88R364 SMH-D
 
  By: Toth H.B. No. 295
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the limitation on increases in the appraised value of a
  residence homestead for ad valorem tax purposes.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 23.23, Tax Code, is amended by amending
  Subsections (a), (b), and (c) and adding Subsections (a-1), (a-2),
  (a-3), (a-4), (a-5), (a-6), (a-7), (a-8), and (c-2) to read as
  follows:
         (a)  The appraised value of a residence homestead for the
  first tax year that the owner qualifies the property for an
  exemption under Section 11.13 is equal to the market value of the
  property. Notwithstanding Section 23.01, the appraised value of
  the property for each subsequent tax year until the tax year in
  which the limitation provided by this subsection expires is equal
  to the appraised value of the property for the preceding tax year as
  adjusted by the chief appraiser for the current tax year to reflect
  any positive change from the preceding tax year in the purchasing
  power of the dollar for consumers in this state [Notwithstanding
  the requirements of Section 25.18 and regardless of whether the
  appraisal office has appraised the property and determined the
  market value of the property for the tax year, an appraisal office
  may increase the appraised value of a residence homestead for a tax
  year to an amount not to exceed the lesser of:
               [(1)  the market value of the property for the most
  recent tax year that the market value was determined by the
  appraisal office; or
               [(2)  the sum of:
                     [(A)  10 percent of the appraised value of the
  property for the preceding tax year;
                     [(B)  the appraised value of the property for the
  preceding tax year; and
                     [(C)  the market value of all new improvements to
  the property].
         (a-1)  Notwithstanding Subsection (a), if the owner of real
  property qualifies the property for an exemption under Section
  11.13 and the owner acquired the property as a bona fide purchaser
  for value, the purchase price of the property paid by the property
  owner is considered to be the market value of the property for the
  first tax year that the owner qualifies the property for the
  exemption.
         (a-2)  If the first tax year the property owner qualified the
  property for an exemption under Section 11.13 was a tax year before
  the 2024 tax year:
               (1)  the property owner is considered to have qualified
  the property for the exemption for the first time in the 2023 tax
  year; and
               (2)  the appraised value of the property as shown on the
  2023 appraisal roll is considered to be the market value of the
  property for that tax year for purposes of Subsection (a).
         (a-3)  Subsection (a-1) does not apply to a residence
  homestead if:
               (1)  the purchase was made:
                     (A)  pursuant to a court order;
                     (B)  from a trustee in bankruptcy;
                     (C)  by one co-owner from one or more other
  co-owners;
                     (D)  from a spouse or a person or persons within
  the first or second degree of lineal consanguinity of one or more of
  the purchasers; or
                     (E)  from a governmental entity; or
               (2)  the chief appraiser determines that the applicant
  was not a bona fide purchaser for value under criteria established
  by rules adopted by the comptroller for that purpose.
         (a-4)  To receive a limitation on appraised value under
  Subsection (a) computed in accordance with Subsection (a-1), an
  owner of the property must apply for the limitation. To apply for
  the limitation, the owner must file an application with the chief
  appraiser for each appraisal district in which the property subject
  to the claimed limitation is located. The application must be filed
  not later than the latest date on which the owner may file an
  application for an exemption under Section 11.13 on the property
  for the year under Section 11.43. The comptroller by rule shall
  prescribe the form for the application to ensure that the applicant
  provides the information necessary to determine the applicant's
  eligibility for the limitation, including the purchase price of the
  property paid by the applicant.
         (a-5)  An application filed with a chief appraiser under
  Subsection (a-4) is confidential and not open to public inspection.
  The application and the information it contains may not be
  disclosed to another person other than an employee of the appraisal
  district who appraises property, except as provided by Subsection
  (a-6).
         (a-6)  Information that is confidential under Subsection
  (a-5) may be disclosed:
               (1)  in a judicial or administrative proceeding under a
  lawful subpoena;
               (2)  to a purchaser, grantee, seller, or grantor named
  in the application or in the deed to which the application applies
  or to a representative of the purchaser, grantee, seller, or
  grantor under a written authorization signed by the purchaser,
  grantee, seller, or grantor;
               (3)  to the comptroller or to an assessor for a taxing
  unit in which the property described in the application is located;
               (4)  in a judicial or administrative proceeding related
  to real property taxation:
                     (A)  to which the purchaser, grantee, seller, or
  grantor is a party;
                     (B)  to which an owner of the property described
  in the application is a party; or
                     (C)  by the appraisal district for the purpose of
  establishing a value of the property or of providing evidence of
  comparable sales to appraise another property;
               (5)  for statistical purposes if the information is
  provided in a form that does not identify a specific property or
  specific purchaser, grantee, seller, or grantor;
               (6)  if and to the extent that the information is
  required to be included in a public document or record that the
  appraisal office is required to prepare or maintain; or
               (7)  to a taxing unit or its legal representative that
  is engaged in the collection of delinquent taxes on the property
  described in the application.
         (a-7)  Information that is disclosed under Subsection (a-6)
  does not lose its confidential character.
         (a-8)  For each tax year, using the index that the
  comptroller considers to most accurately report changes in the
  purchasing power of the dollar for consumers in this state, the
  comptroller shall determine and publicize the percentage by which
  the appraised value of residence homesteads may be increased under
  Subsection (a). Each chief appraiser shall use the percentage
  determined by the comptroller under this subsection to determine
  the appraised value under Subsection (a) of residence homesteads
  appraised by that chief appraiser.
         (b)  When appraising a residence homestead, the chief
  appraiser shall:
               (1)  appraise the property at its market value; and
               (2)  include in the appraisal records both the market
  value of the property and the amount computed under Subsection (a)
  [(a)(2)].
         (c)  The limitation provided by Subsection (a) takes effect
  as to a residence homestead on January 1 of the first tax year
  [following the first tax year] the owner qualifies the property for
  an exemption under Section 11.13. The limitation expires on
  January 1 of the first tax year that neither the owner of the
  property when the limitation took effect nor the owner's spouse or
  surviving spouse qualifies for an exemption under Section 11.13.
         (c-2)  Notwithstanding Subsection (c), a limitation
  established under Subsection (a) does not expire if a change in
  ownership of the property occurs by inheritance or under a will as
  long as the person who acquires the property qualifies for an
  exemption under Section 11.13.
         SECTION 2.  Sections 23.23(e), (f), and (g), Tax Code, are
  repealed.
         SECTION 3.  This Act applies only to ad valorem taxes imposed
  for a tax year beginning on or after the effective date of this Act.
         SECTION 4.  This Act takes effect January 1, 2024, but only
  if the constitutional amendment proposed by the 88th Legislature,
  Regular Session, 2023, authorizing the legislature to provide that
  the appraised value of a residence homestead for ad valorem tax
  purposes for the first tax year that the owner of the property
  qualifies the property for a residence homestead exemption is the
  market value of the property and that, if the owner purchased the
  property, the purchase price of the property is considered to be the
  market value of the property for that tax year and to limit
  increases in the appraised value of the homestead for subsequent
  tax years based on the inflation rate is approved by the voters. If
  that amendment is not approved by the voters, this Act has no
  effect.