79R1941 SMH-D
By: Guillen H.B. No. 213
A BILL TO BE ENTITLED
AN ACT
relating to a limitation on the amount of ad valorem taxes that may
be imposed on the residence homestead of an eligible person serving
on active duty in the United States armed forces.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by
adding Subsection 11.262 to read as follows:
Sec. 11.262. LIMITATION OF TAX ON HOMESTEADS OF MEMBERS OF
ARMED FORCES. (a) In this section, "active duty" means full-time
duty in the active military service of the United States. The term
includes such federal duty as full-time training duty, annual
training duty, and attendance, while in the active military
service, at a school designated as a service school by law or by the
secretary of the military department concerned. The term does not
include full-time National Guard duty.
(b) This section applies only to a taxing unit that has
established a limitation on the total amount of taxes that may be
imposed by the taxing unit on the residence homestead of a person
serving on active duty in the United States armed forces under
Section 1-b(i), Article VIII, Texas Constitution. A tax
limitation established under that subsection applies to the
imposition of taxes beginning with the first tax year after the year
in which the limitation is established.
(c) This section applies only to property that receives an
exemption under Section 11.13 and is the residence homestead of an
individual serving on active duty whose monthly salary for that
duty for any month is less than two times the minimum monthly salary
of the highest-ranking noncommissioned officer serving on active
duty in that individual's branch of the armed forces for August of
the preceding year. If the property is the residence homestead of
more than one individual serving on active duty, each of those
individuals must meet the salary limitation provided by this
subsection. Not later than January 1 of each tax year, the
comptroller shall determine for purposes of this section the
minimum monthly salary of the highest-ranking noncommissioned
officer serving on active duty in each branch of the United States
armed forces for August of the preceding year and shall:
(1) publish that salary in the Texas Register; and
(2) notify each appraisal office of that
determination.
(d) A taxing unit may not increase the total annual amount
of ad valorem taxes it imposes on the residence homestead of an
individual to whom this section applies above the amount of the
taxes it imposed on the property in the preceding tax year if the
property qualified as the individual's residence homestead in the
preceding tax year. 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
provided by this section, the tax imposed is the amount of the tax
as limited by this section, except as otherwise provided by this
section.
(e) If improvements have been made to the individual's
residence homestead, other than repairs and other than improvements
made to comply with governmental requirements, since the most
recent appraisal of the property, the taxing unit may increase the
amount of taxes on the homestead in the first year the appraised
value of the homestead is increased on the appraisal roll because of
the enhancement of value by the improvements. The amount of the tax
increase is determined by applying the current tax rate to the
difference in the appraised value of the homestead with the
improvements and the appraised value it would have had without the
improvements. A limitation imposed by this section then applies to
the increased amount of taxes on the residence homestead until more
improvements, if any, are made.
(f) An individual is eligible for a limitation on tax
increases under this section for a tax year if the individual
qualifies the residence homestead for an exemption under Section
11.13 for that tax year and meets the requirements of Subsection (c)
at any time during that tax year and if the individual qualified the
homestead for an exemption under Section 11.13 for the preceding
tax year. To receive a limitation on tax increases under this
section, an individual claiming the limitation must file an
application for the limitation with the chief appraiser of the
appraisal district. The chief appraiser shall accept and approve
or deny the application. For property appraised by more than one
appraisal district, a separate application must be filed in each
appraisal district to receive a limitation in that district. A
limitation under this section, once allowed, need not be claimed in
subsequent years and applies to the property until the limitation
expires as provided by this section or until the individual's
qualification for the limitation ends. However, the chief
appraiser may require an individual allowed a limitation in a prior
year to file a new application to confirm the individual's current
qualification for the limitation by delivering, not later than
April 1, a written notice that a new application is required,
accompanied by an appropriate application form, to the individual
previously allowed the limitation.
