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A BILL TO BE ENTITLED
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AN ACT
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relating to a limitation on the appraised value of certain rapidly |
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appreciating residence homesteads in specified areas for ad valorem |
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tax purposes. |
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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 RAPIDLY |
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APPRECIATING RESIDENCE HOMESTEADS IN SPECIFIED AREAS. (a) In this |
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section: |
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(1) "Census tract" means the geographic area |
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identified as a "tract" on the 2010 Census TIGER/Line Shapefiles, |
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prepared by the federal Bureau of the Census for the Twenty-third |
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Decennial Census of the United States, enumerated as of April 1, |
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2010. |
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(2) "Disaster recovery program" means the disaster |
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recovery program administered by the General Land Office or by a |
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political subdivision of this state that is funded with community |
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development block grant disaster recovery money authorized by |
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federal law. |
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(3) "New improvement" means an improvement to a |
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rapidly appreciating residence homestead made after the most recent |
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appraisal of the property that increases the market value of the |
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property and the value of which is not included in the appraised |
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value of the property for the preceding tax year. The term does not |
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include repairs to or ordinary maintenance of an existing structure |
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or the grounds or another feature of the property. |
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(4) "Rapidly appreciating residence homestead" means |
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real property: |
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(A) that is a residence homestead; |
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(B) for which the owner was granted a residence |
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homestead exemption in the 2017, 2018, 2019, 2020, 2021, 2022, |
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2023, and 2024 tax years; and |
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(C) for which the market value for the 2024 tax |
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year is at least 25 percent higher than the market value of the |
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property for the 2017 tax year. |
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(5) "Residence homestead" has the meaning assigned by |
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Section 11.13. |
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(b) This section applies only to property located in Dallas |
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County census tract 004300, 010101, 010102, 010500, 010601, 010602, |
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or 020500. |
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(c) Notwithstanding the requirements of Sections 23.23 and |
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25.18, and regardless of whether the appraisal office has appraised |
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the property and determined the market value of the property for the |
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tax year, an appraisal office may increase the appraised value of a |
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rapidly appreciating residence homestead for a tax year to an |
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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 appraised value of the property for the |
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2017 tax year; and |
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(B) the market value of all new improvements to |
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the property. |
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(d) When appraising a rapidly appreciating residence |
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homestead, 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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(c)(2). |
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(e) The limitation provided by Subsection (c) expires on |
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January 1 of the first tax year that neither the owner of the |
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property when the limitation took effect nor the owner's spouse or |
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surviving spouse qualifies for an exemption under Section 11.13. |
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(f) This section does not apply to property appraised under |
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Subchapter C, D, E, F, or G. |
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(g) Notwithstanding Subsection (c), and except as provided |
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by Subdivision (2), an improvement to property that would otherwise |
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constitute a new improvement is not treated as a new improvement if |
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the improvement is a replacement structure for a structure that was |
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rendered uninhabitable or unusable by a casualty or by wind, fire, |
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or water damage. For purposes of appraising the property under |
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Subsection (c) in the tax year in which the structure would have |
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constituted a new improvement: |
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(1) the appraised value the property would have had in |
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the preceding tax year if the casualty or damage had not occurred is |
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considered to be the appraised value of the property for that year, |
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regardless of whether that appraised value exceeds the actual |
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appraised value of the property for that year as limited by |
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Subsection (c); and |
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(2) the replacement structure is considered to be a |
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new improvement only if: |
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(A) the square footage of the replacement |
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structure exceeds that of the replaced structure as that structure |
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existed before the casualty or damage occurred; or |
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(B) the exterior of the replacement structure is |
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of higher quality construction and composition than that of the |
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replaced structure. |
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(h) Notwithstanding Subsection (g)(2), and only to the |
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extent necessary to satisfy the requirements of the disaster |
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recovery program, a replacement structure described by that |
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subdivision is not considered to be a new improvement if to satisfy |
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the requirements of the disaster recovery program it was necessary |
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that: |
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(1) the square footage of the replacement structure |
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exceed that of the replaced structure as that structure existed |
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before the casualty or damage occurred; or |
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(2) the exterior of the replacement structure be of |
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higher quality construction and composition than that of the |
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replaced structure. |
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SECTION 3. Section 25.19(b), Tax Code, as effective January |
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1, 2022, is amended to read as follows: |
