BILL ANALYSIS

C.S.H.B. 69

By: Guillen

Ways & Means

Committee Report (Substituted)

BACKGROUND AND PURPOSE

Armed forces reservists are being activated and deployed from units throughout the state to fulfill troop requirements in numerous locations, especially overseas. 

C.S.H.B. 69 limits the total amount of property taxes that may be imposed by a taxing unit on the residence homestead of an eligible member of a reserve component of the United States armed forces who is ordered to active military duty. The bill prohibits a taxing unit from increasing the total annual amount of property taxes for a qualified individual.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

C.S.H.B. 69 adds Tax Code provisions that apply to a taxing unit if, under a proposed constitutional amendment, the joint resolution for which has been introduced in the 81st Legislature, the taxing unit adopts a limitation on property taxes for the residence homestead of a member of a reserve component of the United States armed forces who is ordered to active duty. The bill, for such a taxing unit, limits the amount of property taxes that may be imposed on the homestead of a member of the reserve, including the National Guard, who is deployed or stationed on active duty for any part of a tax year at a location that is at least 150 miles from the individual's homestead and who has been continuously deployed or stationed on active duty for at least the preceding six months, disregarding temporary periods of leave or other absence, at one or more locations each of which is at least 150 miles from the individual's homestead. The bill establishes that the tax limitation applies to taxes imposed by a political subdivision on homesteads beginning with the first tax year after the year in which the political subdivision establishes the limitation. The bill establishes that the tax limitation applies only to property that receives a residence homestead exemption and is the residence homestead of an individual who meets the requisite deployment or stationing requirements. The bill establishes that an individual is eligible for the limitation in a tax year if the individual qualifies the homestead for a homestead exemption for that tax year, meets the deployment or stationing requirements at any time during that tax year, and qualified the homestead for a homestead exemption for the preceding tax year.    

C.S.H.B. 69 prohibits an affected taxing unit from increasing the total annual amount of property taxes it imposes on the residence homestead of an eligible individual above the amount that is imposed on the property in the preceding tax year. The bill requires the tax officials to appraise the homestead and calculate taxes as on other property, but if the tax so calculated exceeds the specified limitation, the tax imposed is the amount of the tax as limited by the bill, except as otherwise provided.  The bill specifies how improvements to the homestead since the last appraisal are to be treated for tax calculation purposes.

C.S.H.B. 69 sets forth application requirements and deadlines for an individual who wishes to file for the armed reserve property tax limitation and includes provisions governing late filings.  The bill requires, for a property appraised by more than one appraisal district, separate filing in each appraisal district.  The bill specifies that once a tax limitation is allowed, it need not be claimed in subsequent years and applies to the property until the limitation expires or until the individual's qualification for the limitation ends.  However, the bill authorizes the chief appraiser to require an individual allowed a limitation in a prior year to file a new application to confirm the individual's current qualification.  The bill includes provisions relating to tax bill deductions and refunds that result from late application for the limitation and requires certain corrective actions by a tax assessor in the case of an erroneously allowed limitation.

C.S.H.B. 69 requires the comptroller of public accounts, in prescribing the application form for the property tax limitation, to ensure that the form requires an applicant to provide the information necessary to determine the validity of the limitation claim, including certain identifying information.  The bill requires the comptroller to include on the form a notice of the penalties for making or filing an application containing a false statement and 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.

C.S.H.B. 69 requires an individual who receives a tax limitation to notify the appraisal office in writing before May 1 after such qualification for the limitation ends.  The bill provides that a tax limitation expires January 1 of the first tax year that none of the owners of the property qualifies for a homestead exemption, none of the owners of the property who qualify for a homestead exemption and who owned the property when the limitation first took effect is using the property as a homestead, or none of the owners of the property who met the deployment or stationing requirements and other eligibility requirements when the limitation first took effect meets those requirements.

C.S.H.B. 69 establishes that an armed reserve property tax limitation does not expire because the owner of an interest in the property conveys the interest to a qualifying trust, if the owner or the owner's spouse is a trustor of the trust and is entitled to occupy the property.  The bill establishes a formula for determining the maximum property taxes to be imposed if in certain circumstances an individual who receives the limitation qualifies a different residence homestead in the same taxing unit for a homestead exemption during the same period of active duty.  In the case of an individual who receives the limitation and subsequently applies for a limitation by the same taxing unit on a different residence homestead, the bill entitles the individual or the individual's agent to receive a certificate to facilitate eligibility determination and tax determination relevant to the new homestead.

C.S.H.B. 69 adds the armed reserve property tax limitation to the other tax limitations that are determined when a chief appraiser conducts separate appraisals of property occupied by stockholders of a corporation incorporated under the Cooperative Association Act.  The bill adds the armed reserve property tax limitation to the other tax limitations that are taken into consideration when a taxing unit determines the total tax imposed on a cooperative housing corporation for which the interests of the stockholders are separately appraised.

C.S.H.B. 69 makes definitional changes for purposes of statutory provisions and calculations relating to effective tax rates, rollback tax rates, and certain tax rate adjustments to take into account the value of homesteads that qualify for the armed reserve property tax limitation. The bill redefines "current total value," "last year's levy," and "last year's total value."

C.S.H.B. 69 requires the chief appraiser, for each school district in an appraisal district, to determine the portion of the appraised value of homesteads of individuals on which school district taxes are not imposed in a tax year because of the armed reserve property tax limitation. The bill sets forth the calculation of that portion.

C.S.H.B. 69 amends the Education Code to provide that if a school district has established an armed reserve property tax limitation, the notice of a public meeting to discuss and adopt the budget and proposed tax rate must contain specific language regarding the armed reserve property tax limitation and the prohibition against increasing the dollar amount of school taxes imposed on the residence homestead of an eligible recipient of the limitation above the amount of school taxes imposed on the property in the preceding year.

C.S.H.B. 69 amends the Government Code to require the comptroller in the annual determination of school district property values to subtract the portion of the appraised value of homesteads attributable to the armed reserve property tax limitation.

EFFECTIVE DATE

January 1, 2010, if the constitutional amendment authorizing a political subdivision to establish a limitation on the total amount of property taxes that may be imposed by the political subdivision on the residence homestead of an eligible person who is a member of a reserve component of the United States armed forces and is ordered to active military duty is approved by the voters.

COMPARISON OF ORIGINAL AND SUBSTITUTE

C.S.H.B. 69 differs from the original by applying the property tax limitation to a member of the reserve who is deployed or stationed on active duty at a location or locations that are at least 150 miles from the individual's residence homestead, whereas the original established the distance as at least 60 miles from the individual's residence homestead.