80R3080 EJI-D

By: Hopson H.B. No. 1584

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 $22,500, providing for an adjustment 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 changes 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 $22,500 [$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 Subsection (a-1) 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 an individual receives the limitation provided by this section for the individual's residence homestead and the individual or the individual's spouse received the limitation in the preceding tax year for that homestead and the tax rate of the school district for the current tax year is higher or lower than the tax rate of the district for the preceding tax year, the total amount of taxes that may be imposed by the district on the homestead is equal to the amount of tax the district imposed on the homestead for the preceding tax year multiplied by 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, plus any tax for the current tax year attributable to improvements made in the preceding tax year, other than improvements made to comply with governmental regulations or repairs, except that the total amount of taxes that may be imposed may not exceed the amount of taxes imposed by the district for the later of the 2007 tax year or the tax year in which the limitation took effect, as that limitation may have been increased in subsequent tax years or may be increased for the current tax year because of improvements as authorized by this section.

(a-1) Notwithstanding Subsection (a), 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 tax year, the amount of the limitation provided by this section for the 2008 tax year is the amount of tax the school district imposed for the 2007 tax year, increased or reduced, as applicable, in proportion to any increase or reduction in the tax rate as provided by Subsection (a), less an amount equal to the amount determined by multiplying $7,500 times the tax rate of the school district for the 2008 tax year, plus any 2008 tax attributable to improvements made in 2007, other than improvements made to comply with governmental regulations or repairs. That limitation continues to apply to the property in subsequent tax years, subject to the other provisions of this section. [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 was a tax year before the 1997 tax year, the amount of the limitation provided by this section is the amount of tax the school district imposed for the 1996 tax year less an amount equal to the amount determined by multiplying $10,000 times the tax rate of the school district for the 1997 tax year, plus any 1997 tax attributable to improvements made in 1996, other than improvements made to comply with governmental regulations or repairs.]

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 adjustment 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 adjustment 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

(3) the adjustment of the limitation on the total amount of ad valorem taxes that may be imposed for public school purposes on the residence homesteads of the elderly or disabled in proportion to any increase or decrease in the tax rate for those purposes under Section 1-b(d), Article VIII, Texas Constitution, as proposed by __.J.R. No. ____, 80th Legislature, Regular Session, 2007.

SECTION 4. Section 403.302(j), Government Code, is amended 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 adjustment 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 $22,500, and the effect of the corresponding adjustment 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

(B) the effect of the adjustment of the limitation on the total amount of ad valorem taxes that may be imposed for public school purposes on the residence homesteads of the elderly or disabled in proportion to any increase or decrease in the tax rate for those purposes under Section 1-b(d), Article VIII, Texas Constitution, as proposed by __.J.R. No. ____, 80th Legislature, Regular Session, 2007.

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 __.J.R. No. ___, 80th Legislature, Regular Session, 2007, is approved by the voters. If that constitutional amendment is not approved by the voters, this Act has no effect.