By: Nelson, et al. S.B. No. 1
(In the Senate - Filed February 24, 2015;
February 24, 2015, read first time and referred to Committee on
Finance; March 23, 2015, reported adversely, with favorable
Committee Substitute by the following vote: Yeas 13, Nays 2;
March 23, 2015, sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.B. No. 1 By: Nelson
A BILL TO BE ENTITLED
AN ACT
relating to certain restrictions on the imposition of ad valorem
taxes and to the duty of the state to reimburse certain political
subdivisions for certain revenue loss.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 11.13, Tax Code, is amended by amending
Subsection (b) and adding Subsections (b-1) and (n-1) to read as
follows:
(b) An adult is entitled to exemption from taxation by a
school district of a portion [$15,000] of the appraised value of the
adult's residence homestead equal to 25 percent of the median
market value of all residence homesteads in the state, except that
only $5,000 [$10,000] of the exemption applies [does not apply] to
an entity operating under former Chapter 17, 18, 25, 26, 27, or 28,
Education Code, as those chapters existed on May 1, 1995, as
permitted by Section 11.301, Education Code. For purposes of this
subsection, the Legislative Budget Board shall determine the median
market value of all residence homesteads in the state in each tax
year on the basis of the market value of all residence homesteads in
the state in the preceding tax year as determined by the appraisal
districts in the state and shall publish that value in the Texas
Register not later than February 1.
(b-1) Notwithstanding Subsection (b), for purposes of
computing the amount of the exemption under that subsection for the
2015 tax year, the Legislative Budget Board shall determine the
median market value of all residence homesteads in the state in the
manner provided by that subsection and publish that value in the
Texas Register not later than August 1, 2015. This subsection
expires December 31, 2016.
(n-1) The governing body of a taxing unit that adopted an
exemption under Subsection (n) for the 2014 tax year may not reduce
the amount of or repeal the exemption. This subsection expires
December 31, 2024.
SECTION 2. Section 11.26(a), Tax Code, is amended to read as
follows:
(a) The tax officials shall appraise the property to which
this section applies and calculate taxes as on other property, but
if the tax so calculated exceeds the limitation imposed by this
section, the tax imposed is the amount of the tax as limited by this
section, except as otherwise provided by this section. A school
district may not increase the total annual amount of ad valorem tax
it imposes on the residence homestead of an individual 65 years of
age or older or on the residence homestead of an individual who is
disabled, as defined by Section 11.13, above the amount of the tax
it imposed in the first tax year in which the individual qualified
that residence homestead for the applicable exemption provided by
Section 11.13(c) for an individual who is 65 years of age or older
or is disabled. If the individual qualified that residence
homestead for the exemption after the beginning of that first year
and the residence homestead remains eligible for the same exemption
for the next year, and if the school district taxes imposed on the
residence homestead in the next year are less than the amount of
taxes imposed in that first year, a school district may not
subsequently increase the total annual amount of ad valorem taxes
it imposes on the residence homestead above the amount it imposed in
the year immediately following the first year for which the
individual qualified that residence homestead for the same
exemption, except as provided by Subsection (b). If the first tax
year the individual qualified the residence homestead for the
exemption provided by Section 11.13(c) for individuals 65 years of
age or older or disabled was a tax year before the 2015 [1997] tax
year, the amount of the limitation provided by this section is the
amount of tax the school district imposed for the 2014 [1996] tax
year less an amount equal to the amount determined by subtracting
$15,000 from the amount of the exemption under Section 11.13(b) for
the 2015 tax year and multiplying that amount by [$10,000 times] the
tax rate of the school district for the 2015 [1997] tax year, plus
any 2015 [1997] tax attributable to improvements made in 2014
[1996], other than improvements made to comply with governmental
regulations or repairs.
SECTION 3. Section 25.23, Tax Code, is amended by adding
Subsection (a-1) to read as follows:
(a-1) This subsection applies only to the appraisal records
for the 2015 tax year. If the appraisal records submitted to the
appraisal review board include the taxable value of residence
homesteads or show the amount of the exemption under Section
11.13(b) applicable to residence homesteads, the chief appraiser
shall prepare supplemental appraisal records that reflect the
amount of the exemption as published by the Legislative Budget
Board under Section 11.13(b-1). This subsection expires December
31, 2016.
