Texas 2023 - 88th Regular

Texas House Bill HB2666 Compare Versions

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1	1	88R13635 RDS-D
2	2	By: Campos H.B. No. 2666
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to the limitation on the total amount of ad valorem taxes
8	8	that a school district may impose on the residence homestead of an
9	9	individual and the surviving spouse of the individual if the
10	10	individual qualifies the property as the individual's residence
11	11	homestead for at least 20 consecutive tax years.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by
14	14	adding Section 11.262 to read as follows:
15	15	Sec. 11.262. LIMITATION OF TAXES ON HOMESTEADS FOLLOWING
16	16	CERTAIN PERIOD. (a) In this section, "residence homestead" has the
17	17	meaning assigned by Section 11.13.
18	18	(b) The chief appraiser shall appraise, and the tax assessor
19	19	for each school district shall calculate the taxes on, each
20	20	residence homestead in the manner provided by law for other
21	21	property.
22	22	(c) Except as provided by Subsection (h), if an individual
23	23	qualifies property as the individual's residence homestead for at
24	24	least 20 consecutive tax years, a school district may not impose
25	25	taxes on that residence homestead in a subsequent tax year in an
26	26	amount that exceeds the least of the following amounts:
27	27	(1) the amount of school taxes calculated for the
28	28	current tax year under Subsection (b);
29	29	(2) the amount of school taxes imposed for that 20th
30	30	tax year; or
31	31	(3) the amount of school taxes as limited under
32	32	Section 11.26, as applicable.
33	33	(d) For purposes of this section, if the first tax year an
34	34	individual qualified property as the individual's residence
35	35	homestead was a tax year before the 2005 tax year, the individual is
36	36	considered to have qualified the property as the individual's
37	37	residence homestead for the first time in the 2005 tax year.
38	38	(e) If an individual who qualifies for a limitation under
39	39	this section dies, the surviving spouse of the individual is
40	40	entitled to continue receiving the limitation applicable to the
41	41	residence homestead of the individual if the property:
42	42	(1) is the residence homestead of the surviving spouse
43	43	on the date that the individual dies; and
44	44	(2) remains the residence homestead of the surviving
45	45	spouse.
46	46	(f) Except as provided by Subsection (e) or (g), a
47	47	limitation under this section expires on January 1 if the property
48	48	is not the residence homestead of the individual entitled to the
49	49	limitation for the preceding tax year.
50	50	(g) A limitation under this section does not expire if:
51	51	(1) an owner of an interest in the residence homestead
52	52	conveys the interest to a qualifying trust as defined by Section
53	53	11.13(j) and the owner or the owner's spouse is:
54	54	(A) a trustor of the trust; and
55	55	(B) entitled to occupy the property; or
56	56	(2) the owner of the structure qualifies for an
57	57	exemption under Section 11.13 under the circumstances described by
58	58	Section 11.135(a).
59	59	(h) Except as provided by Subsection (i), a school district
60	60	may increase the tax on a residence homestead subject to a
61	61	limitation under this section in the first year the appraised value
62	62	of the property is increased as the result of an improvement made to
63	63	the property in the preceding tax year. The amount of the tax
64	64	increase is determined by applying the current tax rate of the
65	65	school district to the difference in the taxable value of the
66	66	property with the improvement and the taxable value the property
67	67	would have had without the improvement. A limitation imposed by
68	68	this section then applies to the increased amount of tax until
69	69	another improvement is made to the property.
70	70	(i) An improvement to a residence homestead is not treated
71	71	as an improvement under Subsection (h) if the improvement is:
72	72	(1) a repair;
73	73	(2) required to be made to comply with a governmental
74	74	requirement; or
75	75	(3) subject to Subsection (j), a replacement structure
76	76	for a structure that was rendered uninhabitable or unusable by a
77	77	casualty or by wind or water damage.
