79S31838 JD-D
By: Smith of Harris H.B. No. 172
A BILL TO BE ENTITLED
AN ACT
relating to authorizing the commissioners court of a county to
establish for purposes of ad valorem taxation a limitation on
increases in the appraised value of real property in the county that
is less than 10 percent but not less than three 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 commissioners court of a county, in the manner
required by law for official action, may provide that for purposes
of taxation 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 three percent in place of 10 percent in Subsection
(a)(2)(A) will apply to the taxation of real property in the county
by each taxing unit that imposes taxes on that property. The
commissioners court 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 in a
county and the commissioners court of the county 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 in the county for purposes of taxation by each taxing
unit that imposes taxes in that county.
(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 established 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. 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 6. This Act takes effect January 1, 2007, but only
if the constitutional amendment proposed by the 79th Legislature,
3rd Called Session, 2006, authorizing the commissioners court of a
county to establish for purposes of ad valorem taxation a
limitation on the maximum average annual percentage increase in the
appraised value of real property in the county that is less than 10
percent but not less than three percent is approved by the voters.
If that amendment is not approved by the voters, this Act has no
effect.