Texas 2023 - 88th Regular

Texas House Bill HB1566 Compare Versions

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1	1	88R2827 RDS-D
2	2	By: Allison H.B. No. 1566
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the ad valorem taxation of residential real property.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Section 1.12(d), Tax Code, is amended to read as
10	10	follows:
11	11	(d) For purposes of this section, the appraisal ratio of
12	12	real property [a homestead] to which Section 23.23 applies is the
13	13	ratio of the property's market value as determined by the appraisal
14	14	district or appraisal review board, as applicable, to the market
15	15	value of the property according to law. The appraisal ratio is not
16	16	calculated according to the appraised value of the property as
17	17	limited by Section 23.23.
18	18	SECTION 2. Section 11.13, Tax Code, is amended by amending
19	19	Subsection (i) and adding Subsection (s) to read as follows:
20	20	(i) The assessor and collector for a taxing unit may
21	21	disregard the exemptions authorized by Subsection (b), (c), (d),
22	22	[or] (n), or (s) [of this section] and assess and collect a tax
23	23	pledged for payment of debt without deducting the amount of the
24	24	exemption if:
25	25	(1) prior to adoption of the exemption, the taxing
26	26	unit pledged the taxes for the payment of a debt; and
27	27	(2) granting the exemption would impair the obligation
28	28	of the contract creating the debt.
29	29	(s) In addition to any other exemptions provided by this
30	30	section, an individual who purchases property and qualifies the
31	31	property as the individual's residence homestead is entitled to an
32	32	exemption from taxation of the total appraised value of the
33	33	property for the first tax year the individual qualifies the
34	34	property as the individual's residence homestead if the property:
35	35	(1) is the first property the individual has ever
36	36	qualified as the individual's residence homestead; and
37	37	(2) has an appraised value of less than $300,000 for
38	38	that first tax year.
39	39	SECTION 3. Subchapter B, Chapter 11, Tax Code, is amended by
40	40	adding Section 11.262 to read as follows:
41	41	Sec. 11.262. LIMITATION OF TAXES ON HOMESTEADS FOLLOWING
42	42	CERTAIN PERIOD. (a) In this section, "residence homestead" has the
43	43	meaning assigned by Section 11.13.
44	44	(b) The chief appraiser shall appraise, and the tax assessor
45	45	for each taxing unit shall calculate the taxes on, each residence
46	46	homestead in the manner provided by law for other property.
47	47	(c) Except as provided by Subsection (h), if an individual
48	48	qualifies property as the individual's residence homestead for at
49	49	least 25 consecutive tax years, a taxing unit may not impose taxes
50	50	on that residence homestead in a subsequent tax year in an amount
51	51	that exceeds the lesser of the following amounts:
52	52	(1) the amount of taxes calculated for the taxing unit
53	53	for the current tax year under Subsection (b); or
54	54	(2) the amount of taxes imposed by the taxing unit for
55	55	that 25th tax year.
56	56	(d) For purposes of this section, if the first tax year an
57	57	individual qualified property as the individual's residence
58	58	homestead was a tax year before the 2000 tax year, the individual is
59	59	considered to have qualified the property as the individual's
60	60	residence homestead for the first time in the 2000 tax year.
61	61	(e) If an individual who qualifies for a limitation under
62	62	this section dies, the surviving spouse of the individual is
63	63	entitled to continue receiving the limitation applicable to the
64	64	residence homestead of the individual if the property:
65	65	(1) is the residence homestead of the surviving spouse
66	66	on the date that the individual dies; and
67	67	(2) remains the residence homestead of the surviving
68	68	spouse.
69	69	(f) Except as provided by Subsection (e) or (g), a
70	70	limitation under this section expires on January 1 if the property
71	71	is not the residence homestead of the individual entitled to the
72	72	limitation for the preceding tax year.
73	73	(g) A limitation under this section does not expire if:
74	74	(1) an owner of an interest in the residence homestead
75	75	conveys the interest to a qualifying trust as defined by Section
76	76	11.13(j) and the owner or the owner's spouse is:
77	77	(A) a trustor of the trust; and
78	78	(B) entitled to occupy the property; or
79	79	(2) the owner of the structure qualifies for an
80	80	exemption under Section 11.13 under the circumstances described by
81	81	Section 11.135(a).
82	82	(h) Except as provided by Subsection (i), a taxing unit may
83	83	increase the tax on a residence homestead subject to a limitation
84	84	under this section in the first year the appraised value of the
85	85	property is increased as the result of an improvement made to the
86	86	property in the preceding tax year. The amount of the tax increase
87	87	is determined by applying the current tax rate of the taxing unit to
88	88	the difference in the taxable value of the property with the
89	89	improvement and the taxable value the property would have had
90	90	without the improvement. A limitation imposed by this section then
91	91	applies to the increased amount of tax until another improvement is
92	92	made to the property.
