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A BILL TO BE ENTITLED
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AN ACT
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relating to the authority of the governing body of a taxing unit in |
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a county in which home prices are appreciating rapidly to adopt a |
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limitation on increases in the appraised value for purposes of ad |
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valorem taxation by the taxing unit of residence homesteads in |
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certain low-income areas. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 1.12(d), Tax Code, is amended to read as |
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follows: |
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(d) For purposes of this section, the appraisal ratio of a |
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homestead to which Section 23.23 or 23.231 applies is the ratio of |
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the property's market value as determined by the appraisal district |
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or appraisal review board, as applicable, to the market value of the |
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property according to law. The appraisal ratio is not calculated |
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according to the appraised value of the property as limited by |
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Section 23.23 or 23.231. |
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SECTION 2. Subchapter B, Chapter 23, Tax Code, is amended by |
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adding Section 23.231 to read as follows: |
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Sec. 23.231. LIMITATION ON APPRAISED VALUE OF RESIDENCE |
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HOMESTEAD IN LOW-INCOME AREA. (a) In this section: |
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(1) "Qualifying census tract" means a census tract |
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delineated by the United States Bureau of the Census in the most |
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recent decennial census in which: |
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(A) the median family income is less than 60 |
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percent of the area median family income for the county or |
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metropolitan statistical area in which the census tract is located, |
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as determined annually by the United States Department of Housing |
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and Urban Development; or |
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(B) the poverty rate is at least 25 percent. |
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(2) "Qualifying county" means a county in which the |
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rate of increase in the unadjusted median value of the sales price |
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of existing homes over the preceding three years, as calculated by |
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the United States Department of Housing and Urban Development for |
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purposes of the HOME and Housing Trust Fund programs, is greater |
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than 2.5 times the amount computed by averaging the rate of increase |
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in each of the counties in this state for the same period. |
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(b) The governing body of a taxing unit all or part of the |
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territory of which is located in a qualifying county in the manner |
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provided by law for official action by the governing body may |
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provide that, notwithstanding the requirements of Section 25.18 and |
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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 located in a qualifying census tract in the |
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taxing unit for a tax year for purposes of taxation by the taxing |
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unit to an amount not to exceed the lesser of: |
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(1) the market value of the property for the most |
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recent tax year that the 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) the greater of the following amounts: |
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(i) the percentage specified by the |
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governing body, expressed as a decimal, multiplied by the appraised |
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value of the property for the preceding tax year; or |
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(ii) the amount computed by averaging the |
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percentage increase, expressed as a decimal, in the unadjusted |
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median value of the sales price of existing homes in each of the |
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counties in this state for the preceding year as calculated by the |
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United States Department of Housing and Urban Development for |
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purposes of the HOME and Housing Trust Fund programs and |
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multiplying that amount by the appraised value of the property for |
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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 |
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the property. |
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(c) The governing body of a taxing unit that adopts a |
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limitation on increases in appraised value under this section may |
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amend or repeal the limitation. The adoption, amendment, or repeal |
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of a limitation applies beginning with the tax year in which the |
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action is taken if the action is taken before July 1 and takes |
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effect beginning with the following tax year if the action is taken |
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on or after that date. |
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(d) When appraising a residence homestead that is subject to |
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a limitation on increases in appraised value under this section for |
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purposes of taxation of the homestead by the taxing unit that |
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adopted the limitation, the chief 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 |
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(b)(2). |
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(e) Notwithstanding Subsection (b), the appraised value of |
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a residence homestead that is subject to a limitation on increases |
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in appraised value under this section is, for purposes of taxation |
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of the homestead by the taxing unit that adopted the limitation, |
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equal to the lesser of the amount computed under Section 23.23 or |
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the amount computed under Subsection (b). |
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(f) A limitation adopted under Subsection (b) takes effect |
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as to a residence homestead on January 1 of the tax year following |
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the first tax year in which the owner qualifies the property for an |
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exemption under Section 11.13 and the homestead is located in a |
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qualifying census tract. The limitation expires on January 1 of the |
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first tax year in which neither the owner of the property when the |
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limitation took effect nor the owner's spouse or surviving spouse |
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qualifies for an exemption under Section 11.13 or the homestead |
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ceases to be located in a qualifying census tract. |
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(g) Sections 23.23(d), (e), (f), and (g) apply to a |
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limitation under this section in the same manner as those |
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subsections apply to a limitation under Section 23.23. |
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SECTION 3. Section 42.26(d), Tax Code, is amended to read as |
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follows: |
