88R2202 CJC-D
 
  By: Schofield H.B. No. 402
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to the establishment of a limitation on the total amount of
  ad valorem taxes that certain 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 11.261, Tax Code, is
  amended to read as follows:
         Sec. 11.261.  LIMITATION OF TAX IMPOSED BY TAXING UNIT OTHER
  THAN SCHOOL DISTRICT [COUNTY, MUNICIPAL, OR JUNIOR COLLEGE DISTRICT
  TAX] ON HOMESTEADS OF INDIVIDUALS WHO ARE DISABLED OR [AND]
  ELDERLY.
         SECTION 2.  Section 11.261, Tax Code, is amended by amending
  Subsections (a), (b), (c), (d), (e), (f), (g), (h), (i), (j), (k),
  and (l) and adding Subsections (b-1) and (b-2) to read as follows:
         (a)  This section applies only to a taxing unit other than a
  school district [county, municipality, or junior college district
  that has established a limitation on the total amount of taxes that
  may be imposed by the county, municipality, or junior college
  district on the residence homestead of a disabled individual or an
  individual 65 years of age or older under Section 1-b(h), Article
  VIII, Texas Constitution].
         (b)  The tax officials shall appraise the property to which
  this section [the limitation] applies and calculate taxes as on
  other property, but if the tax so calculated exceeds the limitation
  required [provided] by this section, the tax imposed by a taxing
  unit is the amount of the tax as limited by this section, except as
  otherwise provided by this section. A taxing unit [The county,
  municipality, or junior college district] may not increase the
  total annual amount of ad valorem taxes the taxing unit [county,
  municipality, or junior college district] imposes on the residence
  homestead of an individual who is [a] disabled [individual] or is
  [an individual] 65 years of age or older above the amount of the
  taxes the taxing unit [county, municipality, or junior college
  district] imposed on the residence homestead in the first tax
  year[, other than a tax year preceding the tax year in which the
  county, municipality, or junior college district established the
  limitation described by Subsection (a),] in which the individual
  qualified that residence homestead for the exemption provided by
  Section 11.13(c) for an individual who is [a] disabled [individual]
  or is [an individual] 65 years of age or older. 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 exemption for the next year, and if the [county,
  municipal, or junior college district] taxes imposed by the taxing
  unit on the residence homestead in the next year are less than the
  amount of taxes imposed in that first year, the taxing unit [a
  county, municipality, or junior college district] may not
  subsequently increase the total annual amount of ad valorem taxes
  it imposes on the residence homestead above the amount it imposed on
  the residence homestead in the year immediately following the first
  year[, other than a tax year preceding the tax year in which the
  county, municipality, or junior college district established the
  limitation described by Subsection (a),] for which the individual
  qualified that residence homestead for the exemption.
         (b-1)  If the first tax year the individual qualified the
  residence homestead for the exemption provided by Section 11.13(c)
  for individuals who are disabled or are 65 years of age or older was
  a tax year before the 2024 tax year and the homestead qualified for
  a limitation on county, municipal, or junior college district taxes
  under this section for that tax year, the amount of the limitation
  on county, municipal, or junior college district taxes, as
  applicable, required by this section is the amount of the tax
  imposed by the applicable taxing unit for the 2023 tax year, plus
  any 2024 tax attributable to improvements made in 2023, other than
  improvements made to comply with governmental regulations or
  repairs.
         (b-2)  Except as provided by Subsection (b-1), for the
  purpose of calculating a limitation on tax increases by a taxing
  unit under this section, an individual who qualified a residence
  homestead before January 1, 2024, for an exemption under Section
  11.13(c) for individuals who are disabled or are 65 years of age or
  older is considered to have qualified the homestead for that
  exemption on January 1, 2024.
         (c)  If an individual makes improvements to the individual's
  residence homestead, other than repairs and other than improvements
  required to comply with governmental requirements, the taxing unit
  [county, municipality, or junior college district] may increase the
  amount of taxes 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 current tax rate to the
  difference between the appraised value of the homestead with the
  improvements and the appraised value the homestead [it] would have
  had without the improvements. The [A] limitation required
  [provided] by this section then applies to the increased amount of
  [county, municipal, or junior college district] taxes on the
  residence homestead until more improvements, if any, are made.
         (d)  A limitation on [county, municipal, or junior college
  district] tax increases by a taxing unit required [provided] by
  this section expires if on January 1:
               (1)  none of the owners of the structure who qualify for
  the exemption provided by Section 11.13(c) for an individual who is
  [a] disabled [individual] or is [an individual] 65 years of age or
  older and who owned the structure when the limitation [provided by
  this section] first took effect is using the structure as a
  residence homestead; or
               (2)  none of the owners of the structure qualifies for
  the exemption provided by Section 11.13(c) for an individual who is
  [a] disabled [individual] or is [an individual] 65 years of age or
  older.
