Tax Code, on which school district taxes are not
imposed in the year that is the subject of the study, calculated as
if the residence homesteads were appraised at the full value
required by law;
(8) a portion of the market value of property not
otherwise fully taxable by the district at market value because of:
(A) action required by statute or the
constitution of this state that, if the tax rate adopted by the
district is applied to it, produces an amount equal to the
difference between the tax that the district would have imposed on
the property if the property were fully taxable at market value and
the tax that the district is actually authorized to impose on the
property, if this subsection does not otherwise require that
portion to be deducted; or
(B) action taken by the district under Subchapter
B or C, Chapter 313, Tax Code;
(9) the market value of all tangible personal
property, other than manufactured homes, owned by a family or
individual and not held or used for the production of income;
(10) the appraised value of property the collection of
delinquent taxes on which is deferred under Section 33.06, Tax
Code;
(11) the portion of the appraised value of property
the collection of delinquent taxes on which is deferred under
Section 33.065, Tax Code; and
(12) the amount by which the market value of property
[a residence homestead] to which Section 23.23, Tax Code, applies
exceeds the appraised value of that property as calculated under
that section.
(i) If the comptroller determines in the annual study that
the market value of property in a school district as determined by
the appraisal district that appraises property for the school
district, less the total of the amounts and values listed in
Subsection (d) as determined by that appraisal district, is valid,
the comptroller, in determining the taxable value of property in
the school district under Subsection (d), shall for purposes of
Subsection (d)(12) subtract from the market value as determined by
the appraisal district of properties [residence homesteads] to
which Section 23.23, Tax Code, applies the amount by which that
amount exceeds the appraised value of those properties as
calculated by the appraisal district under Section 23.23, Tax Code.
If the comptroller determines in the annual study that the market
value of property in a school district as determined by the
appraisal district that appraises property for the school district,
less the total of the amounts and values listed in Subsection (d) as
determined by that appraisal district, is not valid, the
comptroller, in determining the taxable value of property in the
school district under Subsection (d), shall for purposes of
Subsection (d)(12) subtract from the market value as estimated by
the comptroller of properties [residence homesteads] to which
Section 23.23, Tax Code, applies the amount by which that amount
exceeds the appraised value of those properties as calculated by
the appraisal district under Section 23.23, Tax Code.
SECTION 6. This Act applies only to the appraisal of real
property for ad valorem tax purposes for a tax year that begins on
or after January 1, 2007.
SECTION 7. 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
school district to establish for purposes of ad valorem taxation by
the school district a limitation on the maximum average annual
percentage increase in the appraised value of real property in the
school district that is 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.