(g) In this subsection, "driver's license" and "personal
identification certificate" have the meanings assigned by Section
11.43(f). The comptroller, in prescribing the contents of the
application form for a limitation on tax increases under this
section, shall ensure that the form requires an applicant to
provide the information necessary to determine the validity of the
limitation claim. The form must require an applicant to provide the
applicant's name and driver's license number, personal
identification certificate number, or social security number. The
comptroller shall include on the form:
(1) a notice of the penalties prescribed by Section
37.10, Penal Code, for making or filing an application containing a
false statement; and
(2) a statement explaining that the application need
not be made annually and that if the limitation is allowed, the
applicant has a duty to notify the chief appraiser when the
applicant's qualification for the limitation ends.
(h) An individual who is required to apply for a limitation
on tax increases under this section to receive the limitation for a
tax year must apply for the limitation not later than May 1 or the
90th day after the date the individual begins serving on active
duty, whichever is later. Except as provided by Subsection (i), if
the individual fails to timely file a completed application, the
individual may not receive the limitation for that year.
(i) The chief appraiser shall accept and approve or deny an
application for a limitation on tax increases under this section
after the deadline for filing the application has passed if the
application is filed not later than one year after the delinquency
date for the taxes on the property for that tax year. If a late
application is approved after approval of the appraisal records by
the appraisal review board, the chief appraiser shall notify the
collector for each taxing unit in which the property is located. If
the tax has not been paid, the collector shall deduct from the
individual's tax bill the difference between the taxes that would
have been due had the property not qualified for the limitation and
the taxes due after taking the limitation into account. If the tax
has been paid, the collector shall refund the difference.
(j) An individual who receives a limitation on tax increases
under this section shall notify the appraisal office in writing
before May 1 after the individual's qualification for the
limitation ends.
(k) If the appraisal roll provides for taxation of appraised
value for a prior year because a limitation on tax increases under
this section was erroneously allowed, the tax assessor for each
taxing unit shall add, as back taxes due as provided by Section
26.09(d), the positive difference, if any, between the tax that
should have been imposed for that year and the tax that was imposed
because of this section.
(l) A limitation on tax increases under this section expires
on January 1 of the first tax year that:
(1) none of the owners of the property who qualify for
an exemption provided by Section 11.13 and who owned the property
when the limitation first took effect is using the property as a
residence homestead;
(2) none of the owners of the property qualifies for an
exemption provided by Section 11.13; or
(3) none of the owners of the property who met the
requirements of Subsection (c) when the limitation first took
effect meets the requirements of that subsection.
(m) For each school district in an appraisal district, the
chief appraiser shall determine the portion of the appraised value
of residence homesteads of individuals on which school district
taxes are not imposed in a tax year because of the limitation on tax
increases under this section. That portion is calculated by
determining the taxable value that, if multiplied by the tax rate
adopted by the school district for the tax year, would produce an
amount equal to the amount of tax that would have been imposed by
the school district on those residence homesteads if the limitation
on tax increases under this section were not in effect, but that was
not imposed because of that limitation. The chief appraiser shall
determine that taxable value and certify it to the comptroller as
soon as practicable for each tax year.
(n) A limitation on tax increases under this section does
not expire because the owner of an interest in the property conveys
the interest to a qualifying trust as defined by Section 11.13(j) if
the owner or the owner's spouse is a trustor of the trust and is
entitled to occupy the property.
(o) Except as provided by Subsection (e), if an individual
who receives a limitation on tax increases by a taxing unit under
this section on a residence homestead in the last year in which the
individual resided in the property on January 1 qualifies a
different residence homestead in the same taxing unit for the
limitation during the same period of service on active duty, the
taxing unit may not impose ad valorem taxes on the subsequently
qualified homestead in a year in an amount that exceeds the amount
of taxes the taxing unit would have imposed on the subsequently
qualified homestead in the first year in which the individual
receives the limitation for the subsequently qualified homestead
had the limitation not been in effect, multiplied by a fraction the
numerator of which is the total amount of ad valorem taxes imposed
by the taxing unit on the former homestead in the last year in which
the individual received the limitation for the former homestead and
the denominator of which is the total amount of ad valorem taxes
that would have been imposed by the taxing unit on the former
homestead in the last year in which the individual received the
limitation for the former homestead had the limitation not been in
effect.
