87R2663 CJC-D
By: Pacheco H.B. No. 381
A BILL TO BE ENTITLED
AN ACT
relating to the establishment of a limitation on the total amount of
ad valorem taxes that taxing units may impose on the residence
homesteads of individuals who are disabled or elderly and their
surviving spouses.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The heading to Section 11.26, Tax Code, is
amended to read as follows:
Sec. 11.26. LIMITATION OF TAXES [SCHOOL TAX] ON HOMESTEADS
OF INDIVIDUALS WHO ARE ELDERLY OR DISABLED.
SECTION 2. Sections 11.26(a), (a-1), (a-2), (a-3), (b),
(c), (e), (g), (h), (i), (i-1), (j), (k), and (o), Tax Code, are
amended to read as follows:
(a) The tax officials shall appraise [the] property to which
this section applies and calculate taxes as on other 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 taxing
unit [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 by a taxing unit on the residence homestead in the
next year are less than the amount of those taxes imposed in that
first year, the taxing unit [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-1) 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 2022 tax year, the amount of the limitation on school
district taxes provided by this section is the amount of those taxes
imposed for the 2021 tax year plus any 2022 tax attributable to
improvements made in 2021, other than improvements made to comply
with governmental regulations or repairs [Notwithstanding the
other provisions of this section, if in the 2007 tax year an
individual qualifies for a limitation on tax increases provided by
this section on the individual's residence homestead and the first
tax year the individual or the individual's spouse qualified for an
exemption under Section 11.13(c) for the same homestead was the
2006 tax year, the amount of the limitation provided by this section
on the homestead in the 2007 tax year is equal to the amount
computed by:
[(1) multiplying the amount of tax the school district
imposed on the homestead in the 2006 tax year by a fraction the
numerator of which is the tax rate of the district for the 2007 tax
year and the denominator of which is the tax rate of the district
for the 2006 tax year; and
[(2) adding any tax imposed in the 2007 tax year
attributable to improvements made in the 2006 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 2006 tax year].
(a-2) 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 2022 tax year and the homestead qualified for a
limitation on county, municipal, or junior college district taxes
under former Section 11.261, the amount of the limitation on
county, municipal, or junior college district taxes, as applicable,
provided by this section is the amount of the tax imposed by the
applicable taxing unit for the 2021 tax year, plus any 2022 tax
attributable to improvements made in 2021, other than improvements
made to comply with governmental regulations or repairs
[Notwithstanding the other provisions of this section, if in the
2007 tax year an individual qualifies for a limitation on tax
increases provided by this section on the individual's residence
homestead and the first tax year the individual or the individual's
spouse qualified for an exemption under Section 11.13(c) for the
same homestead was a tax year before the 2006 tax year, the amount
of the limitation provided by this section on the homestead in the
2007 tax year is equal to the amount computed by:
[(1) multiplying the amount of tax the school district
imposed on the homestead in the 2005 tax year by a fraction the
numerator of which is the tax rate of the district for the 2006 tax
year and the denominator of which is the tax rate of the district
for the 2005 tax year;
[(2) adding any tax imposed in the 2006 tax year
attributable to improvements made in the 2005 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 2005 tax year;
[(3) multiplying the amount computed under
Subdivision (2) by a fraction the numerator of which is the tax rate
of the district for the 2007 tax year and the denominator of which
is the tax rate of the district for the 2006 tax year; and
[(4) adding to the lesser of the amount computed under
Subdivision (2) or (3) any tax imposed in the 2007 tax year
attributable to improvements made in the 2006 tax year, as provided
by Subsection (b)].
(a-3) Except as provided by Subsection (a-2), for the
purpose of calculating a limitation on tax increases by a taxing
unit other than a school district under this section, an individual
who qualified a residence homestead before January 1, 2022, for an
exemption under Section 11.13(c) for individuals 65 years of age or
older or disabled is considered to have qualified the homestead for
that exemption on January 1, 2022 [(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].
(b) If an individual makes improvements to the individual's
residence homestead, other than improvements required to comply
with governmental requirements or repairs, a taxing unit [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 taxing unit's
current 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 under [imposed by]
this section [then] applies to the increased amount of tax in
subsequent tax years until more improvements, if any, are made.
(c) The limitation on tax increases required by this section
expires if on January 1:
(1) none of the owners of the structure who qualify for
the exemption under Section 11.13(c) for individuals 65 years of
age or older or disabled and who owned the structure when the
limitation first took effect is using the structure as a residence
homestead; or
(2) none of the owners of the structure qualifies for
the exemption described by Subdivision (1).
