84R1648 SMH-D
By: Watson S.B. No. 278
A BILL TO BE ENTITLED
AN ACT
relating to an increase in the amount of the residence homestead
exemption from ad valorem taxation by a school district and the
increase of the exemption amount in subsequent years to reflect
inflation, a reduction of the limitation on the total amount of ad
valorem taxes that may be imposed by a school district on the
homestead of a disabled or elderly person to reflect the increased
exemption amounts, and the protection of school districts against
the resulting loss in local revenue.
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 Subsection (b-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 in the amount provided by this
subsection, 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 the 2016 tax year, the amount of the exemption is $25,000.
For each subsequent tax year, the amount of the exemption shall be
calculated by the comptroller by multiplying the amount of the
exemption under this subsection for the preceding tax year by the
inflation rate and adding that amount to the amount of that
exemption for the preceding tax year. Each year, not later than
March 15, the comptroller shall calculate the amount of the
exemption for the current tax year and publish that amount in the
Texas Register.
(b-1) In this section:
(1) "Consumer price index" means the average over a
calendar year of the index that the comptroller considers to most
accurately report changes in the purchasing power of the dollar for
consumers in this state.
(2) "Inflation rate" means the positive amount, if
any, expressed in decimal form rounded to the nearest thousandth,
computed by determining the percentage change in the consumer price
index for the preceding calendar year as compared to the consumer
price index for the calendar year preceding that calendar year.
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 2016 [1997] tax
year, the amount of the limitation provided by this section is the
amount of tax the school district imposed for the 2015 [1996] tax
year less an amount equal to the amount determined by multiplying
$10,000 times the tax rate of the school district for the 2016
[1997] tax year, plus any 2016 [1997] tax attributable to
improvements made in 2015 [1996], other than improvements made to
comply with governmental regulations or repairs. 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 a tax year in which
the amount of the exemption provided by Section 11.13(b) is
increased to reflect inflation, the amount of the limitation
provided by this section is the amount of tax the school district
imposed for the tax year preceding the tax year in which the amount
of the exemption is increased less an amount equal to the amount
determined by multiplying the amount of the increase times the tax
rate of the school district for the year in which the amount of the
exemption is increased, plus any tax for the tax year in which the
amount of the exemption is increased attributable to improvements
made in the preceding tax year, other than improvements made to
comply with governmental regulations or repairs. Except as provided
by Subsection (b), a limitation on tax increases provided by this
section on a residence homestead computed under this subsection
continues to apply to the homestead in subsequent tax years until
the limitation expires.
SECTION 3. 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 SCHOOL
YEAR IN WHICH HOMESTEAD EXEMPTION INCREASED. Notwithstanding any
other provision of this chapter, in computing a school district's
wealth per student for a school year that begins in a tax year in
which the amount of the residence homestead exemption under Section
1-b(c), Article VIII, Texas Constitution, is increased and the
amount of the limitation on tax increases under Section 1-b(d),
Article VIII, Texas Constitution, is reduced to reflect the
increased exemption amount, a school district's taxable value of
property under Subchapter M, Chapter 403, Government Code, is
determined as if the increase in the homestead exemption under
Section 1-b(c), Article VIII, Texas Constitution, and the
additional limitation on tax increases under Section 1-b(d),
Article VIII, Texas Constitution, had been in effect for the
preceding tax year.
SECTION 4. Subchapter E, Chapter 42, Education Code, is
amended by adding Section 42.2512 to read as follows:
Sec. 42.2512. ADDITIONAL STATE AID FOR HOMESTEAD EXEMPTION.
(a) This section applies only to a school year that begins in a tax
year in which the amount of the residence homestead exemption under
Section 1-b(c), Article VIII, Texas Constitution, is increased and
the amount of the limitation on tax increases under Section 1-b(d),
Article VIII, Texas Constitution, is reduced to reflect the
increased exemption amount.
(b) Notwithstanding any other provision of this chapter, in
computing state aid to a school district for a school year to which
this section applies, the district's taxable value of property
under Subchapter M, Chapter 403, Government Code, is determined as
if the increase in the residence homestead exemption and the
additional limitation on tax increases described by Subsection (a)
had been in effect for the preceding tax year.
(c) A school district is entitled to additional state aid
for a school year to which this section applies to the extent that
state aid under this chapter based on the determination of the
district's taxable value of property as provided by Subsection (b)
does not fully compensate the district for ad valorem tax revenue
lost due to the increase in the residence homestead exemption and
the additional limitation on tax increases described by Subsection
(a). The commissioner, using information provided by the
comptroller, shall compute the amount of additional state aid to
which a district is entitled under this subsection. A determination
by the commissioner under this subsection is final and may not be
appealed.
SECTION 5. Chapter 46, Education Code, is amended by adding
Subchapter D to read as follows:
SUBCHAPTER D. ADDITIONAL STATE ASSISTANCE
Sec. 46.101. ADDITIONAL STATE ASSISTANCE FOR HOMESTEAD
EXEMPTION. (a) A school district that does not receive state
assistance under Subchapter B for the district's tax effort to pay
the principal of and interest on eligible bonds, as defined by
Section 46.033, is entitled to state assistance to fully compensate
the district for ad valorem tax revenue for that tax effort lost due
to an increase in the residence homestead exemption under Section
1-b(c), Article VIII, Texas Constitution, and a reduction of the
amount of the limitation on tax increases under Section 1-b(d),
Article VIII, Texas Constitution, to reflect the increased
exemption amount.
(b) The commissioner shall compute the amount of assistance
to which a school district is entitled under Subsection (a). A
determination by the commissioner under this section is final and
may not be appealed.
SECTION 6. 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]
(2) [(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;
(3) for the 2016 tax year, a final value for each
school district computed on:
(A) a residence homestead exemption under
Section 1-b(c), Article VIII, Texas Constitution, of $25,000; and
(B) the effect of the additional limitation on ad
valorem tax increases under Section 1-b(d), Article VIII, Texas
Constitution, as proposed by the joint resolution to amend that
section adopted by the 84th Legislature, Regular Session, 2015; and
(4) for each tax year after the 2016 tax year, 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 that tax year; and
(B) the effect of any reduction of the limitation
on ad valorem tax increases under Section 1-b(d), Article VIII,
Texas Constitution, to reflect any increase in the amount of the
exemption from the amount in effect for the 2016 tax year.
SECTION 7. The changes in law made by this Act to Sections
11.13 and 11.26, Tax Code, apply only to an ad valorem tax year that
begins on or after January 1, 2016.
SECTION 8. This Act takes effect January 1, 2016, but only
if the constitutional amendment proposed by the 84th Legislature,
Regular Session, 2015, increasing the amount of the residence
homestead exemption from ad valorem taxation for public school
purposes from $15,000 to $25,000, providing for the increase of the
exemption amount in subsequent years to reflect inflation, and
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 a disabled or elderly person to reflect the increased
exemption amounts is approved by the voters. If that constitutional
amendment is not approved by the voters, this Act has no effect.