(p) An individual who receives a limitation on tax increases
by a taxing unit under this section and who subsequently applies for
a limitation by the same taxing unit on a different residence
homestead, or an agent of the individual, is entitled to receive
from the chief appraiser of the appraisal district in which the
former homestead was located a written certificate providing the
information necessary to determine whether the individual may
qualify for a limitation by the taxing unit on the subsequently
qualified homestead under Subsection (o) and to calculate the
amount of taxes the taxing unit may impose on the subsequently
qualified homestead.
SECTION 2. Sections 23.19(b) and (g), Tax Code, are amended
to read as follows:
(b) If an appraisal district receives a written request for
the appraisal of real property and improvements of a cooperative
housing corporation according to the separate interests of the
corporation's stockholders, the chief appraiser shall separately
appraise the interests described by Subsection (d) if the
conditions required by Subsections (e) and (f) have been met.
Separate appraisal under this section is for the purposes of
administration of tax exemptions, determination of applicable
limitations of taxes under Section 11.26, [or] 11.261, or 11.262,
and apportionment by a cooperative housing corporation of property
taxes among its stockholders but is not the basis for determining
value on which a tax is imposed under this title. A stockholder
whose interest is separately appraised under this section may
protest and appeal the appraised value in the manner provided by
this title for protest and appeal of the appraised value of other
property.
(g) A tax bill or a separate statement accompanying the tax
bill to a cooperative housing corporation for which interests of
stockholders are separately appraised under this section must
state, in addition to the information required by Section 31.01,
the appraised value and taxable value of each interest separately
appraised. Each exemption claimed as provided by this title by a
person entitled to the exemption shall also be deducted from the
total appraised value of the property of the corporation. The total
tax imposed by a taxing unit [school district, county,
municipality, or junior college district] shall be reduced by any
amount that represents an increase in taxes attributable to
separately appraised interests of the real property and
improvements that are subject to the limitation of taxes prescribed
by Section 11.26, [or] 11.261, or 11.262. The corporation shall
apportion among its stockholders liability for reimbursing the
corporation for property taxes according to the relative taxable
values of their interests.
SECTION 3. Sections 26.012(6), (13), and (14), Tax Code,
are amended to read as follows:
(6) "Current total value" means the total taxable
value of property listed on the appraisal roll for the current year,
including all appraisal roll supplements and corrections as of the
date of the calculation, less the taxable value of property
exempted for the current tax year for the first time under Section
11.31, except that:
(A) the current total value for a school district
excludes:
(i) the total value of homesteads that
qualify for a tax limitation as provided by Section 11.26; and
(ii) new property value of property that is
subject to an agreement entered into under Chapter 313; [and]
(B) the current total value for a county,
municipality, or junior college district excludes the total value
of homesteads that qualify for a tax limitation provided by Section
11.261; and
(C) the current total value for a taxing unit
excludes the total value of homesteads that qualify for a tax
limitation provided by Section 11.262.
(13) "Last year's levy" means the total of:
(A) the amount of taxes that would be generated
by multiplying the total tax rate adopted by the governing body in
the preceding year by the total taxable value of property on the
appraisal roll for the preceding year, including:
(i) taxable value that was reduced in an
appeal under Chapter 42; and
(ii) all appraisal roll supplements and
corrections other than corrections made pursuant to Section
25.25(d), as of the date of the calculation, except that last year's
taxable value for a school district excludes the total value of
homesteads that qualified for a tax limitation as provided by
Section 11.26, [and] last year's taxable value for a county,
municipality, or junior college district excludes the total value
of homesteads that qualified for a tax limitation as provided by
Section 11.261, and last year's taxable value for a taxing unit
excludes the total value of homesteads that qualified for a tax
limitation as provided by Section 11.262; and
(B) the amount of taxes refunded by the taxing
unit in the preceding year for tax years before that year.