SECTION 4. Section 26.04, Tax Code, is amended by adding
Subsections (a-1) and (c-1) to read as follows:
(a-1) On receipt of the appraisal roll for the 2015 tax
year, the assessor for a school district shall determine the total
taxable value of property taxable by the school district and the
taxable value of new property based on a residence homestead
exemption under Section 11.13(b) of $15,000 and an exemption under
that subsection of the amount published by the Legislative Budget
Board under Section 11.13(b-1). This subsection expires December
31, 2016.
(c-1) An officer or employee designated by the governing
body of a school district shall calculate the effective tax rate and
the rollback tax rate of the school district for the 2015 tax year
based on a residence homestead exemption under Section 11.13(b) of
$15,000 and an exemption under that subsection of the amount
published by the Legislative Budget Board under Section 11.13(b-1).
This subsection expires December 31, 2016.
SECTION 5. Section 26.05, Tax Code, is amended by adding
Subsection (a-1) to read as follows:
(a-1) Notwithstanding Subsection (a), the governing body of
a taxing unit shall adopt a tax rate for the 2015 tax year before the
later of October 31, 2015, or the 60th day after the date the
certified appraisal roll is received by the taxing unit. This
subsection expires December 31, 2016.
SECTION 6. Section 31.01, Tax Code, is amended by adding
Subsection (a-1) to read as follows:
(a-1) Notwithstanding Subsection (a), the assessor for a
school district shall mail the tax bill for the taxes imposed by the
school district for the 2015 tax year on a residence homestead that
qualifies for a tax limitation as provided by Section 11.26 by
December 1, 2015, or as soon thereafter as practicable. This
subsection expires December 31, 2016.
SECTION 7. Subchapter A, Chapter 41, Education Code, is
amended by adding Section 41.0011 to read as follows:
Sec. 41.0011. COMPUTATION OF WEALTH PER STUDENT FOR
2015-2016 SCHOOL YEAR. Notwithstanding any other provision of this
chapter, in computing a school district's wealth per student for
the 2015-2016 school year, a school district's taxable value of
property under Subchapter M, Chapter 403, Government Code, is
determined as if the increase in the residence homestead exemption
under Section 1-b(c), Article VIII, Texas Constitution, and the
additional limitation on tax increases under Section 1-b(d) of that
article in effect for the 2015 tax year as proposed by S.J.R. 1,
84th Legislature, Regular Session, 2015, had been in effect for the
2014 tax year. This section expires September 1, 2016.
SECTION 8. Section 41.004, Education Code, is amended by
adding Subsections (a-1), (b-1), and (c-1) to read as follows:
(a-1) This subsection applies only if the constitutional
amendment proposed by S.J.R. 1, 84th Legislature, Regular Session,
2015, is approved by the voters in an election held for that
purpose. As soon as practicable after receiving revised property
values that reflect adoption of the constitutional amendment, the
commissioner shall review the wealth per student of districts in
the state and revise as necessary the notifications provided under
Subsection (a) for the 2015-2016 school year.
(b-1) This subsection applies only to a district that has
not previously held an election under this chapter and is not
eligible to reduce the district's wealth per student in the manner
authorized by Section 41.0041. Notwithstanding Subsection (b), a
district that enters into an agreement to exercise an option to
reduce the district's wealth per student under Section 41.003(3),
(4), or (5) for the 2015-2016 school year may request and, as
provided by Section 41.0042(a), receive approval from the
commissioner to delay the date of the election otherwise required
to be ordered before September 1. This subsection expires
September 1, 2016.
(c-1) Notwithstanding Subsection (c), a district that
receives approval from the commissioner to delay an election as
provided by Subsection (b-1) may adopt a tax rate for the 2015 tax
year before the commissioner certifies that the district has
achieved the equalized wealth level. This subsection expires
September 1, 2016.
SECTION 9. Subchapter A, Chapter 41, Education Code, is
amended by adding Section 41.0042 to read as follows:
Sec. 41.0042. TRANSITIONAL PROVISIONS: INCREASED
HOMESTEAD EXEMPTION AND LIMITATION ON TAX INCREASES. (a) The
commissioner shall approve a district's request under Section
41.004(b-1) to delay the date of an election required under this
chapter if the commissioner determines that the district would not
have a wealth per student that exceeds the equalized wealth level
if:
(1) the constitutional amendment proposed by S.J.R. 1,
84th Legislature, Regular Session, 2015, were approved by the
voters; and
(2) the effect of the amendment specified in
Subdivision (1) were determined using the median market value of
all residence homesteads in the state in the 2014 tax year, as
determined by the Legislative Budget Board in accordance with
Section 11.13(b-1), Tax Code.
