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.