H.B. No. 1257
AN ACT
relating to the payment in installments of ad valorem taxes on
certain property owned by a business entity and located in a
disaster area and to the ad valorem taxation of a residence
homestead rendered uninhabitable or unusable by a casualty or by
wind or water damage.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. (a) Subchapter B, Chapter 11, Tax Code, is
amended by adding Section 11.135 to read as follows:
Sec. 11.135. CONTINUATION OF RESIDENCE HOMESTEAD EXEMPTION
WHILE REPLACEMENT STRUCTURE IS CONSTRUCTED; SALE OF PROPERTY. (a)
If a qualified residential structure for which the owner receives
an exemption under Section 11.13 is rendered uninhabitable or
unusable by a casualty or by wind or water damage, the owner may
continue to receive the exemption for the structure and the land and
improvements used in the residential occupancy of the structure
while the owner constructs a replacement qualified residential
structure on the land if the owner does not establish a different
principal residence for which the owner receives an exemption under
Section 11.13 during that period and intends to return and occupy
the structure as the owner's principal residence. To continue to
receive the exemption, the owner must begin active construction of
the replacement qualified residential structure or other physical
preparation of the site on which the structure is to be located not
later than the first anniversary of the date the owner ceases to
occupy the former qualified residential structure as the owner's
principal residence. The owner may not receive the exemption for
that property under the circumstances described by this subsection
for more than two years.
(b) For purposes of Subsection (a), the site of a
replacement qualified residential structure is under physical
preparation if the owner has engaged in architectural or
engineering work, soil testing, land clearing activities, or site
improvement work necessary for the construction of the structure or
has conducted an environmental or land use study relating to the
construction of the structure.
(c) If an owner receives an exemption for property under
Section 11.13 under the circumstances described by Subsection (a)
and sells the property before the owner completes construction of a
replacement qualified residential structure on the property, an
additional tax is imposed on the property equal to the difference
between the taxes imposed on the property for each of the years in
which the owner received the exemption and the tax that would have
been imposed had the owner not received the exemption in each of
those years, plus interest at an annual rate of seven percent
calculated from the dates on which the differences would have
become due.
(d) A tax lien attaches to property on the date a sale under
the circumstances described by Subsection (c) occurs to secure
payment of the additional tax and interest imposed by that
subsection and any penalties incurred. The lien exists in favor of
all taxing units for which the additional tax is imposed.
(e) A determination that a sale of property under the
circumstances described by Subsection (c) has occurred is made by
the chief appraiser. The chief appraiser shall deliver a notice of
the determination to the owner of the property as soon as possible
after making the determination and shall include in the notice an
explanation of the owner's right to protest the determination. If
the owner does not file a timely protest or if the final
determination of the protest is that the additional taxes are due,
the assessor for each taxing unit shall prepare and deliver a bill
for the additional taxes plus interest as soon as practicable. The
taxes and interest are due and become delinquent and incur
penalties and interest as provided by law for ad valorem taxes
imposed by the taxing unit if not paid before the next February 1
that is at least 20 days after the date the bill is delivered to the
owner of the property.
(f) The sanctions provided by Subsection (c) do not apply if
the sale is:
(1) for right-of-way; or
(2) to this state or a political subdivision of this
state to be used for a public purpose.
(g) The comptroller shall adopt rules and forms to implement
this section.
(b) Section 11.26, Tax Code, is amended by adding
Subsections (n) and (o) to read as follows:
(n) Notwithstanding Subsection (c), the limitation on tax
increases required by this section does not expire if the owner of
the structure qualifies for an exemption under Section 11.13 under
the circumstances described by Section 11.135(a).
(o) Notwithstanding Subsections (a), (a-3), and (b), an
improvement to property that would otherwise constitute an
improvement under Subsection (b) is not treated as an improvement
under that subsection if the improvement is a replacement structure
for a structure that was rendered uninhabitable or unusable by a
casualty or by wind or water damage. For purposes of appraising the
property in the tax year in which the structure would have
constituted an improvement under Subsection (b), the replacement
structure is considered to be an improvement under that subsection
only if:
(1) the square footage of the replacement structure
exceeds that of the replaced structure as that structure existed
before the casualty or damage occurred; or
(2) the exterior of the replacement structure is of
higher quality construction and composition than that of the
replaced structure.
(c) Section 11.261, Tax Code, is amended by adding
Subsections (l) and (m) to read as follows:
(l) Notwithstanding Subsection (d), a limitation on county,
municipal, or junior college district tax increases provided by
this section does not expire if the owner of the structure qualifies
for an exemption under Section 11.13 under the circumstances
described by Section 11.135(a).
(m) Notwithstanding Subsections (b) and (c), an improvement
to property that would otherwise constitute an improvement under
Subsection (c) is not treated as an improvement under that
subsection if the improvement is a replacement structure for a
structure that was rendered uninhabitable or unusable by a casualty
or by wind or water damage. For purposes of appraising the property
in the tax year in which the structure would have constituted an
improvement under Subsection (c), the replacement structure is
considered to be an improvement under that subsection only if:
(1) the square footage of the replacement structure
exceeds that of the replaced structure as that structure existed
before the casualty or damage occurred; or
(2) the exterior of the replacement structure is of
higher quality construction and composition than that of the
replaced structure.
(d) Section 23.23(f), Tax Code, is amended to read as
follows:
(f) Notwithstanding Subsections (a) and (e) 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 [mold] or water damage. For purposes of appraising the
property under Subsection (a) 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 [last] year if the casualty or damage had not
occurred [in which the property was appraised for taxation before
the casualty or damage 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 (a) [last year in which the
property was appraised for taxation for purposes of Subsection
(a)(2)(A)]; 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 [to the extent it is a significant
improvement over] 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.
(e) This section applies only to ad valorem taxes imposed
for a tax year beginning on or after the effective date of this Act.
SECTION 2. Section 31.032, Tax Code, is amended by amending
Subsection (a) and adding Subsection (h) to read as follows:
(a) This section applies only to:
(1) real property that:
(A) is:
(i) the residence homestead of the owner or
consists of property that is used for residential purposes and that
has fewer than five living units; or
(ii) owned or leased by a business entity
that had not more than the amount calculated as provided by
Subsection (h) in gross receipts in the entity's most recent
federal tax year or state franchise tax annual period, according to
the applicable federal income tax return or state franchise tax
report of the entity;
(B) is located in a disaster area; and
(C) has been damaged as a direct result of the
disaster; [and]
(2) tangible personal property that is owned or leased
by a business entity described by Subdivision (1)(A)(ii); and
(3) taxes that are imposed on the property by a taxing
unit before the first anniversary of the disaster.
(h) For the 2009 tax year, the limit on gross receipts under
Subsection (a)(1)(A)(ii) is $5 million. For each subsequent tax
year, the comptroller shall adjust the limit to reflect inflation
by using the index that the comptroller considers to most
accurately report changes in the purchasing power of the dollar for
consumers in this state and shall publicize the adjusted limit.
Each collector shall use the adjusted limit as calculated by the
comptroller under this subsection to determine whether property is
owned or leased by a business entity described by Subsection
(a)(1)(A)(ii).
SECTION 3. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2009.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1257 was passed by the House on April
28, 2009, by the following vote: Yeas 149, Nays 0, 1 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 1257 on May 23, 2009, by the following vote: Yeas 137, Nays 0,
2 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 1257 was passed by the Senate, with
amendments, on May 19, 2009, by the following vote: Yeas 30, Nays
0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor