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A BILL TO BE ENTITLED
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AN ACT
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relating to an increase in the amount of the residence homestead |
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exemption from ad valorem taxation by a school district and the |
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increase of the exemption amount in subsequent years to reflect |
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inflation in homestead values, a reduction of the limitation on the |
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total amount of ad valorem taxes that may be imposed by a school |
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district on the homestead of a disabled or elderly person to reflect |
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the increased exemption amounts, and the protection of school |
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districts against the resulting loss in local revenue. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 11.13, Tax Code, is amended by amending |
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Subsection (b) and adding Subsection (b-1) to read as follows: |
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(b) An adult is entitled to exemption from taxation by a |
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school district of a portion [$15,000] of the appraised value of the |
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adult's residence homestead in the amount provided by this |
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subsection, except that only $5,000 [$10,000] of the exemption |
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applies [does not apply] to an entity operating under former |
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Chapter 17, 18, 25, 26, 27, or 28, Education Code, as those chapters |
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existed on May 1, 1995, as permitted by Section 11.301, Education |
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Code. For the 2016 tax year, the amount of the exemption is $35,000. |
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For each subsequent tax year, the amount of the exemption shall be |
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calculated by the comptroller by multiplying the amount of the |
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exemption under this subsection for the preceding tax year by the |
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residence homestead inflation rate and adding that amount to the |
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amount of that exemption for the preceding tax year. Each year, not |
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later than March 15, the comptroller shall calculate the amount of |
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the exemption for the current tax year and publish that amount in |
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the Texas Register. |
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(b-1) In this section, "residence homestead inflation rate" |
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means the positive amount, if any, expressed in decimal form |
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rounded to the nearest thousandth, computed by determining the |
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percentage change in the median market value of residence |
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homesteads in this state for the preceding calendar year as |
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compared to the calendar year preceding that calendar year. |
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SECTION 2. Section 11.26(a), Tax Code, is amended to read as |
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follows: |
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(a) The tax officials shall appraise the property to which |
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this section applies and calculate taxes as on other property, but |
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if the tax so calculated exceeds the limitation imposed by this |
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section, the tax imposed is the amount of the tax as limited by this |
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section, except as otherwise provided by this section. A school |
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district may not increase the total annual amount of ad valorem tax |
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it imposes on the residence homestead of an individual 65 years of |
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age or older or on the residence homestead of an individual who is |
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disabled, as defined by Section 11.13, above the amount of the tax |
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it imposed in the first tax year in which the individual qualified |
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that residence homestead for the applicable exemption provided by |
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Section 11.13(c) for an individual who is 65 years of age or older |
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or is disabled. If the individual qualified that residence |
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homestead for the exemption after the beginning of that first year |
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and the residence homestead remains eligible for the same exemption |
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for the next year, and if the school district taxes imposed on the |
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residence homestead in the next year are less than the amount of |
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taxes imposed in that first year, a school district may not |
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subsequently increase the total annual amount of ad valorem taxes |
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it imposes on the residence homestead above the amount it imposed in |
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the year immediately following the first year for which the |
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individual qualified that residence homestead for the same |
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exemption, except as provided by Subsection (b). If the first tax |
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year the individual qualified the residence homestead for the |
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exemption provided by Section 11.13(c) for individuals 65 years of |
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age or older or disabled was a tax year before the 2016 [1997] tax |
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year, the amount of the limitation provided by this section is the |
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amount of tax the school district imposed for the 2015 [1996] tax |
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year less an amount equal to the amount determined by multiplying |
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$20,000 [$10,000] times the tax rate of the school district for the |
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2016 [1997] tax year, plus any 2016 [1997] tax attributable to |
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improvements made in 2015 [1996], other than improvements made to |
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comply with governmental regulations or repairs. If the first tax |
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year the individual qualified the residence homestead for the |
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exemption provided by Section 11.13(c) for individuals 65 years of |
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age or older or disabled was a tax year before a tax year in which |
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the amount of the exemption provided by Section 11.13(b) is |
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increased to reflect inflation in residence homestead values, the |
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amount of the limitation provided by this section is the amount of |
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tax the school district imposed for the tax year preceding the tax |
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year in which the amount of the exemption is increased less an |
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amount equal to the amount determined by multiplying the amount of |
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the increase times the tax rate of the school district for the year |
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in which the amount of the exemption is increased, plus any tax for |
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the tax year in which the amount of the exemption is increased |
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attributable to improvements made in the preceding tax year, other |
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than improvements made to comply with governmental regulations or |
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repairs. Except as provided by Subsection (b), a limitation on tax |
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increases provided by this section on a residence homestead |
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computed under this subsection continues to apply to the homestead |
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in subsequent tax years until the limitation expires. |
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SECTION 3. Subchapter A, Chapter 41, Education Code, is |
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amended by adding Section 41.0011 to read as follows: |
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Sec. 41.0011. COMPUTATION OF WEALTH PER STUDENT FOR SCHOOL |
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YEAR IN WHICH HOMESTEAD EXEMPTION INCREASED. Notwithstanding any |
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other provision of this chapter, in computing a school district's |
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wealth per student for a school year that begins in a tax year in |
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which the amount of the residence homestead exemption under Section |
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1-b(c), Article VIII, Texas Constitution, is increased and the |
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amount of the limitation on tax increases under Section 1-b(d), |
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Article VIII, Texas Constitution, is reduced to reflect the |
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increased exemption amount, a school district's taxable value of |
