87R2663 CJC-D
 
  By: Pacheco H.B. No. 381
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the establishment of a limitation on the total amount of
  ad valorem taxes that taxing units may impose on the residence
  homesteads of individuals who are disabled or elderly and their
  surviving spouses.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  The heading to Section 11.26, Tax Code, is
  amended to read as follows:
         Sec. 11.26.  LIMITATION OF TAXES [SCHOOL TAX] ON HOMESTEADS
  OF INDIVIDUALS WHO ARE ELDERLY OR DISABLED.
         SECTION 2.  Sections 11.26(a), (a-1), (a-2), (a-3), (b),
  (c), (e), (g), (h), (i), (i-1), (j), (k), and (o), Tax Code, are
  amended to read as follows:
         (a)  The tax officials shall appraise [the] property to which
  this section applies and calculate taxes as on other property, but
  if the tax [so] calculated exceeds the limitation imposed by this
  section, the tax imposed is the amount of the tax as limited by this
  section, except as otherwise provided by this section. A taxing
  unit [school district] may not increase the total annual amount of
  ad valorem tax it imposes on the residence homestead of an
  individual 65 years of age or older or on the residence homestead of
  an individual who is disabled, as defined by Section 11.13, above
  the amount of the tax it imposed in the first tax year in which the
  individual qualified that residence homestead for the applicable
  exemption provided by Section 11.13(c) for an individual who is 65
  years of age or older or is disabled. If the individual qualified
  that residence homestead for the exemption after the beginning of
  that first year and the residence homestead remains eligible for
  the same exemption for the next year, and if the [school district]
  taxes imposed by a taxing unit on the residence homestead in the
  next year are less than the amount of those taxes imposed in that
  first year, the taxing unit [a school district] may not
  subsequently increase the total annual amount of ad valorem taxes
  it imposes on the residence homestead above the amount it imposed in
  the year immediately following the first year for which the
  individual qualified that residence homestead for the same
  exemption, except as provided by Subsection (b). [If the first tax
  year the individual qualified the residence homestead for the
  exemption provided by Section 11.13(c) for individuals 65 years of
  age or older or disabled was a tax year before the 2015 tax year, the
  amount of the limitation provided by this section is the amount of
  tax the school district imposed for the 2014 tax year less an amount
  equal to the amount determined by multiplying $10,000 times the tax
  rate of the school district for the 2015 tax year, plus any 2015 tax
  attributable to improvements made in 2014, other than improvements
  made to comply with governmental regulations or repairs.]
         (a-1)  If the first tax year the individual qualified the
  residence homestead for the exemption provided by Section 11.13(c)
  for individuals 65 years of age or older or disabled was a tax year
  before the 2022 tax year, the amount of the limitation on school
  district taxes provided by this section is the amount of those taxes
  imposed for the 2021 tax year plus any 2022 tax attributable to
  improvements made in 2021, other than improvements made to comply
  with governmental regulations or repairs [Notwithstanding the
  other provisions of this section, if in the 2007 tax year an
  individual qualifies for a limitation on tax increases provided by
  this section on the individual's residence homestead and the first
  tax year the individual or the individual's spouse qualified for an
  exemption under Section 11.13(c) for the same homestead was the
  2006 tax year, the amount of the limitation provided by this section
  on the homestead in the 2007 tax year is equal to the amount
  computed by:
               [(1)  multiplying the amount of tax the school district
  imposed on the homestead in the 2006 tax year by a fraction the
  numerator of which is the tax rate of the district for the 2007 tax
  year and the denominator of which is the tax rate of the district
  for the 2006 tax year; and
               [(2)  adding any tax imposed in the 2007 tax year
  attributable to improvements made in the 2006 tax year as provided
  by Subsection (b) to the lesser of the amount computed under
  Subdivision (1) or the amount of tax the district imposed on the
  homestead in the 2006 tax year].