93	93	(i) An improvement to a residence homestead is not treated
94	94	as an improvement under Subsection (h) if the improvement is:
95	95	(1) a repair;
96	96	(2) required to be made to comply with a governmental
97	97	requirement; or
98	98	(3) subject to Subsection (j), a replacement structure
99	99	for a structure that was rendered uninhabitable or unusable by a
100	100	casualty or by wind or water damage.
101	101	(j) A replacement structure described by Subsection (i)(3)
102	102	is considered to be an improvement under Subsection (h) only if:
103	103	(1) the square footage of the replacement structure
104	104	exceeds the square footage of the replaced structure as the
105	105	replaced structure existed before the casualty or damage occurred;
106	106	or
107	107	(2) the exterior of the replacement structure is of
108	108	higher quality construction and composition than that of the
109	109	replaced structure.
110	110	(k) If the appraisal roll provides for taxation of appraised
111	111	value for a prior year because a limitation under this section was
112	112	erroneously allowed, the tax assessor for the taxing unit shall add
113	113	as back taxes due, as provided by Section 26.09(d), the positive
114	114	difference, if any, between the tax that should have been imposed
115	115	for that tax year and the tax that was imposed because of the
116	116	provisions of this section.
117	117	(l) For each school district in an appraisal district, the
118	118	chief appraiser shall determine the portion of the appraised value
119	119	of residence homesteads of individuals on which school district
120	120	taxes are not imposed in a tax year because of the limitation under
121	121	this section. That portion is calculated by determining the
122	122	taxable value that, if multiplied by the tax rate adopted by the
123	123	school district for the tax year, would produce an amount equal to
124	124	the amount of tax that would have been imposed by the school
125	125	district on those properties if the limitation under this section
126	126	were not in effect, but that was not imposed because of that
127	127	limitation. The chief appraiser shall determine that taxable value
128	128	and certify it to the comptroller as soon as practicable for each
129	129	tax year.
130	130	SECTION 4. Sections 23.19(b) and (g), Tax Code, are amended
131	131	to read as follows:
132	132	(b) If an appraisal district receives a written request for
133	133	the appraisal of real property and improvements of a cooperative
134	134	housing corporation according to the separate interests of the
135	135	corporation's stockholders, the chief appraiser shall separately
136	136	appraise the interests described by Subsection (d) if the
137	137	conditions required by Subsections (e) and (f) have been met.
138	138	Separate appraisal under this section is for the purposes of
139	139	administration of tax exemptions, determination of applicable
140	140	limitations of taxes under Section 11.26, [or] 11.261, or 11.262,
141	141	and apportionment by a cooperative housing corporation of property
142	142	taxes among its stockholders but is not the basis for determining
143	143	value on which a tax is imposed under this title. A stockholder
144	144	whose interest is separately appraised under this section may
145	145	protest and appeal the appraised value in the manner provided by
146	146	this title for protest and appeal of the appraised value of other
147	147	property.
148	148	(g) A tax bill or a separate statement accompanying the tax
149	149	bill to a cooperative housing corporation for which interests of
150	150	stockholders are separately appraised under this section must
151	151	state, in addition to the information required by Section 31.01,
152	152	the appraised value and taxable value of each interest separately
153	153	appraised. Each exemption claimed as provided by this title by a
154	154	person entitled to the exemption shall also be deducted from the
155	155	total appraised value of the property of the corporation. The total
156	156	tax imposed by a school district, county, municipality, or junior
157	157	college district shall be reduced by any amount that represents an
158	158	increase in taxes attributable to separately appraised interests of
159	159	the real property and improvements that are subject to the
160	160	limitation of taxes prescribed by Section 11.26, [or] 11.261, or
161	161	11.262. The corporation shall apportion among its stockholders
162	162	liability for reimbursing the corporation for property taxes
163	163	according to the relative taxable values of their interests.
164	164	SECTION 5. The heading to Section 23.23, Tax Code, is
165	165	amended to read as follows:
166	166	Sec. 23.23. LIMITATION ON APPRAISED VALUE OF RESIDENTIAL
167	167	REAL PROPERTY [RESIDENCE HOMESTEAD].
