Texas 2023 - 88th Regular

Texas House Bill HB117 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New	Differences
1	1	By: Bernal H.B. No. 117
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to a limitation on the total amount of ad valorem taxes
7	7	that a school district may impose on certain residence homesteads
8	8	following a substantial school tax increase.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by
11	11	adding Section 11.262 to read as follows:
12	12	Sec. 11.262. LIMITATION OF SCHOOL TAXES ON CERTAIN
13	13	HOMESTEADS FOLLOWING SUBSTANTIAL TAX INCREASE. (a) In this
14	14	section, "residence homestead" has the meaning assigned by Section
15	15	11.13.
16	16	(b) The chief appraiser shall appraise, and the tax assessor
17	17	for each school district shall calculate the taxes on, each
18	18	residence homestead in the manner provided by law for other
19	19	property.
20	20	(c) Except as provided by Subsection (g), if an individual
21	21	qualifies property as the individual's residence homestead for at
22	22	least 15 consecutive tax years and the total amount of school
23	23	district taxes imposed on the property in that 15th tax year is at
24	24	least 120 percent greater than the total amount of those taxes
25	25	imposed in the first of those tax years, not including taxes imposed
26	26	on the appraised value of all improvements made to the property
27	27	during that period, a school district may not impose taxes on that
28	28	residence homestead in a subsequent tax year in an amount that
29	29	exceeds the least of the following amounts:
30	30	(1) the amount of school taxes calculated for the
31	31	current tax year under Subsection (b);
32	32	(2) the amount of school taxes imposed for that 15th
33	33	tax year; or
34	34	(3) the amount of school taxes as limited under
35	35	Section 11.26, if applicable.
36	36	(c-1) An individual may not receive a limitation on taxes
37	37	under Subsection (c) based on an increase in taxes for any period
38	38	that began before the 2008 tax year.
39	39	(d) If an individual who qualifies for a limitation under
40	40	this section dies, the surviving spouse of the individual is
41	41	entitled to continue receiving the limitation on school taxes
42	42	imposed by a school district on the residence homestead of the
43	43	individual if the property:
44	44	(1) is the residence homestead of the surviving spouse
45	45	on the date that the individual dies; and
46	46	(2) remains the residence homestead of the surviving
47	47	spouse.
48	48	(e) Except as provided by Subsection (d) or (f), a
49	49	limitation under this section expires on January 1 if the property
50	50	is not the residence homestead of the individual entitled to the
51	51	limitation for the preceding tax year.
52	52	(f) A limitation under this section does not expire if:
53	53	(1) an owner of an interest in the residence homestead
54	54	conveys the interest to a qualifying trust as defined by Section
55	55	11.13(j) and the owner or the owner's spouse is:
56	56	(A) a trustor of the trust; and
57	57	(B) entitled to occupy the property; or
58	58	(2) the owner of the structure qualifies for an
59	59	exemption under Section 11.13 under the circumstances described by
60	60	Section 11.135(a).
61	61	(g) Except as provided by Subsection (h), a school district
62	62	may increase the tax on a residence homestead subject to a
63	63	limitation under this section in the first year the appraised value
64	64	of the property is increased as the result of an improvement made to
65	65	the property in the preceding tax year. The amount of the tax
66	66	increase is determined by applying the current tax rate of the
67	67	school district to the difference in the taxable value of the
68	68	property with the improvement and the taxable value the property
69	69	would have had without the improvement. A limitation imposed by
70	70	this section then applies to the increased amount of tax until
71	71	another improvement is made to the property.
72	72	(h) An improvement to a residence homestead is not treated
73	73	as an improvement under Subsection (g) if the improvement is:
74	74	(1) a repair;
75	75	(2) required to be made to comply with a governmental
76	76	requirement; or
77	77	(3) subject to Subsection (i), a replacement structure
78	78	for a structure that was rendered uninhabitable or unusable by a
79	79	casualty or by wind or water damage.
