Texas 2017 - 85th 1st C.S.

Texas House Bill HB88 Compare Versions

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1	1	85S10184 LHC-D
2	2	By: Bell H.B. No. 88
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to a limitation on increases in the appraised value of real
8	8	property for ad valorem tax purposes.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 1.12(d), Tax Code, is amended to read as
11	11	follows:
12	12	(d) For purposes of this section, the appraisal ratio of
13	13	real property [a homestead] to which Section 23.23 applies is the
14	14	ratio of the property's market value as determined by the appraisal
15	15	district or appraisal review board, as applicable, to the market
16	16	value of the property according to law. The appraisal ratio is not
17	17	calculated according to the appraised value of the property as
18	18	limited by Section 23.23.
19	19	SECTION 2. The heading to Section 23.23, Tax Code, is
20	20	amended to read as follows:
21	21	Sec. 23.23. LIMITATION ON APPRAISED VALUE OF REAL PROPERTY
22	22	[RESIDENCE HOMESTEAD].
23	23	SECTION 3. Section 23.23, Tax Code, is amended by amending
24	24	Subsections (a), (b), (c), and (e) and adding Subsections (c-1),
25	25	(c-2), and (c-3) to read as follows:
26	26	(a) Notwithstanding the requirements of Section 25.18 and
27	27	regardless of whether the appraisal office has appraised the
28	28	property and determined the market value of the property for the tax
29	29	year, an appraisal office may increase the appraised value of real
30	30	property [a residence homestead] for a tax year to an amount not to
31	31	exceed the lesser of:
32	32	(1) the market value of the property for the most
33	33	recent tax year that the market value was determined by the
34	34	appraisal office; or
35	35	(2) the sum of:
36	36	(A) five [10] percent of the appraised value of
37	37	the property for the preceding tax year;
38	38	(B) the appraised value of the property for the
39	39	preceding tax year; and
40	40	(C) the market value of all new improvements to
41	41	the property.
42	42	(b) When appraising real property [a residence homestead],
43	43	the chief appraiser shall:
44	44	(1) appraise the property at its market value; and
45	45	(2) include in the appraisal records both the market
46	46	value of the property and the amount computed under Subsection
47	47	(a)(2).
48	48	(c) The limitation provided by Subsection (a) takes effect
49	49	on January 1 of the tax year following the first tax year in which
50	50	the owner owns the property on January 1, or, if the property
51	51	qualifies as the [to a] residence homestead of the owner under
52	52	Section 11.13 in the tax year in which the owner acquires the
53	53	property, the limitation takes effect on January 1 of the tax year
54	54	following that [the first] tax year [the owner qualifies the
55	55	property for an exemption under Section 11.13]. Except as provided
56	56	by Subsection (c-1) or (c-2), the [The] limitation expires on
57	57	January 1 of the first tax year following the year in which [that
58	58	neither] the owner of the property ceases to own the property.
59	59	(c-1) If property subject to a limitation under this section
60	60	qualifies for an exemption under Section 11.13 when the ownership
61	61	of the property is transferred to the owner's spouse or surviving
62	62	spouse, the limitation expires on January 1 of the first tax year
63	63	following the year in which [when the limitation took effect nor]
64	64	the owner's spouse or surviving spouse ceases to own the property,
65	65	unless the limitation is further continued under this subsection on
66	66	the subsequent transfer to a spouse or surviving spouse [qualifies
67	67	for an exemption under Section 11.13].
68	68	(c-2) If property subject to a limitation under Subsection
69	69	(a), other than a residence homestead, is owned by two or more
70	70	persons, the limitation expires on January 1 of the first tax year
71	71	following the year in which the ownership of at least a 50 percent
72	72	interest in the property is sold or otherwise transferred.
