Texas 2019 - 86th Regular

Texas Senate Bill SB1391 Compare Versions

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1	1	By: Menéndez, Johnson S.B. No. 1391
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to an increase in the amount of the residence homestead
7	7	exemption from ad valorem taxation by a school district and the
8	8	increase of the exemption amount in subsequent years to reflect
9	9	inflation in homestead values, a reduction of the limitation on the
10	10	total amount of ad valorem taxes that may be imposed by a school
11	11	district on the homestead of a disabled or elderly person to reflect
12	12	the increased exemption amounts, and the protection of school
13	13	districts against the resulting loss in local revenue.
14	14	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
15	15	SECTION 1. Section 11.13, Tax Code, is amended by amending
16	16	Subsection (b) and adding Subsection (b-1) to read as follows:
17	17	(b) An adult is entitled to exemption from taxation by a
18	18	school district of a portion [$15,000] of the appraised value of the
19	19	adult's residence homestead in the amount provided by this
20	20	subsection, except that only $5,000 [$10,000] of the exemption
21	21	applies [does not apply] to an entity operating under former
22	22	Chapter 17, 18, 25, 26, 27, or 28, Education Code, as those chapters
23	23	existed on May 1, 1995, as permitted by Section 11.301, Education
24	24	Code. For the 2020 tax year, the amount of the exemption is $50,000.
25	25	For each subsequent tax year, the amount of the exemption shall be
26	26	calculated by the comptroller by multiplying the amount of the
27	27	exemption under this subsection for the preceding tax year by the
28	28	residence homestead inflation rate and adding that amount to the
29	29	amount of that exemption for the preceding tax year. Each year, not
30	30	later than March 15, the comptroller shall calculate the amount of
31	31	the exemption for the current tax year and publish that amount in
32	32	the Texas Register.
33	33	(b-1) In this section, "residence homestead inflation rate"
34	34	means the positive amount, if any, expressed in decimal form
35	35	rounded to the nearest thousandth, computed by determining the
36	36	percentage change in the median market value of residence
37	37	homesteads in this state for the preceding calendar year as
38	38	compared to the calendar year preceding that calendar year.
39	39	SECTION 2. Section 11.26(a), Tax Code, is amended to read as
40	40	follows:
41	41	(a) The tax officials shall appraise the property to which
42	42	this section applies and calculate taxes as on other property, but
43	43	if the tax so calculated exceeds the limitation imposed by this
44	44	section, the tax imposed is the amount of the tax as limited by this
45	45	section, except as otherwise provided by this section. A school
46	46	district may not increase the total annual amount of ad valorem tax
47	47	it imposes on the residence homestead of an individual 65 years of
48	48	age or older or on the residence homestead of an individual who is
49	49	disabled, as defined by Section 11.13, above the amount of the tax
50	50	it imposed in the first tax year in which the individual qualified
51	51	that residence homestead for the applicable exemption provided by
52	52	Section 11.13(c) for an individual who is 65 years of age or older
53	53	or is disabled. If the individual qualified that residence
54	54	homestead for the exemption after the beginning of that first year
55	55	and the residence homestead remains eligible for the same exemption
56	56	for the next year, and if the school district taxes imposed on the
57	57	residence homestead in the next year are less than the amount of
58	58	taxes imposed in that first year, a school district may not
59	59	subsequently increase the total annual amount of ad valorem taxes
60	60	it imposes on the residence homestead above the amount it imposed in
61	61	the year immediately following the first year for which the
62	62	individual qualified that residence homestead for the same
63	63	exemption, except as provided by Subsection (b). If the first tax
64	64	year the individual qualified the residence homestead for the
65	65	exemption provided by Section 11.13(c) for individuals 65 years of
66	66	age or older or disabled was a tax year before the 2020 [1997] tax
67	67	year, the amount of the limitation provided by this section is the
68	68	amount of tax the school district imposed for the 2019 [1996] tax
69	69	year less an amount equal to the amount determined by multiplying
70	70	$20,000 [$10,000] times the tax rate of the school district for the
71	71	2020 [1997] tax year, plus any 2020 [1997] tax attributable to
72	72	improvements made in 2019 [1996], other than improvements made to
73	73	comply with governmental regulations or repairs. If the first tax
74	74	year the individual qualified the residence homestead for the
75	75	exemption provided by Section 11.13(c) for individuals 65 years of
76	76	age or older or disabled was a tax year before a tax year in which
77	77	the amount of the exemption provided by Section 11.13(b) is
78	78	increased to reflect inflation in residence homestead values, the
79	79	amount of the limitation provided by this section is the amount of
80	80	tax the school district imposed for the tax year preceding the tax
81	81	year in which the amount of the exemption is increased less an
82	82	amount equal to the amount determined by multiplying the amount of
83	83	the increase times the tax rate of the school district for the year
84	84	in which the amount of the exemption is increased, plus any tax for
85	85	the tax year in which the amount of the exemption is increased
86	86	attributable to improvements made in the preceding tax year, other
87	87	than improvements made to comply with governmental regulations or
88	88	repairs. Except as provided by Subsection (b), a limitation on tax
89	89	increases provided by this section on a residence homestead
90	90	computed under this subsection continues to apply to the homestead
91	91	in subsequent tax years until the limitation expires.