(b) The commissioner shall set a date by which each district
that receives approval under this section must order the election.
(c) Not later than the 2016-2017 school year, the
commissioner shall order detachment and annexation of property
under Subchapter G or consolidation under Subchapter H as necessary
to achieve the equalized wealth level for a district that receives
approval under this section and subsequently:
(1) fails to hold the election; or
(2) does not receive voter approval at the election.
(d) This section expires September 1, 2017.
SECTION 10. Subchapter A, Chapter 41, Education Code, is
amended by adding Section 41.0121 to read as follows:
Sec. 41.0121. TRANSITIONAL ELECTION DATES. (a) This
section applies only to an election under this chapter that occurs
during the 2015-2016 school year.
(b) Section 41.012 does not apply to a district that
receives approval of a request under Section 41.0042. The district
shall hold the election on a Tuesday or Saturday on or before a date
specified by the commissioner. Section 41.001, Election Code, does
not apply to the election.
(c) This section expires September 1, 2016.
SECTION 11. Section 41.094, Education Code, is amended by
adding Subsection (a-1) to read as follows:
(a-1) Notwithstanding Subsection (a), a district that
receives approval of a request under Section 41.0042 shall pay for
credits purchased in equal monthly payments as determined by the
commissioner beginning March 15, 2016, and ending August 15, 2016.
This subsection expires September 1, 2016.
SECTION 12. Subchapter D, Chapter 41, Education Code, is
amended by adding Section 41.0981 to read as follows:
Sec. 41.0981. TRANSITIONAL EARLY AGREEMENT CREDIT.
Notwithstanding Section 41.098, a district that receives approval
of a request under Section 41.0042 may receive the early agreement
credit described by Section 41.098 for the 2015-2016 school year if
the district orders the election and obtains voter approval not
later than the date specified by the commissioner. This section
expires September 1, 2016.
SECTION 13. Section 41.208, Education Code, is amended by
adding Subsection (a-1) to read as follows:
(a-1) Notwithstanding Subsection (a), for the 2015-2016
school year, the commissioner shall order any detachments and
annexations of property under this subchapter as soon as
practicable after the canvass of the votes on the constitutional
amendment proposed by S.J.R. 1, 84th Legislature, Regular Session,
2015. This subsection expires September 1, 2016.
SECTION 14. Subchapter E, Chapter 42, Education Code, is
amended by adding Section 42.2518 to read as follows:
Sec. 42.2518. ADDITIONAL STATE AID FOR HOMESTEAD EXEMPTION
AND LIMITATION ON TAX INCREASES. (a) For the 2015-2016 and
2016-2017 school years, a school district is entitled to additional
state aid to the extent that state and local revenue under this
chapter and Chapter 41 is less than the state and local revenue that
would have been available to the district under Chapter 41 and this
chapter as those chapters existed on September 1, 2015, if the
increase in the residence homestead exemption under Section 1-b(c),
Article VIII, Texas Constitution, and the additional limitation on
tax increases under Section 1-b(d) of that article in effect for the
applicable tax year as proposed by S.J.R. 1, 84th Legislature,
Regular Session, 2015, had not occurred.
(b) The lesser of the school district's currently adopted
maintenance and operations tax rate or the adopted maintenance and
operations tax rate for the 2014 tax year is used for the purpose of
determining additional state aid under this section.
(c) Revenue from a school district maintenance and
operations tax that is levied to pay costs of a lease-purchase
agreement as described by Section 46.004 and that is included in
determining state assistance under Subchapter A, Chapter 46, is
included for the purpose of calculating state aid under this
section.
(d) The commissioner, using information provided by the
comptroller and other information as necessary, shall compute the
amount of additional state aid to which a district is entitled under
this section. A determination by the commissioner under this
section is final and may not be appealed.
(e) This section expires August 31, 2017.
