Texas 2019 - 86th Regular

Texas House Bill HB1102 Compare Versions

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1	1	86R2876 TJB-D
2	2	By: Bernal H.B. No. 1102
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to a limitation on the total amount of ad valorem taxes
8	8	that a school district may impose on certain residence homesteads
9	9	following a substantial school tax increase.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by
12	12	adding Section 11.262 to read as follows:
13	13	Sec. 11.262. LIMITATION OF SCHOOL TAXES ON CERTAIN
14	14	HOMESTEADS FOLLOWING SUBSTANTIAL TAX INCREASE. (a) In this
15	15	section, "residence homestead" has the meaning assigned by Section
16	16	11.13.
17	17	(b) The chief appraiser shall appraise, and the tax assessor
18	18	for each school district shall calculate the taxes on, each
19	19	residence homestead in the manner provided by law for other
20	20	property.
21	21	(c) Except as provided by Subsection (g), if an individual
22	22	qualifies property as the individual's residence homestead for at
23	23	least 15 consecutive tax years and the total amount of school
24	24	district taxes imposed on the property in that 15th tax year is at
25	25	least 120 percent greater than the total amount of those taxes
26	26	imposed in the first of those tax years, not including taxes imposed
27	27	on the appraised value of all improvements made to the property
28	28	during that period, a school district may not impose taxes on that
29	29	residence homestead in a subsequent tax year in an amount that
30	30	exceeds the least of the following amounts:
31	31	(1) the amount of school taxes calculated for the
32	32	current tax year under Subsection (b);
33	33	(2) the amount of school taxes imposed for that 15th
34	34	tax year; or
35	35	(3) the amount of school taxes as limited under
36	36	Section 11.26, if applicable.
37	37	(c-1) An individual may not receive a limitation on taxes
38	38	under Subsection (c) based on an increase in taxes for any period
39	39	that began before the 2006 tax year.
40	40	(d) If an individual who qualifies for a limitation under
41	41	this section dies, the surviving spouse of the individual is
42	42	entitled to continue receiving the limitation on school taxes
43	43	imposed by a school district on the residence homestead of the
44	44	individual if the property:
45	45	(1) is the residence homestead of the surviving spouse
46	46	on the date that the individual dies; and
47	47	(2) remains the residence homestead of the surviving
48	48	spouse.
49	49	(e) Except as provided by Subsection (d) or (f), a
50	50	limitation under this section expires on January 1 if the property
51	51	is not the residence homestead of the individual entitled to the
52	52	limitation for the preceding tax year.
53	53	(f) A limitation under this section does not expire if:
54	54	(1) an owner of an interest in the residence homestead
55	55	conveys the interest to a qualifying trust as defined in Section
56	56	11.13(j) and the owner or the owner's spouse is:
57	57	(A) a trustor of the trust; and
58	58	(B) entitled to occupy the property; or
59	59	(2) the owner of the structure qualifies for an
60	60	exemption under Section 11.13 under the circumstances described by
61	61	Section 11.135(a).
62	62	(g) Except as provided by Subsection (h), a school district
63	63	may increase the tax on a residence homestead subject to a
64	64	limitation under this section in the first year the appraised value
65	65	of the property is increased as the result of an improvement made to
66	66	the property in the preceding tax year. The amount of the tax
67	67	increase is determined by applying the current tax rate of the
68	68	school district to the difference in the taxable value of the
69	69	property with the improvement and the taxable value the property
70	70	would have had without the improvement. A limitation imposed by
71	71	this section then applies to the increased amount of tax until
72	72	another improvement is made to the property.
73	73	(h) An improvement to a residence homestead is not treated
74	74	as an improvement under Subsection (g) if the improvement is:
75	75	(1) a repair;
76	76	(2) required to be made to comply with a governmental
77	77	requirement; or
78	78	(3) subject to Subsection (i), a replacement structure
79	79	for a structure that was rendered uninhabitable or unusable by a
80	80	casualty or by wind or water damage.
