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A BILL TO BE ENTITLED
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AN ACT
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relating to the limitation on increases in the appraised value of a |
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residence homestead for ad valorem tax purposes. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 23.23, Tax Code, is amended by amending |
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Subsections (a), (b), and (c) and adding Subsections (a-1), (a-2), |
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(a-3), (a-4), (a-5), (a-6), (a-7), and (c-1) to read as follows: |
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(a) The [Notwithstanding the requirements of Section 25.18
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and regardless of whether the appraisal office has appraised the
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property and determined the market value of the property for the tax
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year, an appraisal office may increase the] appraised value of a |
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residence homestead for a tax year is equal to [an amount not to
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exceed the lesser of:
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[(1)] the market value of the property for the first |
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[most recent] tax year that the owner qualified the property for an |
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exemption under Section 11.13 [market value was determined by the
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appraisal office; or
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[(2) the sum of:
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[(A)
10 percent of the appraised value of the
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property for the preceding tax year;
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[(B)
the appraised value of the property for the
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preceding tax year; and
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[(C)
the market value of all new improvements to the
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property]. |
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(a-1) Notwithstanding Subsection (a), if the owner of real |
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property qualified the property for an exemption under Section |
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11.13 and the owner acquired the property as a bona fide purchaser |
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for value, the appraised value of the property is equal to the |
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purchase price of the property paid by the owner. |
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(a-2) If the first tax year the property owner qualified the |
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property for an exemption under Section 11.13 was a tax year before |
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the 2020 tax year, the appraised value of the property as shown on |
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the 2019 appraisal roll is considered to be: |
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(1) the market value of the property for the first tax |
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year that the owner qualified the property for an exemption under |
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Section 11.13 for purposes of Subsection (a); and |
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(2) the purchase price of the property paid by the |
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owner for purposes of Subsection (a-1). |
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(a-3) Subsection (a-1) does not apply to a residence |
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homestead if: |
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(1) the purchase was made: |
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(A) pursuant to a court order; |
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(B) from a trustee in bankruptcy; |
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(C) by one co-owner from one or more other |
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co-owners; |
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(D) from a spouse or a person or persons within |
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the first or second degree of lineal consanguinity of one or more of |
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the purchasers; or |
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(E) from a governmental entity; or |
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(2) the chief appraiser determines that the applicant |
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was not a bona fide purchaser for value under criteria established |
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by rules adopted by the comptroller for that purpose. |
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(a-4) To receive a limitation on appraised value under |
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Subsection (a-1), an owner of the property must apply for the |
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limitation. To apply for the limitation, the owner must file an |
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application with the chief appraiser for each appraisal district in |
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which the property subject to the claimed limitation is located. |
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The application must be filed not later than the latest date on |
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which the owner may file an application for an exemption under |
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Section 11.13 on the property for the year under Section 11.43. The |
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comptroller by rule shall prescribe the form for the application to |
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ensure that the applicant provides the information necessary to |
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determine the applicant's eligibility for the limitation, |
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including the purchase price of the property paid by the applicant. |
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(a-5) An application filed with a chief appraiser under |
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Subsection (a-4) is confidential and not open to public inspection. |
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The application and the information it contains may not be |
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disclosed to another person other than an employee of the appraisal |
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district who appraises property, except as provided by Subsection |
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(a-6). |
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(a-6) Information that is confidential under Subsection |
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(a-5) may be disclosed: |
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(1) in a judicial or administrative proceeding under a |
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lawful subpoena; |
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(2) to a purchaser, grantee, seller, or grantor named |
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in the application or in the deed to which the application applies |
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or to a representative of the purchaser, grantee, seller, or |
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grantor under a written authorization signed by the purchaser, |
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grantee, seller, or grantor; |
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(3) to the comptroller or to an assessor for a taxing |
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unit in which the property described in the application is located; |
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(4) in a judicial or administrative proceeding related |
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to real property taxation: |
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(A) to which the purchaser, grantee, seller, or |
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grantor is a party; |
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(B) to which an owner of the property described |
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in the application is a party; or |
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(C) by the appraisal district for the purpose of |
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establishing a value of the property or of providing evidence of |
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comparable sales to appraise another property; |
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(5) for statistical purposes if the information is |
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provided in a form that does not identify a specific property or |
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specific purchaser, grantee, seller, or grantor; |
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(6) if and to the extent that the information is |
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required to be included in a public document or record that the |
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appraisal office is required to prepare or maintain; or |
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(7) to a taxing unit or its legal representative that |
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is engaged in the collection of delinquent taxes on the property |
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described in the application. |
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(a-7) Information that is disclosed under Subsection (a-6) |
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does not lose its confidential character. |
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(b) When appraising a residence homestead, the chief |
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appraiser shall: |
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(1) appraise the property at its market value; and |
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(2) include in the appraisal records both the market |
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value of the property and the amount computed under Subsection (a) |
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or (a-1), as applicable [(a)(2)]. |
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(c) The limitation provided by Subsection (a) or (a-1) takes |
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effect as to a residence homestead on January 1 of the first tax |
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year [following the first tax year] the owner qualifies the |
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property for an exemption under Section 11.13. The limitation |
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expires on January 1 of the first tax year that neither the owner of |
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the property when the limitation took effect nor the owner's spouse |
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or surviving spouse qualifies for an exemption under Section 11.13. |
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(c-1) Notwithstanding Subsection (c), a limitation |
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established under Subsection (a) or (a-1) does not expire if a |
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change in ownership of the property occurs by inheritance or under a |
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will as long as the person who acquires the property qualifies for |
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an exemption under Section 11.13. |
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SECTION 2. Sections 23.23(e), (f), and (g), Tax Code, are |
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repealed. |
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SECTION 3. 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 4. This Act takes effect January 1, 2020, but only |
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if the constitutional amendment proposed by the 86th Legislature, |
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Regular Session, 2019, authorizing the legislature to provide that |
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the appraised value of a residence homestead for ad valorem tax |
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purposes is the market value of the property for the first year that |
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the owner qualified the property for a homestead exemption or, if |
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the owner purchased the property, the purchase price of the |
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property is approved by the voters. If that amendment is not |
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approved by the voters, this Act has no effect. |