SECTION 15. Effective September 1, 2017, Subchapter E,
Chapter 42, Education Code, is amended by adding Section 42.2518 to
read as follows:
Sec. 42.2518. ADDITIONAL STATE AID FOR HOMESTEAD EXEMPTION
AND LIMITATION ON TAX INCREASES. (a) Beginning with the 2017-2018
school year, a school district is entitled to additional state aid
to the extent that state and local revenue under this chapter and
Chapter 41 is less than the state and local revenue that would have
been available to the district under Chapter 41 and this chapter as
those chapters existed on September 1, 2015, excluding any state
aid that would have been provided under former Section 42.2516, if
the increase in the residence homestead exemption under Section
1-b(c), Article VIII, Texas Constitution, and the additional
limitation on tax increases under Section 1-b(d) of that article in
effect for the applicable tax year as proposed by S.J.R. 1, 84th
Legislature, Regular Session, 2015, had not occurred.
(b) The lesser of the school district's currently adopted
maintenance and operations tax rate or the adopted maintenance and
operations tax rate for the 2014 tax year is used for the purpose of
determining additional state aid under this section.
(c) Revenue from a school district maintenance and
operations tax that is levied to pay costs of a lease-purchase
agreement as described by Section 46.004 and that is included in
determining state assistance under Subchapter A, Chapter 46, is
included for the purpose of calculating state aid under this
section.
(d) The commissioner, using information provided by the
comptroller and other information as necessary, shall compute the
amount of additional state aid to which a district is entitled under
this section. A determination by the commissioner under this
section is final and may not be appealed.
SECTION 16. Section 42.252, Education Code, is amended by
adding Subsection (e) to read as follows:
(e) Notwithstanding any other provision of this chapter, in
computing each school district's local share of program cost under
this section for the 2015-2016 school year, a school district's
taxable value of property under Subchapter M, Chapter 403,
Government Code, is determined as if the increase in the residence
homestead exemption under Section 1-b(c), Article VIII, Texas
Constitution, and the additional limitation on tax increases under
Section 1-b(d) of that article in effect for the 2015 tax year as
proposed by S.J.R. 1, 84th Legislature, Regular Session, 2015, had
been in effect for the 2014 tax year. This subsection expires
September 1, 2016.
SECTION 17. Section 42.302, Education Code, is amended by
adding Subsection (g) to read as follows:
(g) Notwithstanding any other provision of this chapter, in
computing a school district's enrichment tax rate ("DTR") and local
revenue ("LR") for the 2015-2016 school year, a school district's
taxable value of property under Subchapter M, Chapter 403,
Government Code, is determined as if the increase in the residence
homestead exemption under Section 1-b(c), Article VIII, Texas
Constitution, and the additional limitation on tax increases under
Section 1-b(d) of that article in effect for the 2015 tax year as
proposed by S.J.R. 1, 84th Legislature, Regular Session, 2015, had
been in effect for the 2014 tax year. This subsection expires
September 1, 2016.
SECTION 18. Section 46.003, Education Code, is amended by
adding Subsection (i) to read as follows:
(i) Notwithstanding any other provision of this chapter, in
computing a district's bond tax rate ("BTR") and taxable value of
property ("DPV") for the 2015-2016 school year, a school district's
taxable value of property under Subchapter M, Chapter 403,
Government Code, is determined as if the increase in the residence
homestead exemption under Section 1-b(c), Article VIII, Texas
Constitution, and the additional limitation on tax increases under
Section 1-b(d) of that article in effect for the 2015 tax year as
proposed by S.J.R. 1, 84th Legislature, Regular Session, 2015, had
been in effect for the 2014 tax year. This subsection expires
September 1, 2016.
SECTION 19. Section 46.032, Education Code, is amended by
adding Subsection (d) to read as follows:
(d) Notwithstanding any other provision of this chapter, in
computing a district's existing debt tax rate ("EDTR") and taxable
value of property ("DPV") for the 2015-2016 school year, a school
district's taxable value of property under Subchapter M, Chapter
403, Government Code, is determined as if the increase in the
residence homestead exemption under Section 1-b(c), Article VIII,
Texas Constitution, and the additional limitation on tax increases
under Section 1-b(d) of that article in effect for the 2015 tax year
as proposed by S.J.R. 1, 84th Legislature, Regular Session, 2015,
had been in effect for the 2014 tax year. This subsection expires
September 1, 2016.