(14) "Last year's total value" means the total taxable
value of property listed on the appraisal roll for the preceding
year, including all appraisal roll supplements and corrections,
other than corrections made pursuant to Section 25.25(d), as of the
date of the calculation, except that:
(A) last year's taxable value for a school
district excludes the total value of homesteads that qualified for
a tax limitation as provided by Section 11.26; [and]
(B) last year's taxable value for a county,
municipality, or junior college district excludes the total value
of homesteads that qualified for a tax limitation as provided by
Section 11.261; and
(C) last year's taxable value for a taxing unit
excludes the total value of homesteads that qualified for a tax
limitation as provided by Section 11.262.
SECTION 4. Section 44.004(c), Education Code, is amended to
read as follows:
(c) The notice of public meeting to discuss and adopt the
budget and the proposed tax rate may not be smaller than one-quarter
page of a standard-size or a tabloid-size newspaper, and the
headline on the notice must be in 18-point or larger type. Subject
to Subsection (d), the notice must:
(1) contain a statement in the following form:
"NOTICE OF PUBLIC MEETING TO DISCUSS BUDGET AND
PROPOSED TAX RATE
"The (name of school district) will hold a public
meeting at (time, date, year) in (name of room, building, physical
location, city, state). The purpose of this meeting is to discuss
the school district's budget that will determine the tax rate that
will be adopted. Public participation in the discussion is
invited." The statement of the purpose of the meeting must be in
bold type. In reduced type, the notice must state: "The tax rate
that is ultimately adopted at this meeting or at a separate meeting
at a later date may not exceed the proposed rate shown below unless
the district publishes a revised notice containing the same
information and comparisons set out below and holds another public
meeting to discuss the revised notice.";
(2) contain a section entitled "Comparison of Proposed
Rates with Last Year's Rates," which must:
(A) show in rows the tax rates described by
Subparagraphs (i)-(iii), expressed as amounts per $100 valuation of
property, for columns entitled "Maintenance & Operations,"
"Interest & Sinking Fund," and "Total," which is the sum of
"Maintenance & Operations" and "Interest & Sinking Fund":
(i) the school district's "Last Year's
Rate";
(ii) the "Rate to Maintain Same Level of
Maintenance & Operations Revenue & Pay Debt Service," which:
(a) in the case of "Maintenance &
Operations," is the tax rate that, when applied to the current
taxable value for the district, as certified by the chief appraiser
under Section 26.01, Tax Code, and as adjusted to reflect changes
made by the chief appraiser as of the time the notice is prepared,
would impose taxes in an amount that, when added to state funds to
be distributed to the district under Chapter 42, would provide the
same amount of maintenance and operations taxes and state funds
distributed under Chapter 42 per student in average daily
attendance for the applicable school year that was available to the
district in the preceding school year; and
(b) in the case of "Interest & Sinking
Fund," is the tax rate that, when applied to the current taxable
value for the district, as certified by the chief appraiser under
Section 26.01, Tax Code, and as adjusted to reflect changes made by
the chief appraiser as of the time the notice is prepared, and when
multiplied by the district's anticipated collection rate, would
impose taxes in an amount that, when added to state funds to be
distributed to the district under Chapter 46 and any excess taxes
collected to service the district's debt during the preceding year
but not used for that purpose during that year, would provide the
amount required to service the district's debt; and
(iii) the "Proposed Rate";
(B) contain fourth and fifth columns aligned with
the columns required by Paragraph (A) that show, for each row
required by Paragraph (A):
(i) the "Local Revenue per Student," which
is computed by multiplying the district's total taxable value of
property, as certified by the chief appraiser for the applicable
school year under Section 26.01, Tax Code, and as adjusted to
reflect changes made by the chief appraiser as of the time the
notice is prepared, by the total tax rate, and dividing the product
by the number of students in average daily attendance in the
district for the applicable school year; and