168	168	SECTION 6. Section 23.23, Tax Code, is amended by amending
169	169	Subsections (a), (b), (c), (e), and (f) and adding Subsections
170	170	(c-2), (c-3), and (c-4) to read as follows:
171	171	(a) Notwithstanding the requirements of Section 25.18 and
172	172	regardless of whether the appraisal office has appraised the
173	173	property and determined the market value of the property for the tax
174	174	year, an appraisal office may increase the appraised value of
175	175	residential real property [a residence homestead] for a tax year to
176	176	an amount not to exceed the lesser of:
177	177	(1) the market value of the property for the most
178	178	recent tax year that the market value was determined by the
179	179	appraisal office; or
180	180	(2) the sum of:
181	181	(A) five [10] percent of the appraised value of
182	182	the property for the preceding tax year;
183	183	(B) the appraised value of the property for the
184	184	preceding tax year; and
185	185	(C) the market value of all new improvements to
186	186	the property.
187	187	(b) When appraising residential real property [a residence
188	188	homestead], the chief appraiser shall:
189	189	(1) appraise the property at its market value; and
190	190	(2) include in the appraisal records both the market
191	191	value of the property and the amount computed under Subsection
192	192	(a)(2).
193	193	(c) The limitation provided by Subsection (a) takes effect
194	194	on January 1 of the tax year following the first tax year in which
195	195	the owner owns the property on January 1 [as to a residence
196	196	homestead on January 1 of the tax year following the first tax year
197	197	the owner qualifies the property for an exemption under Section
198	198	11.13]. Except as provided by Subsection (c-2) or (c-3), the [The]
199	199	limitation expires on January 1 of the first tax year following the
200	200	year in which [that neither] the owner of the property ceases to own
201	201	the property.
202	202	(c-2) If property subject to a limitation under this section
203	203	qualifies for an exemption under Section 11.13 when the ownership
204	204	of the property is transferred to the owner's spouse or surviving
205	205	spouse, the limitation expires on January 1 of the first tax year
206	206	following the year in which [when the limitation took effect nor]
207	207	the owner's spouse or surviving spouse ceases to own the property,
208	208	unless the limitation is further continued under this subsection on
209	209	the subsequent transfer to a spouse or surviving spouse [qualifies
210	210	for an exemption under Section 11.13].
211	211	(c-3) If property subject to a limitation under Subsection
212	212	(a), other than a residence homestead, is owned by two or more
213	213	persons, the limitation expires on January 1 of the first tax year
214	214	following the year in which the ownership of at least a 50 percent
215	215	interest in the property is sold or otherwise transferred.
216	216	(c-4) For purposes of applying the limitation provided by
217	217	this section, a person who acquired residential real property in a
218	218	tax year before the 2023 tax year, other than property that
219	219	qualified as the residence homestead of the person under Section
220	220	11.13 in the 2023 tax year, is considered to have acquired the
221	221	property on January 1, 2023.
222	222	(e) In this section:
223	223	(1) "New [, "new] improvement" means an improvement to
224	224	real property [a residence homestead] made after the most recent
225	225	appraisal of the property that increases the market value of the
226	226	property and the value of which is not included in the appraised
227	227	value of the property for the preceding tax year. The term does not
228	228	include repairs to or ordinary maintenance of an existing structure
229	229	or the grounds or another feature of the property.
230	230	(2) "Residential real property":
231	231	(A) means real property that:
232	232	(i) qualifies for an exemption under
233	233	Section 11.13; or
234	234	(ii) is designed or adapted for residential
235	235	purposes, including the residential portion, not to exceed 20
236	236	acres, of farm or ranch property; and
237	237	(B) does not include real property on which a
238	238	hotel, motel, or similar structure is located that is designed to
239	239	provide temporary lodging or accommodations.
240	240	(f) Notwithstanding Subsections (a) and (e)(1) [(e)] and
241	241	except as provided by Subdivision (2) of this subsection, an
242	242	improvement to property that would otherwise constitute a new
243	243	improvement is not treated as a new improvement if the improvement
244	244	is a replacement structure for a structure that was rendered
245	245	uninhabitable or unusable by a casualty or by wind or water damage.
246	246	For purposes of appraising the property under Subsection (a) in the
247	247	tax year in which the structure would have constituted a new
248	248	improvement:
249	249	(1) the appraised value the property would have had in
250	250	the preceding tax year if the casualty or damage had not occurred is
251	251	considered to be the appraised value of the property for that year,
252	252	regardless of whether that appraised value exceeds the actual
253	253	appraised value of the property for that year as limited by
254	254	Subsection (a); and
255	255	(2) the replacement structure is considered to be a
256	256	new improvement only if:
257	257	(A) the square footage of the replacement
258	258	structure exceeds that of the replaced structure as that structure
259	259	existed before the casualty or damage occurred; or
260	260	(B) the exterior of the replacement structure is
261	261	of higher quality construction and composition than that of the
262	262	replaced structure.