80	80	(i) A replacement structure described by Subsection (h)(3)
81	81	is considered to be an improvement under Subsection (g) only if:
82	82	(1) the square footage of the replacement structure
83	83	exceeds the square footage of the replaced structure as the
84	84	replaced structure existed before the casualty or damage occurred;
85	85	or
86	86	(2) the exterior of the replacement structure is of
87	87	higher quality construction and composition than that of the
88	88	replaced structure.
89	89	(j) If the appraisal roll provides for taxation of appraised
90	90	value for a prior year because a limitation under this section was
91	91	erroneously allowed, the tax assessor for the school district shall
92	92	add as back taxes due, as provided by Section 26.09(d), the positive
93	93	difference, if any, between the tax that should have been imposed
94	94	for that tax year and the tax that was imposed because of the
95	95	provisions of this section.
96	96	(k) For each school district in an appraisal district, the
97	97	chief appraiser shall determine the portion of the appraised value
98	98	of residence homesteads of individuals on which school district
99	99	taxes are not imposed in a tax year because of the limitation under
100	100	this section. That portion is calculated by determining the
101	101	taxable value that, if multiplied by the tax rate adopted by the
102	102	school district for the tax year, would produce an amount equal to
103	103	the amount of tax that would have been imposed by the school
104	104	district on those properties if the limitation under this section
105	105	were not in effect, but that was not imposed because of that
106	106	limitation. The chief appraiser shall determine that taxable value
107	107	and certify it to the comptroller as soon as practicable for each
108	108	tax year.
109	109	SECTION 2. Sections 23.19(b) and (g), Tax Code, are amended
110	110	to read as follows:
111	111	(b) If an appraisal district receives a written request for
112	112	the appraisal of real property and improvements of a cooperative
113	113	housing corporation according to the separate interests of the
114	114	corporation's stockholders, the chief appraiser shall separately
115	115	appraise the interests described by Subsection (d) if the
116	116	conditions required by Subsections (e) and (f) have been met.
117	117	Separate appraisal under this section is for the purposes of
118	118	administration of tax exemptions, determination of applicable
119	119	limitations of taxes under Section 11.26, [or] 11.261, or 11.262,
120	120	and apportionment by a cooperative housing corporation of property
121	121	taxes among its stockholders but is not the basis for determining
122	122	value on which a tax is imposed under this title. A stockholder
123	123	whose interest is separately appraised under this section may
124	124	protest and appeal the appraised value in the manner provided by
125	125	this title for protest and appeal of the appraised value of other
126	126	property.
127	127	(g) A tax bill or a separate statement accompanying the tax
128	128	bill to a cooperative housing corporation for which interests of
129	129	stockholders are separately appraised under this section must
130	130	state, in addition to the information required by Section 31.01,
131	131	the appraised value and taxable value of each interest separately
132	132	appraised. Each exemption claimed as provided by this title by a
133	133	person entitled to the exemption shall also be deducted from the
134	134	total appraised value of the property of the corporation. The total
135	135	tax imposed by a school district, county, municipality, or junior
136	136	college district shall be reduced by any amount that represents an
137	137	increase in taxes attributable to separately appraised interests of
138	138	the real property and improvements that are subject to the
139	139	limitation of taxes prescribed by Section 11.26, [or] 11.261, or
140	140	11.262. The corporation shall apportion among its stockholders
141	141	liability for reimbursing the corporation for property taxes
142	142	according to the relative taxable values of their interests.
143	143	SECTION 3. Sections 26.012(6), (13), and (14), Tax Code,
144	144	are amended to read as follows:
145	145	(6) "Current total value" means the total taxable
146	146	value of property listed on the appraisal roll for the current year,
147	147	including all appraisal roll supplements and corrections as of the
148	148	date of the calculation, less the taxable value of property
149	149	exempted for the current tax year for the first time under Section
150	150	11.31 or 11.315, except that:
151	151	(A) the current total value for a school district
152	152	excludes:
153	153	(i) the total value of homesteads that
154	154	qualify for a tax limitation as provided by Sections [Section]
155	155	11.26 and 11.262; and
156	156	(ii) new property value of property that is
157	157	subject to an agreement entered into under Chapter 313; and
158	158	(B) the current total value for a county,
159	159	municipality, or junior college district excludes the total value
160	160	of homesteads that qualify for a tax limitation provided by Section
161	161	11.261.
