82R935 SMH-D

By: Paxton H.J.R. No. 83

A JOINT RESOLUTION

proposing a constitutional amendment to phase out ad valorem taxes on the residence homesteads of elderly persons by 2021.

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

SECTION 1. Section 1-b, Article VIII, Texas Constitution, is amended by amending Subsections (b), (c), (d), and (h) and adding Subsections (j) and (j-1) to read as follows:

(b) The governing body of any county, city, town, school district, or other political subdivision of the State may exempt by its own action not less than Three Thousand Dollars ($3,000) of the market value of residence homesteads of persons, married or unmarried, including those living alone, who are under a disability for purposes of payment of disability insurance benefits under Federal Old-Age, Survivors, and Disability Insurance or its successor [or of married or unmarried persons sixty-five (65) years of age or older, including those living alone,] from all ad valorem taxes thereafter levied by the political subdivision. As an alternative, upon receipt of a petition signed by twenty percent (20%) of the voters who voted in the last preceding election held by the political subdivision, the governing body of the subdivision shall call an election to determine by majority vote whether an amount not less than Three Thousand Dollars ($3,000) as provided in the petition, of the market value of residence homesteads of disabled persons [or of persons sixty-five (65) years of age or over] shall be exempt from ad valorem taxes thereafter levied by the political subdivision. [An eligible disabled person who is sixty-five (65) years of age or older may not receive both exemptions from the same political subdivision in the same year but may choose either if the subdivision has adopted both.] Where any ad valorem tax has theretofore been pledged for the payment of any debt, the taxing officers of the political subdivision shall have authority to continue to levy and collect the tax against the homestead property at the same rate as the tax so pledged until the debt is discharged, if the cessation of the levy would impair the obligation of the contract by which the debt was created.

(c) Fifteen Thousand Dollars ($15,000) of the market value of the residence homestead of a married or unmarried adult, including one living alone, is exempt from ad valorem taxation for general elementary and secondary public school purposes. The legislature by general law may provide that all or part of the exemption does not apply to a district or political subdivision that imposes ad valorem taxes for public education purposes but is not the principal school district providing general elementary and secondary public education throughout its territory. In addition to this exemption, the legislature by general law may exempt an amount not to exceed Ten Thousand Dollars ($10,000) of the market value of the residence homestead of a person who is disabled as defined in Subsection (b) of this section [and of a person sixty-five (65) years of age or older] from ad valorem taxation for general elementary and secondary public school purposes. The legislature by general law may base the amount of and condition eligibility for the additional exemption authorized by this subsection for disabled persons [and for persons sixty-five (65) years of age or older] on economic need. [An eligible disabled person who is sixty-five (65) years of age or older may not receive both exemptions from a school district but may choose either.] An eligible person is entitled to receive both the exemption required by this subsection for all residence homesteads and any exemption adopted pursuant to Subsection (b) of this section, but the legislature shall provide by general law whether an eligible disabled [or elderly] person may receive both the additional exemption for the [elderly and] disabled authorized by this subsection and any exemption for the [elderly or] disabled adopted pursuant to Subsection (b) of this section. Where ad valorem tax has previously been pledged for the payment of debt, the taxing officers of a school district may continue to levy and collect the tax against the value of homesteads exempted under this subsection until the debt is discharged if the cessation of the levy would impair the obligation of the contract by which the debt was created. The legislature shall provide for formulas to protect school districts against all or part of the revenue loss incurred by the implementation of Article VIII, Sections 1-b(c), 1-b(d), and 1-d-1, of this constitution. The legislature by general law may define residence homestead for purposes of this section.

(d) Except as otherwise provided by this subsection, if a person receives a residence homestead exemption prescribed by Subsection (c) of this section for homesteads of persons who are [sixty-five (65) years of age or older or who are] disabled, the total amount of ad valorem taxes imposed on that homestead for general elementary and secondary public school purposes may not be increased while it remains the residence homestead of that person or that person's spouse who receives the exemption. [If a person sixty-five (65) years of age or older dies in a year in which the person received the exemption, the total amount of ad valorem taxes imposed on the homestead for general elementary and secondary public school purposes may not be increased while it remains the residence homestead of that person's surviving spouse if the spouse is fifty-five (55) years of age or older at the time of the person's death, subject to any exceptions provided by general law.] The legislature, by general law, may provide for the transfer of all or a proportionate amount of a limitation provided by this subsection for a person who qualifies for the limitation and establishes a different residence homestead. However, taxes otherwise limited by this subsection may be increased to the extent the value of the homestead is increased by improvements other than repairs or improvements made to comply with governmental requirements and except as may be consistent with the transfer of a limitation under this subsection. [For a residence homestead subject to the limitation provided by this subsection in the 1996 tax year or an earlier tax year, the legislature shall provide for a reduction in the amount of the limitation for the 1997 tax year and subsequent tax years in an amount equal to $10,000 multiplied by the 1997 tax rate for general elementary and secondary public school purposes applicable to the residence homestead.]