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(d) For purposes of this section, the value of the property |
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subject to the suit and the value of a comparable property or sample |
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property that is used for comparison must be the market value |
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determined by the appraisal district when the property is a |
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residence homestead subject to the limitation on appraised value |
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imposed by Section 23.23 or 23.231. |
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SECTION 4. Section 44.004(c), Education Code, is amended to |
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read as follows: |
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(c) The notice of public meeting to discuss and adopt the |
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budget and the proposed tax rate may not be smaller than one-quarter |
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page of a standard-size or a tabloid-size newspaper, and the |
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headline on the notice must be in 18-point or larger type. Subject |
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to Subsection (d), the notice must: |
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(1) contain a statement in the following form: |
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"NOTICE OF PUBLIC MEETING TO DISCUSS BUDGET AND PROPOSED TAX RATE |
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"The (name of school district) will hold a public meeting at |
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(time, date, year) in (name of room, building, physical location, |
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city, state). The purpose of this meeting is to discuss the school |
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district's budget that will determine the tax rate that will be |
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adopted. Public participation in the discussion is invited." The |
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statement of the purpose of the meeting must be in bold type. In |
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reduced type, the notice must state: "The tax rate that is |
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ultimately adopted at this meeting or at a separate meeting at a |
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later date may not exceed the proposed rate shown below unless the |
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district publishes a revised notice containing the same information |
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and comparisons set out below and holds another public meeting to |
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discuss the revised notice."; |
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(2) contain a section entitled "Comparison of Proposed |
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Budget with Last Year's Budget," which must show the difference, |
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expressed as a percent increase or decrease, as applicable, in the |
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amounts budgeted for the preceding fiscal year and the amount |
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budgeted for the fiscal year that begins in the current tax year for |
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each of the following: |
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(A) maintenance and operations; |
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(B) debt service; and |
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(C) total expenditures; |
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(3) contain a section entitled "Total Appraised Value |
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and Total Taxable Value," which must show the total appraised value |
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and the total taxable value of all property and the total appraised |
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value and the total taxable value of new property taxable by the |
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district in the preceding tax year and the current tax year as |
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calculated under Section 26.04, Tax Code; |
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(4) contain a statement of the total amount of the |
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outstanding and unpaid bonded indebtedness of the school district; |
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(5) contain a section entitled "Comparison of Proposed |
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Rates with Last Year's Rates," which must: |
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(A) show in rows the tax rates described by |
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Subparagraphs (i)-(iii), expressed as amounts per $100 valuation of |
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property, for columns entitled "Maintenance & Operations," |
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"Interest & Sinking Fund," and "Total," which is the sum of |
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"Maintenance & Operations" and "Interest & Sinking Fund": |
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(i) the school district's "Last Year's |
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Rate"; |
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(ii) the "Rate to Maintain Same Level of |
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Maintenance & Operations Revenue & Pay Debt Service," which: |
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(a) in the case of "Maintenance & |
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Operations," is the tax rate that, when applied to the current |
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taxable value for the district, as certified by the chief appraiser |
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under Section 26.01, Tax Code, and as adjusted to reflect changes |
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made by the chief appraiser as of the time the notice is prepared, |
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would impose taxes in an amount that, when added to state funds to |
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be distributed to the district under Chapter 42, would provide the |
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same amount of maintenance and operations taxes and state funds |
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distributed under Chapter 42 per student in average daily |
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attendance for the applicable school year that was available to the |
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district in the preceding school year; and |
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(b) in the case of "Interest & Sinking |
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Fund," is the tax rate that, when applied to the current taxable |
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value for the district, as certified by the chief appraiser under |
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Section 26.01, Tax Code, and as adjusted to reflect changes made by |
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the chief appraiser as of the time the notice is prepared, and when |
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multiplied by the district's anticipated collection rate, would |
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impose taxes in an amount that, when added to state funds to be |
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distributed to the district under Chapter 46 and any excess taxes |
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collected to service the district's debt during the preceding tax |
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year but not used for that purpose during that year, would provide |
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the amount required to service the district's debt; and |
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(iii) the "Proposed Rate"; |
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(B) contain fourth and fifth columns aligned with |
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the columns required by Paragraph (A) that show, for each row |
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required by Paragraph (A): |
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(i) the "Local Revenue per Student," which |
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is computed by multiplying the district's total taxable value of |
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property, as certified by the chief appraiser for the applicable |
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school year under Section 26.01, Tax Code, and as adjusted to |
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reflect changes made by the chief appraiser as of the time the |
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notice is prepared, by the total tax rate, and dividing the product |
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by the number of students in average daily attendance in the |
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district for the applicable school year; and |