263	263	SECTION 7. Sections 26.012(6), (13), and (14), Tax Code,
264	264	are amended to read as follows:
265	265	(6) "Current total value" means the total taxable
266	266	value of property listed on the appraisal roll for the current year,
267	267	including all appraisal roll supplements and corrections as of the
268	268	date of the calculation, less the taxable value of property
269	269	exempted for the current tax year for the first time under Section
270	270	11.31 or 11.315, except that:
271	271	(A) the current total value for a school district
272	272	excludes:
273	273	(i) the total value of homesteads that
274	274	qualify for a tax limitation as provided by Section 11.26; and
275	275	(ii) new property value of property that is
276	276	subject to an agreement entered into under Chapter 313; [and]
277	277	(B) the current total value for a county,
278	278	municipality, or junior college district excludes the total value
279	279	of homesteads that qualify for a tax limitation provided by Section
280	280	11.261; and
281	281	(C) the current total value for a taxing unit
282	282	excludes the total value of homesteads that qualify for a tax
283	283	limitation as provided by Section 11.262.
284	284	(13) "Last year's levy" means the total of:
285	285	(A) the amount of taxes that would be generated
286	286	by multiplying the total tax rate adopted by the governing body in
287	287	the preceding year by the total taxable value of property on the
288	288	appraisal roll for the preceding year, including:
289	289	(i) taxable value that was reduced in an
290	290	appeal under Chapter 42;
291	291	(ii) all appraisal roll supplements and
292	292	corrections other than corrections made pursuant to Section
293	293	25.25(d), as of the date of the calculation, except that last year's
294	294	taxable value for a school district excludes the total value of
295	295	homesteads that qualified for a tax limitation as provided by
296	296	Section 11.26, [and] last year's taxable value for a county,
297	297	municipality, or junior college district excludes the total value
298	298	of homesteads that qualified for a tax limitation as provided by
299	299	Section 11.261, and last year's taxable value for a taxing unit
300	300	excludes the total value of homesteads that qualified for a tax
301	301	limitation as provided by Section 11.262; and
302	302	(iii) the portion of taxable value of
303	303	property that is the subject of an appeal under Chapter 42 on July
304	304	25 that is not in dispute; and
305	305	(B) the amount of taxes refunded by the taxing
306	306	unit in the preceding year for tax years before that year.
307	307	(14) "Last year's total value" means the total taxable
308	308	value of property listed on the appraisal roll for the preceding
309	309	year, including all appraisal roll supplements and corrections,
310	310	other than corrections made pursuant to Section 25.25(d), as of the
311	311	date of the calculation, except that:
312	312	(A) last year's taxable value for a school
313	313	district excludes the total value of homesteads that qualified for
314	314	a tax limitation as provided by Section 11.26; [and]
315	315	(B) last year's taxable value for a county,
316	316	municipality, or junior college district excludes the total value
317	317	of homesteads that qualified for a tax limitation as provided by
318	318	Section 11.261; and
319	319	(C) last year's taxable value for a taxing unit
320	320	excludes the total value of homesteads that qualified for a tax
321	321	limitation as provided by Section 11.262.
322	322	SECTION 8. Section 42.26(d), Tax Code, is amended to read as
323	323	follows:
324	324	(d) For purposes of this section, the value of the property
325	325	subject to the suit and the value of a comparable property or sample
326	326	property that is used for comparison must be the market value
327	327	determined by the appraisal district when the property is [a
328	328	residence homestead] subject to the limitation on appraised value
329	329	imposed by Section 23.23.