81	81	(i) A replacement structure described by Subsection (h)(3)
82	82	is considered to be an improvement under Subsection (g) only if:
83	83	(1) the square footage of the replacement structure
84	84	exceeds the square footage of the replaced structure as the
85	85	replaced structure existed before the casualty or damage occurred;
86	86	or
87	87	(2) the exterior of the replacement structure is of
88	88	higher quality construction and composition than that of the
89	89	replaced structure.
90	90	(j) If the appraisal roll provides for taxation of appraised
91	91	value for a prior year because a limitation under this section was
92	92	erroneously allowed, the tax assessor for the school district shall
93	93	add as back taxes due, as provided by Section 26.09(d), the positive
94	94	difference, if any, between the tax that should have been imposed
95	95	for that tax year and the tax that was imposed because of the
96	96	provisions of this section.
97	97	(k) For each school district in an appraisal district, the
98	98	chief appraiser shall determine the portion of the appraised value
99	99	of residence homesteads of individuals on which school district
100	100	taxes are not imposed in a tax year because of the limitation under
101	101	this section. That portion is calculated by determining the
102	102	taxable value that, if multiplied by the tax rate adopted by the
103	103	school district for the tax year, would produce an amount equal to
104	104	the amount of tax that would have been imposed by the school
105	105	district on those properties if the limitation under this section
106	106	were not in effect, but that was not imposed because of that
107	107	limitation. The chief appraiser shall determine that taxable value
108	108	and certify it to the comptroller as soon as practicable for each
109	109	tax year.
110	110	SECTION 2. Sections 23.19(b) and (g), Tax Code, are amended
111	111	to read as follows:
112	112	(b) If an appraisal district receives a written request for
113	113	the appraisal of real property and improvements of a cooperative
114	114	housing corporation according to the separate interests of the
115	115	corporation's stockholders, the chief appraiser shall separately
116	116	appraise the interests described by Subsection (d) if the
117	117	conditions required by Subsections (e) and (f) have been met.
118	118	Separate appraisal under this section is for the purposes of
119	119	administration of tax exemptions, determination of applicable
120	120	limitations of taxes under Section 11.26, [or] 11.261, or 11.262,
121	121	and apportionment by a cooperative housing corporation of property
122	122	taxes among its stockholders but is not the basis for determining
123	123	value on which a tax is imposed under this title. A stockholder
124	124	whose interest is separately appraised under this section may
125	125	protest and appeal the appraised value in the manner provided by
126	126	this title for protest and appeal of the appraised value of other
127	127	property.
128	128	(g) A tax bill or a separate statement accompanying the tax
129	129	bill to a cooperative housing corporation for which interests of
130	130	stockholders are separately appraised under this section must
131	131	state, in addition to the information required by Section 31.01,
132	132	the appraised value and taxable value of each interest separately
133	133	appraised. Each exemption claimed as provided by this title by a
134	134	person entitled to the exemption shall also be deducted from the
135	135	total appraised value of the property of the corporation. The total
136	136	tax imposed by a school district, county, municipality, or junior
137	137	college district shall be reduced by any amount that represents an
138	138	increase in taxes attributable to separately appraised interests of
139	139	the real property and improvements that are subject to the
140	140	limitation of taxes prescribed by Section 11.26, [or] 11.261, or
141	141	11.262. The corporation shall apportion among its stockholders
142	142	liability for reimbursing the corporation for property taxes
143	143	according to the relative taxable values of their interests.
144	144	SECTION 3. Sections 26.012(6), (13), and (14), Tax Code,
145	145	are amended to read as follows:
146	146	(6) "Current total value" means the total taxable
147	147	value of property listed on the appraisal roll for the current year,
148	148	including all appraisal roll supplements and corrections as of the
149	149	date of the calculation, less the taxable value of property
150	150	exempted for the current tax year for the first time under Section
151	151	11.31 or 11.315, except that:
152	152	(A) the current total value for a school district
153	153	excludes:
154	154	(i) the total value of homesteads that
155	155	qualify for a tax limitation as provided by Sections [Section]
156	156	11.26 and 11.262; and
157	157	(ii) new property value of property that is
158	158	subject to an agreement entered into under Chapter 313; and
159	159	(B) the current total value for a county,
160	160	municipality, or junior college district excludes the total value
161	161	of homesteads that qualify for a tax limitation provided by Section
162	162	11.261.
163	163	(13) "Last year's levy" means the total of:
164	164	(A) the amount of taxes that would be generated
165	165	by multiplying the total tax rate adopted by the governing body in
166	166	the preceding year by the total taxable value of property on the
167	167	appraisal roll for the preceding year, including:
168	168	(i) taxable value that was reduced in an
169	169	appeal under Chapter 42; and
170	170	(ii) all appraisal roll supplements and
171	171	corrections other than corrections made pursuant to Section
172	172	25.25(d), as of the date of the calculation, except that last year's
173	173	taxable value for a school district excludes the total value of
174	174	homesteads that qualified for a tax limitation as provided by
175	175	Sections [Section] 11.26 and 11.262 and last year's taxable value
176	176	for a county, municipality, or junior college district excludes the
177	177	total value of homesteads that qualified for a tax limitation as
178	178	provided by Section 11.261; and
179	179	(B) the amount of taxes refunded by the taxing
180	180	unit in the preceding year for tax years before that year.
181	181	(14) "Last year's total value" means the total taxable
182	182	value of property listed on the appraisal roll for the preceding
183	183	year, including all appraisal roll supplements and corrections,
184	184	other than corrections made pursuant to Section 25.25(d), as of the
185	185	date of the calculation, except that:
186	186	(A) last year's taxable value for a school
187	187	district excludes the total value of homesteads that qualified for
188	188	a tax limitation as provided by Sections [Section] 11.26 and
189	189	11.262; and
190	190	(B) last year's taxable value for a county,
191	191	municipality, or junior college district excludes the total value
192	192	of homesteads that qualified for a tax limitation as provided by
193	193	Section 11.261.
194	194	SECTION 4. Section 44.004(c), Education Code, is amended to
195	195	read as follows:
196	196	(c) The notice of public meeting to discuss and adopt the
197	197	budget and the proposed tax rate may not be smaller than one-quarter
198	198	page of a standard-size or a tabloid-size newspaper, and the
199	199	headline on the notice must be in 18-point or larger type. Subject
200	200	to Subsection (d), the notice must:
201	201	(1) contain a statement in the following form:
202	202	"NOTICE OF PUBLIC MEETING TO DISCUSS BUDGET AND PROPOSED TAX RATE
203	203	"The (name of school district) will hold a public meeting at
204	204	(time, date, year) in (name of room, building, physical location,
205	205	city, state). The purpose of this meeting is to discuss the school
206	206	district's budget that will determine the tax rate that will be
207	207	adopted. Public participation in the discussion is invited." The
208	208	statement of the purpose of the meeting must be in bold type. In
209	209	reduced type, the notice must state: "The tax rate that is
210	210	ultimately adopted at this meeting or at a separate meeting at a
211	211	later date may not exceed the proposed rate shown below unless the
212	212	district publishes a revised notice containing the same information
213	213	and comparisons set out below and holds another public meeting to
214	214	discuss the revised notice.";
215	215	(2) contain a section entitled "Comparison of Proposed
216	216	Budget with Last Year's Budget," which must show the difference,
217	217	expressed as a percent increase or decrease, as applicable, in the
218	218	amounts budgeted for the preceding fiscal year and the amount
219	219	budgeted for the fiscal year that begins in the current tax year for
220	220	each of the following:
221	221	(A) maintenance and operations;
222	222	(B) debt service; and
223	223	(C) total expenditures;
224	224	(3) contain a section entitled "Total Appraised Value
225	225	and Total Taxable Value," which must show the total appraised value
226	226	and the total taxable value of all property and the total appraised
227	227	value and the total taxable value of new property taxable by the
228	228	district in the preceding tax year and the current tax year as
229	229	calculated under Section 26.04, Tax Code;
230	230	(4) contain a statement of the total amount of the
231	231	outstanding and unpaid bonded indebtedness of the school district;
232	232	(5) contain a section entitled "Comparison of Proposed
233	233	Rates with Last Year's Rates," which must:
234	234	(A) show in rows the tax rates described by
235	235	Subparagraphs (i)-(iii), expressed as amounts per $100 valuation of
236	236	property, for columns entitled "Maintenance & Operations,"
237	237	"Interest & Sinking Fund," and "Total," which is the sum of
238	238	"Maintenance & Operations" and "Interest & Sinking Fund":
239	239	(i) the school district's "Last Year's
240	240	Rate";
241	241	(ii) the "Rate to Maintain Same Level of
242	242	Maintenance & Operations Revenue & Pay Debt Service," which:
243	243	(a) in the case of "Maintenance &
244	244	Operations," is the tax rate that, when applied to the current
245	245	taxable value for the district, as certified by the chief appraiser
246	246	under Section 26.01, Tax Code, and as adjusted to reflect changes
247	247	made by the chief appraiser as of the time the notice is prepared,
248	248	would impose taxes in an amount that, when added to state funds to
249	249	be distributed to the district under Chapter 42, would provide the
250	250	same amount of maintenance and operations taxes and state funds
251	251	distributed under Chapter 42 per student in average daily
252	252	attendance for the applicable school year that was available to the
253	253	district in the preceding school year; and
254	254	(b) in the case of "Interest & Sinking
255	255	Fund," is the tax rate that, when applied to the current taxable
256	256	value for the district, as certified by the chief appraiser under
257	257	Section 26.01, Tax Code, and as adjusted to reflect changes made by
258	258	the chief appraiser as of the time the notice is prepared, and when
259	259	multiplied by the district's anticipated collection rate, would
260	260	impose taxes in an amount that, when added to state funds to be
261	261	distributed to the district under Chapter 46 and any excess taxes
262	262	collected to service the district's debt during the preceding tax
263	263	year but not used for that purpose during that year, would provide
264	264	the amount required to service the district's debt; and
265	265	(iii) the "Proposed Rate";
266	266	(B) contain fourth and fifth columns aligned with
267	267	the columns required by Paragraph (A) that show, for each row
268	268	required by Paragraph (A):
269	269	(i) the "Local Revenue per Student," which
270	270	is computed by multiplying the district's total taxable value of
271	271	property, as certified by the chief appraiser for the applicable
272	272	school year under Section 26.01, Tax Code, and as adjusted to
273	273	reflect changes made by the chief appraiser as of the time the
274	274	notice is prepared, by the total tax rate, and dividing the product
275	275	by the number of students in average daily attendance in the
276	276	district for the applicable school year; and
277	277	(ii) the "State Revenue per Student," which
278	278	is computed by determining the amount of state aid received or to be
279	279	received by the district under Chapters 42, 43, and 46 and dividing
280	280	that amount by the number of students in average daily attendance in
281	281	the district for the applicable school year; and
282	282	(C) contain an asterisk after each calculation
283	283	for "Interest & Sinking Fund" and a footnote to the section that, in
284	284	reduced type, states "The Interest & Sinking Fund tax revenue is
285	285	used to pay for bonded indebtedness on construction, equipment, or
286	286	both. The bonds, and the tax rate necessary to pay those bonds,
287	287	were approved by the voters of this district.";
288	288	(6) contain a section entitled "Comparison of Proposed
289	289	Levy with Last Year's Levy on Average Residence," which must:
290	290	(A) show in rows the information described by
291	291	Subparagraphs (i)-(iv), rounded to the nearest dollar, for columns
292	292	entitled "Last Year" and "This Year":
293	293	(i) "Average Market Value of Residences,"
294	294	determined using the same group of residences for each year;
295	295	(ii) "Average Taxable Value of Residences,"
296	296	determined after taking into account the limitation on the
297	297	appraised value of residences under Section 23.23, Tax Code, and
298	298	after subtracting all homestead exemptions applicable in each year,
299	299	other than exemptions available only to disabled persons or persons
300	300	65 years of age or older or their surviving spouses, and using the
301	301	same group of residences for each year;
