Texas 2023 - 88th Regular

Texas House Bill HB32 Compare Versions

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1	1	88R1621 TJB-D
2	2	By: Capriglione H.B. No. 32
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to limitations on increases in the appraised value for ad
8	8	valorem tax purposes of residence homesteads and single-family
9	9	residences other than residence homesteads.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 1.12(d), Tax Code, is amended to read as
12	12	follows:
13	13	(d) For purposes of this section, the appraisal ratio of
14	14	property [a homestead] to which Section 23.23 or 23.231 applies is
15	15	the ratio of the property's market value as determined by the
16	16	appraisal district or appraisal review board, as applicable, to the
17	17	market value of the property according to law. The appraisal ratio
18	18	is not calculated according to the appraised value of the property
19	19	as limited by Section 23.23 or 23.231.
20	20	SECTION 2. Section 23.23(a), Tax Code, is amended to read as
21	21	follows:
22	22	(a) Notwithstanding the requirements of Section 25.18 and
23	23	regardless of whether the appraisal office has appraised the
24	24	property and determined the market value of the property for the tax
25	25	year, an appraisal office may increase the appraised value of a
26	26	residence homestead for a tax year to an amount not to exceed the
27	27	lesser of:
28	28	(1) the market value of the property for the most
29	29	recent tax year that the market value was determined by the
30	30	appraisal office; or
31	31	(2) the sum of:
32	32	(A) five [10] percent of the appraised value of
33	33	the property for the preceding tax year;
34	34	(B) the appraised value of the property for the
35	35	preceding tax year; and
36	36	(C) the market value of all new improvements to
37	37	the property.
38	38	SECTION 3. Subchapter B, Chapter 23, Tax Code, is amended by
39	39	adding Section 23.231 to read as follows:
40	40	Sec. 23.231. LIMITATION ON APPRAISED VALUE OF SINGLE-FAMILY
41	41	RESIDENCE OTHER THAN RESIDENCE HOMESTEAD. (a) In this section:
42	42	(1) "Disaster recovery program" means the disaster
43	43	recovery program administered by the General Land Office or by a
44	44	political subdivision of this state that is funded with community
45	45	development block grant disaster recovery money authorized by
46	46	federal law.
47	47	(2) "New improvement" means an improvement to real
48	48	property made after the most recent appraisal of the property that
49	49	increases the market value of the property and the value of which is
50	50	not included in the appraised value of the property for the
51	51	preceding tax year. The term does not include repairs to or
52	52	ordinary maintenance of an existing structure or the grounds or
53	53	another feature of the property.
54	54	(3) "Qualifying trust" has the meaning assigned by
55	55	Section 11.13.
56	56	(4) "Single-family residence" means a structure,
57	57	including a mobile home, together with the land, not to exceed 20
58	58	acres, and improvements used in the residential occupancy of the
59	59	structure, if the structure and the land and improvements have
60	60	identical ownership, that:
61	61	(A) is owned by one or more individuals, either
62	62	directly or through a beneficial interest in a qualifying trust;
63	63	(B) is designed or adapted for human residence;
64	64	and
65	65	(C) is used as a single-family residence.
66	66	(b) This section does not apply to:
67	67	(1) a residence homestead that qualifies for an
68	68	exemption under Section 11.13; or
69	69	(2) property appraised under Subchapter C, D, E, F, G,
70	70	or H.
71	71	(c) Notwithstanding the requirements of Section 25.18 and
72	72	regardless of whether the appraisal office has appraised the
73	73	property and determined the market value of the property for the tax
74	74	year, an appraisal office may increase the appraised value of a
75	75	single-family residence to which this section applies for a tax
76	76	year to an amount not to exceed the lesser of:
77	77	(1) the market value of the property for the most
78	78	recent tax year that the market value was determined by the
79	79	appraisal office; or
80	80	(2) the sum of:
81	81	(A) 10 percent of the appraised value of the
82	82	property for the preceding tax year;
83	83	(B) the appraised value of the property for the
84	84	preceding tax year; and
85	85	(C) the market value of all new improvements to
86	86	the property.
87	87	(d) When appraising a single-family residence to which this
88	88	section applies, the chief appraiser shall:
89	89	(1) appraise the property at its market value; and
90	90	(2) include in the appraisal records both the market
91	91	value of the property and the amount computed under Subsection
92	92	(c)(2).
93	93	(e) The limitation provided by Subsection (c) takes effect
94	94	as to a single-family residence on January 1 of the tax year
95	95	following the first tax year in which the owner owns the property on
96	96	January 1 and in which the property is used as a single-family
97	97	residence. The limitation expires on January 1 of the tax year
98	98	following the tax year in which the owner of the property ceases to
99	99	own the property or the property ceases to be used as a
100	100	single-family residence.
