88R1084 TJB-D
By: Davis H.B. No. 1189
A BILL TO BE ENTITLED
AN ACT
relating to limitations on the appraised value of certain real
property 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
real property [a homestead] to which Section 23.23, 23.231, or
23.232 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, 23.231, or
23.232.
SECTION 2. Subchapter B, Chapter 23, Tax Code, is amended by
adding Sections 23.231 and 23.232 to read as follows:
Sec. 23.231. TEMPORARY LIMITATION ON APPRAISED VALUE OF
CERTAIN REAL PROPERTY IN SPECIFIED AREAS. (a) In this section:
(1) "Census tract" means the geographic area
identified as a "tract" on the 2020 Census TIGER/Line Shapefiles,
prepared by the federal Bureau of the Census for the Twenty-fourth
Decennial Census of the United States, enumerated as of April 1,
2020.
(2) "Eligible property" means real property that:
(A) is:
(i) a residence homestead; or
(ii) an undeveloped lot, subject to
Subsection (f); and
(B) is located in one of the following census
tracts:
(i) Dallas County tract 002703; or
(ii) Harris County tract 210900, 211000,
211101, 211102, 211200, or 211700.
(3) "Residence homestead" has the meaning assigned by
Section 11.13.
(b) The governing body of a municipality, county, or school
district may by official action adopt a limitation as prescribed by
this section on the appraised value of all eligible property
located in the taxing unit adopting the limitation. The governing
body of a municipality, county, or school district may not repeal,
rescind, or take other action to negate the adoption of the
limitation once adopted under this subsection.
(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
eligible property for a tax year to which a limitation under this
section applies for purposes of taxation of the property by the
taxing unit that adopted the limitation to an amount not to exceed
the lesser of:
(1) the appraised value of the property as otherwise
determined by law; or
(2) the appraised value of the property for the tax
year preceding the tax year in which the limitation adopted by that
taxing unit first applies, as provided by Subsection (e).
(d) When appraising eligible property, the chief appraiser
shall:
(1) appraise the property as otherwise determined by
law; and
(2) include in the appraisal records:
(A) the appraised value of the property
determined under Subdivision (1); and
(B) the amount determined under Subsection
(c)(2) applicable to each taxing unit that has adopted the
limitation.
(e) Except as provided by Subsection (f), a limitation once
adopted by a governing body under this section applies to each tax
year:
(1) beginning with:
(A) the tax year in which the governing body
adopts the limitation, if the governing body adopts the limitation
on or before April 1; or
(B) the tax year following the tax year in which
the governing body adopts the limitation, if the governing body
adopts the limitation after April 1; and
(2) ending with the 2039 tax year.
(f) A limitation adopted under this section as applied to a
vacant lot expires on the earlier of:
(1) January 1 following the end of the fifth tax year
for which the limitation applies, unless:
(A) a single-family residence has been
constructed on the property; and
(B) the owner of the residence has qualified the
property as the owner's residence homestead; or
(2) January 1 of the tax year in which the vacant lot
is:
(A) developed for a purpose other than as a
single-family residence; or
(B) developed as a single-family residence but
not qualified as the residence homestead of an owner of the
property.
(g) This section expires January 1, 2040.
Sec. 23.232. 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 2020 Census TIGER/Line Shapefiles,
prepared by the federal Bureau of the Census for the Twenty-fourth
Decennial Census of the United States, enumerated as of April 1,
2020.
(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) that is located in Dallas County census tract
004300, 010101, 010102, 010500, 010601, 010602, or 020500;
(C) for which the owner was granted a residence
homestead exemption in the 2017, 2018, 2019, 2020, 2021, 2022,
2023, and 2024 tax years; and
(D) 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) 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.
(c) 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:
(A) the market value of the property; and
(B) the amount determined under Subsection
(b)(2).
(d) The limitation provided by Subsection (b) 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.
(e) Notwithstanding Subsection (b), 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 (b) 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 (b); 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.
(f) Notwithstanding Subsection (e)(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. Sections 25.19(b) and (g), Tax Code, are 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 under Section 23.231 or 23.232;
(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;
(8) an explanation of the availability and purpose of
an informal conference with the appraisal office before a hearing
on a protest; and
(9) 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.
(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 under Section 23.231 or 23.232;
(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 4. 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 under Section 23.231 or
23.232;
(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 5. 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 a [the] limitation on appraised
value under [imposed by] Section 23.23, 23.231, or 23.232.
SECTION 6. This Act applies only to the appraisal of real
property for ad valorem tax purposes for a tax year that begins on
or after the effective date of this Act.
SECTION 7. This Act takes effect January 1, 2024, but only
if the constitutional amendment proposed by the 88th Legislature,
Regular Session, 2023, to authorize the legislature to provide for
limitations on the appraised value of certain real property in
specified areas for ad valorem tax purposes is approved by the
voters. If that amendment is not approved by the voters, this Act
has no effect.