78	78	(j) A replacement structure described by Subsection (i)(3)
79	79	is considered to be an improvement under Subsection (h) only if:
80	80	(1) the square footage of the replacement structure
81	81	exceeds the square footage of the replaced structure as the
82	82	replaced structure existed before the casualty or damage occurred;
83	83	or
84	84	(2) the exterior of the replacement structure is of
85	85	higher quality construction and composition than that of the
86	86	replaced structure.
87	87	(k) If the appraisal roll provides for taxation of appraised
88	88	value for a prior year because a limitation under this section was
89	89	erroneously allowed, the tax assessor for the school district shall
90	90	add as back taxes due, as provided by Section 26.09(d), the positive
91	91	difference, if any, between the tax that should have been imposed
92	92	for that tax year and the tax that was imposed because of the
93	93	provisions of this section.
94	94	(l) For each school district in an appraisal district, the
95	95	chief appraiser shall determine the portion of the appraised value
96	96	of residence homesteads of individuals on which school district
97	97	taxes are not imposed in a tax year because of the limitation under
98	98	this section. That portion is calculated by determining the
99	99	taxable value that, if multiplied by the tax rate adopted by the
100	100	school district for the tax year, would produce an amount equal to
101	101	the amount of tax that would have been imposed by the school
102	102	district on those properties if the limitation under this section
103	103	were not in effect, but that was not imposed because of that
104	104	limitation. The chief appraiser shall determine that taxable value
105	105	and certify it to the comptroller as soon as practicable for each
106	106	tax year.
107	107	SECTION 2. Sections 23.19(b) and (g), Tax Code, are amended
108	108	to read as follows:
109	109	(b) If an appraisal district receives a written request for
110	110	the appraisal of real property and improvements of a cooperative
111	111	housing corporation according to the separate interests of the
112	112	corporation's stockholders, the chief appraiser shall separately
113	113	appraise the interests described by Subsection (d) if the
114	114	conditions required by Subsections (e) and (f) have been met.
115	115	Separate appraisal under this section is for the purposes of
116	116	administration of tax exemptions, determination of applicable
117	117	limitations of taxes under Section 11.26, [or] 11.261, or 11.262,
118	118	and apportionment by a cooperative housing corporation of property
119	119	taxes among its stockholders but is not the basis for determining
120	120	value on which a tax is imposed under this title. A stockholder
121	121	whose interest is separately appraised under this section may
122	122	protest and appeal the appraised value in the manner provided by
123	123	this title for protest and appeal of the appraised value of other
124	124	property.
125	125	(g) A tax bill or a separate statement accompanying the tax
126	126	bill to a cooperative housing corporation for which interests of
127	127	stockholders are separately appraised under this section must
128	128	state, in addition to the information required by Section 31.01,
129	129	the appraised value and taxable value of each interest separately
130	130	appraised. Each exemption claimed as provided by this title by a
131	131	person entitled to the exemption shall also be deducted from the
132	132	total appraised value of the property of the corporation. The total
133	133	tax imposed by a school district, county, municipality, or junior
134	134	college district shall be reduced by any amount that represents an
135	135	increase in taxes attributable to separately appraised interests of
136	136	the real property and improvements that are subject to the
137	137	limitation of taxes prescribed by Section 11.26, [or] 11.261, or
138	138	11.262. The corporation shall apportion among its stockholders
139	139	liability for reimbursing the corporation for property taxes
140	140	according to the relative taxable values of their interests.
141	141	SECTION 3. Sections 26.012(6), (13), and (14), Tax Code,
142	142	are amended to read as follows:
143	143	(6) "Current total value" means the total taxable
144	144	value of property listed on the appraisal roll for the current year,
145	145	including all appraisal roll supplements and corrections as of the
146	146	date of the calculation, less the taxable value of property
147	147	exempted for the current tax year for the first time under Section
148	148	11.31 or 11.315, except that:
149	149	(A) the current total value for a school district
150	150	excludes:
151	151	(i) the total value of homesteads that
152	152	qualify for a tax limitation as provided by Sections [Section]
153	153	11.26 and 11.262; and
154	154	(ii) new property value of property that is
155	155	subject to an agreement entered into under Chapter 313; and
156	156	(B) the current total value for a county,
157	157	municipality, or junior college district excludes the total value
158	158	of homesteads that qualify for a tax limitation provided by Section
159	159	11.261.
