88R4342 LHC-D
 
  By: Cook H.B. No. 4261
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to a limitation on increases in the appraised value for ad
  valorem tax purposes of the residence homesteads of military
  veterans, individuals who are disabled or 65 years of age or older,
  and their surviving spouses.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 1.12(d), Tax Code, is amended to read as
  follows:
         (d)  For purposes of this section, the appraisal ratio of a
  homestead to which Section 23.23 or 23.231 applies is the ratio of
  the property's market value as determined by the appraisal district
  or appraisal review board, as applicable, to the market value of the
  property according to law.  The appraisal ratio is not calculated
  according to the appraised value of the property as limited by
  Section 23.23 or 23.231.
         SECTION 2.  Subchapter B, Chapter 23, Tax Code, is amended by
  adding Section 23.231 to read as follows:
         Sec. 23.231.  LIMITATION ON APPRAISED VALUE OF RESIDENCE
  HOMESTEADS OF CERTAIN INDIVIDUALS. (a) In this section:
               (1)  "Disaster recovery program" means the disaster
  recovery program administered by the General Land Office or by a
  political subdivision of this state that is funded with community
  development block grant disaster recovery money authorized by
  federal law.
               (2)  "New improvement" means an improvement to a
  residence homestead made after the most recent appraisal of the
  property that increases the market value of the property and the
  value of which is not included in the appraised value of the
  property for the preceding tax year.  The term does not include
  repairs to or ordinary maintenance of an existing structure or the
  grounds or another feature of the property.
               (3)  "Residence homestead" has the meaning assigned by
  Section 11.13.
               (4)  "Veteran" means an individual who:
                     (A)  has served in:
                           (i)  an active or reserve component of the
  army, navy, air force, coast guard, or marine corps of the United
  States; or
                           (ii)  the Texas National Guard, as defined
  by Section 431.001, Government Code; and
                     (B)  has been discharged or released from the
  branch of the service in which the individual served under
  conditions other than dishonorable.
         (b)  This section applies only to a residence homestead owned
  by:
               (1)  a veteran;
               (2)  an individual who receives an exemption under
  Section 11.13(c); or
               (3)  the surviving spouse of a person described by
  Subdivision (1) or (2).
         (c)  Notwithstanding the requirements of Sections 23.23 and
  25.18, and regardless of whether the appraisal office has appraised
  the property and determined the market value of the property for the
  tax year, an appraisal office may increase the appraised value of a
  residence homestead to which this section applies for a tax year to
  an amount not to exceed the lowest of:
               (1)  the market value of the property for the most
  recent tax year that the market value was determined by the
  appraisal office;
               (2)  the sum of:
                     (A)  the appraised value of the property for the
  tax year in which the owner first qualified the property for the
  limitation provided by this section; and
                     (B)  the market value of all new improvements to
  the property; or
               (3)  the sum of:
                     (A)  the appraised value of the property for the
  preceding tax year; and
                     (B)  the market value of all new improvements to
  the property.
         (d)  When appraising a residence homestead to which this
  section applies, the chief appraiser shall:
               (1)  appraise the property at its market value; and
               (2)  include in the appraisal records both the market
  value of the property and the amounts computed under Subsections
  (c)(2) and (3).
         (e)  The limitation provided by Subsection (c) takes effect
  as to a residence homestead on January 1 of the tax year following
  the first tax year in which the owner owns the property on January 1
  and in which the owner qualifies the property for the
  limitation.  The limitation expires on January 1 of the first tax
  year that neither the owner of the property when the limitation took
  effect nor the owner's spouse or surviving spouse qualifies for the
  limitation.
         (f)  For purposes of Subsection (e), a person who acquired a
  residence homestead to which this section applies before the 2023
  tax year is considered to have acquired the property on January 1,
  2023.
         (g)  This section does not apply to property appraised under
  Subchapter C, D, E, F, or G.
         (h)  Notwithstanding Subsection (c), and except as provided
  by Subdivision (2), an improvement to property that would otherwise
  constitute a new improvement is not treated as a new improvement if
  the improvement is a replacement structure for a structure that was
  rendered uninhabitable or unusable by a casualty or by wind, fire,
  or water damage.  For purposes of appraising the property under
  Subsection (c) in the tax year in which the structure would have
  constituted a new improvement:
               (1)  the appraised value the property would have had in
  the preceding tax year if the casualty or damage had not occurred is
  considered to be the appraised value of the property for that year,
  regardless of whether that appraised value exceeds the actual
  appraised value of the property for that year as limited by
  Subsection (c); and
               (2)  the replacement structure is considered to be a
  new improvement only if:
                     (A)  the square footage of the replacement
  structure exceeds that of the replaced structure as that structure
  existed before the casualty or damage occurred; or
                     (B)  the exterior of the replacement structure is
  of higher quality construction and composition than that of the
  replaced structure.
         (i)  Notwithstanding Subsection (h)(2), and only to the
  extent necessary to satisfy the requirements of a disaster recovery
  program, a replacement structure described by that subdivision is
  not considered to be a new improvement if to satisfy the
  requirements of the disaster recovery program it was necessary
  that:
               (1)  the square footage of the replacement structure
  exceed that of the replaced structure as that structure existed
  before the casualty or damage occurred; or
               (2)  the exterior of the replacement structure be of
  higher quality construction and composition than that of the
  replaced structure.
         (j)  To receive a limitation under Subsection (c), a person
  claiming the limitation must apply for the limitation by filing an
  application with the chief appraiser of the appraisal
  district.  The application must be filed not later than May 1 of the
  year for which the person claims the limitation. The chief
  appraiser shall accept and approve or deny an application.  For
  property appraised by more than one appraisal district, a separate
  application must be filed in each appraisal district to receive the
  limitation in that district.
