Texas 2019 - 86th Regular

Texas Senate Bill SB1791 Compare Versions

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1	1	86R12812 SMH-D
2	2	By: Zaffirini S.B. No. 1791
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the authority of the governing body of a taxing unit in
8	8	a county in which home prices are appreciating rapidly to adopt a
9	9	limitation on increases in the appraised value for purposes of ad
10	10	valorem taxation by the taxing unit of residence homesteads in
11	11	certain low-income areas.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Section 1.12(d), Tax Code, is amended to read as
14	14	follows:
15	15	(d) For purposes of this section, the appraisal ratio of a
16	16	homestead to which Section 23.23 or 23.231 applies is the ratio of
17	17	the property's market value as determined by the appraisal district
18	18	or appraisal review board, as applicable, to the market value of the
19	19	property according to law. The appraisal ratio is not calculated
20	20	according to the appraised value of the property as limited by
21	21	Section 23.23 or 23.231.
22	22	SECTION 2. Subchapter B, Chapter 23, Tax Code, is amended by
23	23	adding Section 23.231 to read as follows:
24	24	Sec. 23.231. LIMITATION ON APPRAISED VALUE OF RESIDENCE
25	25	HOMESTEAD IN LOW-INCOME AREA. (a) In this section:
26	26	(1) "Qualifying census tract" means a census tract
27	27	delineated by the United States Bureau of the Census in the most
28	28	recent decennial census in which:
29	29	(A) the median family income is less than 60
30	30	percent of the area median family income for the county or
31	31	metropolitan statistical area in which the census tract is located,
32	32	as determined annually by the United States Department of Housing
33	33	and Urban Development; or
34	34	(B) the poverty rate is at least 25 percent.
35	35	(2) "Qualifying county" means a county in which the
36	36	rate of increase in the unadjusted median value of the sales price
37	37	of existing homes over the preceding three years, as calculated by
38	38	the United States Department of Housing and Urban Development for
39	39	purposes of the HOME and Housing Trust Fund programs, is greater
40	40	than 2.5 times the amount computed by averaging the rate of increase
41	41	in each of the counties in this state for the same period.
42	42	(b) The governing body of a taxing unit all or part of the
43	43	territory of which is located in a qualifying county in the manner
44	44	provided by law for official action by the governing body may
45	45	provide that, notwithstanding the requirements of Section 25.18 and
46	46	regardless of whether the appraisal office has appraised the
47	47	property and determined the market value of the property for the tax
48	48	year, an appraisal office may increase the appraised value of a
49	49	residence homestead located in a qualifying census tract in the
50	50	taxing unit for a tax year for purposes of taxation by the taxing
51	51	unit to an amount not to exceed the lesser of:
52	52	(1) the market value of the property for the most
53	53	recent tax year that the market value was determined by the
54	54	appraisal office; or
55	55	(2) the sum of:
56	56	(A) the greater of the following amounts:
57	57	(i) the percentage specified by the
58	58	governing body, expressed as a decimal, multiplied by the appraised
59	59	value of the property for the preceding tax year; or
60	60	(ii) the amount computed by averaging the
61	61	percentage increase, expressed as a decimal, in the unadjusted
62	62	median value of the sales price of existing homes in each of the
63	63	counties in this state for the preceding year as calculated by the
64	64	United States Department of Housing and Urban Development for
65	65	purposes of the HOME and Housing Trust Fund programs and
66	66	multiplying that amount by the appraised value of the property for
67	67	the preceding tax year;
68	68	(B) the appraised value of the property for the
69	69	preceding tax year; and
70	70	(C) the market value of all new improvements to
71	71	the property.
72	72	(c) The governing body of a taxing unit that adopts a
73	73	limitation on increases in appraised value under this section may
74	74	amend or repeal the limitation. The adoption, amendment, or repeal
75	75	of a limitation applies beginning with the tax year in which the
76	76	action is taken if the action is taken before July 1 and takes
77	77	effect beginning with the following tax year if the action is taken
78	78	on or after that date.