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property under Subchapter M, Chapter 403, Government Code, is |
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determined as if the increase in the homestead exemption under |
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Section 1-b(c), Article VIII, Texas Constitution, and the |
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additional limitation on tax increases under Section 1-b(d), |
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Article VIII, Texas Constitution, had been in effect for the |
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preceding tax year. |
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SECTION 4. Subchapter E, Chapter 42, Education Code, is |
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amended by adding Section 42.2512 to read as follows: |
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Sec. 42.2512. ADDITIONAL STATE AID FOR HOMESTEAD EXEMPTION. |
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(a) This section applies only to a school year that begins in a tax |
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year in which the amount of the residence homestead exemption under |
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Section 1-b(c), Article VIII, Texas Constitution, is increased and |
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the amount of the limitation on tax increases under Section 1-b(d), |
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Article VIII, Texas Constitution, is reduced to reflect the |
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increased exemption amount. |
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(b) Notwithstanding any other provision of this chapter, in |
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computing state aid to a school district for a school year to which |
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this section applies, the district's taxable value of property |
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under Subchapter M, Chapter 403, Government Code, is determined as |
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if the increase in the residence homestead exemption and the |
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additional limitation on tax increases described by Subsection (a) |
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had been in effect for the preceding tax year. |
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(c) A school district is entitled to additional state aid |
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for a school year to which this section applies to the extent that |
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state aid under this chapter based on the determination of the |
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district's taxable value of property as provided by Subsection (b) |
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does not fully compensate the district for ad valorem tax revenue |
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lost due to the increase in the residence homestead exemption and |
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the additional limitation on tax increases described by Subsection |
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(a). The commissioner, using information provided by the |
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comptroller, shall compute the amount of additional state aid to |
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which a district is entitled under this subsection. A determination |
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by the commissioner under this subsection is final and may not be |
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appealed. |
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SECTION 5. Chapter 46, Education Code, is amended by adding |
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Subchapter D to read as follows: |
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SUBCHAPTER D. ADDITIONAL STATE ASSISTANCE |
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Sec. 46.101. ADDITIONAL STATE ASSISTANCE FOR HOMESTEAD |
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EXEMPTION. (a) A school district that does not receive state |
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assistance under Subchapter B for the district's tax effort to pay |
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the principal of and interest on eligible bonds, as defined by |
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Section 46.033, is entitled to state assistance to fully compensate |
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the district for ad valorem tax revenue for that tax effort lost due |
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to an increase in the residence homestead exemption under Section |
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1-b(c), Article VIII, Texas Constitution, and a reduction of the |
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amount of the limitation on tax increases under Section 1-b(d), |
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Article VIII, Texas Constitution, to reflect the increased |
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exemption amount. |
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(b) The commissioner shall compute the amount of assistance |
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to which a school district is entitled under Subsection (a). A |
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determination by the commissioner under this section is final and |
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may not be appealed. |
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SECTION 6. Section 403.302(j), Government Code, is amended |
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to read as follows: |
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(j) For purposes of Chapter 42, Education Code, the |
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comptroller shall certify to the commissioner of education: |
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(1) [a final value for each school district computed
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on a residence homestead exemption under Section 1-b(c), Article
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VIII, Texas Constitution, of $5,000;
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[(2)] a final value for each school district computed |
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on: |
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(A) a residence homestead exemption under |
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Section 1-b(c), Article VIII, Texas Constitution, of $15,000; and |
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(B) the effect of the additional limitation on |
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tax increases under Section 1-b(d), Article VIII, Texas |
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Constitution, as proposed by H.J.R. No. 4, 75th Legislature, |
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Regular Session, 1997; [and] |
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(2) [(3)] a final value for each school district |
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computed on the effect of the reduction of the limitation on tax |
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increases to reflect any reduction in the school district tax rate |
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as provided by Section 11.26(a-1), (a-2), or (a-3), Tax Code, as |
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applicable; |
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(3) for the 2016 tax year, a final value for each |
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school district computed on: |
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(A) a residence homestead exemption under |
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Section 1-b(c), Article VIII, Texas Constitution, of $35,000; and |
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(B) the effect of the additional limitation on ad |
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valorem tax increases under Section 1-b(d), Article VIII, Texas |
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Constitution, as proposed by the joint resolution to amend that |
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section adopted by the 84th Legislature, Regular Session, 2015; and |
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(4) for each tax year after the 2016 tax year, a final |
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value for each school district computed on: |
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(A) the amount of the residence homestead |
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exemption under Section 1-b(c), Article VIII, Texas Constitution, |
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in effect for that tax year; and |
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(B) the effect of any reduction of the limitation |
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on ad valorem tax increases under Section 1-b(d), Article VIII, |
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Texas Constitution, to reflect any increase in the amount of the |
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exemption from the amount in effect for the 2016 tax year. |
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SECTION 7. The changes in law made by this Act to Sections |
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11.13 and 11.26, Tax Code, apply only to an ad valorem tax year that |
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begins on or after January 1, 2016. |
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SECTION 8. This Act takes effect January 1, 2016, but only |
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if the constitutional amendment proposed by the 84th Legislature, |
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Regular Session, 2015, increasing the amount of the residence |
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homestead exemption from ad valorem taxation for public school |
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purposes from $15,000 to $35,000, providing for the increase of the |
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exemption amount in subsequent years to reflect inflation in |
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homestead values, and providing for a reduction of the limitation |
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on the total amount of ad valorem taxes that may be imposed for |
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those purposes on the homestead of a disabled or elderly person to |
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reflect the increased exemption amounts is approved by the voters. |
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If that constitutional amendment is not approved by the voters, |
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this Act has no effect. |