162	162	(13) "Last year's levy" means the total of:
163	163	(A) the amount of taxes that would be generated
164	164	by multiplying the total tax rate adopted by the governing body in
165	165	the preceding year by the total taxable value of property on the
166	166	appraisal roll for the preceding year, including:
167	167	(i) taxable value that was reduced in an
168	168	appeal under Chapter 42;
169	169	(ii) all appraisal roll supplements and
170	170	corrections other than corrections made pursuant to Section
171	171	25.25(d), as of the date of the calculation, except that last year's
172	172	taxable value for a school district excludes the total value of
173	173	homesteads that qualified for a tax limitation as provided by
174	174	Sections [Section] 11.26 and 11.262 and last year's taxable value
175	175	for a county, municipality, or junior college district excludes the
176	176	total value of homesteads that qualified for a tax limitation as
177	177	provided by Section 11.261; and
178	178	(iii) the portion of taxable value of
179	179	property that is the subject of an appeal under Chapter 42 on July
180	180	25 that is not in dispute; and
181	181	(B) the amount of taxes refunded by the taxing
182	182	unit in the preceding year for tax years before that year.
183	183	(14) "Last year's total value" means the total taxable
184	184	value of property listed on the appraisal roll for the preceding
185	185	year, including all appraisal roll supplements and corrections,
186	186	other than corrections made pursuant to Section 25.25(d), as of the
187	187	date of the calculation, except that:
188	188	(A) last year's taxable value for a school
189	189	district excludes the total value of homesteads that qualified for
190	190	a tax limitation as provided by Sections [Section] 11.26 and
191	191	11.262; and
192	192	(B) last year's taxable value for a county,
193	193	municipality, or junior college district excludes the total value
194	194	of homesteads that qualified for a tax limitation as provided by
195	195	Section 11.261.
196	196	SECTION 4. Section 44.004(c), Education Code, is amended to
197	197	read as follows:
198	198	(c) The notice of public meeting to discuss and adopt the
199	199	budget and the proposed tax rate may not be smaller than one-quarter
200	200	page of a standard-size or a tabloid-size newspaper, and the
201	201	headline on the notice must be in 18-point or larger type. Subject
202	202	to Subsection (d), the notice must:
203	203	(1) contain a statement in the following form:
204	204	"NOTICE OF PUBLIC MEETING TO DISCUSS BUDGET AND PROPOSED TAX RATE
205	205	"The (name of school district) will hold a public meeting at
206	206	(time, date, year) in (name of room, building, physical location,
207	207	city, state). The purpose of this meeting is to discuss the school
208	208	district's budget that will determine the tax rate that will be
209	209	adopted. Public participation in the discussion is invited." The
210	210	statement of the purpose of the meeting must be in bold type. In
211	211	reduced type, the notice must state: "The tax rate that is
212	212	ultimately adopted at this meeting or at a separate meeting at a
213	213	later date may not exceed the proposed rate shown below unless the
214	214	district publishes a revised notice containing the same information
215	215	and comparisons set out below and holds another public meeting to
216	216	discuss the revised notice.";
217	217	(2) contain a section entitled "Comparison of Proposed
218	218	Budget with Last Year's Budget," which must show the difference,
219	219	expressed as a percent increase or decrease, as applicable, in the
220	220	amounts budgeted for the preceding fiscal year and the amount
221	221	budgeted for the fiscal year that begins in the current tax year for
222	222	each of the following:
223	223	(A) maintenance and operations;
224	224	(B) debt service; and
225	225	(C) total expenditures;
226	226	(3) contain a section entitled "Total Appraised Value
227	227	and Total Taxable Value," which must show the total appraised value
228	228	and the total taxable value of all property and the total appraised
229	229	value and the total taxable value of new property taxable by the
230	230	district in the preceding tax year and the current tax year as
231	231	calculated under Section 26.04, Tax Code;
232	232	(4) contain a statement of the total amount of the
233	233	outstanding and unpaid bonded indebtedness of the school district;