         (a-2)  If the first tax year the individual qualified the
  residence homestead for the exemption provided by Section 11.13(c)
  for individuals 65 years of age or older or disabled was a tax year
  before the 2022 tax year and the homestead qualified for a
  limitation on county, municipal, or junior college district taxes
  under former Section 11.261, the amount of the limitation on
  county, municipal, or junior college district taxes, as applicable,
  provided by this section is the amount of the tax imposed by the
  applicable taxing unit for the 2021 tax year, plus any 2022 tax
  attributable to improvements made in 2021, other than improvements
  made to comply with governmental regulations or repairs
  [Notwithstanding the other provisions of this section, if in the
  2007 tax year an individual qualifies for a limitation on tax
  increases provided by this section on the individual's residence
  homestead and the first tax year the individual or the individual's
  spouse qualified for an exemption under Section 11.13(c) for the
  same homestead was a tax year before the 2006 tax year, the amount
  of the limitation provided by this section on the homestead in the
  2007 tax year is equal to the amount computed by:
               [(1)  multiplying the amount of tax the school district
  imposed on the homestead in the 2005 tax year by a fraction the
  numerator of which is the tax rate of the district for the 2006 tax
  year and the denominator of which is the tax rate of the district
  for the 2005 tax year;
               [(2)  adding any tax imposed in the 2006 tax year
  attributable to improvements made in the 2005 tax year as provided
  by Subsection (b) to the lesser of the amount computed under
  Subdivision (1) or the amount of tax the district imposed on the
  homestead in the 2005 tax year;
               [(3)  multiplying the amount computed under
  Subdivision (2) by a fraction the numerator of which is the tax rate
  of the district for the 2007 tax year and the denominator of which
  is the tax rate of the district for the 2006 tax year; and
               [(4)  adding to the lesser of the amount computed under
  Subdivision (2) or (3) any tax imposed in the 2007 tax year
  attributable to improvements made in the 2006 tax year, as provided
  by Subsection (b)].
         (a-3)  Except as provided by Subsection (a-2), for the
  purpose of calculating a limitation on tax increases by a taxing
  unit other than a school district under this section, an individual
  who qualified a residence homestead before January 1, 2022, for an
  exemption under Section 11.13(c) for individuals 65 years of age or
  older or disabled is considered to have qualified the homestead for
  that exemption on January 1, 2022 [(b), a limitation on tax
  increases provided by this section on a residence homestead
  computed under Subsection (a-1) or (a-2) continues to apply to the
  homestead in subsequent tax years until the limitation expires].
         (b)  If an individual makes improvements to the individual's
  residence homestead, other than improvements required to comply
  with governmental requirements or repairs, a taxing unit [the
  school district] may increase the tax on the homestead in the first
  year the value of the homestead is increased on the appraisal roll
  because of the enhancement of value by the improvements. The amount
  of the tax increase is determined by applying the taxing unit's
  current tax rate to the difference in the assessed value of the
  homestead with the improvements and the assessed value it would
  have had without the improvements. A limitation under [imposed by]
  this section [then] applies to the increased amount of tax in
  subsequent tax years until more improvements, if any, are made.
         (c)  The limitation on tax increases required by this section
  expires if on January 1:
               (1)  none of the owners of the structure who qualify for
  the exemption under Section 11.13(c) for individuals 65 years of
  age or older or disabled and who owned the structure when the
  limitation first took effect is using the structure as a residence
  homestead; or
               (2)  none of the owners of the structure qualifies for
  the exemption described by Subdivision (1).
         (e)  For each school district participating in an appraisal
  district, the chief appraiser shall determine the portion of the
  appraised value of residence homesteads of individuals on which
  school district taxes are not imposed in a tax year because of the
  limitation on tax increases imposed by this section. That portion
  is calculated by determining the taxable value that, if multiplied
  by the tax rate adopted by the school district for the tax year,
  would produce an amount equal to the amount of tax that would have
  been imposed by the school district on those residence homesteads
  if the limitation on tax increases imposed by this section were not
  in effect, but that was not imposed because of that limitation. The
  chief appraiser shall determine that taxable value and certify it
  to the comptroller as soon as practicable for each tax year.