160	160	(13) "Last year's levy" means the total of:
161	161	(A) the amount of taxes that would be generated
162	162	by multiplying the total tax rate adopted by the governing body in
163	163	the preceding year by the total taxable value of property on the
164	164	appraisal roll for the preceding year, including:
165	165	(i) taxable value that was reduced in an
166	166	appeal under Chapter 42;
167	167	(ii) all appraisal roll supplements and
168	168	corrections other than corrections made pursuant to Section
169	169	25.25(d), as of the date of the calculation, except that last year's
170	170	taxable value for a school district excludes the total value of
171	171	homesteads that qualified for a tax limitation as provided by
172	172	Sections [Section] 11.26 and 11.262 and last year's taxable value
173	173	for a county, municipality, or junior college district excludes the
174	174	total value of homesteads that qualified for a tax limitation as
175	175	provided by Section 11.261; and
176	176	(iii) the portion of taxable value of
177	177	property that is the subject of an appeal under Chapter 42 on July
178	178	25 that is not in dispute; and
179	179	(B) the amount of taxes refunded by the taxing
180	180	unit in the preceding year for tax years before that year.
181	181	(14) "Last year's total value" means the total taxable
182	182	value of property listed on the appraisal roll for the preceding
183	183	year, including all appraisal roll supplements and corrections,
184	184	other than corrections made pursuant to Section 25.25(d), as of the
185	185	date of the calculation, except that:
186	186	(A) last year's taxable value for a school
187	187	district excludes the total value of homesteads that qualified for
188	188	a tax limitation as provided by Sections [Section] 11.26 and
189	189	11.262; and
190	190	(B) last year's taxable value for a county,
191	191	municipality, or junior college district excludes the total value
192	192	of homesteads that qualified for a tax limitation as provided by
193	193	Section 11.261.
194	194	SECTION 4. Section 44.004(c), Education Code, is amended to
195	195	read as follows:
196	196	(c) The notice of public meeting to discuss and adopt the
197	197	budget and the proposed tax rate may not be smaller than one-quarter
198	198	page of a standard-size or a tabloid-size newspaper, and the
199	199	headline on the notice must be in 18-point or larger type. Subject
200	200	to Subsection (d), the notice must:
201	201	(1) contain a statement in the following form:
202	202	"NOTICE OF PUBLIC MEETING TO DISCUSS BUDGET AND PROPOSED TAX RATE
203	203	"The (name of school district) will hold a public meeting at
204	204	(time, date, year) in (name of room, building, physical location,
205	205	city, state). The purpose of this meeting is to discuss the school
206	206	district's budget that will determine the tax rate that will be
207	207	adopted. Public participation in the discussion is invited." The
208	208	statement of the purpose of the meeting must be in bold type. In
209	209	reduced type, the notice must state: "The tax rate that is
210	210	ultimately adopted at this meeting or at a separate meeting at a
211	211	later date may not exceed the proposed rate shown below unless the
212	212	district publishes a revised notice containing the same information
213	213	and comparisons set out below and holds another public meeting to
214	214	discuss the revised notice." In addition, in reduced type, the
215	215	notice must state: "Visit Texas.gov/PropertyTaxes to find a link to
216	216	your local property tax database on which you can easily access
217	217	information regarding your property taxes, including information
218	218	about proposed tax rates and scheduled public hearings of each
219	219	entity that taxes your property.";
220	220	(2) contain a section entitled "Comparison of Proposed
221	221	Budget with Last Year's Budget," which must show the difference,