330	330	SECTION 9. Section 44.004(c), Education Code, is amended to
331	331	read as follows:
332	332	(c) The notice of public meeting to discuss and adopt the
333	333	budget and the proposed tax rate may not be smaller than one-quarter
334	334	page of a standard-size or a tabloid-size newspaper, and the
335	335	headline on the notice must be in 18-point or larger type. Subject
336	336	to Subsection (d), the notice must:
337	337	(1) contain a statement in the following form:
338	338	"NOTICE OF PUBLIC MEETING TO DISCUSS BUDGET AND PROPOSED TAX RATE
339	339	"The (name of school district) will hold a public meeting at
340	340	(time, date, year) in (name of room, building, physical location,
341	341	city, state). The purpose of this meeting is to discuss the school
342	342	district's budget that will determine the tax rate that will be
343	343	adopted. Public participation in the discussion is invited." The
344	344	statement of the purpose of the meeting must be in bold type. In
345	345	reduced type, the notice must state: "The tax rate that is
346	346	ultimately adopted at this meeting or at a separate meeting at a
347	347	later date may not exceed the proposed rate shown below unless the
348	348	district publishes a revised notice containing the same information
349	349	and comparisons set out below and holds another public meeting to
350	350	discuss the revised notice." In addition, in reduced type, the
351	351	notice must state: "Visit Texas.gov/PropertyTaxes to find a link to
352	352	your local property tax database on which you can easily access
353	353	information regarding your property taxes, including information
354	354	about proposed tax rates and scheduled public hearings of each
355	355	entity that taxes your property.";
356	356	(2) contain a section entitled "Comparison of Proposed
357	357	Budget with Last Year's Budget," which must show the difference,
358	358	expressed as a percent increase or decrease, as applicable, in the
359	359	amounts budgeted for the preceding fiscal year and the amount
360	360	budgeted for the fiscal year that begins in the current tax year for
361	361	each of the following:
362	362	(A) maintenance and operations;
363	363	(B) debt service; and
364	364	(C) total expenditures;
365	365	(3) contain a section entitled "Total Appraised Value
366	366	and Total Taxable Value," which must show the total appraised value
367	367	and the total taxable value of all property and the total appraised
368	368	value and the total taxable value of new property taxable by the
369	369	district in the preceding tax year and the current tax year as
370	370	calculated under Section 26.04, Tax Code;
371	371	(4) contain a statement of the total amount of the
372	372	outstanding and unpaid bonded indebtedness of the school district;
373	373	(5) contain a section entitled "Comparison of Proposed
374	374	Rates with Last Year's Rates," which must:
375	375	(A) show in rows the tax rates described by
376	376	Subparagraphs (i)-(iii), expressed as amounts per $100 valuation of
377	377	property, for columns entitled "Maintenance & Operations,"
378	378	"Interest & Sinking Fund," and "Total," which is the sum of
379	379	"Maintenance & Operations" and "Interest & Sinking Fund":
380	380	(i) the school district's "Last Year's
381	381	Rate";
382	382	(ii) the "Rate to Maintain Same Level of
383	383	Maintenance & Operations Revenue & Pay Debt Service," which:
384	384	(a) in the case of "Maintenance &
385	385	Operations," is the tax rate that, when applied to the current
386	386	taxable value for the district, as certified by the chief appraiser
387	387	under Section 26.01, Tax Code, and as adjusted to reflect changes
388	388	made by the chief appraiser as of the time the notice is prepared,
389	389	would impose taxes in an amount that, when added to state funds to
390	390	be distributed to the district under Chapter 48, would provide the
391	391	same amount of maintenance and operations taxes and state funds
392	392	distributed under Chapter 48 per student in average daily
393	393	attendance for the applicable school year that was available to the
394	394	district in the preceding school year; and
395	395	(b) in the case of "Interest & Sinking
396	396	Fund," is the tax rate that, when applied to the current taxable
397	397	value for the district, as certified by the chief appraiser under
398	398	Section 26.01, Tax Code, and as adjusted to reflect changes made by
399	399	the chief appraiser as of the time the notice is prepared, and when
400	400	multiplied by the district's anticipated collection rate, would
401	401	impose taxes in an amount that, when added to state funds to be
402	402	distributed to the district under Chapter 46 and any excess taxes
403	403	collected to service the district's debt during the preceding tax
404	404	year but not used for that purpose during that year, would provide
405	405	the amount required to service the district's debt; and
406	406	(iii) the "Proposed Rate";
407	407	(B) contain fourth and fifth columns aligned with
408	408	the columns required by Paragraph (A) that show, for each row
409	409	required by Paragraph (A):
410	410	(i) the "Local Revenue per Student," which
411	411	is computed by multiplying the district's total taxable value of
412	412	property, as certified by the chief appraiser for the applicable
413	413	school year under Section 26.01, Tax Code, and as adjusted to
414	414	reflect changes made by the chief appraiser as of the time the
415	415	notice is prepared, by the total tax rate, and dividing the product
416	416	by the number of students in average daily attendance in the
417	417	district for the applicable school year; and
418	418	(ii) the "State Revenue per Student," which
419	419	is computed by determining the amount of state aid received or to be
420	420	received by the district under Chapters 43, 46, and 48 and dividing
421	421	that amount by the number of students in average daily attendance in