302	302	(iii) "Last Year's Rate Versus Proposed
303	303	Rate per $100 Value"; and
304	304	(iv) "Taxes Due on Average Residence,"
305	305	determined using the same group of residences for each year; and
306	306	(B) contain the following information:
307	307	"Increase (Decrease) in Taxes" expressed in dollars and cents,
308	308	which is computed by subtracting the "Taxes Due on Average
309	309	Residence" for the preceding tax year from the "Taxes Due on Average
310	310	Residence" for the current tax year;
311	311	(7) contain the following statement in bold print:
312	312	"Under state law, the dollar amount of school taxes imposed on the
313	313	residence of a person 65 years of age or older or of the surviving
314	314	spouse of such a person, if the surviving spouse was 55 years of age
315	315	or older when the person died, may not be increased above the amount
316	316	paid in the first year after the person turned 65, regardless of
317	317	changes in tax rate or property value.";
318	318	(8) contain the following statement in bold print:
319	319	"Notice of Rollback Rate: The highest tax rate the district can
320	320	adopt before requiring voter approval at an election is (the school
321	321	district rollback rate determined under Section 26.08, Tax Code).
322	322	This election will be automatically held if the district adopts a
323	323	rate in excess of the rollback rate of (the school district rollback
324	324	rate)."; [and]
325	325	(9) contain a section entitled "Fund Balances," which
326	326	must include the estimated amount of interest and sinking fund
327	327	balances and the estimated amount of maintenance and operation or
328	328	general fund balances remaining at the end of the current fiscal
329	329	year that are not encumbered with or by corresponding debt
330	330	obligation, less estimated funds necessary for the operation of the
331	331	district before the receipt of the first payment under Chapter 42 in
332	332	the succeeding school year; and
333	333	(10) contain the following statement in bold print:
334	334	"Under state law, the dollar amount of school taxes imposed on a
335	335	residence homestead that qualifies as the owner's residence
336	336	homestead for at least 15 consecutive years, during which time the
337	337	total amount of school district taxes imposed on the property has
338	338	increased by at least 120 percent, may not be increased above the
339	339	amount of school taxes imposed on the property in that 15th
340	340	consecutive year, regardless of changes in tax rate or property
341	341	value.".
342	342	SECTION 5. Section 403.302(d), Government Code, is amended
343	343	to read as follows:
344	344	(d) For the purposes of this section, "taxable value" means
345	345	the market value of all taxable property less:
346	346	(1) the total dollar amount of any residence homestead
347	347	exemptions lawfully granted under Section 11.13(b) or (c), Tax
348	348	Code, in the year that is the subject of the study for each school
349	349	district;
350	350	(2) one-half of the total dollar amount of any
351	351	residence homestead exemptions granted under Section 11.13(n), Tax
352	352	Code, in the year that is the subject of the study for each school
353	353	district;
354	354	(3) the total dollar amount of any exemptions granted
355	355	before May 31, 1993, within a reinvestment zone under agreements
356	356	authorized by Chapter 312, Tax Code;
357	357	(4) subject to Subsection (e), the total dollar amount
358	358	of any captured appraised value of property that:
359	359	(A) is within a reinvestment zone created on or
360	360	before May 31, 1999, or is proposed to be included within the
361	361	boundaries of a reinvestment zone as the boundaries of the zone and
362	362	the proposed portion of tax increment paid into the tax increment
363	363	fund by a school district are described in a written notification
364	364	provided by the municipality or the board of directors of the zone
365	365	to the governing bodies of the other taxing units in the manner
366	366	provided by former Section 311.003(e), Tax Code, before May 31,
367	367	1999, and within the boundaries of the zone as those boundaries
368	368	existed on September 1, 1999, including subsequent improvements to
369	369	the property regardless of when made;
370	370	(B) generates taxes paid into a tax increment
371	371	fund created under Chapter 311, Tax Code, under a reinvestment zone