101	101	(f) For purposes of Subsection (e), a person who acquired a
102	102	single-family residence to which this section applies before the
103	103	2023 tax year is considered to have acquired the property on January
104	104	1, 2023.
105	105	(g) Notwithstanding Subsections (a) and (c) and except as
106	106	provided by Subdivision (2) of this subsection, an improvement to
107	107	real property that would otherwise constitute a new improvement is
108	108	not treated as a new improvement if the improvement is a replacement
109	109	structure for a structure that was rendered uninhabitable or
110	110	unusable by a casualty or by wind or water damage. For purposes of
111	111	appraising the property under Subsection (c) in the tax year in
112	112	which the structure would have constituted a new improvement:
113	113	(1) the appraised value the property would have had in
114	114	the preceding tax year if the casualty or damage had not occurred is
115	115	considered to be the appraised value of the property for that year,
116	116	regardless of whether that appraised value exceeds the actual
117	117	appraised value of the property for that year as limited by
118	118	Subsection (c); and
119	119	(2) the replacement structure is considered to be a
120	120	new improvement only if:
121	121	(A) the square footage of the replacement
122	122	structure exceeds that of the replaced structure as that structure
123	123	existed before the casualty or damage occurred; or
124	124	(B) the exterior of the replacement structure is
125	125	of higher quality construction and composition than that of the
126	126	replaced structure.
127	127	(h) Notwithstanding Subsection (g)(2), and only to the
128	128	extent necessary to satisfy the requirements of the disaster
129	129	recovery program, a replacement structure described by that
130	130	subdivision is not considered to be a new improvement if to satisfy
131	131	the requirements of the disaster recovery program it was necessary
132	132	that:
133	133	(1) the square footage of the replacement structure
134	134	exceed that of the replaced structure as that structure existed
135	135	before the casualty or damage occurred; or
136	136	(2) the exterior of the replacement structure be of
137	137	higher quality construction and composition than that of the
138	138	replaced structure.
139	139	SECTION 4. Sections 25.19(b) and (g), Tax Code, are amended
140	140	to read as follows:
141	141	(b) The chief appraiser shall separate real from personal
142	142	property and include in the notice for each:
143	143	(1) a list of the taxing units in which the property is
144	144	taxable;
145	145	(2) the appraised value of the property in the
146	146	preceding year;
147	147	(3) the taxable value of the property in the preceding
148	148	year for each taxing unit taxing the property;
149	149	(4) the appraised value of the property for the
150	150	current year, the kind and amount of each exemption and partial
151	151	exemption, if any, approved for the property for the current year
152	152	and for the preceding year, and, if an exemption or partial
153	153	exemption that was approved for the preceding year was canceled or
154	154	reduced for the current year, the amount of the exemption or partial
155	155	exemption canceled or reduced;
156	156	(4-a) a statement of whether the property qualifies for
157	157	the limitation on appraised value provided by Section 23.231;
158	158	(5) in italic typeface, the following statement: "The
159	159	Texas Legislature does not set the amount of your local taxes. Your
160	160	property tax burden is decided by your locally elected officials,
161	161	and all inquiries concerning your taxes should be directed to those
162	162	officials";
163	163	(6) a detailed explanation of the time and procedure
164	164	for protesting the value;
165	165	(7) the date and place the appraisal review board will
166	166	begin hearing protests;
167	167	(8) an explanation of the availability and purpose of
168	168	an informal conference with the appraisal office before a hearing
169	169	on a protest; and
170	170	(9) a brief explanation that the governing body of
171	171	each taxing unit decides whether or not taxes on the property will
172	172	increase and the appraisal district only determines the value of
173	173	the property.
174	174	(g) By April 1 or as soon thereafter as practicable if the
175	175	property is a single-family residence that qualifies for an
176	176	exemption under Section 11.13, or by May 1 or as soon thereafter as
177	177	practicable in connection with any other property, the chief
178	178	appraiser shall deliver a written notice to the owner of each
179	179	property not included in a notice required to be delivered under
180	180	Subsection (a), if the property was reappraised in the current tax
181	181	year, if the ownership of the property changed during the preceding
182	182	year, or if the property owner or the agent of a property owner
183	183	authorized under Section 1.111 makes a written request for the
184	184	notice. The chief appraiser shall separate real from personal
185	185	property and include in the notice for each property:
186	186	(1) the appraised value of the property in the
187	187	preceding year;
188	188	(2) the appraised value of the property for the
189	189	current year and the kind of each partial exemption, if any,
190	190	approved for the current year;
191	191	(2-a) a statement of whether the property qualifies for
192	192	the limitation on appraised value provided by Section 23.231;
193	193	(3) a detailed explanation of the time and procedure
194	194	for protesting the value; and
195	195	(4) the date and place the appraisal review board will
196	196	begin hearing protests.
