Texas 2023 - 88th Regular

Texas House Bill HB3336 Compare Versions

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1	1	88R8047 RDS-D
2	2	By: Tepper H.B. No. 3336
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to a limitation on increases in the appraised value of
8	8	commercial real property and single-family rental property for ad
9	9	valorem tax purposes.
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	real property [a homestead] to which Section 23.23 or 23.231
15	15	applies is the ratio of the property's market value as determined by
16	16	the appraisal district or appraisal review board, as applicable, to
17	17	the market value of the property according to law. The appraisal
18	18	ratio is not calculated according to the appraised value of the
19	19	property as limited by Section 23.23 or 23.231.
20	20	SECTION 2. Subchapter B, Chapter 23, Tax Code, is amended by
21	21	adding Section 23.231 to read as follows:
22	22	Sec. 23.231. LIMITATION ON APPRAISED VALUE OF COMMERCIAL
23	23	REAL PROPERTY AND SINGLE-FAMILY RENTAL PROPERTY. (a) In this
24	24	section:
25	25	(1) "Commercial real property" means real property
26	26	held or used for the production of income, other than property held
27	27	or used for single-family use, multifamily use, heavy industrial
28	28	use, or use as a quarry.
29	29	(2) "Disaster recovery program" means a disaster
30	30	recovery program funded with community development block grant
31	31	disaster recovery money authorized by federal law.
32	32	(3) "New improvement" means an improvement to
33	33	commercial real property or single-family rental property made
34	34	after the most recent appraisal of the property that increases the
35	35	market value of the property and the value of which is not included
36	36	in the appraised value of the property for the preceding tax year.
37	37	The term does not include repairs to or ordinary maintenance of an
38	38	existing structure or the grounds or another feature of the
39	39	property.
40	40	(4) "Single-family rental property" means a
41	41	structure, including a mobile home, together with the land, not to
42	42	exceed 20 acres, and improvements used in the residential occupancy
43	43	of the structure, if the structure and the land and improvements
44	44	have identical ownership, that:
45	45	(A) is owned by one or more individuals, either
46	46	directly or through a beneficial interest in a qualifying trust;
47	47	(B) is designed or adapted for human residence;
48	48	and
49	49	(C) is used to produce rental income as a
50	50	single-family residence.
51	51	(b) This section does not apply to property appraised under
52	52	Subchapter C, D, E, F, G, or H.
53	53	(c) Notwithstanding the requirements of Section 25.18 and
54	54	regardless of whether the appraisal office has appraised the
55	55	property and determined the market value of the property for the tax
56	56	year, an appraisal office may increase the appraised value of a
57	57	parcel of commercial real property or of a single-family rental
58	58	property for a tax year to an amount not to exceed the lesser of:
59	59	(1) the market value of the property for the most
60	60	recent tax year that the market value was determined by the
61	61	appraisal office; or
62	62	(2) the sum of:
63	63	(A) eight percent of the appraised value of the
64	64	property for the preceding tax year;
65	65	(B) the appraised value of the property for the
66	66	preceding tax year; and
67	67	(C) the market value of all new improvements to
68	68	the property.
69	69	(d) When appraising a parcel of commercial real property or
70	70	a single-family rental property, the chief appraiser shall:
71	71	(1) appraise the property at its market value; and
72	72	(2) include in the appraisal records both the market
73	73	value of the property and the amount computed under Subsection
74	74	(c)(2).
75	75	(e) In order to receive a limitation on appraised value for
76	76	a single-family rental property, the owner of the property must
77	77	provide written notice to the chief appraiser that the owner holds
78	78	the property for the production of income. The owner is not
79	79	required to provide more than one notice under this subsection. The
80	80	comptroller by rule shall prescribe the form and manner of
81	81	providing notice under this subsection.