222	222	expressed as a percent increase or decrease, as applicable, in the
223	223	amounts budgeted for the preceding fiscal year and the amount
224	224	budgeted for the fiscal year that begins in the current tax year for
225	225	each of the following:
226	226	(A) maintenance and operations;
227	227	(B) debt service; and
228	228	(C) total expenditures;
229	229	(3) contain a section entitled "Total Appraised Value
230	230	and Total Taxable Value," which must show the total appraised value
231	231	and the total taxable value of all property and the total appraised
232	232	value and the total taxable value of new property taxable by the
233	233	district in the preceding tax year and the current tax year as
234	234	calculated under Section 26.04, Tax Code;
235	235	(4) contain a statement of the total amount of the
236	236	outstanding and unpaid bonded indebtedness of the school district;
237	237	(5) contain a section entitled "Comparison of Proposed
238	238	Rates with Last Year's Rates," which must:
239	239	(A) show in rows the tax rates described by
240	240	Subparagraphs (i)-(iii), expressed as amounts per $100 valuation of
241	241	property, for columns entitled "Maintenance & Operations,"
242	242	"Interest & Sinking Fund," and "Total," which is the sum of
243	243	"Maintenance & Operations" and "Interest & Sinking Fund":
244	244	(i) the school district's "Last Year's
245	245	Rate";
246	246	(ii) the "Rate to Maintain Same Level of
247	247	Maintenance & Operations Revenue & Pay Debt Service," which:
248	248	(a) in the case of "Maintenance &
249	249	Operations," is the tax rate that, when applied to the current
250	250	taxable value for the district, as certified by the chief appraiser
251	251	under Section 26.01, Tax Code, and as adjusted to reflect changes
252	252	made by the chief appraiser as of the time the notice is prepared,
253	253	would impose taxes in an amount that, when added to state funds to
254	254	be distributed to the district under Chapter 48, would provide the
255	255	same amount of maintenance and operations taxes and state funds
256	256	distributed under Chapter 48 per student in average daily
257	257	attendance for the applicable school year that was available to the
258	258	district in the preceding school year; and
259	259	(b) in the case of "Interest & Sinking
260	260	Fund," is the tax rate that, when applied to the current taxable
261	261	value for the district, as certified by the chief appraiser under
262	262	Section 26.01, Tax Code, and as adjusted to reflect changes made by
263	263	the chief appraiser as of the time the notice is prepared, and when
264	264	multiplied by the district's anticipated collection rate, would
265	265	impose taxes in an amount that, when added to state funds to be
266	266	distributed to the district under Chapter 46 and any excess taxes
267	267	collected to service the district's debt during the preceding tax
268	268	year but not used for that purpose during that year, would provide
269	269	the amount required to service the district's debt; and
270	270	(iii) the "Proposed Rate";
271	271	(B) contain fourth and fifth columns aligned with
272	272	the columns required by Paragraph (A) that show, for each row
273	273	required by Paragraph (A):
274	274	(i) the "Local Revenue per Student," which
275	275	is computed by multiplying the district's total taxable value of
276	276	property, as certified by the chief appraiser for the applicable
277	277	school year under Section 26.01, Tax Code, and as adjusted to
278	278	reflect changes made by the chief appraiser as of the time the
279	279	notice is prepared, by the total tax rate, and dividing the product
280	280	by the number of students in average daily attendance in the
281	281	district for the applicable school year; and
282	282	(ii) the "State Revenue per Student," which
283	283	is computed by determining the amount of state aid received or to be
