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A BILL TO BE ENTITLED
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AN ACT
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relating to the limitation on the total amount of ad valorem taxes |
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that a school district may impose on the residence homestead of an |
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individual and the surviving spouse of the individual if the |
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individual qualifies the property as the individual's residence |
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homestead for at least 20 consecutive tax years. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by |
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adding Section 11.262 to read as follows: |
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Sec. 11.262. LIMITATION OF TAXES ON HOMESTEADS FOLLOWING |
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CERTAIN PERIOD. (a) In this section, "residence homestead" has the |
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meaning assigned by Section 11.13. |
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(b) The chief appraiser shall appraise, and the tax assessor |
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for each school district shall calculate the taxes on, each |
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residence homestead in the manner provided by law for other |
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property. |
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(c) Except as provided by Subsection (h), if an individual |
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qualifies property as the individual's residence homestead for at |
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least 20 consecutive tax years, a school district may not impose |
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taxes on that residence homestead in a subsequent tax year in an |
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amount that exceeds the least of the following amounts: |
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(1) the amount of school taxes calculated for the |
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current tax year under Subsection (b); |
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(2) the amount of school taxes imposed for that 20th |
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tax year; or |
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(3) the amount of school taxes as limited under |
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Section 11.26, as applicable. |
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(d) For purposes of this section, if the first tax year an |
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individual qualified property as the individual's residence |
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homestead was a tax year before the 2005 tax year, the individual is |
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considered to have qualified the property as the individual's |
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residence homestead for the first time in the 2005 tax year. |
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(e) If an individual who qualifies for a limitation under |
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this section dies, the surviving spouse of the individual is |
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entitled to continue receiving the limitation applicable to the |
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residence homestead of the individual if the property: |
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(1) is the residence homestead of the surviving spouse |
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on the date that the individual dies; and |
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(2) remains the residence homestead of the surviving |
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spouse. |
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(f) Except as provided by Subsection (e) or (g), a |
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limitation under this section expires on January 1 if the property |
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is not the residence homestead of the individual entitled to the |
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limitation for the preceding tax year. |
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(g) A limitation under this section does not expire if: |
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(1) an owner of an interest in the residence homestead |
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conveys the interest to a qualifying trust as defined by Section |
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11.13(j) and the owner or the owner's spouse is: |
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(A) a trustor of the trust; and |
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(B) entitled to occupy the property; or |
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(2) the owner of the structure qualifies for an |
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exemption under Section 11.13 under the circumstances described by |
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Section 11.135(a). |
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(h) Except as provided by Subsection (i), a school district |
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may increase the tax on a residence homestead subject to a |
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limitation under this section in the first year the appraised value |
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of the property is increased as the result of an improvement made to |
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the property in the preceding tax year. The amount of the tax |
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increase is determined by applying the current tax rate of the |
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school district to the difference in the taxable value of the |
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property with the improvement and the taxable value the property |
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would have had without the improvement. A limitation imposed by |
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this section then applies to the increased amount of tax until |
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another improvement is made to the property. |
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(i) An improvement to a residence homestead is not treated |
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as an improvement under Subsection (h) if the improvement is: |
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(1) a repair; |
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(2) required to be made to comply with a governmental |
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requirement; or |
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(3) subject to Subsection (j), a replacement structure |
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for a structure that was rendered uninhabitable or unusable by a |
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casualty or by wind or water damage. |
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(j) A replacement structure described by Subsection (i)(3) |
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is considered to be an improvement under Subsection (h) only if: |
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(1) the square footage of the replacement structure |
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exceeds the square footage of the replaced structure as the |
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replaced structure existed before the casualty or damage occurred; |
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or |
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(2) the exterior of the replacement structure is of |
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higher quality construction and composition than that of the |
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replaced structure. |
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(k) If the appraisal roll provides for taxation of appraised |
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value for a prior year because a limitation under this section was |
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erroneously allowed, the tax assessor for the school district shall |
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add as back taxes due, as provided by Section 26.09(d), the positive |
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difference, if any, between the tax that should have been imposed |
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for that tax year and the tax that was imposed because of the |
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provisions of this section. |
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(l) For each school district in an appraisal district, the |
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chief appraiser shall determine the portion of the appraised value |
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of residence homesteads of individuals on which school district |
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taxes are not imposed in a tax year because of the limitation under |
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this section. That portion is calculated by determining the |
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taxable value that, if multiplied by the tax rate adopted by the |
