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A BILL TO BE ENTITLED
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AN ACT
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relating to an increase in the amount of the exemption of residence |
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homesteads from ad valorem taxation by a school district, an |
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adjustment in the amount of the limitation on school district ad |
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valorem taxes imposed on the residence homesteads of the elderly or |
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disabled to reflect increases in the exemption amount, and the |
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protection of school districts against the resulting loss in local |
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revenue. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 11.13(b), Tax Code, is amended to read as |
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follows: |
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(b) An adult is entitled to exemption from taxation by a |
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school district of $75,000 [$40,000] of the appraised value of the |
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adult's residence homestead, except that only $5,000 of the |
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exemption applies to an entity operating under former Chapter 17, |
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18, 25, 26, 27, or 28, Education Code, as those chapters existed on |
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May 1, 1995, as permitted by Section 11.301, Education Code. |
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(c) Beginning in 2024 tax year, this amount is increased |
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annually by an amount equal to the amount exempted in the prior tax |
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year, multiplied by the percentage change since the prior year in |
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the average appraised value of homesteads statewide, as calculated |
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by the Comptroller, rounded to the nearest $100. If the change is |
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negative, then the amount of the exemption will be unchanged. |
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SECTION 2. Section 11.26, Tax Code, is amended by amending |
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Subsections (a), (a-10), and (o) and adding Subsection (a-11) to |
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read as follows: |
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(a) The tax officials shall appraise the property to which |
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this section applies and calculate taxes as on other property, but |
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if the tax so calculated exceeds the limitation imposed by this |
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section, the tax imposed is the amount of the tax as limited by this |
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section, except as otherwise provided by this section. A school |
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district may not increase the total annual amount of ad valorem tax |
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it imposes on the residence homestead of an individual 65 years of |
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age or older or on the residence homestead of an individual who is |
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disabled, as defined by Section 11.13, above the amount of the tax |
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it imposed in the first tax year in which the individual qualified |
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that residence homestead for the applicable exemption provided by |
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Section 11.13(c) for an individual who is 65 years of age or older |
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or is disabled. If the individual qualified that residence |
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homestead for the exemption after the beginning of that first year |
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and the residence homestead remains eligible for the same exemption |
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for the next year, and if the school district taxes imposed on the |
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residence homestead in the next year are less than the amount of |
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taxes imposed in that first year, a school district may not |
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subsequently increase the total annual amount of ad valorem taxes |
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it imposes on the residence homestead above the amount it imposed in |
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the year immediately following the first year for which the |
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individual qualified that residence homestead for the same |
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exemption, except as provided by Subsection (b). If the first tax |
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year the individual qualified the residence homestead for the |
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exemption provided by Section 11.13(c) for individuals 65 years of |
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age or older or disabled was a tax year before the 2024 [2015] tax |
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year, the amount of the limitation provided by this section for the |
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2024 tax year is the amount of the limitation as computed under |
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Subsection (a-10) of this section [tax the school district imposed |
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for the 2014 tax year] less an amount equal to the product of |
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$10,000 and [amount determined by multiplying $10,000 times] the |
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tax rate of the school district for the 2024 [2015] tax year[, plus |
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any 2015 tax attributable to improvements made in 2014, other than |
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improvements made to comply with governmental regulations or |
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repairs]. |
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(a-10) For purposes of this section, "maximum compressed |
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rate" means the maximum compressed rate of a school district as |
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calculated under Section 48.2551, Education Code. Notwithstanding |
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the other provisions of this section, if in the 2024 or a subsequent |
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tax year an individual qualifies for a limitation on tax increases |
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provided by this section on the individual's residence homestead, |
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the amount of the limitation provided by this section on the |
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homestead is equal to the amount computed by: |
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(1) multiplying the taxable value of the homestead in |
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the preceding tax year by a tax rate equal to the difference between |
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the school district's maximum compressed rate for the preceding tax |
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year and the district's maximum compressed rate for the current tax |
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year; |
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(2) subtracting the amount computed under Subdivision |
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(1) from the amount of tax the district imposed on the homestead in |
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the preceding tax year; and |
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(3) adding any tax imposed in the current tax year |
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attributable to improvements made in the preceding tax year as |
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provided by Subsection (b) to the amount computed under Subdivision |
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(2). |
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(a-11) This subsection applies only to an individual who in |
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the 2024 tax year qualifies for a limitation under this section and |
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for whom the 2021 tax year or an earlier tax year was the first tax |
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year the individual or the individual's spouse qualified for an |
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exemption under Section 11.13(c). The amount of the limitation |
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provided by this section on the residence homestead of an |
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individual to which this subsection applies for the 2024 tax year is |
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the amount of the limitation for the 2024 tax year as otherwise |
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computed under this section less an amount equal to the product of |