         (g)  Except as provided by Subsection (b), if an individual
  who receives a limitation on tax increases imposed by this section,
  including a surviving spouse who receives a limitation under
  Subsection (i), subsequently qualifies a different residence
  homestead for the same exemption under Section 11.13, a taxing unit
  [school district] may not impose ad valorem taxes on the
  subsequently qualified homestead in a year in an amount that
  exceeds the amount of taxes the taxing unit [school district] would
  have imposed on the subsequently qualified homestead in the first
  year in which the individual receives that same exemption for the
  subsequently qualified homestead had the limitation on tax
  increases imposed by this section not been in effect, multiplied by
  a fraction the numerator of which is the total amount of [school
  district] taxes imposed by a taxing unit of the same type on the
  former homestead in the last year in which the individual received
  that same exemption for the former homestead and the denominator of
  which is the total amount of [school district] taxes that would have
  been imposed by the taxing unit of the same type on the former
  homestead in the last year in which the individual received that
  same exemption for the former homestead had the limitation on tax
  increases imposed by this section not been in effect. A limitation
  under this subsection does not apply to a taxing unit if the former
  homestead was not subject to taxation by a taxing unit of the same
  type in the last year in which the individual received the exemption
  for the former homestead.
         (h)  An individual who receives a limitation on tax increases
  under this section, including a surviving spouse who receives a
  limitation under Subsection (i), and who subsequently qualifies a
  different residence homestead for an exemption under Section 11.13,
  or an agent of the individual, is entitled to receive from the chief
  appraiser of the appraisal district in which the former homestead
  was located a written certificate providing the information
  necessary to determine whether the individual may qualify for that
  same limitation on the subsequently qualified homestead under
  Subsection (g) and to calculate the amount of taxes the taxing units
  [school district] may impose on the subsequently qualified
  homestead.
         (i)  If an individual who qualifies for the exemption
  provided by Section 11.13(c) for individuals 65 years of age or
  older or disabled dies, the surviving spouse of the individual is
  entitled to the limitation applicable to the residence homestead of
  the individual if:
               (1)  the surviving spouse is 55 years of age or older or
  disabled when the individual dies; and
               (2)  the residence homestead of the individual:
                     (A)  is the residence homestead of the surviving
  spouse on the date that the individual dies; and
                     (B)  remains the residence homestead of the
  surviving spouse.
         (i-1)  A limitation on school district taxes under
  Subsection (i) applicable to the residence homestead of the
  surviving spouse of an individual who was disabled and who died
  before January 1, 2020, is calculated as if the surviving spouse was
  entitled to the limitation when the individual died.
         (j)  If an individual who qualifies for an exemption provided
  by Section 11.13(c) for an individual 65 years of age or older dies
  in the first year in which the individual qualified for the
  exemption and the individual first qualified for the exemption
  after the beginning of that year, except as provided by Subsection
  (k), the amount to which the surviving spouse's [school district]
  taxes imposed by a taxing unit are limited under Subsection (i) is
  the amount of [school district] taxes imposed by the taxing unit on
  the residence homestead in that year determined as if the
  individual qualifying for the exemption had lived for the entire
  year.
         (k)  If in the first tax year after the year in which an
  individual dies in the circumstances described by Subsection (j)
  the amount of [school district] taxes imposed by a taxing unit on
  the residence homestead of the surviving spouse is less than the
  amount of [school district] taxes imposed by the taxing unit in the
  preceding year as limited by Subsection (j), in a subsequent tax
  year the [surviving spouse's school district] taxes imposed by that
  taxing unit on that residence homestead are limited to the amount of
  taxes imposed by the district in that first tax year after the year
  in which the individual dies.
         (o)  Notwithstanding Subsections (a)[, (a-3),] and (b), an
  improvement to property that would otherwise constitute an
  improvement under Subsection (b) is not treated as an improvement
  under that subsection if the improvement is a replacement structure
  for a structure that was rendered uninhabitable or unusable by a
  casualty or by wind or water damage. For purposes of appraising the
  property in the tax year in which the structure would have
  constituted an improvement under Subsection (b), the replacement
  structure is considered to be an improvement under that subsection
  only if:
               (1)  the square footage of the replacement structure
  exceeds that of the replaced structure as that structure existed
  before the casualty or damage occurred; or
               (2)  the exterior of the replacement structure is of
  higher quality construction and composition than that of the
  replaced structure.
         SECTION 3.  Sections 23.19(b) and (g), Tax Code, are amended
  to read as follows:
         (b)  If an appraisal district receives a written request for
  the appraisal of real property and improvements of a cooperative
  housing corporation according to the separate interests of the
  corporation's stockholders, the chief appraiser shall separately
  appraise the interests described by Subsection (d) if the
  conditions required by Subsections (e) and (f) have been met.
