By: Zwiener H.B. No. 123
A BILL TO BE ENTITLED
AN ACT
relating to an increase in the amount of the exemption of residence
homesteads from ad valorem taxation by a school district, a
reduction in the amount of the limitation on school district ad
valorem taxes imposed on the residence homesteads of the elderly or
disabled to reflect the increased exemption amount, and the
protection of school districts against the resulting loss in local
revenue.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 11.13(b), Tax Code, is amended to read as
follows:
(b) An adult is entitled to exemption from taxation by a
school district of $50,000 [$25,000] of the appraised value of the
adult's residence homestead, except that only $5,000 of the
exemption applies to an entity operating under former Chapter 17,
18, 25, 26, 27, or 28, Education Code, as those chapters existed on
May 1, 1995, as permitted by Section 11.301, Education Code.
SECTION 2. Section 11.26(a), Tax Code, is 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 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 2023 [2015] tax
year, the amount of the limitation provided by this section for the
2023 tax year is the amount of tax the school district imposed for
the 2022 [2014] tax year less an amount equal to the amount
determined by multiplying $25,000 [$10,000] times the tax rate of
the school district for the 2023 [2015] tax year, plus any 2023
[2015] tax attributable to improvements made in 2022 [2014], other
than improvements made to comply with governmental regulations or
repairs.
SECTION 3. Section 46.071, Education Code, is amended by
amending Subsections (a), (b), and (c) and adding Subsections
(a-1), (b-1), and (c-1) to read as follows:
(a) Beginning with the 2015-2016 school year and continuing
through the 2022-2023 school year, a school district is entitled to
additional state aid under this subchapter to the extent that state
and local revenue used to service debt eligible under this chapter
is less than the state and local revenue that would have been
available to the district under this chapter as it existed on
September 1, 2015, if the increase in the residence homestead
exemption under Section 1-b(c), Article VIII, Texas Constitution,
and the additional limitation on tax increases under Section 1-b(d)
of that article as proposed by S.J.R. 1, 84th Legislature, Regular
Session, 2015, had not occurred.
(a-1) Beginning with the 2023-2024 school year, a school
district is entitled to additional state aid under this subchapter
to the extent that state and local revenue used to service debt
eligible under this chapter is less than the state and local revenue
that would have been available to the district under this chapter as
it existed on September 1, 2022, if any increase in the residence
homestead exemption under Section 1-b(c), Article VIII, Texas
Constitution, and any additional limitation on tax increases under
Section 1-b(d) of that article as proposed by the 87th Legislature,
2nd Called Session, 2021, had not occurred.
(b) Subject to Subsections (c), (d), and (e) [(c)-(e)],
additional state aid under this section through the 2022-2023
school year is equal to the amount by which the loss of local
interest and sinking revenue for debt service attributable to the
increase in the residence homestead exemption under Section 1-b(c),
Article VIII, Texas Constitution, and the additional limitation on
tax increases under Section 1-b(d) of that article as proposed by
S.J.R. 1, 84th Legislature, Regular Session, 2015, is not offset by
a gain in state aid under this chapter.
(b-1) Subject to Subsections (c-1), (d), and (e),
additional state aid under this section beginning with the
2023-2024 school year is equal to the amount by which the loss of
local interest and sinking revenue for debt service attributable to
any increase in the residence homestead exemption under Section
1-b(c), Article VIII, Texas Constitution, and any additional
limitation on tax increases under Section 1-b(d) of that article as
proposed by the 87th Legislature, 2nd Called Session, 2021, is not
offset by a gain in state aid under this chapter.
(c) For the purpose of determining state aid under
Subsections (a) and (b) [this section], local interest and sinking
revenue for debt service is limited to revenue required to service
debt eligible under this chapter as of September 1, 2015, including
refunding of that debt, subject to Section 46.061. The limitation
imposed by Section 46.034(a) does not apply for the purpose of
determining state aid under this section.
(c-1) For the purpose of determining state aid under
Subsections (a-1) and (b-1), local interest and sinking revenue for
debt service is limited to revenue required to service debt
eligible under this chapter as of September 1, 2022, including
refunding of that debt, subject to Section 46.061. The limitation
imposed by Section 46.034(a) does not apply for the purpose of
determining state aid under this section.
SECTION 4. Subchapter F, Chapter 48, Education Code, is
amended by adding Section 48.2541 to read as follows:
Sec. 48.2541. ADDITIONAL STATE AID FOR HOMESTEAD EXEMPTION
AND LIMITATION ON TAX INCREASES. (a) Beginning with the 2023-2024
school year, a school district is entitled to additional state aid
to the extent that state and local revenue under this chapter and
Chapter 49 is less than the state and local revenue that would have
been available to the district under this chapter and Chapter 49 as
those chapters existed on September 1, 2022, if any increase in the
residence homestead exemption under Section 1-b(c), Article VIII,
Texas Constitution, and any additional limitation on tax increases
under Section 1-b(d) of that article as proposed by the 87th
Legislature, 2nd Called Session, 2021, had not occurred.
(b) The lesser of the school district's currently adopted
maintenance and operations tax rate or the adopted maintenance and
operations tax rate for the 2022 tax year is used for the purpose of
determining additional state aid under Subsection (a).
SECTION 5. The changes in law made by this Act to Sections
11.13 and 11.26, Tax Code, apply only to an ad valorem tax year that
begins on or after January 1, 2023.
SECTION 6. This Act takes effect January 1, 2023, but only
if the constitutional amendment proposed by the 87th Legislature,
2nd Called Session, 2021, to increase the amount of the exemption of
residence homesteads from ad valorem taxation by a school district
and to reduce the amount of the limitation on school district ad
valorem taxes imposed on the residence homesteads of the elderly or
disabled to reflect the increased exemption amount is approved by
the voters. If that constitutional amendment is not approved by the
voters, this Act has no effect.