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school district for the tax year, would produce an amount equal to |
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the amount of tax that would have been imposed by the school |
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district on those properties if the limitation under this section |
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were not in effect, but that was not imposed because of that |
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limitation. The chief appraiser shall determine that taxable value |
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and certify it to the comptroller as soon as practicable for each |
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tax year. |
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SECTION 2. Sections 23.19(b) and (g), Tax Code, are amended |
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to read as follows: |
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(b) If an appraisal district receives a written request for |
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the appraisal of real property and improvements of a cooperative |
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housing corporation according to the separate interests of the |
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corporation's stockholders, the chief appraiser shall separately |
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appraise the interests described by Subsection (d) if the |
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conditions required by Subsections (e) and (f) have been met. |
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Separate appraisal under this section is for the purposes of |
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administration of tax exemptions, determination of applicable |
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limitations of taxes under Section 11.26, [or] 11.261, or 11.262, |
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and apportionment by a cooperative housing corporation of property |
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taxes among its stockholders but is not the basis for determining |
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value on which a tax is imposed under this title. A stockholder |
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whose interest is separately appraised under this section may |
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protest and appeal the appraised value in the manner provided by |
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this title for protest and appeal of the appraised value of other |
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property. |
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(g) A tax bill or a separate statement accompanying the tax |
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bill to a cooperative housing corporation for which interests of |
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stockholders are separately appraised under this section must |
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state, in addition to the information required by Section 31.01, |
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the appraised value and taxable value of each interest separately |
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appraised. Each exemption claimed as provided by this title by a |
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person entitled to the exemption shall also be deducted from the |
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total appraised value of the property of the corporation. The total |
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tax imposed by a school district, county, municipality, or junior |
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college district shall be reduced by any amount that represents an |
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increase in taxes attributable to separately appraised interests of |
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the real property and improvements that are subject to the |
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limitation of taxes prescribed by Section 11.26, [or] 11.261, or |
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11.262. The corporation shall apportion among its stockholders |
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liability for reimbursing the corporation for property taxes |
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according to the relative taxable values of their interests. |
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SECTION 3. Sections 26.012(6), (13), and (14), Tax Code, |
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are amended to read as follows: |
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(6) "Current total value" means the total taxable |
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value of property listed on the appraisal roll for the current year, |
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including all appraisal roll supplements and corrections as of the |
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date of the calculation, less the taxable value of property |
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exempted for the current tax year for the first time under Section |
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11.31 or 11.315, except that: |
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(A) the current total value for a school district |
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excludes: |
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(i) the total value of homesteads that |
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qualify for a tax limitation as provided by Sections [Section] |
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11.26 and 11.262; and |
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(ii) new property value of property that is |
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subject to an agreement entered into under Chapter 313; and |
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(B) the current total value for a county, |
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municipality, or junior college district excludes the total value |
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of homesteads that qualify for a tax limitation provided by Section |
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11.261. |
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(13) "Last year's levy" means the total of: |
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(A) the amount of taxes that would be generated |
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by multiplying the total tax rate adopted by the governing body in |
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the preceding year by the total taxable value of property on the |
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appraisal roll for the preceding year, including: |
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(i) taxable value that was reduced in an |
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appeal under Chapter 42; |
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(ii) all appraisal roll supplements and |
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corrections other than corrections made pursuant to Section |
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25.25(d), as of the date of the calculation, except that last year's |
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taxable value for a school district excludes the total value of |
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homesteads that qualified for a tax limitation as provided by |
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Sections [Section] 11.26 and 11.262 and last year's taxable value |
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for a county, municipality, or junior college district excludes the |
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total value of homesteads that qualified for a tax limitation as |
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provided by Section 11.261; and |
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(iii) the portion of taxable value of |
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property that is the subject of an appeal under Chapter 42 on July |
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25 that is not in dispute; and |
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(B) the amount of taxes refunded by the taxing |
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unit in the preceding year for tax years before that year. |
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(14) "Last year's total value" means the total taxable |
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value of property listed on the appraisal roll for the preceding |
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year, including all appraisal roll supplements and corrections, |
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other than corrections made pursuant to Section 25.25(d), as of the |
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date of the calculation, except that: |
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(A) last year's taxable value for a school |
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district excludes the total value of homesteads that qualified for |
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a tax limitation as provided by Sections [Section] 11.26 and |
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11.262; and |
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(B) last year's taxable value for a county, |
