79R4228 JD-D


By:  Bohac, Howard, Kolkhorst, Nixon,                             H.B. No. 784
 
    Callegari, et al.                                                        


A BILL TO BE ENTITLED
AN ACT
relating to providing tax relief and protection for ad valorem tax payers. 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. Section 23.23, Tax Code, is amended to read as follows: Sec. 23.23. LIMITATION ON APPRAISED VALUE OF REAL PROPERTY [RESIDENCE HOMESTEAD]. (a) The appraised value of real property [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) five [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. (b) When appraising real property [a residence homestead], the chief appraiser shall: (1) appraise the property at its market value; and (2) include in the appraisal records both the market value of the property and the amount computed under Subsection (a)(2). (c) The limitation provided by Subsection (a) takes effect as to a parcel of real property [residence homestead] on January 1 of the tax year following the first tax year in which the owner owns [qualifies] the property on January 1, except that if the property qualifies as the residence homestead of the owner [for an exemption] under Section 11.13 in the tax year in which the owner acquires the property, the limitation takes effect on January 1 of the tax year following that tax year. Except as provided by Subsections (d) and (e), the [. The] limitation expires on January 1 of the first tax year following the tax year in which [that neither] the owner of the property ceases to own the property [when the limitation took effect nor the owner's spouse or surviving spouse qualifies for an exemption under Section 11.13]. (d) If real property subject to a limitation under Subsection (a) 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. (e) If real property subject to a limitation under Subsection (a), 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. (f) This section does not apply to a mineral interest or property appraised under Subchapter C, D, E, F, [or] G, or H. (g) [(e)] In this section, "new improvement" means an improvement to real property [a residence homestead] that is made after the most recent appraisal of the property [for the preceding year] and that increases the market value of the property. The term does not include ordinary upkeep, repair, or maintenance of an existing structure or the grounds or another feature of the property. (h) [(f)] Notwithstanding Subsections (a) and (g) [(e)] and except as provided by Subdivision (2), an improvement to property that would otherwise constitute a new improvement is not treated as a new improvement if the improvement is a replacement structure for a structure that was rendered uninhabitable or unusable by a casualty or by mold or water damage. For purposes of appraising the property in the tax year in which the structure would have constituted a new improvement: (1) the last year in which the property was appraised for taxation before the casualty or damage occurred is considered to be the last year in which the property was appraised for taxation for purposes of Subsection (a)(2)(A); and (2) the replacement structure is considered to be a new improvement only to the extent it is a significant improvement over the replaced structure as that structure existed before the casualty or damage occurred. (i) For purposes of applying the limitation provided by Subsection (a) in the first tax year after the 2005 tax year in which the real property is appraised for taxation: (1) the property is considered to have been appraised for taxation in the 2005 tax year 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 2005 tax year real property that the person owns in the 2005 tax year is considered to have acquired the property on January 1, 2005; 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 2005 tax year is considered to have acquired the property in the 2005 tax year. SECTION 3. 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 Section 23.23. SECTION 4. 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 real 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 real 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 real 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 5. Section 31.01, Tax Code, is amended by amending Subsection (c) and adding Subsection (c-1) to read as follows: (c) The tax bill or a separate statement accompanying the tax bill shall: (1) identify the property subject to the tax; (2) state the appraised value, assessed value, and taxable value of the property; (3) if the property is land appraised as provided by Subchapter C, D, E, or H, Chapter 23, state the market value and the taxable value for purposes of deferred or additional taxation as provided by Section 23.46, 23.55, 23.76, or 23.9807, as applicable; (4) state the assessment ratio for the unit; (5) state the type and amount of any partial exemption applicable to the property, indicating whether it applies to appraised or assessed value; (6) state the total tax rate for the unit; (7) state the amount of tax due, the due date, and the delinquency date; (8) explain the payment option and discounts provided by Sections 31.03 and 31.05, if available to the unit's taxpayers, and state the date on which each of the discount periods provided by Section 31.05 concludes, if the discounts are available; (9) state the rates of penalty and interest imposed for delinquent payment of the tax; (10) include the name and telephone number of the assessor for the unit and, if different, of the collector for the unit; [and] (11) for real property, state for the current tax year and each of the preceding five tax years: (A) the appraised value and taxable value of the property; (B) the total tax rate for the unit; (C) the amount of taxes imposed on the property by the unit; and (D) the difference, expressed as a percent increase or decrease, as applicable, in the amount of taxes imposed on the property by the unit compared to the amount imposed for the preceding tax year; (12) for real property, state the differences, expressed as a percent increase or decrease, as applicable, in the following for the current tax year as compared to the fifth tax year before that tax year: (A) the appraised value and taxable value of the property; (B) the total tax rate for the unit; and (C) the amount of taxes imposed on the property by the unit; and (13) include any other information required by the comptroller. (c-1) If for any of the preceding six tax years any information required by Subsection (c)(11) or (12) to be included in a tax bill or separate statement is unavailable, the tax bill or statement must state that the information is not available for that year. This subsection expires December 31, 2011. SECTION 6. Sections 1-4 of this Act apply only to the appraisal for ad valorem tax purposes of real property for a tax year that begins on or after January 1, 2006. SECTION 7. (a) Except as provided by Subsection (b) of this section, this Act takes effect January 1, 2006. (b) Sections 1-4 and Section 6 of this Act take effect as provided by Subsection (a) of this section, but only if the constitutional amendment proposed by the 79th Legislature, Regular Session, 2005, authorizing a five percent limitation on annual increases in the appraised value for ad valorem tax purposes of real property is approved by the voters. If that amendment is not approved by the voters, this Act has no effect.