  Separate appraisal under this section is for the purposes of
  administration of tax exemptions, determination of applicable
  limitations of taxes under Section 11.26 [or 11.261], and
  apportionment by a cooperative housing corporation of property
  taxes among its stockholders but is not the basis for determining
  value on which a tax is imposed under this title. A stockholder
  whose interest is separately appraised under this section may
  protest and appeal the appraised value in the manner provided by
  this title for protest and appeal of the appraised value of other
  property.
         (g)  A tax bill or a separate statement accompanying the tax
  bill to a cooperative housing corporation for which interests of
  stockholders are separately appraised under this section must
  state, in addition to the information required by Section 31.01,
  the appraised value and taxable value of each interest separately
  appraised. Each exemption claimed as provided by this title by a
  person entitled to the exemption shall also be deducted from the
  total appraised value of the property of the corporation. The total
  tax imposed by a taxing unit [school district, county,
  municipality, or junior college district] shall be reduced by any
  amount that represents an increase in taxes attributable to
  separately appraised interests of the real property and
  improvements that are subject to a [the] limitation of taxes
  prescribed by Section 11.26 [or 11.261]. The corporation shall
  apportion among its stockholders liability for reimbursing the
  corporation for property taxes according to the relative taxable
  values of their interests.
         SECTION 4.  Sections 26.012(6), (13), and (14), Tax Code,
  are amended to read as follows:
               (6)  "Current total value" means the total taxable
  value of property listed on the appraisal roll for the current year,
  including all appraisal roll supplements and corrections as of the
  date of the calculation, less the taxable value of property
  exempted for the current tax year for the first time under Section
  11.31 or 11.315, except that:
                     (A)  the current total value for a school district
  excludes:
                           (i)  the total value of homesteads that
  qualify for a tax limitation as provided by Section 11.26; and
                           (ii)  new property value of property that is
  subject to an agreement entered into under Chapter 313; and
                     (B)  the current total value for a taxing unit
  other than a school district [county, municipality, or junior
  college district] excludes the total value of homesteads that
  qualify for a tax limitation provided by Section 11.26 [11.261].
               (13)  "Last year's levy" means the total of:
                     (A)  the amount of taxes that would be generated
  by multiplying the total tax rate adopted by the governing body in
  the preceding year by the total taxable value of property on the
  appraisal roll for the preceding year, including:
                           (i)  taxable value that was reduced in an
  appeal under Chapter 42;
                           (ii)  all appraisal roll supplements and
  corrections other than corrections made pursuant to Section
  25.25(d), as of the date of the calculation but excluding[, except
  that last year's taxable value for a school district excludes] the
  total value of homesteads that qualified for a tax limitation as
  provided by Section 11.26 [and last year's taxable value for a
  county, municipality, or junior college district excludes the total
  value of homesteads that qualified for a tax limitation as provided
  by Section 11.261]; and
                           (iii)  the portion of taxable value of
  property that is the subject of an appeal under Chapter 42 on July
  25 that is not in dispute; and
                     (B)  the amount of taxes refunded by the taxing
  unit in the preceding year for tax years before that year.
               (14)  "Last year's total value" means the total taxable
  value of property listed on the appraisal roll for the preceding
  year, including all appraisal roll supplements and corrections,
  other than corrections made pursuant to Section 25.25(d), as of the
  date of the calculation but excluding[, except that:
                     [(A)  last year's taxable value for a school
  district excludes] the total value of homesteads that qualified for
  a tax limitation as provided by Section 11.26[; and
                     [(B)  last year's taxable value for a county,
  municipality, or junior college district excludes the total value
  of homesteads that qualified for a tax limitation as provided by
  Section 11.261].
         SECTION 5.  The following provisions of the Tax Code are
  repealed:
               (1)  Sections 11.26(l) and (m); and
               (2)  Section 11.261.
         SECTION 6.  Section 11.26, Tax Code, as amended by this Act,
  applies only to ad valorem taxes imposed for a tax year beginning on
  or after the effective date of this Act.
         SECTION 7.  This Act takes effect January 1, 2022, but only
  if the constitutional amendment proposed by the 87th Legislature,
  Regular Session, 2021, establishing a limitation on the total
  amount of ad valorem taxes that political subdivisions may impose
  on the residence homesteads of individuals who are disabled or
  elderly and their surviving spouses is approved by the voters. If
  that constitutional amendment is not approved by the voters, this
  Act has no effect.