197	197	SECTION 5. Section 41.41(a), Tax Code, is amended to read as
198	198	follows:
199	199	(a) A property owner is entitled to protest before the
200	200	appraisal review board the following actions:
201	201	(1) determination of the appraised value of the
202	202	owner's property or, in the case of land appraised as provided by
203	203	Subchapter C, D, E, or H, Chapter 23, determination of its appraised
204	204	or market value;
205	205	(2) unequal appraisal of the owner's property;
206	206	(3) inclusion of the owner's property on the appraisal
207	207	records;
208	208	(4) denial to the property owner in whole or in part of
209	209	a partial exemption;
210	210	(4-a) determination that the owner's property does not
211	211	qualify for the limitation on appraised value provided by Section
212	212	23.231;
213	213	(5) determination that the owner's land does not
214	214	qualify for appraisal as provided by Subchapter C, D, E, or H,
215	215	Chapter 23;
216	216	(6) identification of the taxing units in which the
217	217	owner's property is taxable in the case of the appraisal district's
218	218	appraisal roll;
219	219	(7) determination that the property owner is the owner
220	220	of property;
221	221	(8) a determination that a change in use of land
222	222	appraised under Subchapter C, D, E, or H, Chapter 23, has occurred;
223	223	or
224	224	(9) any other action of the chief appraiser, appraisal
225	225	district, or appraisal review board that applies to and adversely
226	226	affects the property owner.
227	227	SECTION 6. Section 42.26(d), Tax Code, is amended to read as
228	228	follows:
229	229	(d) For purposes of this section, the value of the property
230	230	subject to the suit and the value of a comparable property or sample
231	231	property that is used for comparison must be the market value
232	232	determined by the appraisal district when the property is [a
233	233	residence homestead] subject to the limitation on appraised value
234	234	imposed by Section 23.23 or 23.231.
235	235	SECTION 7. Sections 403.302(d) and (i), Government Code,
236	236	are amended to read as follows:
237	237	(d) For the purposes of this section, "taxable value" means
238	238	the market value of all taxable property less:
239	239	(1) the total dollar amount of any residence homestead
240	240	exemptions lawfully granted under Section 11.13(b) or (c), Tax
241	241	Code, in the year that is the subject of the study for each school
242	242	district;
243	243	(2) one-half of the total dollar amount of any
244	244	residence homestead exemptions granted under Section 11.13(n), Tax
245	245	Code, in the year that is the subject of the study for each school
246	246	district;
247	247	(3) the total dollar amount of any exemptions granted
248	248	before May 31, 1993, within a reinvestment zone under agreements
249	249	authorized by Chapter 312, Tax Code;
250	250	(4) subject to Subsection (e), the total dollar amount
251	251	of any captured appraised value of property that:
252	252	(A) is within a reinvestment zone created on or
253	253	before May 31, 1999, or is proposed to be included within the
254	254	boundaries of a reinvestment zone as the boundaries of the zone and
255	255	the proposed portion of tax increment paid into the tax increment
256	256	fund by a school district are described in a written notification
257	257	provided by the municipality or the board of directors of the zone
258	258	to the governing bodies of the other taxing units in the manner
259	259	provided by former Section 311.003(e), Tax Code, before May 31,
260	260	1999, and within the boundaries of the zone as those boundaries
261	261	existed on September 1, 1999, including subsequent improvements to
262	262	the property regardless of when made;
263	263	(B) generates taxes paid into a tax increment
264	264	fund created under Chapter 311, Tax Code, under a reinvestment zone
265	265	financing plan approved under Section 311.011(d), Tax Code, on or
266	266	before September 1, 1999; and
267	267	(C) is eligible for tax increment financing under
268	268	Chapter 311, Tax Code;
269	269	(5) the total dollar amount of any captured appraised
270	270	value of property that:
271	271	(A) is within a reinvestment zone:
272	272	(i) created on or before December 31, 2008,
273	273	by a municipality with a population of less than 18,000; and
274	274	(ii) the project plan for which includes
275	275	the alteration, remodeling, repair, or reconstruction of a
276	276	structure that is included on the National Register of Historic
277	277	Places and requires that a portion of the tax increment of the zone
278	278	be used for the improvement or construction of related facilities
279	279	or for affordable housing;
280	280	(B) generates school district taxes that are paid
281	281	into a tax increment fund created under Chapter 311, Tax Code; and
282	282	(C) is eligible for tax increment financing under
283	283	Chapter 311, Tax Code;
284	284	(6) the total dollar amount of any exemptions granted
285	285	under Section 11.251 or 11.253, Tax Code;
