Texas 2023 - 88th Regular

Texas House Bill HB3205 Compare Versions

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1	1	By: Zwiener H.B. No. 3205
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to an increase in the amount of the exemption of residence
7	7	homesteads from ad valorem taxation by a school district, an
8	8	adjustment in the amount of the limitation on school district ad
9	9	valorem taxes imposed on the residence homesteads of the elderly or
10	10	disabled to reflect increases in the exemption amount, and the
11	11	protection of school districts against the resulting loss in local
12	12	revenue.
13	13	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
14	14	SECTION 1. Section 11.13(b), Tax Code, is amended to read as
15	15	follows:
16	16	(b) An adult is entitled to exemption from taxation by a
17	17	school district of $75,000 [$40,000] of the appraised value of the
18	18	adult's residence homestead, except that only $5,000 of the
19	19	exemption applies to an entity operating under former Chapter 17,
20	20	18, 25, 26, 27, or 28, Education Code, as those chapters existed on
21	21	May 1, 1995, as permitted by Section 11.301, Education Code.
22	22	(c) Beginning in 2024 tax year, this amount is increased
23	23	annually by an amount equal to the amount exempted in the prior tax
24	24	year, multiplied by the percentage change since the prior year in
25	25	the average appraised value of homesteads statewide, as calculated
26	26	by the Comptroller, rounded to the nearest $100. If the change is
27	27	negative, then the amount of the exemption will be unchanged.
28	28	SECTION 2. Section 11.26, Tax Code, is amended by amending
29	29	Subsections (a), (a-10), and (o) and adding Subsection (a-11) to
30	30	read as follows:
31	31	(a) The tax officials shall appraise the property to which
32	32	this section applies and calculate taxes as on other property, but
33	33	if the tax so calculated exceeds the limitation imposed by this
34	34	section, the tax imposed is the amount of the tax as limited by this
35	35	section, except as otherwise provided by this section. A school
36	36	district may not increase the total annual amount of ad valorem tax
37	37	it imposes on the residence homestead of an individual 65 years of
38	38	age or older or on the residence homestead of an individual who is
39	39	disabled, as defined by Section 11.13, above the amount of the tax
40	40	it imposed in the first tax year in which the individual qualified
41	41	that residence homestead for the applicable exemption provided by
42	42	Section 11.13(c) for an individual who is 65 years of age or older
43	43	or is disabled. If the individual qualified that residence
44	44	homestead for the exemption after the beginning of that first year
45	45	and the residence homestead remains eligible for the same exemption
46	46	for the next year, and if the school district taxes imposed on the
47	47	residence homestead in the next year are less than the amount of
48	48	taxes imposed in that first year, a school district may not
49	49	subsequently increase the total annual amount of ad valorem taxes
50	50	it imposes on the residence homestead above the amount it imposed in
51	51	the year immediately following the first year for which the
52	52	individual qualified that residence homestead for the same
53	53	exemption, except as provided by Subsection (b). If the first tax
54	54	year the individual qualified the residence homestead for the
55	55	exemption provided by Section 11.13(c) for individuals 65 years of
56	56	age or older or disabled was a tax year before the 2024 [2015] tax
57	57	year, the amount of the limitation provided by this section for the
58	58	2024 tax year is the amount of the limitation as computed under
59	59	Subsection (a-10) of this section [tax the school district imposed
60	60	for the 2014 tax year] less an amount equal to the product of
61	61	$10,000 and [amount determined by multiplying $10,000 times] the
62	62	tax rate of the school district for the 2024 [2015] tax year[, plus
63	63	any 2015 tax attributable to improvements made in 2014, other than
64	64	improvements made to comply with governmental regulations or
65	65	repairs].
