By: Nelson, et al. S.B. No. 1
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 in the current tax year 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 in the current tax
year of all residence homesteads in the state as of July 25 and
publish that value in the Texas Register.
(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 in that tax year of all residence homesteads in
the state as of September 30 and publish that value in the Texas
Register. 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 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 or the 60th day after the date the certified
appraisal roll is received by the taxing unit. This subsection
expires December 31, 2016.
SECTION 4. 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 the joint
resolution to amend that article adopted by the 84th Legislature,
Regular Session, 2015, had been in effect for the 2014 tax year.
This section expires September 1, 2016.
SECTION 5. 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 January 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 the joint resolution to amend
that article adopted by the 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) 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.
(d) This section expires August 31, 2017.
SECTION 6. 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 January 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 the joint resolution to amend
that article adopted by the 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) 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 7. 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 the joint resolution to amend that article adopted by
the 84th Legislature, Regular Session, 2015, had been in effect for
the 2014 tax year. This subsection expires September 1, 2016.
SECTION 8. 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 the joint resolution to amend that article adopted by
the 84th Legislature, Regular Session, 2015, had been in effect for
the 2014 tax year. This subsection expires September 1, 2016.
SECTION 9. 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 the joint resolution to amend that article adopted by
the 84th Legislature, Regular Session, 2015, had been in effect for
the 2014 tax year. This subsection expires September 1, 2016.
SECTION 10. 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 the joint resolution to amend that article adopted by
the 84th Legislature, Regular Session, 2015, had been in effect for
the 2014 tax year. This subsection expires September 1, 2016.
SECTION 11. 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 for assistance 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 January 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 the joint
resolution to amend that article adopted by the 84th Legislature,
Regular Session, 2015, had not occurred.
(b) Subject to Subsections (c)-(g), 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 the joint resolution to amend
that article adopted by the 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 for assistance
under this chapter that was issued on or before January 1, 2015,
including refunding of that debt, subject to Section 46.061.
(d) To the extent that the revenue is not included in the
calculation of state aid under Section 42.2518, local maintenance
and operations revenue for lease-purchase agreements eligible for
assistance under this chapter as described by Section 46.004 is
included for the purpose of calculating state aid under this
section.
(e) The effective tax rate used to calculate state aid under
this section may not exceed the lesser of the district's current
effective tax rate or the tax rate that would have been necessary
for the current year to make payments for eligible debt service, as
defined under this section, 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 the joint resolution to amend that article adopted by
the 84th Legislature, Regular Session, 2015, had not occurred.
(f) 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.
(g) 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 12. 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 the joint resolution to amend that
subsection adopted by the 84th Legislature, Regular Session, 2015.
SECTION 13. This Act applies to each tax year that begins on
or after January 1, 2015.
SECTION 14. Except as otherwise provided by this Act, this
Act takes effect on the date that the constitutional amendment
proposed by the 84th Legislature, Regular Session, 2015, providing
for an exemption from ad valorem taxation for public school
purposes of a portion of the market value of a residence homestead
equal to 25 percent of the median market value of all residence
homesteads in the state, providing for a reduction of the
limitation on the total amount of ad valorem taxes that may be
imposed for those purposes on the homestead of an elderly or
disabled person to reflect the increased exemption amount,
authorizing the legislature to prohibit a political subdivision
that has adopted an optional residence homestead exemption from
reducing the amount of or repealing the exemption, and prohibiting
the imposition or collection of a tax on the conveyance, including
by sale, lease, or other transfer, of an interest in real property
takes effect. If that constitutional amendment is not approved by
the voters, this Act has no effect.