(ii) the "State Revenue per Student," which
is computed by determining the amount of state aid received or to be
received by the district under Chapters 42, 43, and 46 and dividing
that amount by the number of students in average daily attendance in
the district for the applicable school year; and
(C) contain an asterisk after each calculation
for "Interest & Sinking Fund" and a footnote to the section that, in
reduced type, states "The Interest & Sinking Fund tax revenue is
used to pay for bonded indebtedness on construction, equipment, or
both. The bonds, and the tax rate necessary to pay those bonds,
were approved by the voters of this district.";
(3) contain a section entitled "Comparison of Proposed
Levy with Last Year's Levy on Average Residence," which must:
(A) show in rows the information described by
Subparagraphs (i)-(iv), rounded to the nearest dollar, for columns
entitled "Last Year" and "This Year":
(i) "Average Market Value of Residences,"
determined using the same group of residences for each year;
(ii) "Average Taxable Value of Residences,"
determined after taking into account the limitation on the
appraised value of residences under Section 23.23, Tax Code, and
after subtracting all homestead exemptions applicable in each year,
other than exemptions available only to disabled persons or persons
65 years of age or older or their surviving spouses, and using the
same group of residences for each year;
(iii) "Last Year's Rate Versus Proposed
Rate per $100 Value"; and
(iv) "Taxes Due on Average Residence,"
determined using the same group of residences for each year; and
(B) contain the following information:
"Increase (Decrease) in Taxes" expressed in dollars and cents,
which is computed by subtracting the "Taxes Due on Average
Residence" for the preceding tax year from the "Taxes Due on Average
Residence" for the current tax year;
(4) contain the following statement in bold print:
"Under state law, the dollar amount of school taxes imposed on the
residence of a person 65 years of age or older or of the surviving
spouse of such a person, if the surviving spouse was 55 years of age
or older when the person died, may not be increased above the amount
paid in the first year after the person turned 65, regardless of
changes in tax rate or property value.";
(5) if the school district has established a
limitation on the total amount of ad valorem taxes that may be
imposed by the district on the residence homestead of a person
serving on active duty in the United States armed forces under
Section 1-b(i), Article VIII, Texas Constitution, contain the
following statement in bold print: "Under state law, the dollar
amount of school taxes imposed on the residence homestead of a
person serving on active duty in the United States armed forces may
not be increased above the amount of taxes imposed on the property
in the preceding year, regardless of changes in tax rate or property
value.";
(6) contain the following statement in bold print:
"Notice of Rollback Rate: The highest tax rate the district can
adopt before requiring voter approval at an election is (the school
district rollback rate determined under Section 26.08, Tax Code).
This election will be automatically held if the district adopts a
rate in excess of the rollback rate of (the school district rollback
rate)."; and
(7) [(6)] contain a section entitled "Fund Balances,"
which must include the estimated amount of interest and sinking
fund balances and the estimated amount of maintenance and operation
or general fund balances remaining at the end of the current fiscal
year that are not encumbered with or by corresponding debt
obligation, less estimated funds necessary for the operation of the
district before the receipt of the first payment under Chapter 42 in
the succeeding school year.
SECTION 5. Section 403.302(d), Government Code, is 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 or 11.262, 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 a
residence homestead to which Section 23.23, Tax Code, applies
exceeds the appraised value of that property as calculated under
that section.
SECTION 6. This Act takes effect January 1, 2006, and
applies only to ad valorem taxes imposed on or after that date, but
only if the constitutional amendment to authorize a political
subdivision to establish an ad valorem tax freeze on residence
homesteads of certain persons serving on active duty in the United
States armed forces is approved by the voters. If that amendment is
not approved by the voters, this Act has no effect.