(e) For each school district participating 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 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.
(g) Except as provided by Subsection (b), if an individual
who receives a limitation on tax increases imposed by this section,
including a surviving spouse who receives a limitation under
Subsection (i), subsequently qualifies a different residence
homestead for the same exemption under Section 11.13, a taxing unit
[school district] may not impose ad valorem taxes on the
subsequently qualified homestead in a year in an amount that
exceeds the amount of taxes the taxing unit [school district] would
have imposed on the subsequently qualified homestead in the first
year in which the individual receives that same exemption for the
subsequently qualified homestead had the limitation on tax
increases imposed by this section not been in effect, multiplied by
a fraction the numerator of which is the total amount of [school
district] taxes imposed by a taxing unit of the same type on the
former homestead in the last year in which the individual received
that same exemption for the former homestead and the denominator of
which is the total amount of [school district] taxes that would have
been imposed by the taxing unit of the same type on the former
homestead in the last year in which the individual received that
same exemption for the former homestead had the limitation on tax
increases imposed by this section not been in effect. A limitation
under this subsection does not apply to a taxing unit if the former
homestead was not subject to taxation by a taxing unit of the same
type in the last year in which the individual received the exemption
for the former homestead.
(h) An individual who receives a limitation on tax increases
under this section, including a surviving spouse who receives a
limitation under Subsection (i), and who subsequently qualifies a
different residence homestead for an exemption under Section 11.13,
or an agent of the individual, is entitled to receive from the chief
appraiser of the appraisal district in which the former homestead
was located a written certificate providing the information
necessary to determine whether the individual may qualify for that
same limitation on the subsequently qualified homestead under
Subsection (g) and to calculate the amount of taxes the taxing units
[school district] may impose on the subsequently qualified
homestead.
(i) If an individual who qualifies for the exemption
provided by Section 11.13(c) for individuals 65 years of age or
older or disabled dies, the surviving spouse of the individual is
entitled to the limitation applicable to the residence homestead of
the individual if:
(1) the surviving spouse is 55 years of age or older or
disabled when the individual dies; and
(2) the residence homestead of the individual:
(A) is the residence homestead of the surviving
spouse on the date that the individual dies; and
(B) remains the residence homestead of the
surviving spouse.
(i-1) A limitation on school district taxes under
Subsection (i) applicable to the residence homestead of the
surviving spouse of an individual who was disabled and who died
before January 1, 2020, is calculated as if the surviving spouse was
entitled to the limitation when the individual died.
(j) If an individual who qualifies for an exemption provided
by Section 11.13(c) for an individual 65 years of age or older dies
in the first year in which the individual qualified for the
exemption and the individual first qualified for the exemption
after the beginning of that year, except as provided by Subsection
(k), the amount to which the surviving spouse's [school district]
taxes imposed by a taxing unit are limited under Subsection (i) is
the amount of [school district] taxes imposed by the taxing unit on
the residence homestead in that year determined as if the
individual qualifying for the exemption had lived for the entire
year.
(k) If in the first tax year after the year in which an
individual dies in the circumstances described by Subsection (j)
the amount of [school district] taxes imposed by a taxing unit on
the residence homestead of the surviving spouse is less than the
amount of [school district] taxes imposed by the taxing unit in the
preceding year as limited by Subsection (j), in a subsequent tax
year the [surviving spouse's school district] taxes imposed by that
taxing unit on that residence homestead are limited to the amount of
taxes imposed by the district in that first tax year after the year
in which the individual dies.
(o) Notwithstanding Subsections (a)[, (a-3),] and (b), an
improvement to property that would otherwise constitute an
improvement under Subsection (b) is not treated as an improvement
under that subsection if the improvement is a replacement structure
for a structure that was rendered uninhabitable or unusable by a
casualty or by wind or water damage. For purposes of appraising the
property in the tax year in which the structure would have
constituted an improvement under Subsection (b), the replacement
structure is considered to be an improvement under that subsection
only if:
(1) the square footage of the replacement structure
exceeds that of the replaced structure as that structure existed
before the casualty or damage occurred; or
(2) the exterior of the replacement structure is of
higher quality construction and composition than that of the
replaced structure.