286	286	(7) the difference between the comptroller's estimate
287	287	of the market value and the productivity value of land that
288	288	qualifies for appraisal on the basis of its productive capacity,
289	289	except that the productivity value estimated by the comptroller may
290	290	not exceed the fair market value of the land;
291	291	(8) the portion of the appraised value of residence
292	292	homesteads of individuals who receive a tax limitation under
293	293	Section 11.26, Tax Code, on which school district taxes are not
294	294	imposed in the year that is the subject of the study, calculated as
295	295	if the residence homesteads were appraised at the full value
296	296	required by law;
297	297	(9) a portion of the market value of property not
298	298	otherwise fully taxable by the district at market value because of
299	299	action required by statute or the constitution of this state, other
300	300	than Section 11.311, Tax Code, that, if the tax rate adopted by the
301	301	district is applied to it, produces an amount equal to the
302	302	difference between the tax that the district would have imposed on
303	303	the property if the property were fully taxable at market value and
304	304	the tax that the district is actually authorized to impose on the
305	305	property, if this subsection does not otherwise require that
306	306	portion to be deducted;
307	307	(10) the market value of all tangible personal
308	308	property, other than manufactured homes, owned by a family or
309	309	individual and not held or used for the production of income;
310	310	(11) the appraised value of property the collection of
311	311	delinquent taxes on which is deferred under Section 33.06, Tax
312	312	Code;
313	313	(12) the portion of the appraised value of property
314	314	the collection of delinquent taxes on which is deferred under
315	315	Section 33.065, Tax Code;
316	316	(13) the amount by which the market value of property
317	317	[a residence homestead] to which Section 23.23 or 23.231, Tax Code,
318	318	applies exceeds the appraised value of that property as calculated
319	319	under Section 23.23 or 23.231, Tax Code, as applicable [that
320	320	section]; and
321	321	(14) the total dollar amount of any exemptions granted
322	322	under Section 11.35, Tax Code.
323	323	(i) If the comptroller determines in the study that the
324	324	market value of property in a school district as determined by the
325	325	appraisal district that appraises property for the school district,
326	326	less the total of the amounts and values listed in Subsection (d) as
327	327	determined by that appraisal district, is valid, the comptroller,
328	328	in determining the taxable value of property in the school district
329	329	under Subsection (d), shall for purposes of Subsection (d)(13)
330	330	subtract from the market value as determined by the appraisal
331	331	district of properties [residence homesteads] to which Section
332	332	23.23 or 23.231, Tax Code, applies the amount by which that amount
333	333	exceeds the appraised value of those properties as calculated by
334	334	the appraisal district under Section 23.23 or 23.231, Tax Code, as
335	335	applicable. If the comptroller determines in the study that the
336	336	market value of property in a school district as determined by the
337	337	appraisal district that appraises property for the school district,
338	338	less the total of the amounts and values listed in Subsection (d) as
339	339	determined by that appraisal district, is not valid, the
340	340	comptroller, in determining the taxable value of property in the
341	341	school district under Subsection (d), shall for purposes of
342	342	Subsection (d)(13) subtract from the market value as estimated by
343	343	the comptroller of properties [residence homesteads] to which
344	344	Section 23.23 or 23.231, Tax Code, applies the amount by which that
345	345	amount exceeds the appraised value of those properties as
346	346	calculated by the appraisal district under Section 23.23 or 23.231,
347	347	Tax Code, as applicable.
348	348	SECTION 8. This Act applies only to the appraisal of
349	349	property for ad valorem tax purposes for a tax year that begins on
350	350	or after the effective date of this Act.
351	351	SECTION 9. This Act takes effect January 1, 2024, but only
352	352	if the constitutional amendment proposed by the 88th Legislature,
353	353	Regular Session, 2023, to authorize the legislature to limit the
354	354	maximum appraised value of a residence homestead for ad valorem tax
355	355	purposes to 105 percent or more of the appraised value of the
356	356	property for the preceding tax year and to limit the maximum
357	357	appraised value of a single-family residence other than a residence
358	358	homestead for those purposes to 110 percent or more of the appraised
359	359	value of the property for the preceding tax year is approved by the
360	360	voters. If that amendment is not approved by the voters, this Act
361	361	has no effect.