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$15,000 and the tax rate of the school district for the 2022 tax |
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year. This subsection expires January 1, 2025. |
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(o) Notwithstanding Subsections (a)[, (a-3),] and (b), an |
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improvement to property that would otherwise constitute an |
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improvement under Subsection (b) is not treated as an improvement |
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under that subsection if the improvement is 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. For purposes of appraising the |
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property in the tax year in which the structure would have |
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constituted an improvement under Subsection (b), the replacement |
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structure is considered to be an improvement under that subsection |
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only if: |
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(1) the square footage of the replacement structure |
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exceeds 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 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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SECTION 3. Section 46.071, Education Code, is amended by |
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amending Subsections (a-1) and (b-1) and adding Subsections (a-2), |
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(b-2), and (c-2) to read as follows: |
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(a-1) For [Beginning with] the 2022-2023 and 2023-2024 |
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school years [year], a school district is entitled to additional |
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state aid under this subchapter to the extent that state and local |
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revenue used to service debt eligible under this chapter is less |
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than the state and local revenue that would have been available to |
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the district under this chapter as it existed on September 1, 2021, |
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if any increase in the residence homestead exemption under Section |
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1-b(c), Article VIII, Texas Constitution, as proposed by the 87th |
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Legislature, 3rd Called Session, 2021, had not occurred. |
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(a-2) Beginning with the 2024-2025 school year, a school |
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district is entitled to additional state aid under this subchapter |
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to the extent that state and local revenue used to service debt |
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eligible under this chapter is less than the state and local |
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revenue that would have been available to the district under this |
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chapter as it existed on September 1, 2023, if any increase in the |
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residence homestead exemption under Section 1-b(c), Article VIII, |
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Texas Constitution, and any additional limitation on tax increases |
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under Section 1-b(d) of that article as proposed by the 88th |
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Legislature, Regular Session, 2023, had not occurred. |
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(b-1) Subject to Subsections (c-1), (d), and (e), |
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additional state aid under this section for [beginning with] the |
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2022-2023 and 2023-2024 school years [year] is equal to the amount |
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by which the loss of local interest and sinking revenue for debt |
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service attributable to any increase in the residence homestead |
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exemption under Section 1-b(c), Article VIII, Texas Constitution, |
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as proposed by the 87th Legislature, 3rd Called Session, 2021, is |
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not offset by a gain in state aid under this chapter. |
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(b-2) Subject to Subsections (c-2), (d), and (e), |
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additional state aid under this section beginning with the |
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2024-2025 school year is equal to the amount by which the loss of |
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local interest and sinking revenue for debt service attributable |
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to any increase in the residence homestead exemption under Section |
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1-b(c), Article VIII, Texas Constitution, and any additional |
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limitation on tax increases under Section 1-b(d) of that article as |
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proposed by the 88th Legislature, Regular Session, 2023, is not |
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offset by a gain in state aid under this chapter. |
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(c-2) For the purpose of determining state aid under |
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Subsections (a-2) and (b-2), local interest and sinking revenue for |
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debt service is limited to revenue required to service debt |
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eligible under this chapter as of September 1, 2024, including |
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refunding of that debt, subject to Section 46.061. The limitation |
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imposed by Section 46.034(a) does not apply for the purpose of |
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determining state aid under this section. |
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SECTION 4. Section 48.2542, Education Code, is amended to |
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read as follows: |
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Sec. 48.2542. ADDITIONAL STATE AID FOR ADJUSTMENT OF |
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LIMITATION ON TAX INCREASES ON HOMESTEAD OF ELDERLY OR DISABLED. |
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Notwithstanding any other provision of this chapter, if a school |
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district is not fully compensated through state aid or the |
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calculation of excess local revenue under this chapter based on the |
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determination of the district's taxable value of property under |
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Subchapter M, Chapter 403, Government Code, the district is |
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entitled to additional state aid in the amount necessary to fully |
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compensate the district for the amount of ad valorem tax revenue |
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lost due to a reduction of the amount of the limitation on tax |
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increases provided by Sections 11.26(a-10) and (a-11) [11.26(a-4), |
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(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10)], Tax Code, as |
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applicable. |
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SECTION 5. Effective January 1, 2025, Section 48.2542, |
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Education Code, is amended to read as follows: |
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Sec. 48.2542. ADDITIONAL STATE AID FOR ADJUSTMENT OF |
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LIMITATION ON TAX INCREASES ON HOMESTEAD OF ELDERLY OR DISABLED. |
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Notwithstanding any other provision of this chapter, if a school |
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district is not fully compensated through state aid or the |
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calculation of excess local revenue under this chapter based on the |
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determination of the district's taxable value of property under |
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Subchapter M, Chapter 403, Government Code, the district is |
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entitled to additional state aid in the amount necessary to fully |
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compensate the district for the amount of ad valorem tax revenue |
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lost due to a reduction of the amount of the limitation on tax |
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increases provided by Section 11.26(a-10) [Sections 11.26(a-4), |
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(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10)], Tax Code[,as |
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applicable]. |
