87R22250 TJB-D
By: Shaheen, González of Dallas H.B. No. 3694
Substitute the following for H.B. No. 3694:
By: Shine C.S.H.B. No. 3694
A BILL TO BE ENTITLED
AN ACT
relating to a limitation on the appraised value of certain rapidly
appreciating residence homesteads in specified areas for ad valorem
tax purposes.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1.12(d), Tax Code, is amended to read as
follows:
(d) For purposes of this section, the appraisal ratio of a
homestead to which Section 23.23 or 23.231 applies is the ratio of
the property's market value as determined by the appraisal district
or appraisal review board, as applicable, to the market value of the
property according to law. The appraisal ratio is not calculated
according to the appraised value of the property as limited by
Section 23.23 or 23.231.
SECTION 2. Subchapter B, Chapter 23, Tax Code, is amended by
adding Section 23.231 to read as follows:
Sec. 23.231. LIMITATION ON APPRAISED VALUE OF RAPIDLY
APPRECIATING RESIDENCE HOMESTEADS IN SPECIFIED AREAS. (a) In this
section:
(1) "Census tract" means the geographic area
identified as a "tract" on the 2010 Census TIGER/Line Shapefiles,
prepared by the federal Bureau of the Census for the Twenty-third
Decennial Census of the United States, enumerated as of April 1,
2010.
(2) "Disaster recovery program" means the disaster
recovery program administered by the General Land Office or by a
political subdivision of this state that is funded with community
development block grant disaster recovery money authorized by
federal law.
(3) "New improvement" means an improvement to a
rapidly appreciating residence homestead made after the most recent
appraisal of the property that increases the market value of the
property and the value of which is not included in the appraised
value of the property for the preceding tax year. The term does not
include repairs to or ordinary maintenance of an existing structure
or the grounds or another feature of the property.
(4) "Rapidly appreciating residence homestead" means
real property:
(A) that is a residence homestead;
(B) for which the owner was granted a residence
homestead exemption in the 2017, 2018, 2019, 2020, 2021, 2022,
2023, and 2024 tax years; and
(C) for which the market value for the 2024 tax
year is at least 25 percent higher than the market value of the
property for the 2017 tax year.
(5) "Residence homestead" has the meaning assigned by
Section 11.13.
(b) This section applies only to property located in Dallas
County census tract 004300, 010101, 010102, 010500, 010601, 010602,
or 020500.
(c) Notwithstanding the requirements of Sections 23.23 and
25.18, and regardless of whether the appraisal office has appraised
the property and determined the market value of the property for the
tax year, an appraisal office may increase the appraised value of a
rapidly appreciating residence homestead for a tax year to an
amount not to exceed the lesser of:
(1) the market value of the property for the most
recent tax year that the market value was determined by the
appraisal office; or
(2) the sum of:
(A) the appraised value of the property for the
2017 tax year; and
(B) the market value of all new improvements to
the property.
(d) When appraising a rapidly appreciating residence
homestead, the chief appraiser shall:
(1) appraise the property at its market value; and
(2) include in the appraisal records both the market
value of the property and the amount computed under Subsection
(c)(2).
(e) The limitation provided by Subsection (c) expires on
January 1 of the first tax year that neither the owner of the
property when the limitation took effect nor the owner's spouse or
surviving spouse qualifies for an exemption under Section 11.13.
(f) This section does not apply to property appraised under
Subchapter C, D, E, F, or G.
(g) Notwithstanding Subsection (c), and except as provided
by Subdivision (2), an improvement to property that would otherwise
constitute a new improvement is not treated as a new improvement if
the improvement is a replacement structure for a structure that was
rendered uninhabitable or unusable by a casualty or by wind, fire,
or water damage. For purposes of appraising the property under
Subsection (c) in the tax year in which the structure would have
constituted a new improvement:
(1) the appraised value the property would have had in
the preceding tax year if the casualty or damage had not occurred is
considered to be the appraised value of the property for that year,
regardless of whether that appraised value exceeds the actual
appraised value of the property for that year as limited by
Subsection (c); and
(2) the replacement structure is considered to be a
new improvement only if:
(A) the square footage of the replacement
structure exceeds that of the replaced structure as that structure
existed before the casualty or damage occurred; or
(B) the exterior of the replacement structure is
of higher quality construction and composition than that of the
replaced structure.
