80R1621 SMH-D

By: Leibowitz H.B. No. 1080

A BILL TO BE ENTITLED

AN ACT

relating to increasing the amount of the residence homestead exemption from ad valorem taxation by a school district to $45,000, providing for a reduction of the limitation on the total amount of ad valorem taxes that may be imposed by a school district on the homesteads of the elderly or disabled to reflect the increased exemption amount and any reduction in the school district's ad valorem tax rate, and protecting school districts against the resulting loss in local revenue.

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

SECTION 1. Section 11.13(b), Tax Code, is amended to read as follows:

(b) An adult is entitled to exemption from taxation by a school district of $45,000 [$15,000] of the appraised value of the adult's residence homestead, except that only $5,000 [$10,000] of the exemption applies [does not apply] to an entity operating under former Chapter 17, 18, 25, 26, 27, or 28, Education Code, as those chapters existed on May 1, 1995, as permitted by Section 11.301, Education Code.

SECTION 2. Section 11.26, Tax Code, is amended by amending Subsection (a) and adding Subsections (a-1), (a-2), (a-3), and (a-4) to read as follows:

(a) 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 imposed by this section, the tax imposed is the amount of the tax as limited by this section, except as otherwise provided by this section. A school district may not increase the total annual amount of ad valorem tax it imposes on the residence homestead of an individual 65 years of age or older or on the residence homestead of an individual who is disabled, as defined by Section 11.13, above the amount of the tax it imposed in the first tax year in which the individual qualified that residence homestead for the applicable exemption provided by Section 11.13(c) for an individual who is 65 years of age or older or is disabled. If the individual qualified that residence homestead for the exemption after the beginning of that first year and the residence homestead remains eligible for the same exemption for the next year, and if the school district taxes imposed on the residence homestead in the next year are less than the amount of taxes imposed in that first year, a school district may not subsequently increase the total annual amount of ad valorem taxes it imposes on the residence homestead above the amount it imposed in the year immediately following the first year for which the individual qualified that residence homestead for the same exemption, except as provided by Subsection (b). If the first tax year the individual qualified the residence homestead for the exemption provided by Section 11.13(c) for individuals 65 years of age or older or disabled was a tax year before the 2008 [1997] tax year, the amount of the limitation provided by this section is the amount of tax the school district imposed for the 2007 [1996] tax year less an amount equal to the amount determined by multiplying $30,000 [$10,000] times the tax rate of the school district for the 2008 [1997] tax year, plus any 2008 [1997] tax attributable to improvements made in 2007 [1996], other than improvements made to comply with governmental regulations or repairs.

(a-1) Notwithstanding the other provisions of this section and except as provided by Subsections (a-2), (a-3), and (a-4), if in the current tax year an individual qualifies for a limitation on tax increases provided by this section on the individual's residence homestead and the individual or the individual's spouse qualified for an exemption under Section 11.13(c) for the same homestead in the preceding tax year, the amount of the limitation provided by this section on the homestead in the current tax year is equal to the lesser of:

(1) the amount computed by:

(A) multiplying the amount of tax the school district imposed on the homestead in the preceding tax year by the lesser of one or a fraction the numerator of which is the tax rate of the district for the current tax year and the denominator of which is the tax rate of the district for the preceding tax year; and

(B) adding to the amount computed under Paragraph (A) any tax in the current tax year attributable to improvements made in the preceding tax year, as provided by Subsection (b); or

(2) the amount of the limitation on tax increases on the homestead as otherwise provided by this section.