73	73	(c-3) For purposes of applying the limitation provided by
74	74	this section in the first tax year after the 2017 tax year in which
75	75	the property is appraised for taxation:
76	76	(1) the property is considered to have been appraised
77	77	for taxation in the 2017 tax year at a market value equal to the
78	78	appraised value of the property for that tax year;
79	79	(2) a person who acquired real property in a tax year
80	80	before the 2017 tax year is considered to have acquired the property
81	81	on January 1, 2017; and
82	82	(3) a person who qualified the property for an
83	83	exemption under Section 11.13 as the person's residence homestead
84	84	for any portion of the 2017 tax year is considered to have acquired
85	85	the property in the 2017 tax year.
86	86	(e) In this section, "new improvement" means an improvement
87	87	to real property [a residence homestead] made after the most recent
88	88	appraisal of the property that increases the market value of the
89	89	property and the value of which is not included in the appraised
90	90	value of the property for the preceding tax year. The term does not
91	91	include repairs to or ordinary maintenance of an existing structure
92	92	or the grounds or another feature of the property.
93	93	SECTION 4. Section 42.26(d), Tax Code, is amended to read as
94	94	follows:
95	95	(d) For purposes of this section, the value of the property
96	96	subject to the suit and the value of a comparable property or sample
97	97	property that is used for comparison must be the market value
98	98	determined by the appraisal district when the property is [a
99	99	residence homestead] subject to the limitation on appraised value
100	100	imposed by Section 23.23.
101	101	SECTION 5. Sections 403.302(d) and (i), Government Code,
102	102	are amended to read as follows:
103	103	(d) For the purposes of this section, "taxable value" means
104	104	the market value of all taxable property less:
105	105	(1) the total dollar amount of any residence homestead
106	106	exemptions lawfully granted under Section 11.13(b) or (c), Tax
107	107	Code, in the year that is the subject of the study for each school
108	108	district;
109	109	(2) one-half of the total dollar amount of any
110	110	residence homestead exemptions granted under Section 11.13(n), Tax
111	111	Code, in the year that is the subject of the study for each school
112	112	district;
113	113	(3) the total dollar amount of any exemptions granted
114	114	before May 31, 1993, within a reinvestment zone under agreements
115	115	authorized by Chapter 312, Tax Code;
116	116	(4) subject to Subsection (e), the total dollar amount
117	117	of any captured appraised value of property that:
118	118	(A) is within a reinvestment zone created on or
119	119	before May 31, 1999, or is proposed to be included within the
120	120	boundaries of a reinvestment zone as the boundaries of the zone and
121	121	the proposed portion of tax increment paid into the tax increment
122	122	fund by a school district are described in a written notification
123	123	provided by the municipality or the board of directors of the zone
124	124	to the governing bodies of the other taxing units in the manner
125	125	provided by former Section 311.003(e), Tax Code, before May 31,
126	126	1999, and within the boundaries of the zone as those boundaries
127	127	existed on September 1, 1999, including subsequent improvements to
128	128	the property regardless of when made;
129	129	(B) generates taxes paid into a tax increment
130	130	fund created under Chapter 311, Tax Code, under a reinvestment zone
131	131	financing plan approved under Section 311.011(d), Tax Code, on or
132	132	before September 1, 1999; and
133	133	(C) is eligible for tax increment financing under
134	134	Chapter 311, Tax Code;
135	135	(5) the total dollar amount of any captured appraised
136	136	value of property that:
137	137	(A) is within a reinvestment zone:
138	138	(i) created on or before December 31, 2008,
139	139	by a municipality with a population of less than 18,000; and
140	140	(ii) the project plan for which includes
141	141	the alteration, remodeling, repair, or reconstruction of a
142	142	structure that is included on the National Register of Historic
143	143	Places and requires that a portion of the tax increment of the zone
144	144	be used for the improvement or construction of related facilities
145	145	or for affordable housing;
146	146	(B) generates school district taxes that are paid
147	147	into a tax increment fund created under Chapter 311, Tax Code; and
148	148	(C) is eligible for tax increment financing under
149	149	Chapter 311, Tax Code;
150	150	(6) the total dollar amount of any exemptions granted
