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A BILL TO BE ENTITLED
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AN ACT
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relating to the treatment of a replacement structure for a |
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structure that was rendered uninhabitable or unusable by a casualty |
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or by wind or water damage as a new improvement for ad valorem tax |
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purposes. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 11.26(o), Tax Code, is amended to read as |
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follows: |
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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 |
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the 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 2. Section 11.261(m), Tax Code, is amended to read |
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as follows: |
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(m) Notwithstanding Subsections (b) and (c), an improvement |
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to property that would otherwise constitute an improvement under |
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Subsection (c) is not treated as an improvement under that |
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subsection if the improvement is a replacement structure for a |
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structure that was rendered uninhabitable or unusable by a casualty |
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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 (c), 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. Sections 23.23(f) and (g), Tax Code, are amended |
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to read as follows: |
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(f) Notwithstanding Subsections (a) and (e) and except as |
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provided by Subdivision (2), an improvement to property that would |
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otherwise constitute a new improvement is not treated as a new |
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improvement if the improvement is a replacement structure for a |
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structure that was rendered uninhabitable or unusable by a casualty |
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or by wind or water damage. For purposes of appraising the |
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property under Subsection (a) in the tax year in which the structure |
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would have constituted a new improvement: |
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(1) the appraised value the property would have had in |
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the preceding tax year if the casualty or damage had not occurred is |
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considered to be the appraised value of the property for that year, |
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regardless of whether that appraised value exceeds the actual |
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appraised value of the property for that year as limited by |
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Subsection (a); and |
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(2) the replacement structure is considered to be a |
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new improvement only if[: |
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[(A)] the square footage of the replacement |
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structure exceeds that of the replaced structure as that structure |
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existed before the casualty or damage occurred[; or |
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[(B) the exterior of the replacement structure is |
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of higher quality construction and composition than that of the |
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replaced structure]. |
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(g) In this subsection, "disaster recovery program" means |
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the disaster recovery program administered by the General Land |
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Office or by a political subdivision of this state that is funded |
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with community development block grant disaster recovery money |
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authorized by federal law. Notwithstanding Subsection (f)(2), and |
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only to the extent necessary to satisfy the requirements of the |
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disaster recovery program, a replacement structure described by |
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that subdivision is not considered to be a new improvement if to |
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satisfy the requirements of the disaster recovery program it was |
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necessary that [: |
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[(1)] the square footage of the replacement structure |
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exceed 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 be 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 4. This Act applies only to ad valorem taxes imposed |
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for a tax year beginning on or after the effective date of this Act. |
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SECTION 5. This Act takes effect January 1, 2024. |