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SECTION 6. Section 48.2543, Education Code, is amended to |
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read as follows: |
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Sec. 48.2543. ADDITIONAL STATE AID FOR HOMESTEAD EXEMPTION. |
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(a) For [Beginning with] the 2022-2023 and 2023-2024 school years |
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[year], a school district is entitled to additional state aid to the |
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extent that state and local revenue under this chapter and Chapter |
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49 is less than the state and local revenue that would have been |
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available to the district under this chapter and Chapter 49 as those |
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chapters existed on September 1, 2021, if any increase in the |
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residence homestead exemption under Section 1-b(c), Article VIII, |
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Texas Constitution, as proposed by the 87th Legislature, 3rd Called |
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Session, 2021, had not occurred. |
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(a-1) Beginning with the 2024-2025 school year, a school |
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district is entitled to additional state aid to the extent that |
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state and local revenue under this chapter and Chapter 49 is less |
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than the state and local revenue that would have been available to |
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the district under this chapter and Chapter 49 as those chapters |
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existed on September 1, 2023, if any increase in the residence |
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homestead exemption under Section 1-b(c), Article VIII, Texas |
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Constitution, and any additional limitation on tax increases under |
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Section 1-b(d) of that article as proposed by the 88th Legislature, |
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Regular Session, 2023, had not occurred. |
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(b) The lesser of the school district's currently adopted |
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maintenance and operations tax rate or the adopted maintenance and |
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operations tax rate for: |
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(1) the 2021 tax year is used for the purpose of |
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determining additional state aid under Subsection (a); and |
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(2) the 2023 tax year is used for the purpose of |
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determining additional state aid under Subsection (a-1). |
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SECTION 7. Section 48.2556(a), Education Code, is amended |
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to read as follows: |
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(a) For purposes of allowing the chief appraiser of each |
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appraisal district and the assessor for each school district to |
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make the calculations required by Sections 11.26(a-10) and (a-11), |
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Tax Code, the [The] agency shall post [the following information] |
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on the agency's Internet website [for purposes of allowing the |
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chief appraiser of each appraisal district and the assessor for |
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each school district to make the calculations required by Sections |
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11.26(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10), Tax Code: |
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[(1)] each school district's maximum compressed rate, |
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as determined under Section 48.2551, for each tax year beginning |
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with the 2022 [2019] tax year[; and |
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[(2) each school district's tier one maintenance and |
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operations tax rate, as provided by Section 45.0032(a), for the |
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2018 tax year]. |
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SECTION 8. Effective January 1, 2025, Section 48.2556(a), |
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Education Code, is amended to read as follows: |
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(a) For purposes of allowing the chief appraiser of each |
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appraisal district and the assessor for each school district to |
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make the calculations required by Section 11.26(a-10), Tax Code, |
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the [The] agency shall post [the following information] on the |
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agency's Internet website [for purposes of allowing the chief |
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appraiser of each appraisal district and the assessor for each |
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school district to make the calculations required by Sections |
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11.26(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10), Tax Code: |
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[(1)] each school district's maximum compressed rate, |
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as determined under Section 48.2551, for the current [each] tax |
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year and the preceding [beginning with the 2019] tax year[;and |
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[(2) each school district's tier one maintenance and |
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operations tax rate, as provided by Section 45.0032(a), for the |
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2018 tax year]. |
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SECTION 9. Section 403.302, Government Code, is amended by |
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amending Subsection (j-1) and adding Subsection (j-2) to read as |
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follows: |
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(j-1) In the final certification of the study under |
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Subsection (j), the comptroller shall separately identify the final |
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taxable value for each school district as adjusted to account for |
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the reduction of the amount of the limitation on tax increases |
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provided by Section 11.26(a-10) [Sections 11.26(a-4), (a-5), |
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(a-6), (a-7), (a-8), (a-9), and (a-10)], Tax Code[,as applicable]. |
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(j-2) In the final certification of the study under |
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Subsection (j), the comptroller shall separately identify the final |
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taxable value for each school district as adjusted to account for |
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the reduction of the amount of the limitation on tax increases |
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provided by Section 11.26(a-11), Tax Code. This subsection expires |
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January 1, 2025. |
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SECTION 10. Sections 11.26(a-1), (a-2), (a-3), (a-4), |
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(a-5), (a-6), (a-7), (a-8), and (a-9), Tax Code, are repealed. |
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SECTION 11. The changes in law made by this Act to Sections |
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11.13 and 11.26, Tax Code, apply only to an ad valorem tax year that |
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begins on or after January 1, 2024. |
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SECTION 12. Except as otherwise provided by this Act, this |
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Act takes effect January 1, 2024, but only if the constitutional |
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amendment proposed by the 88th Legislature, Regular Session, 2023, |
|
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to increase the amount of the exemption of residence homesteads |
|
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from ad valorem taxation by a school district and to adjust the |
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amount of the limitation on school district ad valorem taxes |
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imposed on the residence homesteads of the elderly or disabled to |
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reflect increases in the exemption amount is approved by the |
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voters. If that amendment is not approved by the voters, this Act |
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has no effect. |