234	234	(5) contain a section entitled "Comparison of Proposed
235	235	Rates with Last Year's Rates," which must:
236	236	(A) show in rows the tax rates described by
237	237	Subparagraphs (i)-(iii), expressed as amounts per $100 valuation of
238	238	property, for columns entitled "Maintenance & Operations,"
239	239	"Interest & Sinking Fund," and "Total," which is the sum of
240	240	"Maintenance & Operations" and "Interest & Sinking Fund":
241	241	(i) the school district's "Last Year's
242	242	Rate";
243	243	(ii) the "Rate to Maintain Same Level of
244	244	Maintenance & Operations Revenue & Pay Debt Service," which:
245	245	(a) in the case of "Maintenance &
246	246	Operations," is the tax rate that, when applied to the current
247	247	taxable value for the district, as certified by the chief appraiser
248	248	under Section 26.01, Tax Code, and as adjusted to reflect changes
249	249	made by the chief appraiser as of the time the notice is prepared,
250	250	would impose taxes in an amount that, when added to state funds to
251	251	be distributed to the district under Chapter 48, would provide the
252	252	same amount of maintenance and operations taxes and state funds
253	253	distributed under Chapter 48 per student in average daily
254	254	attendance for the applicable school year that was available to the
255	255	district in the preceding school year; and
256	256	(b) in the case of "Interest & Sinking
257	257	Fund," is the tax rate that, when applied to the current taxable
258	258	value for the district, as certified by the chief appraiser under
259	259	Section 26.01, Tax Code, and as adjusted to reflect changes made by
260	260	the chief appraiser as of the time the notice is prepared, and when
261	261	multiplied by the district's anticipated collection rate, would
262	262	impose taxes in an amount that, when added to state funds to be
263	263	distributed to the district under Chapter 46 and any excess taxes
264	264	collected to service the district's debt during the preceding tax
265	265	year but not used for that purpose during that year, would provide
266	266	the amount required to service the district's debt; and
267	267	(iii) the "Proposed Rate";
268	268	(B) contain fourth and fifth columns aligned with
269	269	the columns required by Paragraph (A) that show, for each row
270	270	required by Paragraph (A):
271	271	(i) the "Local Revenue per Student," which
272	272	is computed by multiplying the district's total taxable value of
273	273	property, as certified by the chief appraiser for the applicable
274	274	school year under Section 26.01, Tax Code, and as adjusted to
275	275	reflect changes made by the chief appraiser as of the time the
276	276	notice is prepared, by the total tax rate, and dividing the product
277	277	by the number of students in average daily attendance in the
278	278	district for the applicable school year; and
279	279	(ii) the "State Revenue per Student," which
280	280	is computed by determining the amount of state aid received or to be
281	281	received by the district under Chapters 43, 46, and 48 and dividing
282	282	that amount by the number of students in average daily attendance in
283	283	the district for the applicable school year; and
284	284	(C) contain an asterisk after each calculation
285	285	for "Interest & Sinking Fund" and a footnote to the section that, in
286	286	reduced type, states "The Interest & Sinking Fund tax revenue is
287	287	used to pay for bonded indebtedness on construction, equipment, or
288	288	both. The bonds, and the tax rate necessary to pay those bonds,
289	289	were approved by the voters of this district.";
290	290	(6) contain a section entitled "Comparison of Proposed
291	291	Levy with Last Year's Levy on Average Residence," which must:
292	292	(A) show in rows the information described by
293	293	Subparagraphs (i)-(iv), rounded to the nearest dollar, for columns
294	294	entitled "Last Year" and "This Year":
295	295	(i) "Average Market Value of Residences,"
296	296	determined using the same group of residences for each year;
297	297	(ii) "Average Taxable Value of Residences,"
298	298	determined after taking into account the limitation on the
299	299	appraised value of residences under Section 23.23, Tax Code, and
300	300	after subtracting all homestead exemptions applicable in each year,
301	301	other than exemptions available only to disabled persons or persons