SECTION 3. Sections 23.19(b) and (g), Tax Code, are amended
to read as follows:
(b) If an appraisal district receives a written request for
the appraisal of real property and improvements of a cooperative
housing corporation according to the separate interests of the
corporation's stockholders, the chief appraiser shall separately
appraise the interests described by Subsection (d) if the
conditions required by Subsections (e) and (f) have been met.
Separate appraisal under this section is for the purposes of
administration of tax exemptions, determination of applicable
limitations of taxes under Section 11.26 [or 11.261], and
apportionment by a cooperative housing corporation of property
taxes among its stockholders but is not the basis for determining
value on which a tax is imposed under this title. A stockholder
whose interest is separately appraised under this section may
protest and appeal the appraised value in the manner provided by
this title for protest and appeal of the appraised value of other
property.
(g) A tax bill or a separate statement accompanying the tax
bill to a cooperative housing corporation for which interests of
stockholders are separately appraised under this section must
state, in addition to the information required by Section 31.01,
the appraised value and taxable value of each interest separately
appraised. Each exemption claimed as provided by this title by a
person entitled to the exemption shall also be deducted from the
total appraised value of the property of the corporation. The total
tax imposed by a taxing unit [school district, county,
municipality, or junior college district] shall be reduced by any
amount that represents an increase in taxes attributable to
separately appraised interests of the real property and
improvements that are subject to a [the] limitation of taxes
prescribed by Section 11.26 [or 11.261]. The corporation shall
apportion among its stockholders liability for reimbursing the
corporation for property taxes according to the relative taxable
values of their interests.
SECTION 4. Sections 26.012(6), (13), and (14), Tax Code,
are amended to read as follows:
(6) "Current total value" means the total taxable
value of property listed on the appraisal roll for the current year,
including all appraisal roll supplements and corrections as of the
date of the calculation, less the taxable value of property
exempted for the current tax year for the first time under Section
11.31 or 11.315, except that:
(A) the current total value for a school district
excludes:
(i) the total value of homesteads that
qualify for a tax limitation as provided by Section 11.26; and
(ii) new property value of property that is
subject to an agreement entered into under Chapter 313; and
(B) the current total value for a taxing unit
other than a school district [county, municipality, or junior
college district] excludes the total value of homesteads that
qualify for a tax limitation provided by Section 11.26 [11.261].
(13) "Last year's levy" means the total of:
(A) the amount of taxes that would be generated
by multiplying the total tax rate adopted by the governing body in
the preceding year by the total taxable value of property on the
appraisal roll for the preceding year, including:
(i) taxable value that was reduced in an
appeal under Chapter 42;
(ii) all appraisal roll supplements and
corrections other than corrections made pursuant to Section
25.25(d), as of the date of the calculation but excluding[, except
that last year's taxable value for a school district excludes] the
total value of homesteads that qualified for a tax limitation as
provided by Section 11.26 [and last year's taxable value for a
county, municipality, or junior college district excludes the total
value of homesteads that qualified for a tax limitation as provided
by Section 11.261]; and
(iii) the portion of taxable value of
property that is the subject of an appeal under Chapter 42 on July
25 that is not in dispute; and
(B) the amount of taxes refunded by the taxing
unit in the preceding year for tax years before that year.
(14) "Last year's total value" means the total taxable
value of property listed on the appraisal roll for the preceding
year, including all appraisal roll supplements and corrections,
other than corrections made pursuant to Section 25.25(d), as of the
date of the calculation but excluding[, except that:
[(A) last year's taxable value for a school
district excludes] the total value of homesteads that qualified for
a tax limitation as provided by Section 11.26[; and
[(B) last year's taxable value for a county,
municipality, or junior college district excludes the total value
of homesteads that qualified for a tax limitation as provided by
Section 11.261].
SECTION 5. The following provisions of the Tax Code are
repealed:
(1) Sections 11.26(l) and (m); and
(2) Section 11.261.
SECTION 6. Section 11.26, Tax Code, as amended by this Act,
applies only to ad valorem taxes imposed for a tax year beginning on
or after the effective date of this Act.
SECTION 7. This Act takes effect January 1, 2022, but only
if the constitutional amendment proposed by the 87th Legislature,
Regular Session, 2021, establishing a limitation on the total
amount of ad valorem taxes that political subdivisions may impose
on the residence homesteads of individuals who are disabled or
elderly and their surviving spouses is approved by the voters. If
that constitutional amendment is not approved by the voters, this
Act has no effect.