87R2178 SMT-D
By: Stephenson H.B. No. 288
A BILL TO BE ENTITLED
AN ACT
relating to an exemption from ad valorem taxation by a school
district for maintenance and operations purposes of the total
appraised value of a residence homestead and the offsetting of the
resulting revenue loss to school districts with state sales and use
tax revenue.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. SCHOOL DISTRICT MAINTENANCE AND OPERATIONS TAXES
SECTION 1.01. Section 11.13, Tax Code, is amended by adding
Subsection (s) to read as follows:
(s) In addition to any other exemptions provided by this
section, an adult is entitled to an exemption from taxation by a
school district for maintenance and operations purposes of the
total appraised value of the adult's residence homestead.
SECTION 1.02. Section 11.26, Tax Code, is amended by
amending Subsections (a), (a-3), (b), and (e) and adding
Subsections (a-4) and (a-5) to read as follows:
(a) The tax officials shall appraise [the] property to which
this section applies and calculate taxes as on other residence
homesteads [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 2015 tax year, the
amount of the limitation provided by this section is the amount of
tax the school district imposed for the 2014 tax year less an amount
equal to the amount determined by multiplying $10,000 times the tax
rate of the school district for the 2015 tax year, plus any 2015 tax
attributable to improvements made in 2014, other than improvements
made to comply with governmental regulations or repairs.
(a-3) Except as provided by Subsections (a-4) and
[Subsection] (b), a limitation on tax increases provided by this
section on a residence homestead computed under Subsection (a-1) or
(a-2) continues to apply to the homestead in subsequent tax years
until the limitation expires.
(a-4) Notwithstanding the other provisions of this section,
if in the 2022 tax year an individual qualifies for a limitation on
tax increases provided by this section on the individual's
residence homestead, the amount of the limitation provided by this
section on the homestead in the 2022 tax year is equal to the amount
computed by:
(1) multiplying the amount of tax the school district
imposed on the homestead in the 2021 tax year by a fraction the
numerator of which is the current debt rate of the district for the
2022 tax year and the denominator of which is the tax rate of the
district for the 2021 tax year; and
(2) adding any tax imposed in the 2022 tax year
attributable to improvements made in the 2021 tax year as provided
by Subsection (b) to the lesser of the amount computed under
Subdivision (1) or the amount of tax the district imposed on the
homestead in the 2021 tax year.
(a-5) Except as provided by Subsection (b), a limitation on
tax increases provided by this section on a residence homestead
computed under Subsection (a-4) continues to apply to the residence
homestead in subsequent tax years until the limitation expires.
(b) If an individual makes improvements to the individual's
residence homestead, other than improvements required to comply
with governmental requirements or repairs, the school district may
increase the tax on the homestead in the first year the value of the
homestead is increased on the appraisal roll because of the
enhancement of value by the improvements. The amount of the tax
increase is determined by applying the current debt [tax] rate to
the difference in the assessed value of the homestead with the
improvements and the assessed value it would have had without the
improvements. A limitation imposed by this section then applies to
the increased amount of tax until more improvements, if any, are
made.
(e) For each school district in an appraisal district, the
chief appraiser shall determine the portion of the appraised value
of residence homesteads of individuals on which school district
taxes are not imposed in a tax year because of the limitation on tax
increases imposed by this section. That portion is calculated by
determining the taxable value that, if multiplied by the current
debt [tax] rate adopted by the school district for the tax year,
would produce an amount equal to the amount of tax that would have
been imposed by the school district on those residence homesteads
if the limitation on tax increases imposed by this section were not
in effect, but that was not imposed because of that limitation. The
chief appraiser shall determine that taxable value and certify it
to the comptroller as soon as practicable for each tax year.
SECTION 1.03. Section 26.09, Tax Code, is amended by adding
Subsection (f) to read as follows:
(f) For purposes of calculating the tax imposed on the
residence homestead of an adult by a school district, the tax rate
of the district is considered to be the district's current debt
rate.