422	422	the district for the applicable school year; and
423	423	(C) contain an asterisk after each calculation
424	424	for "Interest & Sinking Fund" and a footnote to the section that, in
425	425	reduced type, states "The Interest & Sinking Fund tax revenue is
426	426	used to pay for bonded indebtedness on construction, equipment, or
427	427	both. The bonds, and the tax rate necessary to pay those bonds,
428	428	were approved by the voters of this district.";
429	429	(6) contain a section entitled "Comparison of Proposed
430	430	Levy with Last Year's Levy on Average Residence," which must:
431	431	(A) show in rows the information described by
432	432	Subparagraphs (i)-(iv), rounded to the nearest dollar, for columns
433	433	entitled "Last Year" and "This Year":
434	434	(i) "Average Market Value of Residences,"
435	435	determined using the same group of residences for each year;
436	436	(ii) "Average Taxable Value of Residences,"
437	437	determined after taking into account the limitation on the
438	438	appraised value of residences under Section 23.23, Tax Code, and
439	439	after subtracting all homestead exemptions applicable in each year,
440	440	other than exemptions available only to disabled persons or persons
441	441	65 years of age or older or their surviving spouses, and using the
442	442	same group of residences for each year;
443	443	(iii) "Last Year's Rate Versus Proposed
444	444	Rate per $100 Value"; and
445	445	(iv) "Taxes Due on Average Residence,"
446	446	determined using the same group of residences for each year; and
447	447	(B) contain the following information: "Increase
448	448	(Decrease) in Taxes" expressed in dollars and cents, which is
449	449	computed by subtracting the "Taxes Due on Average Residence" for
450	450	the preceding tax year from the "Taxes Due on Average Residence" for
451	451	the current tax year;
452	452	(7) contain the following statement in bold print:
453	453	"Under state law, the dollar amount of school taxes imposed on the
454	454	residence of a person 65 years of age or older or of the surviving
455	455	spouse of such a person, if the surviving spouse was 55 years of age
456	456	or older when the person died, may not be increased above the amount
457	457	paid in the first year after the person turned 65, regardless of
458	458	changes in tax rate or property value.";
459	459	(8) contain the following statement in bold print:
460	460	"Notice of Voter-Approval Rate: The highest tax rate the district
461	461	can adopt before requiring voter approval at an election is (the
462	462	school district voter-approval rate determined under Section
463	463	26.08, Tax Code). This election will be automatically held if the
464	464	district adopts a rate in excess of the voter-approval rate of (the
465	465	school district voter-approval rate)."; [and]
466	466	(9) contain a section entitled "Fund Balances," which
467	467	must include the estimated amount of interest and sinking fund
468	468	balances and the estimated amount of maintenance and operation or
469	469	general fund balances remaining at the end of the current fiscal
470	470	year that are not encumbered with or by corresponding debt
471	471	obligation, less estimated funds necessary for the operation of the
472	472	district before the receipt of the first payment under Chapter 48 in
473	473	the succeeding school year; and
474	474	(10) contain the following statement in bold print:
475	475	"Under state law, the dollar amount of school taxes imposed on a
476	476	residence homestead that qualifies as the owner's residence
477	477	homestead for at least 25 consecutive years may not be increased
478	478	above the amount of school taxes imposed on the property in that
479	479	25th consecutive year, regardless of changes in tax rate or
480	480	property value."[.]
481	481	SECTION 10. Section 46.071, Education Code, is amended by
482	482	adding Subsection (a-2) and amending Subsections (b-1) and (c-1) to
483	483	read as follows:
484	484	(a-2) Beginning with the 2024-2025 school year, in addition
485	485	to state aid a school district is entitled to under Subsection
486	486	(a-1), a school district is also entitled to additional state aid
487	487	under this subchapter to the extent that state and local revenue
488	488	used to service debt eligible under this chapter is less than the
489	489	state and local revenue that would have been available to the
490	490	district under this chapter as it existed on September 1, 2023, if
491	491	the exemption for an individual's first residence homestead under
492	492	Section 1-b(w), Article VIII, Texas Constitution, as proposed by
493	493	the 88th Legislature, Regular Session, 2023, had not been adopted.
494	494	(b-1) Subject to Subsections (c-1), (d), and (e),
495	495	additional state aid under this section beginning with the
496	496	2022-2023 school year is equal to the amount by which the loss of
497	497	local interest and sinking revenue for debt service attributable to
498	498	any increase in the residence homestead exemption under Section
499	499	1-b(c), Article VIII, Texas Constitution, as proposed by the 87th
500	500	Legislature, 3rd Called Session, 2021, and the residence homestead
501	501	exemption under Section 1-b(w), Article VIII, Texas Constitution,
502	502	as proposed by the 88th Legislature, Regular Session, 2023, is not
503	503	offset by a gain in state aid under this chapter.
504	504	(c-1) For the purpose of determining state aid under
505	505	Subsection [Subsections] (a-1) or (a-2) [and (b-1)], local interest
506	506	and sinking revenue for debt service is limited to revenue required
507	507	to service debt eligible under this chapter as of September 1, 2021,
508	508	or as of September 1, 2023, respectively, including refunding of
509	509	the applicable [that] debt, subject to Section 46.061. The
510	510	limitation imposed by Section 46.034(a) does not apply for the
511	511	purpose of determining state aid under Subsection (a-1) or (a-2)
512	512	[this section].