372	372	financing plan approved under Section 311.011(d), Tax Code, on or
373	373	before September 1, 1999; and
374	374	(C) is eligible for tax increment financing under
375	375	Chapter 311, Tax Code;
376	376	(5) the total dollar amount of any captured appraised
377	377	value of property that:
378	378	(A) is within a reinvestment zone:
379	379	(i) created on or before December 31, 2008,
380	380	by a municipality with a population of less than 18,000; and
381	381	(ii) the project plan for which includes
382	382	the alteration, remodeling, repair, or reconstruction of a
383	383	structure that is included on the National Register of Historic
384	384	Places and requires that a portion of the tax increment of the zone
385	385	be used for the improvement or construction of related facilities
386	386	or for affordable housing;
387	387	(B) generates school district taxes that are paid
388	388	into a tax increment fund created under Chapter 311, Tax Code; and
389	389	(C) is eligible for tax increment financing under
390	390	Chapter 311, Tax Code;
391	391	(6) the total dollar amount of any exemptions granted
392	392	under Section 11.251 or 11.253, Tax Code;
393	393	(7) the difference between the comptroller's estimate
394	394	of the market value and the productivity value of land that
395	395	qualifies for appraisal on the basis of its productive capacity,
396	396	except that the productivity value estimated by the comptroller may
397	397	not exceed the fair market value of the land;
398	398	(8) the portion of the appraised value of residence
399	399	homesteads of individuals who receive a tax limitation under
400	400	Section 11.26 or 11.262, Tax Code, on which school district taxes
401	401	are not imposed in the year that is the subject of the study,
402	402	calculated as if the residence homesteads were appraised at the
403	403	full value required by law;
404	404	(9) a portion of the market value of property not
405	405	otherwise fully taxable by the district at market value because of:
406	406	(A) action required by statute or the
407	407	constitution of this state, other than Section 11.311, Tax Code,
408	408	that, if the tax rate adopted by the district is applied to it,
409	409	produces an amount equal to the difference between the tax that the
410	410	district would have imposed on the property if the property were
411	411	fully taxable at market value and the tax that the district is
412	412	actually authorized to impose on the property, if this subsection
413	413	does not otherwise require that portion to be deducted; or
414	414	(B) action taken by the district under Subchapter
415	415	B or C, Chapter 313, Tax Code, before the expiration of the
416	416	subchapter;
417	417	(10) the market value of all tangible personal
418	418	property, other than manufactured homes, owned by a family or
419	419	individual and not held or used for the production of income;
420	420	(11) the appraised value of property the collection of
421	421	delinquent taxes on which is deferred under Section 33.06, Tax
422	422	Code;
423	423	(12) the portion of the appraised value of property
424	424	the collection of delinquent taxes on which is deferred under
425	425	Section 33.065, Tax Code; and
426	426	(13) the amount by which the market value of a
427	427	residence homestead to which Section 23.23, Tax Code, applies
428	428	exceeds the appraised value of that property as calculated under
429	429	that section.
430	430	SECTION 6. The limitation on taxes provided by Section
431	431	11.262, Tax Code, as added by this Act, applies only to ad valorem
432	432	taxes imposed for an ad valorem tax year that begins on or after the
433	433	effective date of this Act.
434	434	SECTION 7. This Act takes effect January 1, 2020, but only
435	435	if the constitutional amendment proposed by the 86th Legislature,
436	436	Regular Session, 2019, authorizing the legislature to limit the
437	437	total amount of ad valorem taxes that a school district may impose
438	438	on the residence homestead of an individual and the surviving
439	439	spouse of the individual if the individual qualifies the property
440	440	as the individual's residence homestead for 15 consecutive tax
441	441	years and the school taxes on the property increase by at least 120
442	442	percent during that period is approved by the voters. If that
443	443	amendment is not approved by the voters, this Act has no effect.