89R14249 LHC-D

By: Vasut H.J.R. No. 178

A JOINT RESOLUTION

proposing a constitutional amendment authorizing the legislature to provide that the appraised value of a parcel of single-family residential real property for ad valorem tax purposes for the first tax year in which the owner owns the property on January 1 is the market value of the property and that, if the owner purchased the property, the purchase price of the property is considered to be the market value of the property for that tax year and to limit increases in the appraised value of the property for subsequent tax years based on the inflation and population growth rates.

BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 1, Article VIII, Texas Constitution, is amended by amending Subsections (i) and (n) and adding Subsections (i-1), (i-2), (i-3), (i-4), and (i-5) to read as follows:

(i) The Legislature by general law may provide that the appraised value of a parcel of single-family residential real property for ad valorem tax purposes for the first tax year in which the owner owns the property on January 1 is the market value of the property and that, if the owner acquired the property as a bona fide purchaser for value, the purchase price of the property paid by the owner is considered to be the market value of the property for that tax year. Notwithstanding Subsections (a) and (b) of this section, a general law enacted under this subsection may provide that the appraised value of the property for each subsequent tax year until the tax year in which the limitation authorized by the general law expires is equal to the appraised value of the property for ad valorem tax purposes for the preceding tax year as increased by the appraisal entity for the current tax year to reflect the sum of the inflation rate and the population growth rate of this state [Notwithstanding Subsections (a) and (b) of this section, the Legislature by general law may limit the maximum appraised value of a residence homestead for ad valorem tax purposes in a tax year to the lesser of the most recent market value of the residence homestead as determined by the appraisal entity or 110 percent, or a greater percentage, of the appraised value of the residence homestead for the preceding tax year]. A limitation on appraised values authorized by this subsection:

(1) takes effect on January 1 of the first tax year in which the owner owns the property on January 1 [as to a residence homestead on the later of the effective date of the law imposing the limitation or January 1 of the tax year following the first tax year the owner qualifies the property for an exemption under Section 1-b of this article]; and

(2) expires on January 1 of the [first] tax year following the tax year in which [that neither] the owner of the property when the limitation took effect ceases to own the property, except that:

(A) the Legislature by general law may provide for the limitation applicable to a residence homestead to continue during ownership of the property by [nor] the owner's spouse or surviving spouse; and

(B) a limitation established under this subsection does not expire if a change in ownership of the property occurs by inheritance or under a will as long as the person who acquires the property qualifies for an exemption under Section 1-b of this article.

(i-1) A general law enacted under Subsection (i) of this section may provide that, for each tax year, the comptroller of public accounts shall determine and publicize the percentage by which the appraised value of single-family residential real property in this state may be increased under Subsection (i) of this section. The comptroller shall determine the percentage by which the appraised value may be increased by calculating the sum of:

(1) the inflation rate, expressed as a percentage; and

(2) the growth rate of the population of this state for the preceding year, expressed as a percentage.

(i-2) Each appraisal entity shall use the percentage determined by the comptroller under Subsection (i-1) of this section to determine the appraised value under Subsection (i) of this section of single-family residential real property appraised by that appraisal entity.

(i-3) A general law enacted under Subsection (i) of this section may provide that if the first tax year an owner of single-family residential real property owned the property on January 1 was a tax year before the tax year in which the general law took effect:

(1) the property owner is considered to have acquired the property on January 1 of the tax year preceding the tax year in which the general law took effect; and

(2) the appraised value of the property as shown on the appraisal roll of the appraisal entity for the tax year preceding the tax year in which the general law took effect is considered to be the market value of the property for that tax year for purposes of Subsection (i) of this section.

(i-4) For purposes of Subsection (i) of this section, the Legislature by general law may define single-family residential real property, which may include a manufactured or mobile home used as a dwelling.

(i-5) The Legislature by general law may define "inflation rate" for purposes of Subsections (i) and (i-1) of this section.

(n) This subsection does not apply to a parcel of single-family residential real property [residence homestead] to which Subsection (i) of this section applies. Notwithstanding Subsections (a) and (b) of this section, the Legislature by general law may limit the maximum appraised value of real property for ad valorem tax purposes in a tax year to the lesser of the most recent market value of the property as determined by the appraisal entity or 120 percent, or a greater percentage, of the appraised value of the property for the preceding tax year. The general law enacted under this subsection may prescribe additional eligibility requirements for the limitation on appraised values authorized by this subsection. A limitation on appraised values authorized by this subsection:

(1) takes effect as to a parcel of real property described by this subsection on the later of the effective date of the law imposing the limitation or January 1 of the tax year following the first tax year in which the owner owns the property on January 1; and

(2) expires on January 1 of the tax year following the tax year in which the owner of the property ceases to own the property.

SECTION 2. This proposed constitutional amendment shall be submitted to the voters at an election to be held November 4, 2025. The ballot shall be printed to permit voting for or against the proposition: "The constitutional amendment authorizing the legislature to provide that the appraised value of a parcel of single-family residential real property for ad valorem tax purposes for the first tax year in which the owner of the property owns the property on January 1 is the market value of the property and that, if the owner purchased the property, the purchase price of the property is considered to be the market value of the property for that tax year and to limit increases in the appraised value of the property for subsequent tax years based on the inflation and population growth rates."