(h) Notwithstanding Subsection (g)(2), and only to the
extent necessary to satisfy the requirements of the disaster
recovery program, a replacement structure described by that
subdivision is not considered to be a new improvement if to satisfy
the requirements of the disaster recovery program it was necessary
that:
(1) the square footage of the replacement structure
exceed that of the replaced structure as that structure existed
before the casualty or damage occurred; or
(2) the exterior of the replacement structure be of
higher quality construction and composition than that of the
replaced structure.
SECTION 3. Section 25.19(b), Tax Code, as effective January
1, 2022, is amended to read as follows:
(b) The chief appraiser shall separate real from personal
property and include in the notice for each:
(1) a list of the taxing units in which the property is
taxable;
(2) the appraised value of the property in the
preceding year;
(3) the taxable value of the property in the preceding
year for each taxing unit taxing the property;
(4) the appraised value of the property for the
current year, the kind and amount of each exemption and partial
exemption, if any, approved for the property for the current year
and for the preceding year, and, if an exemption or partial
exemption that was approved for the preceding year was canceled or
reduced for the current year, the amount of the exemption or partial
exemption canceled or reduced;
(4-a) a statement of whether the property qualifies
for a limitation on appraised value adopted under Section 23.231;
(5) in italic typeface, the following statement: "The
Texas Legislature does not set the amount of your local
taxes. Your property tax burden is decided by your locally elected
officials, and all inquiries concerning your taxes should be
directed to those officials";
(6) a detailed explanation of the time and procedure
for protesting the value;
(7) the date and place the appraisal review board will
begin hearing protests; and
(8) a brief explanation that the governing body of
each taxing unit decides whether or not taxes on the property will
increase and the appraisal district only determines the value of
the property.
SECTION 4. Section 25.19(g), Tax Code, is amended to read as
follows:
(g) By April 1 or as soon thereafter as practicable if the
property is a single-family residence that qualifies for an
exemption under Section 11.13, or by May 1 or as soon thereafter as
practicable in connection with any other property, the chief
appraiser shall deliver a written notice to the owner of each
property not included in a notice required to be delivered under
Subsection (a), if the property was reappraised in the current tax
year, if the ownership of the property changed during the preceding
year, or if the property owner or the agent of a property owner
authorized under Section 1.111 makes a written request for the
notice. The chief appraiser shall separate real from personal
property and include in the notice for each property:
(1) the appraised value of the property in the
preceding year;
(2) the appraised value of the property for the
current year and the kind of each partial exemption, if any,
approved for the current year;
(2-a) a statement of whether the property qualifies
for a limitation on appraised value adopted under Section 23.231;
(3) a detailed explanation of the time and procedure
for protesting the value; and
(4) the date and place the appraisal review board will
begin hearing protests.
SECTION 5. Section 41.41(a), Tax Code, is amended to read as
follows:
(a) A property owner is entitled to protest before the
appraisal review board the following actions:
(1) determination of the appraised value of the
owner's property or, in the case of land appraised as provided by
Subchapter C, D, E, or H, Chapter 23, determination of its appraised
or market value;
(2) unequal appraisal of the owner's property;
(3) inclusion of the owner's property on the appraisal
records;
(4) denial to the property owner in whole or in part of
a partial exemption;
(4-a) determination that the owner's property does not
qualify for a limitation on appraised value adopted under Section
23.231;
(5) determination that the owner's land does not
qualify for appraisal as provided by Subchapter C, D, E, or H,
Chapter 23;
(6) identification of the taxing units in which the
owner's property is taxable in the case of the appraisal district's
appraisal roll;
(7) determination that the property owner is the owner
of property;
(8) a determination that a change in use of land
appraised under Subchapter C, D, E, or H, Chapter 23, has occurred;
or
(9) any other action of the chief appraiser, appraisal
district, or appraisal review board that applies to and adversely
affects the property owner.
SECTION 6. Section 42.26(d), Tax Code, is amended to read as
follows:
(d) For purposes of this section, the value of the property
subject to the suit and the value of a comparable property or sample
property that is used for comparison must be the market value
determined by the appraisal district when the property is [a
residence homestead] subject to the limitation on appraised value
imposed by Section 23.23 or 23.231.
SECTION 7. This Act applies only to the appraisal of
residence homesteads for ad valorem tax purposes for a tax year that
begins on or after the effective date of this Act.
SECTION 8. This Act takes effect January 1, 2024, but only
if a constitutional amendment proposed by the 88th Legislature,
Regular Session, 2023, to authorize the legislature to limit the
maximum appraised value of certain rapidly appreciating residence
homesteads in specified areas for ad valorem tax purposes is
approved by the voters. If such an amendment is not approved by the
voters, this Act has no effect.