82R3005 SMH-D
By: King of Parker H.B. No. 1079
A BILL TO BE ENTITLED
AN ACT
relating to a limitation on increases in the appraised value for ad
valorem tax purposes of commercial or industrial real property.
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 applies or of commercial or
industrial real property to which Section 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 COMMERCIAL OR
INDUSTRIAL REAL PROPERTY. (a) Notwithstanding the requirements of
Section 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 commercial or industrial real property for a tax
year to an amount not to exceed the lesser of:
(1) the market value of the property for the most
recent tax year that the market value was determined by the
appraisal office; or
(2) the sum of:
(A) 10 percent of the appraised value of the
property for the preceding tax year;
(B) the appraised value of the property for the
preceding tax year; and
(C) the market value of all new improvements to
the property.
(b) When appraising commercial or industrial real property,
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 amount computed under Subsection
(a)(2).
(c) The limitation provided by Subsection (a) takes effect
as to a parcel of commercial or industrial real property 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 uses the
property primarily for commercial or industrial purposes. Except
as provided by Subsection (d), the limitation expires on January 1
of the tax year following the first tax year in which the owner of
the property ceases to own the property or ceases to use the
property primarily for commercial or industrial purposes.
(d) If property subject to a limitation under this section
is owned by two or more persons, the limitation expires on January 1
of the tax year following the first tax year in which the ownership
of at least a 50 percent interest in the property is sold or
otherwise transferred.
(e) For purposes of applying the limitation provided by this
section in the first tax year after the 2011 tax year in which the
property is appraised for taxation:
(1) the property is considered to have been appraised
for taxation in the 2011 tax year at a market value equal to the
appraised value of the property for that tax year; and
(2) a person who acquired commercial or industrial
real property in a tax year before the 2011 tax year is considered
to have acquired the property on January 1, 2011.
(f) This section does not apply to property appraised under
Subchapter C, D, E, F, G, or H.
(g) In this section, "new improvement" means an improvement
to commercial or industrial real property 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.
(h) Notwithstanding Subsections (a) and (g) 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 unusable by a casualty or by wind 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 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 (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 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.
SECTION 3. Sections 25.19(b) and (g), Tax Code, are amended
to read as follows:
(b) The chief appraiser shall separate real from personal
property and include in the notice for each:
(1) a list of the taxing units in which the property is
taxable;
(2) the appraised value of the property in the
preceding year;
(3) the taxable value of the property in the preceding
year for each taxing unit taxing the property;
(4) the appraised value of the property for the
current year and the kind and amount of each partial exemption, if
any, approved for the current year;
(4-a) a statement of whether the property qualifies
for the limitation on appraised value provided by Section 23.231;
(5) if the appraised value is greater than it was in
the preceding year, the amount of tax that would be imposed on the
property on the basis of the tax rate for the preceding year;
(6) in italic typeface, the following
statement: "The Texas Legislature does not set the amount of your
local taxes. Your property tax burden is decided by your locally
elected officials, and all inquiries concerning your taxes should
be directed to those officials";
(7) a detailed explanation of the time and procedure
for protesting the value;
(8) the date and place the appraisal review board will
begin hearing protests; and
(9) a brief explanation that the governing body of
each taxing unit decides whether or not taxes on the property will
increase and the appraisal district only determines the value of
the property.
(g) By April 1 or as soon thereafter as practicable if the
property is a single-family residence that qualifies for an
exemption under Section 11.13, or by May 1 or as soon thereafter as
practicable in connection with any other property, the chief
appraiser shall deliver a written notice to the owner of each
property not included in a notice required to be delivered under
Subsection (a), if the property was reappraised in the current tax
year, if the ownership of the property changed during the preceding
year, or if the property owner or the agent of a property owner
authorized under Section 1.111 makes a written request for the
notice. The chief appraiser shall separate real from personal
property and include in the notice for each property:
(1) the appraised value of the property in the
preceding year;
(2) the appraised value of the property for the
current year and the kind of each partial exemption, if any,
approved for the current year;
(2-a) a statement of whether the property qualifies
for the limitation on appraised value provided by Section 23.231;
(3) a detailed explanation of the time and procedure
for protesting the value; and
(4) the date and place the appraisal review board will
begin hearing protests.
SECTION 4. 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 5. 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 commercial or industrial real property
subject to the limitation on appraised value imposed by Section
23.231.
SECTION 6. Section 403.302(d), Government Code, as amended
by Chapters 1186 (H.B. 3676) and 1328 (H.B. 3646), Acts of the 81st
Legislature, Regular Session, 2009, is reenacted and 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 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:
(A) action required by statute or the
constitution of this state, other than Section 23.231, 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; or
(B) action taken by the district under Subchapter
B or C, Chapter 313, Tax Code, before the expiration of the
subchapter;
(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; and
(13) the amount by which the market value of a
residence homestead to which Section 23.23, Tax Code, applies
exceeds the appraised value of that property as calculated under
that section.
SECTION 7. Section 403.302(m), Government Code, as added by
Chapter 1186 (H.B. 3676), Acts of the 81st Legislature, Regular
Session, 2009, is amended to conform to Section 80, Chapter 1328
(H.B. 3646), Acts of the 81st Legislature, Regular Session, 2009,
to read as follows:
(m) Subsection (d)(9) [(d)(10)] does not apply to property
that was the subject of an application under Subchapter B or C,
Chapter 313, Tax Code, made after May 1, 2009, that the comptroller
recommended should be disapproved.
SECTION 8. To the extent of any conflict, this Act prevails
over another Act of the 82nd Legislature, Regular Session, 2011,
relating to nonsubstantive additions to and corrections in enacted
codes.
SECTION 9. This Act applies only to the appraisal of
commercial or industrial real property for ad valorem tax purposes
for a tax year that begins on or after the effective date of this
Act.
SECTION 10. This Act takes effect January 1, 2012, but only
if the constitutional amendment proposed by the 82nd Legislature,
Regular Session, 2011, to authorize the legislature to limit the
maximum appraised value of commercial or industrial real property
for ad valorem tax purposes to 110 percent or more of the appraised
value of the property for the preceding tax year is approved by the
voters. If that amendment is not approved by the voters, this Act
has no effect.