(a-2) Notwithstanding the other provisions of this section, if in the 2008 tax year an individual qualifies for a limitation on tax increases provided by this section on the individual's residence homestead and the first tax year the individual or the individual's spouse qualified for an exemption under Section 11.13(c) for the same homestead was a tax year before the 2006 tax year, the amount of the limitation provided by this section on the homestead in the 2008 tax year is equal to the amount computed by:

(1) multiplying the amount of tax the school district imposed on the homestead in the 2005 tax year by the lesser of one or a fraction the numerator of which is the tax rate of the district for the 2006 tax year and the denominator of which is the tax rate of the district for the 2005 tax year;

(2) adding to the amount computed under Subdivision (1) any tax in the 2006 tax year attributable to improvements made in the 2005 tax year, as provided by Subsection (b);

(3) multiplying the amount computed under Subdivision (2) by the lesser of one or a fraction the numerator of which is the tax rate of the district for the 2007 tax year and the denominator of which is the tax rate of the district for the 2006 tax year;

(4) adding to the amount computed under Subdivision (3) any tax in the 2007 tax year attributable to improvements made in the 2006 tax year, as provided by Subsection (b);

(5) multiplying the amount computed under Subdivision (4) by the lesser of one or a fraction the numerator of which is the tax rate of the district for the 2008 tax year and the denominator of which is the tax rate of the district for the 2007 tax year;

(6) subtracting from the amount computed under Subdivision (5) the amount computed by multiplying $30,000 by the tax rate of the district for the 2008 tax year; and

(7) adding to the amount computed under Subdivision (6) any tax in the 2008 tax year attributable to improvements made in the 2007 tax year, as provided by Subsection (b).

(a-3) Notwithstanding the other provisions of this section, if in the 2008 tax year an individual qualifies for a limitation on tax increases provided by this section on the individual's residence homestead and the first tax year the individual or the individual's spouse qualified for an exemption under Section 11.13(c) for the same homestead was the 2006 tax year, the amount of the limitation provided by this section on the homestead in the 2008 tax year is equal to the amount computed by:

(1) multiplying the amount of tax the school district imposed on the homestead in the 2006 tax year by the lesser of one or a fraction the numerator of which is the tax rate of the district for the 2007 tax year and the denominator of which is the tax rate of the district for the 2006 tax year;

(2) adding to the amount computed under Subdivision (1) any tax in the 2007 tax year attributable to improvements made in the 2006 tax year, as provided by Subsection (b);

(3) multiplying the amount computed under Subdivision (2) by the lesser of one or a fraction the numerator of which is the tax rate of the district for the 2008 tax year and the denominator of which is the tax rate of the district for the 2007 tax year;

(4) subtracting from the amount computed under Subdivision (3) the amount computed by multiplying $30,000 by the tax rate of the district for the 2008 tax year; and

(5) adding to the amount computed under Subdivision (4) any tax in the 2008 tax year attributable to improvements made in the 2007 tax year, as provided by Subsection (b).

(a-4) Notwithstanding the other provisions of this section, if in the 2008 tax year an individual qualifies for a limitation on tax increases provided by this section on the individual's residence homestead and the first tax year the individual or the individual's spouse qualified for an exemption under Section 11.13(c) for the same homestead was the 2007 tax year, the amount of the limitation provided by this section on the homestead in the 2008 tax year is equal to the amount computed by:

(1) multiplying the amount of tax the school district imposed on the homestead in the 2007 tax year by the lesser of one or a fraction the numerator of which is the tax rate of the district for the 2008 tax year and the denominator of which is the tax rate of the district for the 2007 tax year;

(2) subtracting from the amount computed under Subdivision (1) the amount computed by multiplying $30,000 by the tax rate of the district for the 2008 tax year; and

(3) adding to the amount computed under Subdivision (2) any tax in the 2008 tax year attributable to improvements made in the 2007 tax year, as provided by Subsection (b).

SECTION 3. Section 42.2511(a), Education Code, is amended to read as follows:

(a) Notwithstanding any other provision of this chapter, a school district is entitled to additional state aid to the extent that state aid under this chapter based on the determination of the school district's taxable value of property as provided under Subchapter M, Chapter 403, Government Code, does not fully compensate the district for ad valorem tax revenue lost due to:

(1) the increase in the amount of the residence homestead exemption under Section 1-b(c), Article VIII, Texas Constitution, as proposed by H.J.R. No. 4, 75th Legislature, Regular Session, 1997, and the corresponding reduction of the [additional] limitation on the total amount of ad valorem taxes that may be imposed for public school purposes on the homesteads of the elderly or disabled [tax increases] under Section 1-b(d), Article VIII, Texas Constitution, as proposed by H.J.R. No. 4, 75th Legislature, Regular Session, 1997;

(2) the increase in the amount of the residence homestead exemption under Section 1-b(c), Article VIII, Texas Constitution, as proposed by ___.J.R. No. ___, 80th Legislature, Regular Session, 2007, and the corresponding reduction of the limitation described by Subdivision (1) as proposed by ___.J.R. No. ___, 80th Legislature, Regular Session, 2007; and

(3) the reduction of the limitation described by Subdivision (1) to reflect any reduction in the school district tax rate as provided by Section 11.26(a-1), (a-2), (a-3), or (a-4), Tax Code, as applicable.

SECTION 4. Section 403.302, Government Code, is amended by amending Subsection (j) and adding Subsection (j-1) to read as follows:

(j) For purposes of Section 42.2511, Education Code, the comptroller shall certify to the commissioner of education:

(1) a final value for each school district computed on a residence homestead exemption under Section 1-b(c), Article VIII, Texas Constitution, of $5,000; [and]

(2) a final value for each school district computed on[:

[(A)] a residence homestead exemption under Section 1-b(c), Article VIII, Texas Constitution, of $15,000,[;] and

[(B)] the effect of the corresponding reduction of the [additional] limitation on the total amount of ad valorem taxes that may be imposed for public school purposes on the homesteads of the elderly or disabled [tax increases] under Section 1-b(d), Article VIII, Texas Constitution, as proposed by H.J.R. No. 4, 75th Legislature, Regular Session, 1997; and

(3) a final value for each school district computed on:

(A) a residence homestead exemption under Section 1-b(c), Article VIII, Texas Constitution, of $45,000, and the effect of the corresponding reduction of the limitation described by Subdivision (2) as proposed by __.J.R. No. ____, 80th Legislature, Regular Session, 2007; and

(B) the effect of the reduction of the limitation described by Subdivision (2) to reflect any reduction in the school district tax rate as provided by Section 11.26(a-1), (a-2), (a-3), or (a-4), Tax Code, as applicable.

(j-1) For purposes of applying Subsection (j)(3) in the 2008-2009 school year, the comptroller shall compute the final value under that subsection as if the increase in the amount of the residence homestead exemption under Section 1-b(c), Article VIII, Texas Constitution, as proposed by __.J.R. No. ____, 80th Legislature, Regular Session, 2007, the corresponding reduction of the limitation on the total amount of ad valorem taxes that may be imposed for public school purposes on the homesteads of the elderly or disabled under Section 1-b(d), Article VIII, Texas Constitution, as proposed by __.J.R. No. ____, 80th Legislature, Regular Session, 2007, and the reduction of that limitation to reflect any reduction in the school district tax rate as provided by Section 11.26(a-1), (a-2), (a-3), or (a-4), Tax Code, as applicable, had taken effect in the 2007 tax year. This subsection expires September 1, 2009.

SECTION 5. This Act applies only to an ad valorem tax year that begins on or after January 1, 2008.

SECTION 6. This Act takes effect January 1, 2008, but only if the constitutional amendment proposed by the 80th Legislature, Regular Session, 2007, increasing the amount of the residence homestead exemption from ad valorem taxation for public school purposes from $15,000 to $45,000, providing for a reduction of the limitation on the total amount of ad valorem taxes that may be imposed for those purposes on the homestead of an elderly or disabled person to reflect the increased exemption amount, and authorizing the legislature to provide for the reduction of that limitation to reflect any reduction in the rate of those school taxes, is approved by the voters. If that constitutional amendment is not approved by the voters, this Act has no effect.