         (k)  A limitation provided by Subsection (c), once allowed,
  need not be claimed in subsequent years and applies to the property
  until the limitation expires as provided by this section or until
  the person's qualification for the limitation ends.  However, the
  chief appraiser may require a person allowed a limitation in a prior
  year to file a new application to confirm the person's current
  qualification for the limitation by delivering not later than April
  1 a written notice that a new application is required, accompanied
  by an appropriate application form, to the person previously
  allowed the limitation.
         (l)  The comptroller, in prescribing the contents of the
  application form for a limitation under Subsection (c), shall
  ensure that the form requires an applicant to provide the
  information necessary to determine the validity of the limitation
  claim.
         SECTION 3.  Section 41.41(a), Tax Code, is amended to read as
  follows:
         (a)  A property owner is entitled to protest before the
  appraisal review board the following actions:
               (1)  determination of the appraised value of the
  owner's property or, in the case of land appraised as provided by
  Subchapter C, D, E, or H, Chapter 23, determination of its appraised
  or market value;
               (2)  unequal appraisal of the owner's property;
               (3)  inclusion of the owner's property on the appraisal
  records;
               (4)  denial to the property owner in whole or in part of
  a partial exemption;
               (4-a)  determination that the owner's property does not
  qualify for the limitation on appraised value provided by Section
  23.231;
               (5)  determination that the owner's land does not
  qualify for appraisal as provided by Subchapter C, D, E, or H,
  Chapter 23;
               (6)  identification of the taxing units in which the
  owner's property is taxable in the case of the appraisal district's
  appraisal roll;
               (7)  determination that the property owner is the owner
  of property;
               (8)  a determination that a change in use of land
  appraised under Subchapter C, D, E, or H, Chapter 23, has occurred;
  or
               (9)  any other action of the chief appraiser, appraisal
  district, or appraisal review board that applies to and adversely
  affects the property owner.
         SECTION 4.  Section 42.26(d), Tax Code, is amended to read as
  follows:
         (d)  For purposes of this section, the value of the property
  subject to the suit and the value of a comparable property or sample
  property that is used for comparison must be the market value
  determined by the appraisal district when the property is a
  residence homestead subject to the limitation on appraised value
  imposed by Section 23.23 or 23.231.
         SECTION 5.  Sections 403.302(d) and (i), Government Code,
  are 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
  district;
               (2)  one-half of the total dollar amount of any
  residence homestead exemptions granted under Section 11.13(n), Tax
  Code, in the year that is the subject of the study for each school
  district;
               (3)  the total dollar amount of any exemptions granted
  before May 31, 1993, within a reinvestment zone under agreements
  authorized by Chapter 312, Tax Code;
               (4)  subject to Subsection (e), the total dollar amount
  of any captured appraised value of property that:
                     (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
  to the governing bodies of the other taxing units in the manner
  provided by former Section 311.003(e), Tax Code, before May 31,
  1999, and within the boundaries of the zone as those boundaries
  existed on September 1, 1999, including subsequent improvements to
  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:
                     (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;
               (8)  the portion of the appraised value of residence
  homesteads of individuals who receive a tax limitation under
  Section 11.26, Tax Code, on which school district taxes 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;
               (9)  a portion of the market value of property not
  otherwise fully taxable by the district at market value because of
  action required by statute or the constitution of this state, other
  than Section 11.311, Tax Code, that, if the tax rate adopted by the
  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 or 23.231, Tax Code,
  applies exceeds the appraised value of that property as calculated
  under Section 23.23 or 23.231, Tax Code, as applicable [that
  section]; and
               (14)  the total dollar amount of any exemptions granted
  under Section 11.35, Tax Code.
         (i)  If the comptroller determines in the study that the
  market value of property in a school district as determined by the
  appraisal district that appraises property for the school district,
  less the total of the amounts and values listed in Subsection (d) as
  determined by that appraisal district, is valid, the comptroller,
  in determining the taxable value of property in the school district
  under Subsection (d), shall for purposes of Subsection (d)(13)
  subtract from the market value as determined by the appraisal
  district of residence homesteads to which Section 23.23 or 23.231,
  Tax Code, applies the amount by which that amount exceeds the
  appraised value of those properties as calculated by the appraisal
  district under Section 23.23 or 23.231, Tax Code, as
  applicable.  If the comptroller determines in the study that the
  market value of property in a school district as determined by the
  appraisal district that appraises property for the school district,
  less the total of the amounts and values listed in Subsection (d) as
  determined by that appraisal district, is not valid, the
  comptroller, in determining the taxable value of property in the
  school district under Subsection (d), shall for purposes of
  Subsection (d)(13) subtract from the market value as estimated by
  the comptroller of residence homesteads to which Section 23.23 or
  23.231, Tax Code, applies the amount by which that amount exceeds
  the appraised value of those properties as calculated by the
  appraisal district under Section 23.23 or 23.231, Tax Code, as
  applicable.
         SECTION 6.  This Act applies only to the appraisal of
  residence homesteads for ad valorem tax purposes 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 a constitutional amendment proposed by the 88th Legislature,
  Regular Session, 2023, authorizing the legislature to limit the
  appraised value for ad valorem tax purposes of residence homesteads
  of military veterans, individuals who are disabled or 65 years of
  age or older, and their surviving spouses is approved by the
  voters.  If such an amendment is not approved by the voters, this
  Act has no effect.