302	302	65 years of age or older or their surviving spouses, and using the
303	303	same group of residences for each year;
304	304	(iii) "Last Year's Rate Versus Proposed
305	305	Rate per $100 Value"; and
306	306	(iv) "Taxes Due on Average Residence,"
307	307	determined using the same group of residences for each year; and
308	308	(B) contain the following information: "Increase
309	309	(Decrease) in Taxes" expressed in dollars and cents, which is
310	310	computed by subtracting the "Taxes Due on Average Residence" for
311	311	the preceding tax year from the "Taxes Due on Average Residence" for
312	312	the current tax year;
313	313	(7) contain the following statement in bold print:
314	314	"Under state law, the dollar amount of school taxes imposed on the
315	315	residence of a person 65 years of age or older or of the surviving
316	316	spouse of such a person, if the surviving spouse was 55 years of age
317	317	or older when the person died, may not be increased above the amount
318	318	paid in the first year after the person turned 65, regardless of
319	319	changes in tax rate or property value.";
320	320	(8) contain the following statement in bold print:
321	321	"Notice of Voter-Approval Rate: The highest tax rate the district
322	322	can adopt before requiring voter approval at an election is (the
323	323	school district voter-approval rate determined under Section
324	324	26.08, Tax Code). This election will be automatically held if the
325	325	district adopts a rate in excess of the voter-approval rate of (the
326	326	school district voter-approval rate)."; [and]
327	327	(9) contain a section entitled "Fund Balances," which
328	328	must include the estimated amount of interest and sinking fund
329	329	balances and the estimated amount of maintenance and operation or
330	330	general fund balances remaining at the end of the current fiscal
331	331	year that are not encumbered with or by corresponding debt
332	332	obligation, less estimated funds necessary for the operation of the
333	333	district before the receipt of the first payment under Chapter 48 in
334	334	the succeeding school year; and
335	335	(10) contain the following statement in bold print:
336	336	"Under state law, the dollar amount of school taxes imposed on a
337	337	residence homestead that qualifies as the owner's residence
338	338	homestead for at least 15 consecutive years, during which time the
339	339	total amount of school district taxes imposed on the property has
340	340	increased by at least 120 percent, may not be increased above the
341	341	amount of school taxes imposed on the property in that 15th
342	342	consecutive year, regardless of changes in tax rate or property
343	343	value.".
344	344	SECTION 5. Section 403.302(d), Government Code, is amended
345	345	to read as follows:
346	346	(d) For the purposes of this section, "taxable value" means
347	347	the market value of all taxable property less:
348	348	(1) the total dollar amount of any residence homestead
349	349	exemptions lawfully granted under Section 11.13(b) or (c), Tax
350	350	Code, in the year that is the subject of the study for each school
351	351	district;
352	352	(2) one-half of the total dollar amount of any
353	353	residence homestead exemptions granted under Section 11.13(n), Tax
354	354	Code, in the year that is the subject of the study for each school
355	355	district;
356	356	(3) the total dollar amount of any exemptions granted
357	357	before May 31, 1993, within a reinvestment zone under agreements
358	358	authorized by Chapter 312, Tax Code;
359	359	(4) subject to Subsection (e), the total dollar amount
360	360	of any captured appraised value of property that:
361	361	(A) is within a reinvestment zone created on or
362	362	before May 31, 1999, or is proposed to be included within the
363	363	boundaries of a reinvestment zone as the boundaries of the zone and
364	364	the proposed portion of tax increment paid into the tax increment
365	365	fund by a school district are described in a written notification
366	366	provided by the municipality or the board of directors of the zone
367	367	to the governing bodies of the other taxing units in the manner
368	368	provided by former Section 311.003(e), Tax Code, before May 31,
369	369	1999, and within the boundaries of the zone as those boundaries
370	370	existed on September 1, 1999, including subsequent improvements to
371	371	the property regardless of when made;
372	372	(B) generates taxes paid into a tax increment
