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A BILL TO BE ENTITLED
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AN ACT
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relating to the ad valorem taxation of a residence homestead that is |
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rendered uninhabitable or unusable by a casualty or by wind or water |
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damage. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by |
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adding Section 11.135 to read as follows: |
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Sec. 11.135. CONTINUATION OF RESIDENCE HOMESTEAD EXEMPTION |
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WHILE REPLACEMENT STRUCTURE IS CONSTRUCTED; SALE OF PROPERTY. (a) |
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If a qualified residential structure for which the owner receives |
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an exemption under Section 11.13 is rendered uninhabitable or |
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unusable by a casualty or by wind or water damage, the owner may |
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continue to receive the exemption for the structure and the land and |
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improvements used in the residential occupancy of the structure |
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while the owner constructs a replacement qualified residential |
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structure on the land if the owner does not establish a different |
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principal residence for which the owner receives an exemption under |
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Section 11.13 during that period and intends to return and occupy |
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the structure as the owner's principal residence. To continue to |
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receive the exemption, the owner must begin active construction of |
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the replacement qualified residential structure or other physical |
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preparation of the site on which the structure is to be located not |
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later than the first anniversary of the date the owner ceases to |
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occupy the former qualified residential structure as the owner's |
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principal residence. The owner may not receive the exemption for |
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that property under the circumstances described by this subsection |
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for more than two years. |
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(b) For purposes of Subsection (a), the site of a |
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replacement qualified residential structure is under physical |
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preparation if the owner has engaged in architectural or |
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engineering work, soil testing, land clearing activities, or site |
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improvement work necessary for the construction of the structure or |
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has conducted an environmental or land use study relating to the |
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construction of the structure. |
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(c) If an owner receives an exemption for property under |
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Section 11.13 under the circumstances described by Subsection (a) |
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and sells the property before the owner completes construction of a |
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replacement qualified residential structure on the property, an |
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additional tax is imposed on the property equal to the difference |
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between the taxes imposed on the property for each of the years in |
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which the owner received the exemption and the tax that would have |
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been imposed had the owner not received the exemption in each of |
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those years, plus interest at an annual rate of seven percent |
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calculated from the dates on which the differences would have |
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become due. |
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(d) A tax lien attaches to property on the date a sale under |
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the circumstances described by Subsection (c) occurs to secure |
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payment of the additional tax and interest imposed by that |
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subsection and any penalties incurred. The lien exists in favor of |
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all taxing units for which the additional tax is imposed. |
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(e) A determination that a sale of property under the |
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circumstances described by Subsection (c) has occurred is made by |
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the chief appraiser. The chief appraiser shall deliver a notice of |
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the determination to the owner of the property as soon as possible |
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after making the determination and shall include in the notice an |
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explanation of the owner's right to protest the determination. If |
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the owner does not file a timely protest or if the final |
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determination of the protest is that the additional taxes are due, |
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the assessor for each taxing unit shall prepare and deliver a bill |
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for the additional taxes plus interest as soon as practicable. The |
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taxes and interest are due and become delinquent and incur |
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penalties and interest as provided by law for ad valorem taxes |
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imposed by the taxing unit if not paid before the next February 1 |
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that is at least 20 days after the date the bill is delivered to the |
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owner of the property. |
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(f) The sanctions provided by Subsection (c) do not apply if |
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the sale is: |
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(1) for right-of-way; or |
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(2) to this state or a political subdivision of this |
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state to be used for a public purpose. |
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(g) The comptroller shall adopt rules and forms to implement |
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this section. |
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SECTION 2. Section 11.26, Tax Code, is amended by adding |
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Subsections (n) and (o) to read as follows: |
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(n) Notwithstanding Subsection (c), the limitation on tax |
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increases required by this section does not expire if the owner of |
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the structure qualifies for an exemption under Section 11.13 under |
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the circumstances described by Section 11.135(a). |
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(o) Notwithstanding Subsections (a), (a-3), and (b), an |
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improvement to property that would otherwise constitute an |
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improvement under Subsection (b) is not treated as an improvement |
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under that subsection if the improvement is a replacement structure |
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for a structure that was rendered uninhabitable or unusable by a |
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casualty or by wind or water damage. For purposes of appraising the |
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property in the tax year in which the structure would have |
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constituted an improvement under Subsection (b), the replacement |
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structure is considered to be an improvement under that subsection |
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only if: |
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(1) the square footage of the replacement structure |
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exceeds that of the replaced structure as that structure existed |
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before the casualty or damage occurred; or |
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(2) the exterior of the replacement structure is of |
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higher quality construction and composition than that of the |
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replaced structure. |
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SECTION 3. Section 11.261, Tax Code, is amended by adding |
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Subsections (l) and (m) to read as follows: |
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(l) Notwithstanding Subsection (d), a limitation on county, |
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municipal, or junior college district tax increases provided by |
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this section does not expire if the owner of the structure qualifies |
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for an exemption under Section 11.13 under the circumstances |
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described by Section 11.135(a). |
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(m) Notwithstanding Subsections (b) and (c), an improvement |
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to property that would otherwise constitute an improvement under |
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Subsection (c) is not treated as an improvement under that |
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subsection if the improvement is a replacement structure for a |
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structure that was rendered uninhabitable or unusable by a casualty |
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or by wind or water damage. For purposes of appraising the property |
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in the tax year in which the structure would have constituted an |
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improvement under Subsection (c), the replacement structure is |
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considered to be an improvement under that subsection only if: |
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(1) the square footage of the replacement structure |
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exceeds that of the replaced structure as that structure existed |
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before the casualty or damage occurred; or |
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(2) the exterior of the replacement structure is of |
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higher quality construction and composition than that of the |
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replaced structure. |
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SECTION 4. Section 23.23(f), Tax Code, is amended to read as |
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follows: |
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(f) Notwithstanding Subsections (a) and (e) and except as |
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provided by Subdivision (2), an improvement to property that would |
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otherwise constitute a new improvement is not treated as a new |
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improvement if the improvement is a replacement structure for a |
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structure that was rendered uninhabitable or unusable by a casualty |
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or by wind [mold] or water damage. For purposes of appraising the |
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property under Subsection (a) in the tax year in which the structure |
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would have constituted a new improvement: |
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(1) the appraised value the property would have had in |
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the preceding tax [last] year if the casualty or damage had not |
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occurred [in which the property was appraised for taxation before
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the casualty or damage occurred] is considered to be the appraised |
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value of the property for that year, regardless of whether that |
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appraised value exceeds the actual appraised value of the property |
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for that year as limited by Subsection (a) [last year in which the
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property was appraised for taxation for purposes of Subsection
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(a)(2)(A)]; and |
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(2) the replacement structure is considered to be a |
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new improvement only if: |
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(A) the square footage of the replacement |
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structure exceeds that of [to the extent it is a significant
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improvement over] the replaced structure as that structure existed |
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before the casualty or damage occurred; or |
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(B) the exterior of the replacement structure is |
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of higher quality construction and composition than that of the |
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replaced structure. |
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SECTION 5. This Act applies only to ad valorem taxes imposed |
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for a tax year beginning on or after the effective date of this Act. |
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SECTION 6. This Act takes effect January 1, 2010. |
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