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(b) The chief appraiser shall separate real from personal |
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property and include in the notice for each: |
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(1) a list of the taxing units in which the property is |
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taxable; |
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(2) the appraised value of the property in the |
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preceding year; |
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(3) the taxable value of the property in the preceding |
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year for each taxing unit taxing the property; |
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(4) the appraised value of the property for the |
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current year, the kind and amount of each exemption and partial |
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exemption, if any, approved for the property for the current year |
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and for the preceding year, and, if an exemption or partial |
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exemption that was approved for the preceding year was canceled or |
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reduced for the current year, the amount of the exemption or partial |
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exemption canceled or reduced; |
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(4-a) a statement of whether the property qualifies |
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for a limitation on appraised value adopted under Section 23.231; |
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(5) in italic typeface, the following statement: "The |
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Texas Legislature does not set the amount of your local |
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taxes. Your property tax burden is decided by your locally elected |
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officials, and all inquiries concerning your taxes should be |
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directed to those officials"; |
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(6) a detailed explanation of the time and procedure |
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for protesting the value; |
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(7) the date and place the appraisal review board will |
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begin hearing protests; and |
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(8) a brief explanation that the governing body of |
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each taxing unit decides whether or not taxes on the property will |
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increase and the appraisal district only determines the value of |
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the property. |
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SECTION 4. Section 25.19(g), Tax Code, is amended to read as |
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follows: |
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(g) By April 1 or as soon thereafter as practicable if the |
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property is a single-family residence that qualifies for an |
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exemption under Section 11.13, or by May 1 or as soon thereafter as |
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practicable in connection with any other property, the chief |
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appraiser shall deliver a written notice to the owner of each |
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property not included in a notice required to be delivered under |
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Subsection (a), if the property was reappraised in the current tax |
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year, if the ownership of the property changed during the preceding |
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year, or if the property owner or the agent of a property owner |
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authorized under Section 1.111 makes a written request for the |
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notice. The chief appraiser shall separate real from personal |
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property and include in the notice for each property: |
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(1) the appraised value of the property in the |
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preceding year; |
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(2) the appraised value of the property for the |
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current year and the kind of each partial exemption, if any, |
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approved for the current year; |
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(2-a) a statement of whether the property qualifies |
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for a limitation on appraised value adopted under Section 23.231; |
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(3) a detailed explanation of the time and procedure |
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for protesting the value; and |
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(4) the date and place the appraisal review board will |
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begin hearing protests. |
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SECTION 5. Section 41.41(a), Tax Code, is amended to read as |
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follows: |
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(a) A property owner is entitled to protest before the |
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appraisal review board the following actions: |
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(1) determination of the appraised value of the |
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owner's property or, in the case of land appraised as provided by |
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Subchapter C, D, E, or H, Chapter 23, determination of its appraised |
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or market value; |
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(2) unequal appraisal of the owner's property; |
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(3) inclusion of the owner's property on the appraisal |
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records; |
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(4) denial to the property owner in whole or in part of |
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a partial exemption; |
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(4-a) determination that the owner's property does not |
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qualify for a limitation on appraised value adopted under Section |
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23.231; |
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(5) determination that the owner's land does not |
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qualify for appraisal as provided by Subchapter C, D, E, or H, |
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Chapter 23; |
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(6) identification of the taxing units in which the |
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owner's property is taxable in the case of the appraisal district's |
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appraisal roll; |
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(7) determination that the property owner is the owner |
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of property; |
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(8) a determination that a change in use of land |
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appraised under Subchapter C, D, E, or H, Chapter 23, has occurred; |
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or |
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(9) any other action of the chief appraiser, appraisal |
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district, or appraisal review board that applies to and adversely |
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affects the property owner. |
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SECTION 6. 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 7. This Act applies only to the appraisal of |
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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 8. This Act takes effect January 1, 2024, but only |
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if a constitutional amendment proposed by the 88th Legislature, |
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Regular Session, 2023, to authorize the legislature to limit the |
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maximum appraised value of certain rapidly appreciating residence |
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homesteads in specified areas for ad valorem tax purposes is |
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approved by the voters. If such an amendment is not approved by the |
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voters, this Act has no effect. |