66	66	(a-10) For purposes of this section, "maximum compressed
67	67	rate" means the maximum compressed rate of a school district as
68	68	calculated under Section 48.2551, Education Code. Notwithstanding
69	69	the other provisions of this section, if in the 2024 or a subsequent
70	70	tax year an individual qualifies for a limitation on tax increases
71	71	provided by this section on the individual's residence homestead,
72	72	the amount of the limitation provided by this section on the
73	73	homestead is equal to the amount computed by:
74	74	(1) multiplying the taxable value of the homestead in
75	75	the preceding tax year by a tax rate equal to the difference between
76	76	the school district's maximum compressed rate for the preceding tax
77	77	year and the district's maximum compressed rate for the current tax
78	78	year;
79	79	(2) subtracting the amount computed under Subdivision
80	80	(1) from the amount of tax the district imposed on the homestead in
81	81	the preceding tax year; and
82	82	(3) adding any tax imposed in the current tax year
83	83	attributable to improvements made in the preceding tax year as
84	84	provided by Subsection (b) to the amount computed under Subdivision
85	85	(2).
86	86	(a-11) This subsection applies only to an individual who in
87	87	the 2024 tax year qualifies for a limitation under this section and
88	88	for whom the 2021 tax year or an earlier tax year was the first tax
89	89	year the individual or the individual's spouse qualified for an
90	90	exemption under Section 11.13(c). The amount of the limitation
91	91	provided by this section on the residence homestead of an
92	92	individual to which this subsection applies for the 2024 tax year is
93	93	the amount of the limitation for the 2024 tax year as otherwise
94	94	computed under this section less an amount equal to the product of
95	95	$15,000 and the tax rate of the school district for the 2022 tax
96	96	year. This subsection expires January 1, 2025.
97	97	(o) Notwithstanding Subsections (a)[, (a-3),] and (b), an
98	98	improvement to property that would otherwise constitute an
99	99	improvement under Subsection (b) is not treated as an improvement
100	100	under that subsection if the improvement is a replacement structure
101	101	for a structure that was rendered uninhabitable or unusable by a
102	102	casualty or by wind or water damage. For purposes of appraising the
103	103	property in the tax year in which the structure would have
104	104	constituted an improvement under Subsection (b), the replacement
105	105	structure is considered to be an improvement under that subsection
106	106	only if:
107	107	(1) the square footage of the replacement structure
108	108	exceeds that of the replaced structure as that structure existed
109	109	before the casualty or damage occurred; or
110	110	(2) the exterior of the replacement structure is of
111	111	higher quality construction and composition than that of the
112	112	replaced structure.
113	113	SECTION 3. Section 46.071, Education Code, is amended by
114	114	amending Subsections (a-1) and (b-1) and adding Subsections (a-2),
115	115	(b-2), and (c-2) to read as follows:
116	116	(a-1) For [Beginning with] the 2022-2023 and 2023-2024
117	117	school years [year], a school district is entitled to additional
118	118	state aid under this subchapter to the extent that state and local
119	119	revenue used to service debt eligible under this chapter is less
120	120	than the state and local revenue that would have been available to
121	121	the district under this chapter as it existed on September 1, 2021,
122	122	if any increase in the residence homestead exemption under Section
123	123	1-b(c), Article VIII, Texas Constitution, as proposed by the 87th
124	124	Legislature, 3rd Called Session, 2021, had not occurred.
125	125	(a-2) Beginning with the 2024-2025 school year, a school
126	126	district is entitled to additional state aid under this subchapter
127	127	to the extent that state and local revenue used to service debt
128	128	eligible under this chapter is less than the state and local
129	129	revenue that would have been available to the district under this
130	130	chapter as it existed on September 1, 2023, if any increase in the
131	131	residence homestead exemption under Section 1-b(c), Article VIII,
132	132	Texas Constitution, and any additional limitation on tax increases
133	133	under Section 1-b(d) of that article as proposed by the 88th
134	134	Legislature, Regular Session, 2023, had not occurred.
135	135	(b-1) Subject to Subsections (c-1), (d), and (e),
136	136	additional state aid under this section for [beginning with] the
137	137	2022-2023 and 2023-2024 school years [year] is equal to the amount
138	138	by which the loss of local interest and sinking revenue for debt
139	139	service attributable to any increase in the residence homestead
140	140	exemption under Section 1-b(c), Article VIII, Texas Constitution,
141	141	as proposed by the 87th Legislature, 3rd Called Session, 2021, is
142	142	not offset by a gain in state aid under this chapter.
