85S10598 SMH/CAE-D
By: White H.B. No. 288
A BILL TO BE ENTITLED
AN ACT
relating to an exemption from ad valorem taxation by a school
district of a portion of the appraised value of a residence
homestead based on the median market value of all residence
homesteads in this state, 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 an elderly or disabled person to reflect any
increase in the exemption amount, and the protection of school
districts against any resulting loss in local revenue.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 11.13(b), Tax Code, is amended to read as
follows:
(b) An adult is entitled to exemption from taxation by a
school district of a portion [$25,000] of the appraised value of the
adult's residence homestead equal to 25 percent of the highest
median market value for any tax year beginning with the 2017 tax
year of all residence homesteads in the state, except that only
$5,000 of the exemption applies 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, not later than March 1 of
each year the Legislative Budget Board shall determine the median
market value of all residence homesteads in the state as of the
preceding tax year and publish in the Texas Register the highest
median market value for any preceding tax year beginning with the
2017 tax year of all residence homesteads in the state. The
Legislative Budget Board shall make the determination based on
information provided to the board by each appraisal district. Each
appraisal district shall provide to the Legislative Budget Board
the information requested by the board that the board determines to
be necessary to make the determination.
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 2018 [2015] tax
year, the amount of the limitation provided by this section is the
amount of tax the school district imposed for the 2017 [2014] tax
year less an amount equal to the amount determined by subtracting
$25,000 from the amount of the exemption under Section 11.13(b) for
the 2018 tax year and multiplying that amount by [$10,000 times] the
tax rate of the school district for the 2018 [2015] tax year, plus
any 2018 [2015] tax attributable to improvements made in 2017
[2014], other than improvements made to comply with governmental
regulations or repairs.
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
2018-2019 SCHOOL YEAR. Notwithstanding any other provision of
this chapter, in computing a school district's wealth per student
for the 2018-2019 school year, a school district's taxable value of
property under Subchapter M, Chapter 403, Government Code, is
determined as if any change in the amount of the residence homestead
exemption under Section 1-b(c), Article VIII, Texas Constitution,
and any additional limitation on tax increases under Section 1-b(d)
of that article in effect for the 2018 tax year as proposed by the
85th Legislature, 1st Called Session, 2017, had been in effect for
the 2017 tax year. This section expires September 1, 2019.
SECTION 4. Section 42.2518, Education Code, as effective
September 1, 2017, is amended by amending Subsections (a) and (b)
and adding Subsection (a-1) to read as follows:
(a) For [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 as proposed by
S.J.R. 1, 84th Legislature, Regular Session, 2015, had not
occurred.
(a-1) Beginning with the 2018-2019 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, 2017, if any change in the amount of the
residence homestead exemption under Section 1-b(c), Article VIII,
Texas Constitution, as proposed by the joint resolution to amend
that subsection adopted by the 85th Legislature, 1st Called
Session, 2017, and any additional limitation on tax increases under
Section 1-b(d) of that article as proposed by the joint resolution
to amend that subsection adopted by the 85th Legislature, 1st
Called Session, 2017, 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:
(1) the 2014 tax year is used for the purpose of
determining additional state aid under Subsection (a); and
(2) the 2017 tax year is used for the purpose of
determining additional state aid under Subsection (a-1) [this
section].
SECTION 5. 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 2018-2019 school year, a school district's
taxable value of property under Subchapter M, Chapter 403,
Government Code, is determined as if any change in the amount of the
residence homestead exemption under Section 1-b(c), Article VIII,
Texas Constitution, and any additional limitation on tax increases
under Section 1-b(d) of that article in effect for the 2018 tax year
as proposed by the 85th Legislature, 1st Called Session, 2017, had
been in effect for the 2017 tax year. This subsection expires
September 1, 2019.
SECTION 6. 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 2018-2019 school year, a school district's
taxable value of property under Subchapter M, Chapter 403,
Government Code, is determined as if any change in the amount of the
residence homestead exemption under Section 1-b(c), Article VIII,
Texas Constitution, and any additional limitation on tax increases
under Section 1-b(d) of that article in effect for the 2018 tax year
as proposed by the 85th Legislature, 1st Called Session, 2017, had
been in effect for the 2017 tax year. This subsection expires
September 1, 2019.
SECTION 7. 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 2018-2019 school year, a school district's
taxable value of property under Subchapter M, Chapter 403,
Government Code, is determined as if any change in the amount of
the residence homestead exemption under Section 1-b(c), Article
VIII, Texas Constitution, and any additional limitation on tax
increases under Section 1-b(d) of that article in effect for the
2018 tax year as proposed by the 85th Legislature, 1st Called
Session, 2017, had been in effect for the 2017 tax year. This
subsection expires September 1, 2019.
SECTION 8. 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 2018-2019 school year, a school
district's taxable value of property under Subchapter M, Chapter
403, Government Code, is determined as if any change in the amount
of the residence homestead exemption under Section 1-b(c), Article
VIII, Texas Constitution, and any additional limitation on tax
increases under Section 1-b(d) of that article in effect for the
2018 tax year as proposed by the 85th Legislature, 1st Called
Session, 2017, had been in effect for the 2017 tax year. This
subsection expires September 1, 2019.
SECTION 9. Section 46.071, Education Code, is amended by
amending Subsections (a), (b), and (c) and adding Subsections
(a-1), (b-1), and (c-1) to read as follows:
(a) Beginning with the 2015-2016 school year and continuing
through the 2017-2018 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 as proposed by S.J.R. 1, 84th Legislature, Regular
Session, 2015, had not occurred.
(a-1) Beginning with the 2018-2019 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, 2017, if any change in the amount of the
residence homestead exemption under Section 1-b(c), Article VIII,
Texas Constitution, and any additional limitation on tax increases
under Section 1-b(d) of that article as proposed by the 85th
Legislature, 1st Called Session, 2017, had not occurred.
(b) Subject to Subsections (c), (d), and (e) [(c)-(e)],
additional state aid under this section through the 2017-2018
school year 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 as proposed by
S.J.R. 1, 84th Legislature, Regular Session, 2015, is not offset by
a gain in state aid under this chapter.
(b-1) Subject to Subsections (c-1), (d), and (e),
additional state aid under this section beginning with the
2018-2019 school year is equal to the amount by which the loss of
local interest and sinking revenue for debt service attributable to
any change in the amount of the residence homestead exemption under
Section 1-b(c), Article VIII, Texas Constitution, and any
additional limitation on tax increases under Section 1-b(d) of that
article as proposed by the 85th Legislature, 1st Called Session,
2017, is not offset by a gain in state aid under this chapter.
(c) For the purpose of determining state aid under
Subsections (a) and (b) [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.
(c-1) For the purpose of determining state aid under
Subsections (a-1) and (b-1), local interest and sinking revenue for
debt service is limited to revenue required to service debt
eligible under this chapter as of September 1, 2017, 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.
SECTION 10. 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, 2018.
SECTION 11. This Act takes effect January 1, 2018, but only
if the constitutional amendment proposed by the 85th Legislature,
1st Called Session, 2017, providing for an exemption from ad
valorem taxation for public school purposes of a portion of the
market value of a residence homestead based on the median market
value of all residence homesteads in the state 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 an
elderly or disabled person to reflect the increased exemption
amount is approved by the voters. If that constitutional amendment
is not approved by the voters, this Act has no effect.