79	79	(d) When appraising a residence homestead that is subject to
80	80	a limitation on increases in appraised value under this section for
81	81	purposes of taxation of the homestead by the taxing unit that
82	82	adopted the limitation, the chief appraiser shall:
83	83	(1) appraise the property at its market value; and
84	84	(2) include in the appraisal records both the market
85	85	value of the property and the amount computed under Subsection
86	86	(b)(2).
87	87	(e) Notwithstanding Subsection (b), the appraised value of
88	88	a residence homestead that is subject to a limitation on increases
89	89	in appraised value under this section is, for purposes of taxation
90	90	of the homestead by the taxing unit that adopted the limitation,
91	91	equal to the lesser of the amount computed under Section 23.23 or
92	92	the amount computed under Subsection (b).
93	93	(f) A limitation adopted under Subsection (b) takes effect
94	94	as to a residence homestead on January 1 of the tax year following
95	95	the first tax year in which the owner qualifies the property for an
96	96	exemption under Section 11.13 and the homestead is located in a
97	97	qualifying census tract. The limitation expires on January 1 of the
98	98	first tax year in which neither the owner of the property when the
99	99	limitation took effect nor the owner's spouse or surviving spouse
100	100	qualifies for an exemption under Section 11.13 or the homestead
101	101	ceases to be located in a qualifying census tract.
102	102	(g) Sections 23.23(d), (e), (f), and (g) apply to a
103	103	limitation under this section in the same manner as those
104	104	subsections apply to a limitation under Section 23.23.
105	105	SECTION 3. Section 42.26(d), Tax Code, is amended to read as
106	106	follows:
107	107	(d) For purposes of this section, the value of the property
108	108	subject to the suit and the value of a comparable property or sample
109	109	property that is used for comparison must be the market value
110	110	determined by the appraisal district when the property is a
111	111	residence homestead subject to the limitation on appraised value
112	112	imposed by Section 23.23 or 23.231.
113	113	SECTION 4. Section 44.004(c), Education Code, is amended to
114	114	read as follows:
115	115	(c) The notice of public meeting to discuss and adopt the
116	116	budget and the proposed tax rate may not be smaller than one-quarter
117	117	page of a standard-size or a tabloid-size newspaper, and the
118	118	headline on the notice must be in 18-point or larger type. Subject
119	119	to Subsection (d), the notice must:
120	120	(1) contain a statement in the following form:
121	121	"NOTICE OF PUBLIC MEETING TO DISCUSS BUDGET AND PROPOSED TAX RATE
122	122	"The (name of school district) will hold a public meeting at
123	123	(time, date, year) in (name of room, building, physical location,
124	124	city, state). The purpose of this meeting is to discuss the school
125	125	district's budget that will determine the tax rate that will be
126	126	adopted. Public participation in the discussion is invited." The
127	127	statement of the purpose of the meeting must be in bold type. In
128	128	reduced type, the notice must state: "The tax rate that is
129	129	ultimately adopted at this meeting or at a separate meeting at a
130	130	later date may not exceed the proposed rate shown below unless the
131	131	district publishes a revised notice containing the same information
132	132	and comparisons set out below and holds another public meeting to
133	133	discuss the revised notice.";
134	134	(2) contain a section entitled "Comparison of Proposed
135	135	Budget with Last Year's Budget," which must show the difference,
136	136	expressed as a percent increase or decrease, as applicable, in the
137	137	amounts budgeted for the preceding fiscal year and the amount
138	138	budgeted for the fiscal year that begins in the current tax year for
139	139	each of the following:
140	140	(A) maintenance and operations;
141	141	(B) debt service; and
142	142	(C) total expenditures;
143	143	(3) contain a section entitled "Total Appraised Value
144	144	and Total Taxable Value," which must show the total appraised value
145	145	and the total taxable value of all property and the total appraised
146	146	value and the total taxable value of new property taxable by the
147	147	district in the preceding tax year and the current tax year as
148	148	calculated under Section 26.04, Tax Code;
149	149	(4) contain a statement of the total amount of the
150	150	outstanding and unpaid bonded indebtedness of the school district;
151	151	(5) contain a section entitled "Comparison of Proposed
152	152	Rates with Last Year's Rates," which must:
153	153	(A) show in rows the tax rates described by