284	284	received by the district under Chapters 43, 46, and 48 and dividing
285	285	that amount by the number of students in average daily attendance in
286	286	the district for the applicable school year; and
287	287	(C) contain an asterisk after each calculation
288	288	for "Interest & Sinking Fund" and a footnote to the section that, in
289	289	reduced type, states "The Interest & Sinking Fund tax revenue is
290	290	used to pay for bonded indebtedness on construction, equipment, or
291	291	both. The bonds, and the tax rate necessary to pay those bonds,
292	292	were approved by the voters of this district.";
293	293	(6) contain a section entitled "Comparison of Proposed
294	294	Levy with Last Year's Levy on Average Residence," which must:
295	295	(A) show in rows the information described by
296	296	Subparagraphs (i)-(iv), rounded to the nearest dollar, for columns
297	297	entitled "Last Year" and "This Year":
298	298	(i) "Average Market Value of Residences,"
299	299	determined using the same group of residences for each year;
300	300	(ii) "Average Taxable Value of Residences,"
301	301	determined after taking into account the limitation on the
302	302	appraised value of residences under Section 23.23, Tax Code, and
303	303	after subtracting all homestead exemptions applicable in each year,
304	304	other than exemptions available only to disabled persons or persons
305	305	65 years of age or older or their surviving spouses, and using the
306	306	same group of residences for each year;
307	307	(iii) "Last Year's Rate Versus Proposed
308	308	Rate per $100 Value"; and
309	309	(iv) "Taxes Due on Average Residence,"
310	310	determined using the same group of residences for each year; and
311	311	(B) contain the following information: "Increase
312	312	(Decrease) in Taxes" expressed in dollars and cents, which is
313	313	computed by subtracting the "Taxes Due on Average Residence" for
314	314	the preceding tax year from the "Taxes Due on Average Residence" for
315	315	the current tax year;
316	316	(7) contain the following statement in bold print:
317	317	"Under state law, the dollar amount of school taxes imposed on the
318	318	residence of a person 65 years of age or older or of the surviving
319	319	spouse of such a person, if the surviving spouse was 55 years of age
320	320	or older when the person died, may not be increased above the amount
321	321	paid in the first year after the person turned 65, regardless of
322	322	changes in tax rate or property value.";
323	323	(8) contain the following statement in bold print:
324	324	"Notice of Voter-Approval Rate: The highest tax rate the district
325	325	can adopt before requiring voter approval at an election is (the
326	326	school district voter-approval rate determined under Section
327	327	26.08, Tax Code). This election will be automatically held if the
328	328	district adopts a rate in excess of the voter-approval rate of (the
329	329	school district voter-approval rate)."; [and]
330	330	(9) contain a section entitled "Fund Balances," which
331	331	must include the estimated amount of interest and sinking fund
332	332	balances and the estimated amount of maintenance and operation or
333	333	general fund balances remaining at the end of the current fiscal
334	334	year that are not encumbered with or by corresponding debt
335	335	obligation, less estimated funds necessary for the operation of the
336	336	district before the receipt of the first payment under Chapter 48 in
337	337	the succeeding school year; and
338	338	(10) contain the following statement in bold print:
339	339	"Under state law, the dollar amount of school taxes imposed on a
340	340	residence homestead that qualifies as the owner's residence
341	341	homestead for at least 20 consecutive years may not be increased
342	342	above the amount of school taxes imposed on the property in that
343	343	20th consecutive year, regardless of changes in tax rate or
344	344	property value."[.]