513	513	SECTION 11. Section 48.2543, Education Code, is amended by
514	514	adding Subsection (a-1) and amending Subsection (b) to read as
515	515	follows:
516	516	(a-1) Beginning with the 2024-2025 school year, in addition
517	517	to state aid a school district is entitled to under Subsection (a),
518	518	a school district is entitled to additional state aid to the extent
519	519	that state and local revenue under this chapter and Chapter 49 is
520	520	less than the state and local revenue that would have been available
521	521	to the district under this chapter and Chapter 49 as those chapters
522	522	existed on September 1, 2023, if the exemption for an individual's
523	523	first residence homestead under Section 1-b(w), Article VIII, Texas
524	524	Constitution, as proposed by the joint resolution to add that
525	525	subsection adopted by the 88th Legislature, Regular Session, 2023,
526	526	had not been adopted.
527	527	(b) The lesser of the school district's currently adopted
528	528	maintenance and operations tax rate or the adopted maintenance and
529	529	operations tax rate for:
530	530	(1) the 2021 tax year is used for the purpose of
531	531	determining additional state aid under Subsection (a); and
532	532	(2) the 2023 tax year is used for the purpose of
533	533	determining additional state aid under Subsection (a-1).
534	534	SECTION 12. Sections 403.302(d), (d-1), and (i), Government
535	535	Code, are amended to read as follows:
536	536	(d) For the purposes of this section, "taxable value" means
537	537	the market value of all taxable property less:
538	538	(1) the total dollar amount of any residence homestead
539	539	exemptions lawfully granted under Section 11.13(b) or (c), Tax
540	540	Code, in the year that is the subject of the study for each school
541	541	district;
542	542	(2) one-half of the total dollar amount of any
543	543	residence homestead exemptions granted under Section 11.13(n), Tax
544	544	Code, in the year that is the subject of the study for each school
545	545	district;
546	546	(3) the total dollar amount of any exemptions granted
547	547	before May 31, 1993, within a reinvestment zone under agreements
548	548	authorized by Chapter 312, Tax Code;
549	549	(4) subject to Subsection (e), the total dollar amount
550	550	of any captured appraised value of property that:
551	551	(A) is within a reinvestment zone created on or
552	552	before May 31, 1999, or is proposed to be included within the
553	553	boundaries of a reinvestment zone as the boundaries of the zone and
554	554	the proposed portion of tax increment paid into the tax increment
555	555	fund by a school district are described in a written notification
556	556	provided by the municipality or the board of directors of the zone
557	557	to the governing bodies of the other taxing units in the manner
558	558	provided by former Section 311.003(e), Tax Code, before May 31,
559	559	1999, and within the boundaries of the zone as those boundaries
560	560	existed on September 1, 1999, including subsequent improvements to
561	561	the property regardless of when made;
562	562	(B) generates taxes paid into a tax increment
563	563	fund created under Chapter 311, Tax Code, under a reinvestment zone
564	564	financing plan approved under Section 311.011(d), Tax Code, on or
565	565	before September 1, 1999; and
566	566	(C) is eligible for tax increment financing under
567	567	Chapter 311, Tax Code;
568	568	(5) the total dollar amount of any captured appraised
569	569	value of property that:
570	570	(A) is within a reinvestment zone:
571	571	(i) created on or before December 31, 2008,
572	572	by a municipality with a population of less than 18,000; and
573	573	(ii) the project plan for which includes
574	574	the alteration, remodeling, repair, or reconstruction of a
575	575	structure that is included on the National Register of Historic
576	576	Places and requires that a portion of the tax increment of the zone
577	577	be used for the improvement or construction of related facilities
578	578	or for affordable housing;
579	579	(B) generates school district taxes that are paid
580	580	into a tax increment fund created under Chapter 311, Tax Code; and
581	581	(C) is eligible for tax increment financing under
582	582	Chapter 311, Tax Code;
583	583	(6) the total dollar amount of any exemptions granted
584	584	under Section 11.251 or 11.253, Tax Code;
585	585	(7) the difference between the comptroller's estimate
586	586	of the market value and the productivity value of land that
587	587	qualifies for appraisal on the basis of its productive capacity,
588	588	except that the productivity value estimated by the comptroller may
589	589	not exceed the fair market value of the land;
590	590	(8) the portion of the appraised value of residence
591	591	homesteads of individuals who receive a tax limitation under
592	592	Section 11.26 or 11.262, Tax Code, on which school district taxes
593	593	are not imposed in the year that is the subject of the study,
594	594	calculated as if the residence homesteads were appraised at the
595	595	full value required by law;
596	596	(9) a portion of the market value of property not
597	597	otherwise fully taxable by the district at market value because of
598	598	action required by statute or the constitution of this state, other
599	599	than Section 11.311, Tax Code, that, if the tax rate adopted by the
600	600	district is applied to it, produces an amount equal to the
601	601	difference between the tax that the district would have imposed on
602	602	the property if the property were fully taxable at market value and
603	603	the tax that the district is actually authorized to impose on the
604	604	property, if this subsection does not otherwise require that
605	605	portion to be deducted;
606	606	(10) the market value of all tangible personal
607	607	property, other than manufactured homes, owned by a family or
608	608	individual and not held or used for the production of income;
609	609	(11) the appraised value of property the collection of
610	610	delinquent taxes on which is deferred under Section 33.06, Tax
611	611	Code;
612	612	(12) the portion of the appraised value of property
613	613	the collection of delinquent taxes on which is deferred under
614	614	Section 33.065, Tax Code;
615	615	(13) the amount by which the market value of real
616	616	property [a residence homestead] to which Section 23.23, Tax Code,
617	617	applies exceeds the appraised value of that property as calculated
618	618	under that section; and
619	619	(14) the total dollar amount of any exemptions granted
620	620	under Section 11.35, Tax Code.
