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A BILL TO BE ENTITLED
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AN ACT
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relating to the limitation on increases in the appraised value of a |
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residence homestead for ad valorem tax purposes. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 23.23, Tax Code, is amended by amending |
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Subsection (a) and adding Subsections (a-1) and (a-2) to read as |
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follows: |
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(a) Notwithstanding the requirements of Section 25.18 and |
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regardless of whether the appraisal office has appraised the |
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property and determined the market value of the property for the tax |
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year, an appraisal office may increase the appraised value of a |
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residence homestead for a tax year to an amount not to exceed the |
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lesser of: |
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(1) the market value of the property for the most |
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recent tax year that the market value was determined by the |
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appraisal office; or |
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(2) the sum of: |
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(A) the lesser of: |
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(i) 10 percent of the appraised value of the |
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property for the preceding tax year; or |
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(ii) the product of the inflation rate for |
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the preceding tax year as determined under Subsection (a-1), |
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expressed as a decimal, and the appraised value of the property for |
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the preceding tax year; |
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(B) the appraised value of the property for the |
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preceding tax year; and |
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(C) the market value of all new improvements to |
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the property. |
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(a-1) Not later than March 1 of each tax year, the |
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comptroller shall determine the inflation rate for the preceding |
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tax year for purposes of Subsection (a), provide the rate to each |
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appraisal office, and publish the rate in the Texas Register. |
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(a-2) In this section: |
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(1) "Consumer price index" means the average over a |
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tax year of the index that the comptroller considers to most |
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accurately report changes in the purchasing power of the dollar for |
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consumers in this state. |
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(2) "Inflation rate" means the amount, expressed in |
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decimal form rounded to the nearest thousandth, computed by |
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determining the percentage change in the consumer price index for |
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the preceding tax year as compared to the consumer price index for |
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the tax year preceding that tax year. |
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SECTION 2. This Act applies only to the appraisal of a |
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residence homestead for ad valorem tax purposes for a tax year that |
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begins on or after the effective date of this Act. |
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SECTION 3. This Act takes effect January 1, 2024, but only |
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if the constitutional amendment proposed by the 88th Legislature, |
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Regular Session, 2023, to authorize the legislature to set a lower |
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limit on the maximum appraised value of a residence homestead for ad |
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valorem tax purposes is approved by the voters. If that amendment |
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is not approved by the voters, this Act has no effect. |