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(ii) the "State Revenue per Student," which |
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is computed by determining the amount of state aid received or to be |
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received by the district under Chapters 42, 43, and 46 and dividing |
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that amount by the number of students in average daily attendance in |
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the district for the applicable school year; and |
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(C) contain an asterisk after each calculation |
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for "Interest & Sinking Fund" and a footnote to the section that, in |
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reduced type, states "The Interest & Sinking Fund tax revenue is |
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used to pay for bonded indebtedness on construction, equipment, or |
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both. The bonds, and the tax rate necessary to pay those bonds, |
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were approved by the voters of this district."; |
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(6) contain a section entitled "Comparison of Proposed |
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Levy with Last Year's Levy on Average Residence," which must: |
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(A) show in rows the information described by |
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Subparagraphs (i)-(iv), rounded to the nearest dollar, for columns |
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entitled "Last Year" and "This Year": |
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(i) "Average Market Value of Residences," |
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determined using the same group of residences for each year; |
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(ii) "Average Taxable Value of Residences," |
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determined after taking into account the limitation on the |
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appraised value of residences under Section 23.23 or 23.231, Tax |
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Code, and after subtracting all homestead exemptions applicable in |
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each year, other than exemptions available only to disabled persons |
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or persons 65 years of age or older or their surviving spouses, and |
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using the same group of residences for each year; |
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(iii) "Last Year's Rate Versus Proposed |
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Rate per $100 Value"; and |
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(iv) "Taxes Due on Average Residence," |
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determined using the same group of residences for each year; and |
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(B) contain the following |
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information: "Increase (Decrease) in Taxes" expressed in dollars |
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and cents, which is computed by subtracting the "Taxes Due on |
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Average Residence" for the preceding tax year from the "Taxes Due on |
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Average Residence" for the current tax year; |
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(7) contain the following statement in bold |
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print: "Under state law, the dollar amount of school taxes imposed |
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on the residence of a person 65 years of age or older or of the |
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surviving spouse of such a person, if the surviving spouse was 55 |
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years of age or older when the person died, may not be increased |
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above the amount paid in the first year after the person turned 65, |
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regardless of changes in tax rate or property value."; |
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(8) contain the following statement in bold |
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print: "Notice of Rollback Rate: The highest tax rate the |
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district can adopt before requiring voter approval at an election |
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is (the school district rollback rate determined under Section |
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26.08, Tax Code). This election will be automatically held if the |
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district adopts a rate in excess of the rollback rate of (the school |
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district rollback rate)."; and |
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(9) contain a section entitled "Fund Balances," which |
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must include the estimated amount of interest and sinking fund |
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balances and the estimated amount of maintenance and operation or |
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general fund balances remaining at the end of the current fiscal |
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year that are not encumbered with or by corresponding debt |
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obligation, less estimated funds necessary for the operation of the |
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district before the receipt of the first payment under Chapter 42 in |
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the succeeding school year. |
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SECTION 5. Sections 403.302(d) and (i), Government Code, |
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are amended to read as follows: |
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(d) For the purposes of this section, "taxable value" means |
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the market value of all taxable property less: |
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(1) the total dollar amount of any residence homestead |
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exemptions lawfully granted under Section 11.13(b) or (c), Tax |
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Code, in the year that is the subject of the study for each school |
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district; |
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(2) one-half of the total dollar amount of any |
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residence homestead exemptions granted under Section 11.13(n), Tax |
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Code, in the year that is the subject of the study for each school |
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district; |
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(3) the total dollar amount of any exemptions granted |
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before May 31, 1993, within a reinvestment zone under agreements |
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authorized by Chapter 312, Tax Code; |
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(4) subject to Subsection (e), the total dollar amount |
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of any captured appraised value of property that: |
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(A) is within a reinvestment zone created on or |
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before May 31, 1999, or is proposed to be included within the |
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boundaries of a reinvestment zone as the boundaries of the zone and |
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the proposed portion of tax increment paid into the tax increment |
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fund by a school district are described in a written notification |
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provided by the municipality or the board of directors of the zone |
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to the governing bodies of the other taxing units in the manner |
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provided by former Section 311.003(e), Tax Code, before May 31, |
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1999, and within the boundaries of the zone as those boundaries |
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existed on September 1, 1999, including subsequent improvements to |
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the property regardless of when made; |
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(B) generates taxes paid into a tax increment |
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fund created under Chapter 311, Tax Code, under a reinvestment zone |
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financing plan approved under Section 311.011(d), Tax Code, on or |
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before September 1, 1999; and |
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(C) is eligible for tax increment financing under |
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Chapter 311, Tax Code; |