SECTION 1.04. This article applies only to ad valorem taxes
imposed for a tax year beginning on or after the effective date of
this Act.
ARTICLE 2. SALES AND USE TAXES; PAYMENTS TO SCHOOL DISTRICTS
SECTION 2.01. Subchapter A, Chapter 151, Tax Code, is
amended by adding Section 151.0021 to read as follows:
Sec. 151.0021. "ACCOUNTING AND AUDIT SERVICES."
"Accounting and audit services" means the making and recording of
business financial records and statements, the creation and
implementation of accounting or bookkeeping systems, cost
accounting or bookkeeping services, and services provided by a
certified public accountant, enrolled agent, or bookkeeping firm in
connection with the preparation of financial and auditing reports.
The term includes financial planning services, tax return
preparation, and budgeting services.
SECTION 2.02. Section 151.0028(b), Tax Code, is amended to
read as follows:
(b) "Amusement services" includes:
(1) membership in a private club or organization that
provides entertainment, recreational, sports, dining, or social
facilities to its members; and
(2) an admission or ticket to a high school or
collegiate sporting event.
SECTION 2.03. Subchapter A, Chapter 151, Tax Code, is
amended by adding Sections 151.0037, 151.0041, and 151.0046 to read
as follows:
Sec. 151.0037. "ENGINEERING SERVICES." "Engineering
services" means an act or activity constituting the "practice of
engineering" as that term is defined by Section 1001.003,
Occupations Code, and any other act or activity provided to an
engineer's client in relation to the practice of engineering.
Sec. 151.0041. "LEGAL SERVICES." "Legal services" means an
act or activity constituting the practice of law and any other act
or activity provided by an attorney-at-law licensed by the Supreme
Court of Texas to a client in connection with the practice of law.
The term also includes services provided by a paralegal or a legal
secretary employed by an attorney-at-law and provided to the
attorney's client in relation to the practice of law and lawyer
referral services.
Sec. 151.0046. "REAL ESTATE BROKERAGE AND AGENCY SERVICES."
"Real estate brokerage and agency services" means acts or services
described by Section 1101.002(1), (6), or (7), Occupations Code,
that are performed by a person licensed or registered under Chapter
1101, Occupations Code, including by a person described by Section
1101.002(2) or (8) of that code.
SECTION 2.04. Section 151.0101(a), Tax Code, is amended to
read as follows:
(a) "Taxable services" means:
(1) amusement services;
(2) cable television services;
(3) personal services;
(4) motor vehicle parking and storage services;
(5) the repair, remodeling, maintenance, and
restoration of tangible personal property, except:
(A) aircraft;
(B) a ship, boat, or other vessel, other than:
(i) a taxable boat or motor as defined by
Section 160.001;
(ii) a sports fishing boat; or
(iii) any other vessel used for pleasure;
(C) the repair, maintenance, and restoration of a
motor vehicle; and
(D) the repair, maintenance, creation, and
restoration of a computer program, including its development and
modification, not sold by the person performing the repair,
maintenance, creation, or restoration service;
(6) telecommunications services;
(7) credit reporting services;
(8) debt collection services;
(9) insurance services;
(10) information services;
(11) real property services;
(12) data processing services;
(13) real property repair and remodeling;
(14) security services;
(15) telephone answering services;
(16) Internet access service; [and]
(17) a sale by a transmission and distribution
utility, as defined in Section 31.002, Utilities Code, of
transmission or delivery of service directly to an electricity
end-use customer whose consumption of electricity is subject to
taxation under this chapter;
(18) accounting and audit services;
(19) engineering services;
(20) legal services; and
(21) real estate brokerage and agency services.
SECTION 2.05. Section 151.801, Tax Code, is amended by
amending Subsection (a) and adding Subsection (c-4) to read as
follows:
(a) Except for the amounts allocated under Subsections (b),
(c), (c-2), [and] (c-3), and (c-4), all proceeds from the
collection of the taxes imposed by this chapter shall be deposited
to the credit of the general revenue fund.