154	154	Subparagraphs (i)-(iii), expressed as amounts per $100 valuation of
155	155	property, for columns entitled "Maintenance & Operations,"
156	156	"Interest & Sinking Fund," and "Total," which is the sum of
157	157	"Maintenance & Operations" and "Interest & Sinking Fund":
158	158	(i) the school district's "Last Year's
159	159	Rate";
160	160	(ii) the "Rate to Maintain Same Level of
161	161	Maintenance & Operations Revenue & Pay Debt Service," which:
162	162	(a) in the case of "Maintenance &
163	163	Operations," is the tax rate that, when applied to the current
164	164	taxable value for the district, as certified by the chief appraiser
165	165	under Section 26.01, Tax Code, and as adjusted to reflect changes
166	166	made by the chief appraiser as of the time the notice is prepared,
167	167	would impose taxes in an amount that, when added to state funds to
168	168	be distributed to the district under Chapter 42, would provide the
169	169	same amount of maintenance and operations taxes and state funds
170	170	distributed under Chapter 42 per student in average daily
171	171	attendance for the applicable school year that was available to the
172	172	district in the preceding school year; and
173	173	(b) in the case of "Interest & Sinking
174	174	Fund," is the tax rate that, when applied to the current taxable
175	175	value for the district, as certified by the chief appraiser under
176	176	Section 26.01, Tax Code, and as adjusted to reflect changes made by
177	177	the chief appraiser as of the time the notice is prepared, and when
178	178	multiplied by the district's anticipated collection rate, would
179	179	impose taxes in an amount that, when added to state funds to be
180	180	distributed to the district under Chapter 46 and any excess taxes
181	181	collected to service the district's debt during the preceding tax
182	182	year but not used for that purpose during that year, would provide
183	183	the amount required to service the district's debt; and
184	184	(iii) the "Proposed Rate";
185	185	(B) contain fourth and fifth columns aligned with
186	186	the columns required by Paragraph (A) that show, for each row
187	187	required by Paragraph (A):
188	188	(i) the "Local Revenue per Student," which
189	189	is computed by multiplying the district's total taxable value of
190	190	property, as certified by the chief appraiser for the applicable
191	191	school year under Section 26.01, Tax Code, and as adjusted to
192	192	reflect changes made by the chief appraiser as of the time the
193	193	notice is prepared, by the total tax rate, and dividing the product
194	194	by the number of students in average daily attendance in the
195	195	district for the applicable school year; and
196	196	(ii) the "State Revenue per Student," which
197	197	is computed by determining the amount of state aid received or to be
198	198	received by the district under Chapters 42, 43, and 46 and dividing
199	199	that amount by the number of students in average daily attendance in
200	200	the district for the applicable school year; and
201	201	(C) contain an asterisk after each calculation
202	202	for "Interest & Sinking Fund" and a footnote to the section that, in
203	203	reduced type, states "The Interest & Sinking Fund tax revenue is
204	204	used to pay for bonded indebtedness on construction, equipment, or
205	205	both. The bonds, and the tax rate necessary to pay those bonds,
206	206	were approved by the voters of this district.";
207	207	(6) contain a section entitled "Comparison of Proposed
208	208	Levy with Last Year's Levy on Average Residence," which must:
209	209	(A) show in rows the information described by
210	210	Subparagraphs (i)-(iv), rounded to the nearest dollar, for columns
211	211	entitled "Last Year" and "This Year":
212	212	(i) "Average Market Value of Residences,"
213	213	determined using the same group of residences for each year;
214	214	(ii) "Average Taxable Value of Residences,"
215	215	determined after taking into account the limitation on the
216	216	appraised value of residences under Section 23.23 or 23.231, Tax
217	217	Code, and after subtracting all homestead exemptions applicable in
218	218	each year, other than exemptions available only to disabled persons
219	219	or persons 65 years of age or older or their surviving spouses, and
220	220	using the same group of residences for each year;
221	221	(iii) "Last Year's Rate Versus Proposed
222	222	Rate per $100 Value"; and
223	223	(iv) "Taxes Due on Average Residence,"
224	224	determined using the same group of residences for each year; and
225	225	(B) contain the following
226	226	information: "Increase (Decrease) in Taxes" expressed in dollars
227	227	and cents, which is computed by subtracting the "Taxes Due on