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municipality, or junior college district excludes the total value |
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of homesteads that qualified for a tax limitation as provided by |
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Section 11.261. |
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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." In addition, in reduced type, the |
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notice must state: "Visit Texas.gov/PropertyTaxes to find a link to |
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your local property tax database on which you can easily access |
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information regarding your property taxes, including information |
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about proposed tax rates and scheduled public hearings of each |
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entity that taxes your property."; |
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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 48, would provide the |
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same amount of maintenance and operations taxes and state funds |
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distributed under Chapter 48 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 43, 46, and 48 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, Tax Code, and |
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after subtracting all homestead exemptions applicable in each year, |
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other than exemptions available only to disabled persons or persons |
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65 years of age or older or their surviving spouses, and using the |
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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 information: "Increase |
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(Decrease) in Taxes" expressed in dollars and cents, which is |
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computed by subtracting the "Taxes Due on Average Residence" for |
|
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the preceding tax year from the "Taxes Due on Average Residence" for |
|
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the current tax year; |
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(7) contain the following statement in bold print: |
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"Under state law, the dollar amount of school taxes imposed on the |
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residence of a person 65 years of age or older or of the surviving |
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spouse of such a person, if the surviving spouse was 55 years of age |
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or older when the person died, may not be increased above the amount |
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paid in the first year after the person turned 65, regardless of |
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changes in tax rate or property value."; |
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(8) contain the following statement in bold print: |
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"Notice of Voter-Approval Rate: The highest tax rate the district |
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can adopt before requiring voter approval at an election is (the |
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school district voter-approval 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 voter-approval rate of (the |
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school district voter-approval 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 |
|
|
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 |
|
|
obligation, less estimated funds necessary for the operation of the |
|
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district before the receipt of the first payment under Chapter 48 in |
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the succeeding school year; and |
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(10) contain the following statement in bold print: |
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"Under state law, the dollar amount of school taxes imposed on a |
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residence homestead that qualifies as the owner's residence |
|
|
homestead for at least 20 consecutive years may not be increased |
|
|
above the amount of school taxes imposed on the property in that |
|
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20th consecutive year, regardless of changes in tax rate or |
|
|
property value."[.] |
|
|
SECTION 5. Section 403.302(d), Government Code, is amended |
|
|
to read as follows: |
|
|
(d) For the purposes of this section, "taxable value" means |
|
|
the market value of all taxable property less: |
|
|
(1) the total dollar amount of any residence homestead |
|
|
exemptions lawfully granted under Section 11.13(b) or (c), Tax |
|
|
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 |
|
|
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 |
|
|
before May 31, 1999, or is proposed to be included within the |
|
|
boundaries of a reinvestment zone as the boundaries of the zone and |
|
|
the proposed portion of tax increment paid into the tax increment |
|
|
fund by a school district are described in a written notification |
|
|
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 |
|
|
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 |
|
|
existed on September 1, 1999, including subsequent improvements to |
|
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the property regardless of when made; |
|
|
(B) generates taxes paid into a tax increment |
|
|
fund created under Chapter 311, Tax Code, under a reinvestment zone |
|
|
financing plan approved under Section 311.011(d), Tax Code, on or |
|
|
before September 1, 1999; and |
|
|
(C) is eligible for tax increment financing under |
|
|
Chapter 311, Tax Code; |
|
|
(5) the total dollar amount of any captured appraised |
|
|
value of property that: |
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(A) is within a reinvestment zone: |
|
|
(i) created on or before December 31, 2008, |
|
|
by a municipality with a population of less than 18,000; and |
|
|
(ii) the project plan for which includes |
|
|
the alteration, remodeling, repair, or reconstruction of a |
|
|
structure that is included on the National Register of Historic |
|
|
Places and requires that a portion of the tax increment of the zone |
|
|
be used for the improvement or construction of related facilities |
|
|
or for affordable housing; |
|
|
(B) generates school district taxes that are paid |
|
|
into a tax increment fund created under Chapter 311, Tax Code; and |
|
|
(C) is eligible for tax increment financing under |
|
|
Chapter 311, Tax Code; |
|
|
(6) the total dollar amount of any exemptions granted |
|
|
under Section 11.251 or 11.253, Tax Code; |
|
|
(7) the difference between the comptroller's estimate |
|
|
of the market value and the productivity value of land that |
|
|
qualifies for appraisal on the basis of its productive capacity, |
|
|
except that the productivity value estimated by the comptroller may |
|
|
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 or 11.262, Tax Code, on which school district taxes |
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|
are not imposed in the year that is the subject of the study, |
|
|
calculated as if the residence homesteads were appraised at the |
|
|
full value 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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|
action required by statute or the constitution of this state, other |
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|
than Section 11.311, Tax Code, that, if the tax rate adopted by the |
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|
district is applied to it, produces an amount equal to the |
|
|
difference between the tax that the district would have imposed on |
|
|
the property if the property were fully taxable at market value and |
|
|
the tax that the district is actually authorized to impose on the |
|
|
property, if this subsection does not otherwise require that |
|
|
portion to be deducted; |
|
|
(10) the market value of all tangible personal |
|
|
property, other than manufactured homes, owned by a family or |
|
|
individual and not held or used for the production of income; |
|
|
(11) the appraised value of property the collection of |
|
|
delinquent taxes on which is deferred under Section 33.06, Tax |
|
|
Code; |
|
|
(12) the portion of the appraised value of property |
|
|
the collection of delinquent taxes on which is deferred under |
|
|
Section 33.065, Tax Code; |
|
|
(13) the amount by which the market value of a |
|
|
residence homestead to which Section 23.23, Tax Code, applies |
|
|
exceeds the appraised value of that property as calculated under |
|
|
that section; and |
|
|
(14) the total dollar amount of any exemptions granted |
|
|
under Section 11.35, Tax Code. |
|
|
SECTION 6. Section 11.262, Tax Code, as added by this Act, |
|
|
applies only to ad valorem taxes imposed for a tax year that begins |
|
|
on or after the effective date of this Act. |
|
|
SECTION 7. 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 limit the |
|
|
total amount of ad valorem taxes that a school district may impose |
|
|
on the residence homestead of an individual and the surviving |
|
|
spouse of the individual if the individual qualifies the property |
|
|
as the individual's residence homestead for at least 20 consecutive |
|
|
tax years is approved by the voters. If that constitutional |
|
|
amendment is not approved by the voters, this Act has no effect. |