345	345	SECTION 5. Section 403.302(d), Government Code, is amended
346	346	to read as follows:
347	347	(d) For the purposes of this section, "taxable value" means
348	348	the market value of all taxable property less:
349	349	(1) the total dollar amount of any residence homestead
350	350	exemptions lawfully granted under Section 11.13(b) or (c), Tax
351	351	Code, in the year that is the subject of the study for each school
352	352	district;
353	353	(2) one-half of the total dollar amount of any
354	354	residence homestead exemptions granted under Section 11.13(n), Tax
355	355	Code, in the year that is the subject of the study for each school
356	356	district;
357	357	(3) the total dollar amount of any exemptions granted
358	358	before May 31, 1993, within a reinvestment zone under agreements
359	359	authorized by Chapter 312, Tax Code;
360	360	(4) subject to Subsection (e), the total dollar amount
361	361	of any captured appraised value of property that:
362	362	(A) is within a reinvestment zone created on or
363	363	before May 31, 1999, or is proposed to be included within the
364	364	boundaries of a reinvestment zone as the boundaries of the zone and
365	365	the proposed portion of tax increment paid into the tax increment
366	366	fund by a school district are described in a written notification
367	367	provided by the municipality or the board of directors of the zone
368	368	to the governing bodies of the other taxing units in the manner
369	369	provided by former Section 311.003(e), Tax Code, before May 31,
370	370	1999, and within the boundaries of the zone as those boundaries
371	371	existed on September 1, 1999, including subsequent improvements to
372	372	the property regardless of when made;
373	373	(B) generates taxes paid into a tax increment
374	374	fund created under Chapter 311, Tax Code, under a reinvestment zone
375	375	financing plan approved under Section 311.011(d), Tax Code, on or
376	376	before September 1, 1999; and
377	377	(C) is eligible for tax increment financing under
378	378	Chapter 311, Tax Code;
379	379	(5) the total dollar amount of any captured appraised
380	380	value of property that:
381	381	(A) is within a reinvestment zone:
382	382	(i) created on or before December 31, 2008,
383	383	by a municipality with a population of less than 18,000; and
384	384	(ii) the project plan for which includes
385	385	the alteration, remodeling, repair, or reconstruction of a
386	386	structure that is included on the National Register of Historic
387	387	Places and requires that a portion of the tax increment of the zone
388	388	be used for the improvement or construction of related facilities
389	389	or for affordable housing;
390	390	(B) generates school district taxes that are paid
391	391	into a tax increment fund created under Chapter 311, Tax Code; and
392	392	(C) is eligible for tax increment financing under
393	393	Chapter 311, Tax Code;
394	394	(6) the total dollar amount of any exemptions granted
395	395	under Section 11.251 or 11.253, Tax Code;
396	396	(7) the difference between the comptroller's estimate
397	397	of the market value and the productivity value of land that
398	398	qualifies for appraisal on the basis of its productive capacity,
399	399	except that the productivity value estimated by the comptroller may
400	400	not exceed the fair market value of the land;
401	401	(8) the portion of the appraised value of residence
402	402	homesteads of individuals who receive a tax limitation under
403	403	Section 11.26 or 11.262, Tax Code, on which school district taxes
404	404	are not imposed in the year that is the subject of the study,
405	405	calculated as if the residence homesteads were appraised at the
406	406	full value required by law;
407	407	(9) a portion of the market value of property not
408	408	otherwise fully taxable by the district at market value because of
409	409	action required by statute or the constitution of this state, other
410	410	than Section 11.311, Tax Code, that, if the tax rate adopted by the
411	411	district is applied to it, produces an amount equal to the
412	412	difference between the tax that the district would have imposed on
413	413	the property if the property were fully taxable at market value and
414	414	the tax that the district is actually authorized to impose on the
415	415	property, if this subsection does not otherwise require that
416	416	portion to be deducted;
417	417	(10) the market value of all tangible personal
418	418	property, other than manufactured homes, owned by a family or
419	419	individual and not held or used for the production of income;
420	420	(11) the appraised value of property the collection of
421	421	delinquent taxes on which is deferred under Section 33.06, Tax
422	422	Code;
423	423	(12) the portion of the appraised value of property
424	424	the collection of delinquent taxes on which is deferred under
425	425	Section 33.065, Tax Code;
426	426	(13) the amount by which the market value of a
427	427	residence homestead to which Section 23.23, Tax Code, applies
428	428	exceeds the appraised value of that property as calculated under
429	429	that section; and
430	430	(14) the total dollar amount of any exemptions granted
431	431	under Section 11.35, Tax Code.
432	432	SECTION 6. Section 11.262, Tax Code, as added by this Act,
433	433	applies only to ad valorem taxes imposed for a tax year that begins
434	434	on or 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 at least 20 consecutive
442	442	tax years is approved by the voters. If that constitutional
443	443	amendment is not approved by the voters, this Act has no effect.