228	228	Average Residence" for the preceding tax year from the "Taxes Due on
229	229	Average Residence" for the current tax year;
230	230	(7) contain the following statement in bold
231	231	print: "Under state law, the dollar amount of school taxes imposed
232	232	on the residence of a person 65 years of age or older or of the
233	233	surviving spouse of such a person, if the surviving spouse was 55
234	234	years of age or older when the person died, may not be increased
235	235	above the amount paid in the first year after the person turned 65,
236	236	regardless of changes in tax rate or property value.";
237	237	(8) contain the following statement in bold
238	238	print: "Notice of Rollback Rate: The highest tax rate the
239	239	district can adopt before requiring voter approval at an election
240	240	is (the school district rollback rate determined under Section
241	241	26.08, Tax Code). This election will be automatically held if the
242	242	district adopts a rate in excess of the rollback rate of (the school
243	243	district rollback rate)."; and
244	244	(9) contain a section entitled "Fund Balances," which
245	245	must include the estimated amount of interest and sinking fund
246	246	balances and the estimated amount of maintenance and operation or
247	247	general fund balances remaining at the end of the current fiscal
248	248	year that are not encumbered with or by corresponding debt
249	249	obligation, less estimated funds necessary for the operation of the
250	250	district before the receipt of the first payment under Chapter 42 in
251	251	the succeeding school year.
252	252	SECTION 5. Sections 403.302(d) and (i), Government Code,
253	253	are amended to read as follows:
254	254	(d) For the purposes of this section, "taxable value" means
255	255	the market value of all taxable property less:
256	256	(1) the total dollar amount of any residence homestead
257	257	exemptions lawfully granted under Section 11.13(b) or (c), Tax
258	258	Code, in the year that is the subject of the study for each school
259	259	district;
260	260	(2) one-half of the total dollar amount of any
261	261	residence homestead exemptions granted under Section 11.13(n), Tax
262	262	Code, in the year that is the subject of the study for each school
263	263	district;
264	264	(3) the total dollar amount of any exemptions granted
265	265	before May 31, 1993, within a reinvestment zone under agreements
266	266	authorized by Chapter 312, Tax Code;
267	267	(4) subject to Subsection (e), the total dollar amount
268	268	of any captured appraised value of property that:
269	269	(A) is within a reinvestment zone created on or
270	270	before May 31, 1999, or is proposed to be included within the
271	271	boundaries of a reinvestment zone as the boundaries of the zone and
272	272	the proposed portion of tax increment paid into the tax increment
273	273	fund by a school district are described in a written notification
274	274	provided by the municipality or the board of directors of the zone
275	275	to the governing bodies of the other taxing units in the manner
276	276	provided by former Section 311.003(e), Tax Code, before May 31,
277	277	1999, and within the boundaries of the zone as those boundaries
278	278	existed on September 1, 1999, including subsequent improvements to
279	279	the property regardless of when made;
280	280	(B) generates taxes paid into a tax increment
281	281	fund created under Chapter 311, Tax Code, under a reinvestment zone
282	282	financing plan approved under Section 311.011(d), Tax Code, on or
283	283	before September 1, 1999; and
284	284	(C) is eligible for tax increment financing under
285	285	Chapter 311, Tax Code;
286	286	(5) the total dollar amount of any captured appraised
287	287	value of property that:
288	288	(A) is within a reinvestment zone:
289	289	(i) created on or before December 31, 2008,
290	290	by a municipality with a population of less than 18,000; and
291	291	(ii) the project plan for which includes
292	292	the alteration, remodeling, repair, or reconstruction of a
293	293	structure that is included on the National Register of Historic
294	294	Places and requires that a portion of the tax increment of the zone
295	295	be used for the improvement or construction of related facilities
296	296	or for affordable housing;
297	297	(B) generates school district taxes that are paid
298	298	into a tax increment fund created under Chapter 311, Tax Code; and
299	299	(C) is eligible for tax increment financing under
300	300	Chapter 311, Tax Code;
301	301	(6) the total dollar amount of any exemptions granted
302	302	under Section 11.251 or 11.253, Tax Code;
303	303	(7) the difference between the comptroller's estimate