151	151	under Section 11.251 or 11.253, Tax Code;
152	152	(7) the difference between the comptroller's estimate
153	153	of the market value and the productivity value of land that
154	154	qualifies for appraisal on the basis of its productive capacity,
155	155	except that the productivity value estimated by the comptroller may
156	156	not exceed the fair market value of the land;
157	157	(8) the portion of the appraised value of residence
158	158	homesteads of individuals who receive a tax limitation under
159	159	Section 11.26, Tax Code, on which school district taxes are not
160	160	imposed in the year that is the subject of the study, calculated as
161	161	if the residence homesteads were appraised at the full value
162	162	required by law;
163	163	(9) a portion of the market value of property not
164	164	otherwise fully taxable by the district at market value because of:
165	165	(A) action required by statute or the
166	166	constitution of this state, other than Section 11.311, Tax Code,
167	167	that, if the tax rate adopted by the district is applied to it,
168	168	produces an amount equal to the difference between the tax that the
169	169	district would have imposed on the property if the property were
170	170	fully taxable at market value and the tax that the district is
171	171	actually authorized to impose on the property, if this subsection
172	172	does not otherwise require that portion to be deducted; or
173	173	(B) action taken by the district under Subchapter
174	174	B or C, Chapter 313, Tax Code, before the expiration of the
175	175	subchapter;
176	176	(10) the market value of all tangible personal
177	177	property, other than manufactured homes, owned by a family or
178	178	individual and not held or used for the production of income;
179	179	(11) the appraised value of property the collection of
180	180	delinquent taxes on which is deferred under Section 33.06, Tax
181	181	Code;
182	182	(12) the portion of the appraised value of property
183	183	the collection of delinquent taxes on which is deferred under
184	184	Section 33.065, Tax Code; and
185	185	(13) the amount by which the market value of real
186	186	property [a residence homestead] to which Section 23.23, Tax Code,
187	187	applies exceeds the appraised value of that property as calculated
188	188	under that section.
189	189	(i) If the comptroller determines in the study that the
190	190	market value of property in a school district as determined by the
191	191	appraisal district that appraises property for the school district,
192	192	less the total of the amounts and values listed in Subsection (d) as
193	193	determined by that appraisal district, is valid, the comptroller,
194	194	in determining the taxable value of property in the school district
195	195	under Subsection (d), shall for purposes of Subsection (d)(13)
196	196	subtract from the market value as determined by the appraisal
197	197	district of properties [residence homesteads] to which Section
198	198	23.23, Tax Code, applies the amount by which that amount exceeds the
199	199	appraised value of those properties as calculated by the appraisal
200	200	district under Section 23.23, Tax Code. If the comptroller
201	201	determines in the study that the market value of property in a
202	202	school district as determined by the appraisal district that
203	203	appraises property for the school district, less the total of the
204	204	amounts and values listed in Subsection (d) as determined by that
205	205	appraisal district, is not valid, the comptroller, in determining
206	206	the taxable value of property in the school district under
207	207	Subsection (d), shall for purposes of Subsection (d)(13) subtract
208	208	from the market value as estimated by the comptroller of properties
209	209	[residence homesteads] to which Section 23.23, Tax Code, applies
210	210	the amount by which that amount exceeds the appraised value of those
211	211	properties as calculated by the appraisal district under Section
212	212	23.23, Tax Code.
213	213	SECTION 6. This Act applies only to the appraisal for ad
214	214	valorem tax purposes of real property for a tax year that begins on
215	215	or after the effective date of this Act.
216	216	SECTION 7. This Act takes effect January 1, 2018, but only
217	217	if the constitutional amendment proposed by the 85th Legislature,
218	218	1st Called Session, 2017, to authorize the legislature to limit the
219	219	maximum appraised value of real property for ad valorem tax
220	220	purposes to 105 percent or more of the appraised value of the
221	221	property for the preceding tax year is approved by the voters. If
222	222	that amendment is not approved by the voters, this Act has no
223	223	effect.