(c-4) The amount of the proceeds from the collection of the
taxes imposed by this chapter on the sale, storage, or use of
taxable items not subject to the taxes on January 1, 2021, shall be
deposited to the credit of the school district reimbursement trust
fund under Section 151.802.
SECTION 2.06. Section 151.801(d), Tax Code, as effective
September 1, 2021, is amended to read as follows:
(d) The comptroller shall determine the amount to be
deposited to the state highway fund under Subsection (b) according
to available statistical data indicating the estimated average or
actual consumption or sales of lubricants used to propel motor
vehicles over the public roadways. The comptroller shall determine
the amounts to be deposited to the accounts under Subsection (c)
according to available statistical data indicating the estimated or
actual total receipts in this state from taxable sales of sporting
goods, and according to the specific amounts provided in the
General Appropriations Act in accordance with Subsection (c-1).
The comptroller shall determine the amount to be deposited to the
fund under Subsection (c-2) according to available statistical data
indicating the estimated or actual total receipts in this state
from taxes imposed on sales at retail of fireworks. The comptroller
shall determine the amount to be deposited to the account under
Subsection (c-3) according to available statistical data
indicating the estimated or actual total receipts in this state
from taxable sales of horse feed, horse supplements, horse tack,
horse bedding and grooming supplies, and other taxable expenditures
directly related to horse ownership, riding, or boarding. The
comptroller shall determine the amount to be deposited to the fund
under Subsection (c-4) according to available statistical data
indicating the estimated or actual total receipts in this state
from taxable sales of taxable items described by that subsection.
If satisfactory data are not available, the comptroller may require
taxpayers who make taxable sales or uses of those lubricants, of
sporting goods, of fireworks, or of taxable items described by
Subsection (c-4) or of horse feed, horse supplements, horse tack,
horse bedding and grooming supplies, or other taxable expenditures
directly related to horse ownership, riding, or boarding to report
to the comptroller as necessary to make the allocation required by
Subsection (b), (c), (c-2), [or] (c-3), or (c-4).
SECTION 2.07. Subchapter M, Chapter 151, Tax Code, is
amended by adding Section 151.802 to read as follows:
Sec. 151.802. SCHOOL DISTRICT REIMBURSEMENT TRUST FUND.
(a) The school district reimbursement trust fund is created as a
trust fund outside the state treasury to be held with the
comptroller in trust. The fund consists of money deposited to the
credit of the fund under Section 151.801(c-4). The comptroller
shall administer the fund as trustee on behalf of each school
district in this state.
(b) Beginning in 2023, not later than April 1 of each year,
the comptroller shall pay to each school district an amount equal to
the revenue the school district was unable to collect in the
preceding tax year because of the exemption under Section 11.13(s).
A school district must apply for the payment authorized under this
subsection on a form promulgated by the comptroller. If the
comptroller determines that the balance of the fund in a year is not
sufficient to pay the full amount of lost revenue to each school
district that applies for a payment in that year, the comptroller
shall proportionately reduce the amount of each payment made to a
school district as necessary to prevent the fund from becoming
insolvent.
SECTION 2.08. The following provisions of the Tax Code are
repealed:
(1) Section 151.3021;
(2) Section 151.3071;
(3) Section 151.3101; and
(4) Section 151.311.
SECTION 2.09. The changes in law made by this article do not
affect tax liability accruing before the effective date of this
Act. That liability continues in effect as if this Act had not been
enacted, and the former law is continued in effect for the
collection of taxes due and for civil and criminal enforcement of
the liability for those taxes.
ARTICLE 3. EFFECTIVE DATE
SECTION 3.01. This Act takes effect January 1, 2022, but
only if the constitutional amendment proposed by the 87th
Legislature, Regular Session, 2021, authorizing the legislature to
exempt from ad valorem taxation by a school district for
maintenance and operations purposes all or part of the appraised
value of a residence homestead and to use state money to offset the
resulting revenue loss to school districts is approved by the
voters. If that amendment is not approved by the voters, this Act
has no effect.