By: Bohac H.B. No. 3149

A BILL TO BE ENTITLED

AN ACT

relating to the authority of the governing body of a taxing unit that imposes ad valorem taxes on real property in Harris County, other than a school district or junior college district, to establish a limitation of not less than five percent on the maximum average annual increase in the appraised value of residence homesteads for ad valorem taxation by the taxing unit.

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

SECTION 1. Section 23.23, Tax Code, is amended by amending Subsection (a) and adding Subsections (g) and (h) to read as follows:

(a) Except as provided by Subsection (g), the [The] appraised value of a residence homestead for a tax year may not exceed the lesser of:

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

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

(g) The governing body of a taxing unit that imposes taxes on real property in Harris County, other than a school district or junior college district, by official action in the manner required by law, may provide that a percentage limitation on increases in appraised value determined in the manner provided by Subsection (a)(2) using a percentage of not less than five percent in place of the percentage specified by Subsection (a)(2)(A) will apply to the taxation of residence homesteads by the taxing unit. If the governing body of a taxing unit establishes a limitation under this subsection, the limitation applies beginning with the tax year following the year in which the limitation is established and remains in effect until amended or repealed by the governing body. A limitation established by the governing body of a taxing unit under this subsection applies to the taxation of all residence homesteads by the taxing unit, including residence homesteads located outside of Harris County. This subsection does not affect the appraised value of a residence homestead for taxation by a taxing unit other than the taxing unit whose governing body establishes a limitation on appraised value under this subsection. If the governing body of a taxing unit amends or repeals a limitation established under this subsection, the amendment or repeal applies beginning with the tax year in which the amendment or repeal is enacted.

(h) If in the tax year the limitation on increases in appraised value provided by Subsection (a)(2) applies to residence homesteads taxable by a taxing unit in Harris County and the governing body of the taxing unit has provided for the application in that tax year of a limitation on increases in appraised value under Subsection (g), the lower limitation applies to the taxation of residence homesteads by the taxing unit.

SECTION 2. Section 42.26(d), Tax Code, is amended to read as follows:

(d) For purposes of this section, the value of the property subject to the suit and the value of a comparable property or sample property that is used for comparison must be the market value determined by the appraisal district when the property is a residence homestead subject to a [the] limitation on appraised value imposed by or established under Section 23.23.

SECTION 3. This Act applies only to the appraisal of a residence homestead for ad valorem tax purposes for a tax year that begins on or after January 1, 2008.

SECTION 4. This Act takes effect January 1, 2008, but only if the constitutional amendment proposed by the 80th Legislature, Regular Session, 2007, authorizing the legislature to permit the governing body of a political subdivision that imposes ad valorem taxes on real property in Harris County to establish a limitation of not less than three percent on the maximum average annual increase in the appraised value of residence homesteads for ad valorem taxation by the political subdivision is approved by the voters. If that amendment is not approved by the voters, this Act has no effect.