143	143	(b-2) Subject to Subsections (c-2), (d), and (e),
144	144	additional state aid under this section beginning with the
145	145	2024-2025 school year is equal to the amount by which the loss of
146	146	local interest and sinking revenue for debt service attributable
147	147	to any increase in the residence homestead exemption under Section
148	148	1-b(c), Article VIII, Texas Constitution, and any additional
149	149	limitation on tax increases under Section 1-b(d) of that article as
150	150	proposed by the 88th Legislature, Regular Session, 2023, is not
151	151	offset by a gain in state aid under this chapter.
152	152	(c-2) For the purpose of determining state aid under
153	153	Subsections (a-2) and (b-2), local interest and sinking revenue for
154	154	debt service is limited to revenue required to service debt
155	155	eligible under this chapter as of September 1, 2024, including
156	156	refunding of that debt, subject to Section 46.061. The limitation
157	157	imposed by Section 46.034(a) does not apply for the purpose of
158	158	determining state aid under this section.
159	159	SECTION 4. Section 48.2542, Education Code, is amended to
160	160	read as follows:
161	161	Sec. 48.2542. ADDITIONAL STATE AID FOR ADJUSTMENT OF
162	162	LIMITATION ON TAX INCREASES ON HOMESTEAD OF ELDERLY OR DISABLED.
163	163	Notwithstanding any other provision of this chapter, if a school
164	164	district is not fully compensated through state aid or the
165	165	calculation of excess local revenue under this chapter based on the
166	166	determination of the district's taxable value of property under
167	167	Subchapter M, Chapter 403, Government Code, the district is
168	168	entitled to additional state aid in the amount necessary to fully
169	169	compensate the district for the amount of ad valorem tax revenue
170	170	lost due to a reduction of the amount of the limitation on tax
171	171	increases provided by Sections 11.26(a-10) and (a-11) [11.26(a-4),
172	172	(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10)], Tax Code, as
173	173	applicable.
174	174	SECTION 5. Effective January 1, 2025, Section 48.2542,
175	175	Education Code, is amended to read as follows:
176	176	Sec. 48.2542. ADDITIONAL STATE AID FOR ADJUSTMENT OF
177	177	LIMITATION ON TAX INCREASES ON HOMESTEAD OF ELDERLY OR DISABLED.
178	178	Notwithstanding any other provision of this chapter, if a school
179	179	district is not fully compensated through state aid or the
180	180	calculation of excess local revenue under this chapter based on the
181	181	determination of the district's taxable value of property under
182	182	Subchapter M, Chapter 403, Government Code, the district is
183	183	entitled to additional state aid in the amount necessary to fully
184	184	compensate the district for the amount of ad valorem tax revenue
185	185	lost due to a reduction of the amount of the limitation on tax
186	186	increases provided by Section 11.26(a-10) [Sections 11.26(a-4),
187	187	(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10)], Tax Code[,as
188	188	applicable].
189	189	SECTION 6. Section 48.2543, Education Code, is amended to
190	190	read as follows:
191	191	Sec. 48.2543. ADDITIONAL STATE AID FOR HOMESTEAD EXEMPTION.
192	192	(a) For [Beginning with] the 2022-2023 and 2023-2024 school years
193	193	[year], a school district is entitled to additional state aid to the
194	194	extent that state and local revenue under this chapter and Chapter
195	195	49 is less than the state and local revenue that would have been
196	196	available to the district under this chapter and Chapter 49 as those
197	197	chapters existed on September 1, 2021, if any increase in the
198	198	residence homestead exemption under Section 1-b(c), Article VIII,
199	199	Texas Constitution, as proposed by the 87th Legislature, 3rd Called
200	200	Session, 2021, had not occurred.
201	201	(a-1) Beginning with the 2024-2025 school year, a school
202	202	district is entitled to additional state aid to the extent that
203	203	state and local revenue under this chapter and Chapter 49 is less
204	204	than the state and local revenue that would have been available to
205	205	the district under this chapter and Chapter 49 as those chapters
206	206	existed on September 1, 2023, if any increase in the residence
207	207	homestead exemption under Section 1-b(c), Article VIII, Texas
208	208	Constitution, and any additional limitation on tax increases under
209	209	Section 1-b(d) of that article as proposed by the 88th Legislature,
210	210	Regular Session, 2023, had not occurred.
