79R5406 MFC-D
By: Villarreal H.B. No. 2328
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 homesteads of certain elderly
individuals by a county.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by
adding Section 11.262 to read as follows:
Sec. 11.262. LIMITATION OF COUNTY TAX ON HOMESTEADS OF
ELDERLY. (a) This section applies only to a county that has
established a limitation on the total amount of taxes that may be
imposed by the county on the residence homestead of an individual 65
years of age or older 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.
(b) This section applies only to property that is the
residence homestead of an individual who receives an exemption for
the property under Section 11.13(c) for an individual 65 years of
age or older for all or part of the current year and whose household
income for the preceding year did not exceed the greater of $35,000
or the median household income for individuals 65 years of age or
older, as determined by the Bureau of the Census of the United
States Department of Commerce for the most recent year for which
that data is available. Not later than February 1 of each tax year,
the comptroller shall determine for purposes of qualification for a
limitation under this section in the current year the applicable
median household income for individuals 65 years of age or older for
the preceding year and shall:
(1) publish that income amount in the Texas Register;
and
(2) notify each appraisal office of that
determination.
(c) A county 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.
(d) 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 county 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.
(e) 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 for the county. The chief appraiser shall
accept and approve or deny the application. 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.
(f) 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.
(g) 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 initially becomes eligible
for an exemption under Section 11.13(c) for an individual 65 years
of age or older, whichever is later. Except as provided by
Subsection (h), if the individual fails to timely file a completed
application, the individual may not receive the limitation for that
year.
(h) 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 the county 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.
(i) 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.
(j) 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 the
county 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.
(k) 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 qualified
for an exemption under Section 11.13(c) for an individual 65 years
of age or older 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 under Section 11.13(c) for an individual 65 years of age
or older; or
(3) none of the owners of the property who met the
requirements of Subsection (b) when the limitation first took
effect meets the requirements of that subsection.
(l) 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.
(m) Except as provided by Subsection (d), if an individual
who receives a limitation on tax increases by a county under this
section on a residence homestead in the last year in which the
individual resided in the property on January 1 subsequently
qualifies a different residence homestead in the same county for
the limitation, the county may not impose ad valorem taxes on the
subsequently qualified homestead in a year in an amount that
exceeds the amount of taxes the county 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 county 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 county 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.
(n) In the year preceding the convening of the regular
session of the legislature in 2015 and in every 10th year after that
year, the Legislative Budget Board shall review the administration
of this section and shall examine the fiscal impact of the
limitation provided by this section on county taxes and the public
and the effectiveness of the limitation in assisting low and
moderate income individuals 65 years of age or older to maintain
home ownership. The Legislative Budget Board shall report the
results of the review to the legislature and may include in the
report any recommended revisions to this section and a
recommendation regarding whether to continue this section in
effect.
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 county 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 county 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 county
excludes the total value of homesteads that qualified for a tax
limitation as provided by Section 11.262.
SECTION 4. This Act applies only to ad valorem taxes imposed
on or after the effective date of this Act.
SECTION 5. This Act takes effect January 1, 2006, but only
if the constitutional amendment to permit a county to establish an
ad valorem tax freeze on the residence homesteads of certain
elderly persons is approved by the voters. If that amendment is not
approved by the voters, this Act has no effect.