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.