211	211	(b) The lesser of the school district's currently adopted
212	212	maintenance and operations tax rate or the adopted maintenance and
213	213	operations tax rate for:
214	214	(1) the 2021 tax year is used for the purpose of
215	215	determining additional state aid under Subsection (a); and
216	216	(2) the 2023 tax year is used for the purpose of
217	217	determining additional state aid under Subsection (a-1).
218	218	SECTION 7. Section 48.2556(a), Education Code, is amended
219	219	to read as follows:
220	220	(a) For purposes of allowing the chief appraiser of each
221	221	appraisal district and the assessor for each school district to
222	222	make the calculations required by Sections 11.26(a-10) and (a-11),
223	223	Tax Code, the [The] agency shall post [the following information]
224	224	on the agency's Internet website [for purposes of allowing the
225	225	chief appraiser of each appraisal district and the assessor for
226	226	each school district to make the calculations required by Sections
227	227	11.26(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10), Tax Code:
228	228	[(1)] each school district's maximum compressed rate,
229	229	as determined under Section 48.2551, for each tax year beginning
230	230	with the 2022 [2019] tax year[; and
231	231	[(2) each school district's tier one maintenance and
232	232	operations tax rate, as provided by Section 45.0032(a), for the
233	233	2018 tax year].
234	234	SECTION 8. Effective January 1, 2025, Section 48.2556(a),
235	235	Education Code, is amended to read as follows:
236	236	(a) For purposes of allowing the chief appraiser of each
237	237	appraisal district and the assessor for each school district to
238	238	make the calculations required by Section 11.26(a-10), Tax Code,
239	239	the [The] agency shall post [the following information] on the
240	240	agency's Internet website [for purposes of allowing the chief
241	241	appraiser of each appraisal district and the assessor for each
242	242	school district to make the calculations required by Sections
243	243	11.26(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10), Tax Code:
244	244	[(1)] each school district's maximum compressed rate,
245	245	as determined under Section 48.2551, for the current [each] tax
246	246	year and the preceding [beginning with the 2019] tax year[;and
247	247	[(2) each school district's tier one maintenance and
248	248	operations tax rate, as provided by Section 45.0032(a), for the
249	249	2018 tax year].
250	250	SECTION 9. Section 403.302, Government Code, is amended by
251	251	amending Subsection (j-1) and adding Subsection (j-2) to read as
252	252	follows:
253	253	(j-1) In the final certification of the study under
254	254	Subsection (j), the comptroller shall separately identify the final
255	255	taxable value for each school district as adjusted to account for
256	256	the reduction of the amount of the limitation on tax increases
257	257	provided by Section 11.26(a-10) [Sections 11.26(a-4), (a-5),
258	258	(a-6), (a-7), (a-8), (a-9), and (a-10)], Tax Code[,as applicable].
259	259	(j-2) In the final certification of the study under
260	260	Subsection (j), the comptroller shall separately identify the final
261	261	taxable value for each school district as adjusted to account for
262	262	the reduction of the amount of the limitation on tax increases
263	263	provided by Section 11.26(a-11), Tax Code. This subsection expires
264	264	January 1, 2025.
265	265	SECTION 10. Sections 11.26(a-1), (a-2), (a-3), (a-4),
266	266	(a-5), (a-6), (a-7), (a-8), and (a-9), Tax Code, are repealed.
267	267	SECTION 11. The changes in law made by this Act to Sections
268	268	11.13 and 11.26, Tax Code, apply only to an ad valorem tax year that
269	269	begins on or after January 1, 2024.
270	270	SECTION 12. Except as otherwise provided by this Act, this
271	271	Act takes effect January 1, 2024, but only if the constitutional
272	272	amendment proposed by the 88th Legislature, Regular Session, 2023,
273	273	to increase the amount of the exemption of residence homesteads
274	274	from ad valorem taxation by a school district and to adjust the
275	275	amount of the limitation on school district ad valorem taxes
276	276	imposed on the residence homesteads of the elderly or disabled to
277	277	reflect increases in the exemption amount is approved by the
278	278	voters. If that amendment is not approved by the voters, this Act
279	279	has no effect.