92	92	SECTION 3. Subchapter A, Chapter 41, Education Code, is
93	93	amended by adding Section 41.0011 to read as follows:
94	94	Sec. 41.0011. COMPUTATION OF WEALTH PER STUDENT FOR SCHOOL
95	95	YEAR IN WHICH HOMESTEAD EXEMPTION INCREASED. Notwithstanding any
96	96	other provision of this chapter, in computing a school district's
97	97	wealth per student for a school year that begins in a tax year in
98	98	which the amount of the residence homestead exemption under Section
99	99	1-b(c), Article VIII, Texas Constitution, is increased and the
100	100	amount of the limitation on tax increases under Section 1-b(d),
101	101	Article VIII, Texas Constitution, is reduced to reflect the
102	102	increased exemption amount, a school district's taxable value of
103	103	property under Subchapter M, Chapter 403, Government Code, is
104	104	determined as if the increase in the homestead exemption under
105	105	Section 1-b(c), Article VIII, Texas Constitution, and the
106	106	additional limitation on tax increases under Section 1-b(d),
107	107	Article VIII, Texas Constitution, had been in effect for the
108	108	preceding tax year.
109	109	SECTION 4. Subchapter E, Chapter 42, Education Code, is
110	110	amended by adding Section 42.2512 to read as follows:
111	111	Sec. 42.2512. ADDITIONAL STATE AID FOR HOMESTEAD EXEMPTION.
112	112	(a) This section applies only to a school year that begins in a tax
113	113	year in which the amount of the residence homestead exemption under
114	114	Section 1-b(c), Article VIII, Texas Constitution, is increased and
115	115	the amount of the limitation on tax increases under Section 1-b(d),
116	116	Article VIII, Texas Constitution, is reduced to reflect the
117	117	increased exemption amount.
118	118	(b) Notwithstanding any other provision of this chapter, in
119	119	computing state aid to a school district for a school year to which
120	120	this section applies, the district's taxable value of property
121	121	under Subchapter M, Chapter 403, Government Code, is determined as
122	122	if the increase in the residence homestead exemption and the
123	123	additional limitation on tax increases described by Subsection (a)
124	124	had been in effect for the preceding tax year.
125	125	(c) A school district is entitled to additional state aid
126	126	for a school year to which this section applies to the extent that
127	127	state aid under this chapter based on the determination of the
128	128	district's taxable value of property as provided by Subsection (b)
129	129	does not fully compensate the district for ad valorem tax revenue
130	130	lost due to the increase in the residence homestead exemption and
131	131	the additional limitation on tax increases described by Subsection
132	132	(a). The commissioner, using information provided by the
133	133	comptroller, shall compute the amount of additional state aid to
134	134	which a district is entitled under this subsection. A
135	135	determination by the commissioner under this subsection is final
136	136	and may not be appealed.
