80R16517 JD-F

By: Hochberg, Crabb H.B. No. 438

Substitute the following for H.B. No. 438:

By: Elkins C.S.H.B. No. 438

A BILL TO BE ENTITLED

AN ACT

relating to the limitation on the maximum percentage increase in the appraised value of a residence homestead for ad valorem taxation.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Sections 23.23(a) and (e), Tax Code, are amended to read as follows:

(a) Notwithstanding the requirements of Section 25.18 and regardless of whether the appraisal office has appraised the property and determined the market value of the property for the tax year, an appraisal office may increase the [The] appraised value of a residence homestead for a tax year to an amount [may] not to exceed the lesser of:

(1) the market value of the property for the most recent tax year that the market value was determined by the appraisal office; or

(2) the sum of:

(A) 10 percent of the appraised value of the property for the preceding tax [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 preceding tax [last] year [in which the property was appraised]; and

(C) the market value of all new improvements to the property.

(e) In this section, "new improvement" means an improvement to 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 and the value of which is not included in the appraised value of the property for the preceding tax year. The term does not include repairs to or ordinary maintenance of an existing structure or the grounds or another feature of the property.

SECTION 2. This Act applies only to the appraisal for ad valorem taxation of a residence homestead for a tax year that begins on or after the effective date of this Act, but only if the constitutional amendment proposed by the 80th Legislature, Regular Session, 2007, authorizing the legislature to provide that the maximum appraised value of a residence homestead for ad valorem taxation is limited to the lesser of the most recent market value of the residence homestead as determined by the appraisal entity or 110 percent, or a greater percentage, of the appraised value of the residence homestead for the preceding tax year is approved by the voters. If that amendment is not approved by the voters, this Act has no effect.

SECTION 3. This Act takes effect January 1, 2008.