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(5) the total dollar amount of any captured appraised |
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value of property that: |
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(A) is within a reinvestment zone: |
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(i) created on or before December 31, 2008, |
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by a municipality with a population of less than 18,000; and |
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(ii) the project plan for which includes |
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the alteration, remodeling, repair, or reconstruction of a |
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structure that is included on the National Register of Historic |
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Places and requires that a portion of the tax increment of the zone |
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be used for the improvement or construction of related facilities |
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or for affordable housing; |
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(B) generates school district taxes that are paid |
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into a tax increment fund created under Chapter 311, Tax Code; and |
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(C) is eligible for tax increment financing under |
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Chapter 311, Tax Code; |
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(6) the total dollar amount of any exemptions granted |
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under Section 11.251 or 11.253, Tax Code; |
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(7) the difference between the comptroller's estimate |
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of the market value and the productivity value of land that |
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qualifies for appraisal on the basis of its productive capacity, |
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except that the productivity value estimated by the comptroller may |
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not exceed the fair market value of the land; |
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(8) the portion of the appraised value of residence |
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homesteads of individuals who receive a tax limitation under |
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Section 11.26, Tax Code, on which school district taxes are not |
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imposed in the year that is the subject of the study, calculated as |
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if the residence homesteads were appraised at the full value |
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required by law; |
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(9) a portion of the market value of property not |
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otherwise fully taxable by the district at market value because of: |
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(A) action required by statute or the |
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constitution of this state, other than Section 11.311, Tax Code, |
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that, if the tax rate adopted by the district is applied to it, |
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produces an amount equal to the difference between the tax that the |
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district would have imposed on the property if the property were |
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fully taxable at market value and the tax that the district is |
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actually authorized to impose on the property, if this subsection |
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does not otherwise require that portion to be deducted; or |
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(B) action taken by the district under Subchapter |
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B or C, Chapter 313, Tax Code, before the expiration of the |
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subchapter; |
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(10) the market value of all tangible personal |
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property, other than manufactured homes, owned by a family or |
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individual and not held or used for the production of income; |
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(11) the appraised value of property the collection of |
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delinquent taxes on which is deferred under Section 33.06, Tax |
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Code; |
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(12) the portion of the appraised value of property |
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the collection of delinquent taxes on which is deferred under |
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Section 33.065, Tax Code; and |
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(13) the amount by which the market value of a |
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residence homestead to which Section 23.23 or 23.231, Tax Code, |
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applies exceeds the appraised value of that property as calculated |
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under that section. |
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(i) If the comptroller determines in the study that the |
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market value of property in a school district as determined by the |
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appraisal district that appraises property for the school district, |
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less the total of the amounts and values listed in Subsection (d) as |
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determined by that appraisal district, is valid, the comptroller, |
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in determining the taxable value of property in the school district |
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under Subsection (d), shall for purposes of Subsection (d)(13) |
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subtract from the market value as determined by the appraisal |
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district of residence homesteads to which Section 23.23 or 23.231, |
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Tax Code, applies the amount by which that amount exceeds the |
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appraised value of those properties as calculated by the appraisal |
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district under Section 23.23 or 23.231, Tax Code. If the |
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comptroller determines in the study that the market value of |
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property in a school district as determined by the appraisal |
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district that appraises property for the school district, less the |
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total of the amounts and values listed in Subsection (d) as |
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determined by that appraisal district, is not valid, the |
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comptroller, in determining the taxable value of property in the |
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school district under Subsection (d), shall for purposes of |
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Subsection (d)(13) subtract from the market value as estimated by |
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the comptroller of residence homesteads to which Section 23.23 or |
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23.231, Tax Code, applies the amount by which that amount exceeds |
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the appraised value of those properties as calculated by the |
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appraisal district under Section 23.23 or 23.231, Tax Code. |
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SECTION 6. This Act applies only to the appraisal of certain |
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residence homesteads for ad valorem tax purposes for a tax year that |
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begins on or after the effective date of this Act. |
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SECTION 7. This Act takes effect January 1, 2020, but only |
|
if the constitutional amendment proposed by the 86th Legislature, |
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Regular Session, 2019, to authorize the legislature to permit the |
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governing body of a political subdivision in a county in which home |
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prices are appreciating rapidly to adopt a limitation on increases |
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in the appraised value for purposes of ad valorem taxation by the |
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political subdivision of residence homesteads in certain |
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low-income areas is approved by the voters. If that amendment is |
|
not approved by the voters, this Act has no effect. |