137	137	SECTION 5. Chapter 46, Education Code, is amended by adding
138	138	Subchapter D to read as follows:
139	139	SUBCHAPTER D. ADDITIONAL STATE ASSISTANCE
140	140	Sec. 46.101. ADDITIONAL STATE ASSISTANCE FOR HOMESTEAD
141	141	EXEMPTION. (a) A school district that does not receive state
142	142	assistance under Subchapter B for the district's tax effort to pay
143	143	the principal of and interest on eligible bonds, as defined by
144	144	Section 46.033, is entitled to state assistance to fully compensate
145	145	the district for ad valorem tax revenue for that tax effort lost due
146	146	to an increase in the residence homestead exemption under Section
147	147	1-b(c), Article VIII, Texas Constitution, and a reduction of the
148	148	amount of the limitation on tax increases under Section 1-b(d),
149	149	Article VIII, Texas Constitution, to reflect the increased
150	150	exemption amount.
151	151	(b) The commissioner shall compute the amount of assistance
152	152	to which a school district is entitled under Subsection (a). A
153	153	determination by the commissioner under this section is final and
154	154	may not be appealed.
155	155	SECTION 6. Section 403.302(j), Government Code, is amended
156	156	to read as follows:
157	157	(j) For purposes of Chapter 42, Education Code, the
158	158	comptroller shall certify to the commissioner of education:
159	159	(1) [a final value for each school district computed
160	160	on a residence homestead exemption under Section 1-b(c), Article
161	161	VIII, Texas Constitution, of $5,000;
162	162	[(2)] a final value for each school district computed
163	163	on:
164	164	(A) a residence homestead exemption under
165	165	Section 1-b(c), Article VIII, Texas Constitution, of $15,000; and
166	166	(B) the effect of the additional limitation on
167	167	tax increases under Section 1-b(d), Article VIII, Texas
168	168	Constitution, as proposed by H.J.R. No. 4, 75th Legislature,
169	169	Regular Session, 1997; [and]
170	170	(2) [(3)] a final value for each school district
171	171	computed on the effect of the reduction of the limitation on tax
172	172	increases to reflect any reduction in the school district tax rate
173	173	as provided by Section 11.26(a-1), (a-2), or (a-3), Tax Code, as
174	174	applicable;
175	175	(3) for the 2020 tax year, a final value for each
176	176	school district computed on:
177	177	(A) a residence homestead exemption under
178	178	Section 1-b(c), Article VIII, Texas Constitution, of $50,000; and
179	179	(B) the effect of the additional limitation on ad
180	180	valorem tax increases under Section 1-b(d), Article VIII, Texas
181	181	Constitution, as proposed by the joint resolution to amend that
182	182	section adopted by the 86th Legislature, Regular Session, 2019; and
183	183	(4) for each tax year after the 2020 tax year, a final
184	184	value for each school district computed on:
185	185	(A) the amount of the residence homestead
186	186	exemption under Section 1-b(c), Article VIII, Texas Constitution,
187	187	in effect for that tax year; and
188	188	(B) the effect of any reduction of the limitation
189	189	on ad valorem tax increases under Section 1-b(d), Article VIII,
190	190	Texas Constitution, to reflect any increase in the amount of the
191	191	exemption from the amount in effect for the 2020 tax year.
192	192	SECTION 7. The changes in law made by this Act to Sections
193	193	11.13 and 11.26, Tax Code, apply only to an ad valorem tax year that
194	194	begins on or after January 1, 2020.
195	195	SECTION 8 This Act takes effect January 1, 2020, but only
196	196	if the constitutional amendment proposed by the 86th Legislature,
197	197	Regular Session, 2015, increasing the amount of the residence
198	198	homestead exemption from ad valorem taxation for public school
199	199	purposes from $15,000 to $50,000, providing for the increase of the
200	200	exemption amount in subsequent years to reflect inflation in
201	201	homestead values, and providing for a reduction of the limitation
202	202	on the total amount of ad valorem taxes that may be imposed for
203	203	thosepurposesonthehomesteadofadisabledorelderlypersonto
204	204	reflect the increased exemption amounts is approved by the voters.
205	205	If that constitutional amendment is not approved by the voters,
206	206	this Act has no effect.