         (e)  If the appraisal roll provides for taxation of appraised
  value for a prior year because a residence homestead exemption for
  an individual who is disabled [individuals] or is [individuals] 65
  years of age or older was erroneously allowed, the tax assessor for
  the applicable taxing unit [county, municipality, or junior college
  district] shall add, as back taxes due as provided by Section
  26.09(d), the positive difference, if any, between the tax that
  should have been imposed for that year and the tax that was imposed
  because of the provisions of this section.
         (f)  A limitation on tax increases by a taxing unit required
  [provided] by this section does not expire because the owner of an
  interest in the structure conveys the interest to a qualifying
  trust as defined by Section 11.13(j) if the owner or the owner's
  spouse is a trustor of the trust and is entitled to occupy the
  structure.
         (g)  Except as provided by Subsection (c), if an individual
  who receives a limitation on [county, municipal, or junior college
  district] tax increases by a taxing unit required [provided] by
  this section subsequently qualifies a different residence
  homestead in the same taxing unit [county, municipality, or junior
  college district] for an exemption under Section 11.13, the taxing
  unit [county, municipality, or junior college 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
  [county, municipality, or junior college district] would have
  imposed on the subsequently qualified homestead in the first year
  in which the individual receives that exemption for the
  subsequently qualified homestead had the limitation on tax
  increases required [provided] by this section not been in effect,
  multiplied by a fraction the numerator of which is the total amount
  of taxes the taxing unit [county, municipality, or junior college
  district] imposed on the former homestead in the last year in which
  the individual received that exemption for the former homestead and
  the denominator of which is the total amount of taxes the taxing
  unit [county, municipality, or junior college district] would have
  imposed on the former homestead in the last year in which the
  individual received that exemption for the former homestead had the
  limitation on tax increases required [provided] by this section not
  been in effect.
         (h)  An individual who receives a limitation on [county,
  municipal, or junior college district] tax increases by a taxing
  unit under this section and who subsequently qualifies a different
  residence homestead in the same taxing unit [county, municipality,
  or junior college district] 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 a
  limitation on the subsequently qualified homestead under
  Subsection (g) and to calculate the amount of taxes the taxing unit
  [county, municipality, or junior college district] may impose on
  the subsequently qualified homestead.
         (i)  If an individual who qualifies for a limitation on
  [county, municipal, or junior college district] tax increases by a
  taxing unit under this section dies, the surviving spouse of the
  individual is entitled to the limitation on taxes imposed by the
  taxing unit [county, municipality, or junior college district] on
  the residence homestead of the individual if:
               (1)  the surviving spouse is disabled or is 55 years of
  age or older 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.
         (j)  If an individual who is 65 years of age or older and
  qualifies for a limitation on [county, municipal, or junior college
  district] tax increases for the elderly under this section dies in
  the first year in which the individual qualified for the limitation
  and the individual first qualified for the limitation after the
  beginning of that year, except as provided by Subsection (k), the
  amount to which the surviving spouse's [county, municipal, or
  junior college district] taxes are limited under Subsection (i) is
  the amount of taxes imposed by the taxing unit to which the
  limitation applies [county, municipality, or junior college
  district, as applicable,] 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 who is 65 years of age or older dies under the
  circumstances described by Subsection (j) the amount of taxes
  imposed by a taxing unit [county, municipality, or junior college
  district] on the residence homestead of the surviving spouse is
  less than the amount of taxes imposed by the taxing unit [county,
  municipality, or junior college district] in the preceding year as
  limited by Subsection (j), in a subsequent tax year the surviving
  spouse's taxes imposed by the taxing unit [county, municipality, or
  junior college district] on that residence homestead are limited to
  the amount of taxes imposed by the taxing unit [county,
  municipality, or junior college district] in that first tax year
  after the year in which the individual dies.
         (l)  Notwithstanding Subsection (d), a limitation on
  [county, municipal, or junior college district] tax increases by a
  taxing unit required [provided] by this section does not expire if
  the owner of the structure qualifies for an exemption under Section
  11.13 under the circumstances described by Section 11.135(a).
         SECTION 3.  Section 23.19(g), Tax Code, is amended to read as
  follows:
         (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 school district or other taxing unit [, 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 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 as provided by Section 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, 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 taxing unit other
  than a school district [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, 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 taxing unit
  other than a school district [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.  This Act applies only to ad valorem taxes imposed
  for a tax year beginning on or after the effective date of this Act.
         SECTION 6.  This Act takes effect January 1, 2024, but only
  if the constitutional amendment proposed by the 88th Legislature,
  Regular Session, 2023, establishing a limitation on the total
  amount of ad valorem taxes that certain political subdivisions may
  impose on the residence homesteads of persons who are disabled or
  elderly and their surviving spouses is approved by the voters. If
  that amendment is not approved by the voters, this Act has no
  effect.