621	621	(d-1) For purposes of Subsection (d), a residence homestead
622	622	that receives an exemption under Section 11.13(s), 11.131, 11.133,
623	623	or 11.134, Tax Code, in the year that is the subject of the study is
624	624	not considered to be taxable property.
625	625	(i) If the comptroller determines in the study that the
626	626	market value of property in a school district as determined by the
627	627	appraisal district that appraises property for the school district,
628	628	less the total of the amounts and values listed in Subsection (d) as
629	629	determined by that appraisal district, is valid, the comptroller,
630	630	in determining the taxable value of property in the school district
631	631	under Subsection (d), shall for purposes of Subsection (d)(13)
632	632	subtract from the market value as determined by the appraisal
633	633	district of properties [residence homesteads] to which Section
634	634	23.23, Tax Code, applies the amount by which that amount exceeds the
635	635	appraised value of those properties as calculated by the appraisal
636	636	district under Section 23.23, Tax Code. If the comptroller
637	637	determines in the study that the market value of property in a
638	638	school district as determined by the appraisal district that
639	639	appraises property for the school district, less the total of the
640	640	amounts and values listed in Subsection (d) as determined by that
641	641	appraisal district, is not valid, the comptroller, in determining
642	642	the taxable value of property in the school district under
643	643	Subsection (d), shall for purposes of Subsection (d)(13) subtract
644	644	from the market value as estimated by the comptroller of properties
645	645	[residence homesteads] to which Section 23.23, Tax Code, applies
646	646	the amount by which that amount exceeds the appraised value of those
647	647	properties as calculated by the appraisal district under Section
648	648	23.23, Tax Code.
649	649	SECTION 13. Section 23.23(c-1), Tax Code, is repealed.
650	650	SECTION 14. Section 11.13(s), Tax Code, as added by this
651	651	Act, applies only to the appraisal for ad valorem tax purposes of
652	652	residence homesteads for a tax year that begins on or after the
653	653	effective date of this Act.
654	654	SECTION 15. Section 11.262, Tax Code, as added by this Act,
655	655	applies only to ad valorem taxes imposed for a tax year that begins
656	656	on or after the effective date of this Act.
657	657	SECTION 16. Section 23.23, Tax Code, as amended by this Act,
658	658	applies only to the appraisal for ad valorem tax purposes of
659	659	residential real property for a tax year that begins on or after the
660	660	effective date of this Act.
661	661	SECTION 17. This Act takes effect January 1, 2024, but only
662	662	if the constitutional amendment proposed by the 88th Legislature,
663	663	Regular Session, 2023, authorizing the legislature to limit the
664	664	maximum appraised value of residential real property for ad valorem
665	665	tax purposes to 105 percent or more of the appraised value of the
666	666	property for the preceding tax year, to exempt from ad valorem
667	667	taxation the total appraised value of property purchased by an
668	668	individual for the first tax year the individual qualifies the
669	669	property as the individual's residence homestead if the property is
670	670	the individual's first residence homestead and has an appraised
671	671	value of less than $300,000, and to limit the total amount of ad
672	672	valorem taxes that a political subdivision may impose on the
673	673	residence homestead of an individual and the surviving spouse of
674	674	the individual if the individual qualifies the property as the
675	675	individual's residence homestead for at least 25 consecutive tax
676	676	years is approved by the voters. If that constitutional amendment
677	677	is not approved by the voters, this Act has no effect.