SECTION 20. Chapter 46, Education Code, is amended by
adding Subchapter D to read as follows:
SUBCHAPTER D. STATE AID FOR HOMESTEAD EXEMPTION AND LIMITATION ON
TAX INCREASES
Sec. 46.071. ADDITIONAL STATE AID FOR HOMESTEAD EXEMPTION
AND LIMITATION ON TAX INCREASES. (a) Beginning with the 2015-2016
school year, a school district is entitled to additional state aid
under this subchapter to the extent that state and local revenue
used to service debt eligible under this chapter is less than the
state and local revenue that would have been available to the
district under this chapter as it existed on September 1, 2015, if
the increase in the residence homestead exemption under Section
1-b(c), Article VIII, Texas Constitution, and the additional
limitation on tax increases under Section 1-b(d) of that article in
effect for the applicable tax year as proposed by S.J.R. 1, 84th
Legislature, Regular Session, 2015, had not occurred.
(b) Subject to Subsections (c)-(e), additional state aid
under this section is equal to the amount by which the loss of local
interest and sinking revenue for debt service attributable to the
increase in the residence homestead exemption under Section 1-b(c),
Article VIII, Texas Constitution, and the additional limitation on
tax increases under Section 1-b(d) of that article in effect for the
applicable tax year as proposed by S.J.R. 1, 84th Legislature,
Regular Session, 2015, is not offset by a gain in state aid under
this chapter.
(c) For the purpose of determining state aid under this
section, local interest and sinking revenue for debt service is
limited to revenue required to service debt eligible under this
chapter as of September 1, 2015, including refunding of that debt,
subject to Section 46.061. The limitation imposed by Section
46.034(a) does not apply for the purpose of determining state aid
under this section.
(d) If the amount required to pay debt service eligible
under this section is less than the sum of state and local
assistance provided under this chapter, including the amount of
additional aid provided under this section, the district may not
receive aid under this section in excess of the amount that, when
added to the district's local interest and sinking revenue for debt
service for the school year, as defined by this section, and state
aid under Subchapters A and B, equals the amount required to pay the
eligible debt service.
(e) The commissioner, using information provided by the
comptroller and other information as necessary, shall compute the
amount of additional state aid to which a district is entitled under
this section. A determination by the commissioner under this
section is final and may not be appealed.
SECTION 21. Section 403.302(j), Government Code, is amended
to read as follows:
(j) For purposes of Chapter 42, Education Code, the
comptroller shall certify to the commissioner of education:
(1) a final value for each school district computed on
a residence homestead exemption under Section 1-b(c), Article VIII,
Texas Constitution, of $5,000;
(2) a final value for each school district computed
on:
(A) a residence homestead exemption under
Section 1-b(c), Article VIII, Texas Constitution, of $15,000; and
(B) the effect of the additional limitation on
tax increases under Section 1-b(d), Article VIII, Texas
Constitution, as proposed by H.J.R. No. 4, 75th Legislature,
Regular Session, 1997; [and]
(3) a final value for each school district computed on
the effect of the reduction of the limitation on tax increases to
reflect any reduction in the school district tax rate as provided by
Section 11.26(a-1), (a-2), or (a-3), Tax Code, as applicable; and
(4) a final value for each school district computed
on:
(A) the amount of the residence homestead
exemption under Section 1-b(c), Article VIII, Texas Constitution,
in effect for the applicable tax year; and
(B) the effect of the additional limitation on
tax increases under Section 1-b(d), Article VIII, Texas
Constitution, as proposed by S.J.R. 1, 84th Legislature, Regular
Session, 2015.
SECTION 22. This Act applies to each tax year that begins on
or after January 1, 2015.
SECTION 23. (a) Except as provided by Subsection (b) of this
section or as otherwise provided by this Act:
(1) this Act takes effect on the date on which the
constitutional amendment proposed by S.J.R. 1, 84th Legislature,
Regular Session, 2015, takes effect; and
(2) if that amendment is not approved by the voters,
this Act has no effect.
(b) Sections 11.13(b-1), 25.23(a-1), 26.04(a-1) and (c-1),
and 31.01(a-1), Tax Code, and Sections 41.004(a-1), (b-1), and
(c-1), 41.0042, 41.0121, 41.094(a-1), and 41.0981, Education Code,
as added by this Act, take effect immediately if this Act 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 those sections to have
immediate effect, those sections take effect on the 91st day after
the last day of the legislative session.
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