(h) The governing body of a county, a city or town, or a junior college district by official action may provide that if a person who is disabled [or is sixty-five (65) years of age or older] receives a residence homestead exemption prescribed or authorized by this section, the total amount of ad valorem taxes imposed on that homestead by the county, the city or town, or the junior college district may not be increased while it remains the residence homestead of that person or that person's spouse who is disabled [or sixty-five (65) years of age or older] and receives a residence homestead exemption on the homestead. As an alternative, on receipt of a petition signed by five percent (5%) of the registered voters of the county, the city or town, or the junior college district, the governing body of the county, the city or town, or the junior college district shall call an election to determine by majority vote whether to establish a tax limitation provided by this subsection. If a county, a city or town, or a junior college district establishes a tax limitation provided by this subsection and a disabled person [or a person sixty-five (65) years of age or older] dies in a year in which the person received a residence homestead exemption, the total amount of ad valorem taxes imposed on the homestead by the county, the city or town, or the junior college district may not be increased while it remains the residence homestead of that person's surviving spouse if the spouse is fifty-five (55) years of age or older at the time of the person's death, subject to any exceptions provided by general law. The legislature, by general law, may provide for the transfer of all or a proportionate amount of a tax limitation provided by this subsection for a person who qualifies for the limitation and establishes a different residence homestead within the same county, within the same city or town, or within the same junior college district. A county, a city or town, or a junior college district that establishes a tax limitation under this subsection must comply with a law providing for the transfer of the limitation, even if the legislature enacts the law subsequent to the county's, the city's or town's, or the junior college district's establishment of the limitation. Taxes otherwise limited by a county, a city or town, or a junior college district under this subsection may be increased to the extent the value of the homestead is increased by improvements other than repairs and other than improvements made to comply with governmental requirements and except as may be consistent with the transfer of a tax limitation under a law authorized by this subsection. The governing body of a county, a city or town, or a junior college district may not repeal or rescind a tax limitation established under this subsection.

(j) A person 65 years of age or older is entitled to an exemption from ad valorem taxation of the total market value of the person's residence homestead. The surviving spouse of a person who received an exemption under this subsection for the residence homestead of a person 65 years of age or older is entitled to an exemption from ad valorem taxation of the total market value of the same property if the deceased spouse died in a year in which the deceased spouse received the exemption, the surviving spouse was 55 years of age or older when the deceased spouse died, the property was the residence homestead of the surviving spouse when the deceased spouse died and remains the residence homestead of the surviving spouse, and the surviving spouse has not remarried since the death of the deceased spouse. Where ad valorem tax of a school district has previously been pledged for the payment of debt, the taxing officers of the school district may continue to levy and collect the tax against the value of homesteads exempted under this subsection until the debt is discharged if the cessation of the levy would impair the obligation of the contract by which the debt was created. The legislature shall provide for formulas to protect school districts against all or part of the revenue loss incurred by the implementation of this subsection. The legislature by general law may prescribe procedures for the administration of this subsection.

(j-1) Subsection (j) of this section applies to the ad valorem taxation of the residence homestead of a person 65 years of age or older only for the 2021 and subsequent tax years. The ad valorem taxation of the residence homestead of a person 65 years of age or older for the 2017, 2018, 2019, and 2020 tax years is governed by this subsection. In addition to any exemptions authorized by Subsections (b) and (c) of this section, the legislature by general law may exempt from ad valorem taxation a percentage of the market value of the residence homestead of a person 65 years of age or older. For the 2017 tax year, the amount of the exemption may not exceed 20 percent of the market value of the homestead. For the 2018 tax year, the amount of the exemption may not exceed 40 percent of the market value of the homestead. For the 2019 tax year, the amount of the exemption may not exceed 60 percent of the market value of the homestead. For the 2020 tax year, the amount of the exemption may not exceed 80 percent of the market value of the homestead. The legislature by general law may provide that the surviving spouse of a person who received an exemption under this subsection for the residence homestead of a person 65 years of age or older is entitled to an exemption for the same property in an amount equal to that of the exemption for which the deceased spouse would have qualified had the deceased spouse continued to qualify for the exemption if the deceased spouse died in a year in which the deceased spouse received the exemption, the surviving spouse was 55 years of age or older when the deceased spouse died, the property was the residence homestead of the surviving spouse when the deceased spouse died and remains the residence homestead of the surviving spouse, and the surviving spouse has not remarried since the death of the deceased spouse. A person who receives an exemption under this subsection for a person 65 years of age or older is not entitled to an exemption under this subsection for the surviving of a person 65 years of age or older. Where ad valorem tax of a school district has previously been pledged for the payment of debt, the taxing officers of the school district may continue to levy and collect the tax against the value of homesteads exempted under this subsection until the debt is discharged if the cessation of the levy would impair the obligation of the contract by which the debt was created. The legislature shall provide for formulas to protect school districts against all or part of the revenue loss incurred by the implementation of this subsection. The legislature by general law may prescribe procedures for the administration of this subsection. This subsection expires January 1, 2021.

SECTION 2. Section 1-b(f), Article VIII, Texas Constitution, is repealed.

SECTION 3. The following temporary provision is added to the Texas Constitution:

TEMPORARY PROVISION. (a) This temporary provision applies to the constitutional amendment proposed by the 82nd Legislature, Regular Session, 2011, to phase out ad valorem taxes on the residence homesteads of elderly persons by 2021.

(b) Except as provided by Subsection (c) of this section, the amendments to Section 1-b, Article VIII, of this constitution and the repeal of Section 1-b(f), Article VIII, of this constitution take effect January 1, 2021.

(c) Section 1-b(j-1), Article VIII, of this constitution takes effect January 1, 2017.

(d) This temporary provision expires January 1, 2022.

SECTION 4. This proposed constitutional amendment shall be submitted to the voters at an election to be held November 8, 2011. The ballot shall be printed to permit voting for or against the proposition: "The constitutional amendment to phase out ad valorem taxes on the residence homesteads of elderly persons by 2021."