BILL ANALYSIS |
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C.S.H.B. 835 |
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By: Eiland |
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Ways & Means |
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Committee Report (Substituted) |
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BACKGROUND AND PURPOSE
Current law caps, for property tax purposes, the amount by which the appraised value of a residence homestead may be annually increased at 10 percent of the appraised value of the property for the preceding tax year. This cap does not apply to new improvements to a property, such as a new structure that increases in size or a new exterior that is of higher quality than the old exterior. Interested parties contend that while this exception makes sense in general, it has unintended consequences for some homeowners who cannot rebuild their homes following a natural disaster to the home's original state because of disaster recovery program requirements. The parties assert that taxpayers whose homes improve only to meet minimum disaster recovery should benefit from the cap so that the appraised tax value of their property increases gradually, like their neighbors who were fortunate enough to have their homes survive a disaster. C.S.H.B. 835 seeks to address this concern.
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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.
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ANALYSIS
C.S.H.B. 835 amends the Tax Code to establish, for purposes of the cap on the appraised value of a residence homestead for property tax purposes, that a replacement structure for a structure rendered uninhabitable or unusable by a casualty or by wind or water damage is not considered to be a new improvement if, in order to satisfy the requirements of the disaster recovery program administered by the General Land Office that is funded with community development block grant disaster recovery money authorized by federal law, it was necessary that the square footage of the replacement structure exceed that of the replaced structure as that structure existed before the applicable casualty or damage occurred or it was necessary that the exterior of the replacement structure be of higher quality construction and composition than that of the replaced structure.
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EFFECTIVE DATE
January 1, 2014.
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COMPARISON OF ORIGINAL AND SUBSTITUTE
While C.S.H.B. 835 may differ from the original in minor or nonsubstantive ways, the following comparison is organized and highlighted in a manner that indicates the substantial differences between the introduced and committee substitute versions of the bill.
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