373	373	fund created under Chapter 311, Tax Code, under a reinvestment zone
374	374	financing plan approved under Section 311.011(d), Tax Code, on or
375	375	before September 1, 1999; and
376	376	(C) is eligible for tax increment financing under
377	377	Chapter 311, Tax Code;
378	378	(5) the total dollar amount of any captured appraised
379	379	value of property that:
380	380	(A) is within a reinvestment zone:
381	381	(i) created on or before December 31, 2008,
382	382	by a municipality with a population of less than 18,000; and
383	383	(ii) the project plan for which includes
384	384	the alteration, remodeling, repair, or reconstruction of a
385	385	structure that is included on the National Register of Historic
386	386	Places and requires that a portion of the tax increment of the zone
387	387	be used for the improvement or construction of related facilities
388	388	or for affordable housing;
389	389	(B) generates school district taxes that are paid
390	390	into a tax increment fund created under Chapter 311, Tax Code; and
391	391	(C) is eligible for tax increment financing under
392	392	Chapter 311, Tax Code;
393	393	(6) the total dollar amount of any exemptions granted
394	394	under Section 11.251 or 11.253, Tax Code;
395	395	(7) the difference between the comptroller's estimate
396	396	of the market value and the productivity value of land that
397	397	qualifies for appraisal on the basis of its productive capacity,
398	398	except that the productivity value estimated by the comptroller may
399	399	not exceed the fair market value of the land;
400	400	(8) the portion of the appraised value of residence
401	401	homesteads of individuals who receive a tax limitation under
402	402	Section 11.26 or 11.262, Tax Code, on which school district taxes
403	403	are not imposed in the year that is the subject of the study,
404	404	calculated as if the residence homesteads were appraised at the
405	405	full value required by law;
406	406	(9) a portion of the market value of property not
407	407	otherwise fully taxable by the district at market value because of
408	408	action required by statute or the constitution of this state, other
409	409	than Section 11.311, Tax Code, that, if the tax rate adopted by the
410	410	district is applied to it, produces an amount equal to the
411	411	difference between the tax that the district would have imposed on
412	412	the property if the property were fully taxable at market value and
413	413	the tax that the district is actually authorized to impose on the
414	414	property, if this subsection does not otherwise require that
415	415	portion to be deducted;
416	416	(10) the market value of all tangible personal
417	417	property, other than manufactured homes, owned by a family or
418	418	individual and not held or used for the production of income;
419	419	(11) the appraised value of property the collection of
420	420	delinquent taxes on which is deferred under Section 33.06, Tax
421	421	Code;
422	422	(12) the portion of the appraised value of property
423	423	the collection of delinquent taxes on which is deferred under
424	424	Section 33.065, Tax Code;
425	425	(13) the amount by which the market value of a
426	426	residence homestead to which Section 23.23, Tax Code, applies
427	427	exceeds the appraised value of that property as calculated under
428	428	that section; and
429	429	(14) the total dollar amount of any exemptions granted
430	430	under Section 11.35, Tax Code.
431	431	SECTION 6. The limitation on school taxes provided by
432	432	Section 11.262, Tax Code, as added by this Act, applies only to ad
433	433	valorem taxes imposed for an ad valorem tax year that begins on or
434	434	after the effective date of this Act.
435	435	SECTION 7. This Act takes effect January 1, 2024, but only
436	436	if the constitutional amendment proposed by the 88th Legislature,
437	437	Regular Session, 2023, authorizing the legislature to limit the
438	438	total amount of ad valorem taxes that a school district may impose
439	439	on the residence homestead of an individual and the surviving
440	440	spouse of the individual if the individual qualifies the property
441	441	as the individual's residence homestead for 15 consecutive tax
442	442	years and the school taxes on the property increase by at least 120
443	443	percent during that period is approved by the voters. If that
444	444	amendment is not approved by the voters, this Act has no effect.