304	304	of the market value and the productivity value of land that
305	305	qualifies for appraisal on the basis of its productive capacity,
306	306	except that the productivity value estimated by the comptroller may
307	307	not exceed the fair market value of the land;
308	308	(8) the portion of the appraised value of residence
309	309	homesteads of individuals who receive a tax limitation under
310	310	Section 11.26, Tax Code, on which school district taxes are not
311	311	imposed in the year that is the subject of the study, calculated as
312	312	if the residence homesteads were appraised at the full value
313	313	required by law;
314	314	(9) a portion of the market value of property not
315	315	otherwise fully taxable by the district at market value because of:
316	316	(A) action required by statute or the
317	317	constitution of this state, other than Section 11.311, Tax Code,
318	318	that, if the tax rate adopted by the district is applied to it,
319	319	produces an amount equal to the difference between the tax that the
320	320	district would have imposed on the property if the property were
321	321	fully taxable at market value and the tax that the district is
322	322	actually authorized to impose on the property, if this subsection
323	323	does not otherwise require that portion to be deducted; or
324	324	(B) action taken by the district under Subchapter
325	325	B or C, Chapter 313, Tax Code, before the expiration of the
326	326	subchapter;
327	327	(10) the market value of all tangible personal
328	328	property, other than manufactured homes, owned by a family or
329	329	individual and not held or used for the production of income;
330	330	(11) the appraised value of property the collection of
331	331	delinquent taxes on which is deferred under Section 33.06, Tax
332	332	Code;
333	333	(12) the portion of the appraised value of property
334	334	the collection of delinquent taxes on which is deferred under
335	335	Section 33.065, Tax Code; and
336	336	(13) the amount by which the market value of a
337	337	residence homestead to which Section 23.23 or 23.231, Tax Code,
338	338	applies exceeds the appraised value of that property as calculated
339	339	under that section.
340	340	(i) If the comptroller determines in the study that the
341	341	market value of property in a school district as determined by the
342	342	appraisal district that appraises property for the school district,
343	343	less the total of the amounts and values listed in Subsection (d) as
344	344	determined by that appraisal district, is valid, the comptroller,
345	345	in determining the taxable value of property in the school district
346	346	under Subsection (d), shall for purposes of Subsection (d)(13)
347	347	subtract from the market value as determined by the appraisal
348	348	district of residence homesteads to which Section 23.23 or 23.231,
349	349	Tax Code, applies the amount by which that amount exceeds the
350	350	appraised value of those properties as calculated by the appraisal
351	351	district under Section 23.23 or 23.231, Tax Code. If the
352	352	comptroller determines in the study that the market value of
353	353	property in a school district as determined by the appraisal
354	354	district that appraises property for the school district, less the
355	355	total of the amounts and values listed in Subsection (d) as
356	356	determined by that appraisal district, is not valid, the
357	357	comptroller, in determining the taxable value of property in the
358	358	school district under Subsection (d), shall for purposes of
359	359	Subsection (d)(13) subtract from the market value as estimated by
360	360	the comptroller of residence homesteads to which Section 23.23 or
361	361	23.231, Tax Code, applies the amount by which that amount exceeds
362	362	the appraised value of those properties as calculated by the
363	363	appraisal district under Section 23.23 or 23.231, Tax Code.
364	364	SECTION 6. This Act applies only to the appraisal of certain
365	365	residence homesteads for ad valorem tax purposes for a tax year that
366	366	begins on or after the effective date of this Act.
367	367	SECTION 7. This Act takes effect January 1, 2020, but only
368	368	if the constitutional amendment proposed by the 86th Legislature,
369	369	Regular Session, 2019, to authorize the legislature to permit the
370	370	governing body of a political subdivision in a county in which home
371	371	prices are appreciating rapidly to adopt a limitation on increases
372	372	in the appraised value for purposes of ad valorem taxation by the
373	373	political subdivision of residence homesteads in certain
374	374	low-income areas is approved by the voters. If that amendment is
375	375	not approved by the voters, this Act has no effect.