82	82	(f) The limitation provided by Subsection (c) takes effect
83	83	as to a parcel of commercial real property or a single-family rental
84	84	property on January 1 of the tax year following the first tax year
85	85	in which the owner owns the property on January 1 and in which the
86	86	property meets the definition of commercial real property or
87	87	single-family rental property, as applicable. The limitation
88	88	expires on January 1 of the tax year following the first tax year in
89	89	which the owner of the property ceases to own the property or the
90	90	property no longer meets the definition of commercial real property
91	91	or single-family rental property, as applicable.
92	92	(g) For purposes of Subsection (f), a person who acquired
93	93	commercial real property or a single-family rental property to
94	94	which this section applies before the 2023 tax year is considered to
95	95	have acquired the property on January 1, 2023.
96	96	(h) Notwithstanding Subsections (a)(3) and (c) and except
97	97	as provided by Subdivision (2) of this subsection, an improvement
98	98	to property that would otherwise constitute a new improvement is
99	99	not treated as a new improvement if the improvement is a replacement
100	100	structure for a structure that was rendered unusable by a casualty
101	101	or by wind or water damage. For purposes of appraising the property
102	102	under Subsection (c) in the tax year in which the structure would
103	103	have constituted a new improvement:
104	104	(1) the appraised value the property would have had in
105	105	the preceding tax year if the casualty or damage had not occurred is
106	106	considered to be the appraised value of the property for that year,
107	107	regardless of whether that appraised value exceeds the actual
108	108	appraised value of the property for that year as limited by
109	109	Subsection (c); and
110	110	(2) the replacement structure is considered to be a
111	111	new improvement only if:
112	112	(A) the square footage of the replacement
113	113	structure exceeds that of the replaced structure as that structure
114	114	existed before the casualty or damage occurred; or
115	115	(B) the exterior of the replacement structure is
116	116	of higher quality construction and composition than that of the
117	117	replaced structure.
118	118	(i) Notwithstanding Subsection (h)(2), and only to the
119	119	extent necessary to satisfy the requirements of a disaster recovery
120	120	program, a replacement structure described by that subdivision is
121	121	not considered to be a new improvement if to satisfy the
122	122	requirements of the disaster recovery program it was necessary
123	123	that:
124	124	(1) the square footage of the replacement structure
125	125	exceed that of the replaced structure as that structure existed
126	126	before the casualty or damage occurred; or
127	127	(2) the exterior of the replacement structure be of
128	128	higher quality construction and composition than that of the
129	129	replaced structure.
130	130	SECTION 3. Sections 25.19(b) and (g), Tax Code, are amended
131	131	to read as follows:
132	132	(b) The chief appraiser shall separate real from personal
133	133	property and include in the notice for each:
134	134	(1) a list of the taxing units in which the property is
135	135	taxable;
136	136	(2) the appraised value of the property in the
137	137	preceding year;
138	138	(3) the taxable value of the property in the preceding
139	139	year for each taxing unit taxing the property;
140	140	(4) the appraised value of the property for the
141	141	current year, the kind and amount of each exemption and partial
142	142	exemption, if any, approved for the property for the current year
143	143	and for the preceding year, and, if an exemption or partial
144	144	exemption that was approved for the preceding year was canceled or
145	145	reduced for the current year, the amount of the exemption or partial
146	146	exemption canceled or reduced;
147	147	(4-a) a statement of whether the property qualifies for
148	148	the limitation on appraised value provided by Section 23.231;
149	149	(5) in italic typeface, the following statement: "The
150	150	Texas Legislature does not set the amount of your local taxes. Your
151	151	property tax burden is decided by your locally elected officials,
152	152	and all inquiries concerning your taxes should be directed to those
153	153	officials";
154	154	(6) a detailed explanation of the time and procedure
155	155	for protesting the value;
156	156	(7) the date and place the appraisal review board will
157	157	begin hearing protests;
158	158	(8) an explanation of the availability and purpose of
159	159	an informal conference with the appraisal office before a hearing
160	160	on a protest; and
161	161	(9) a brief explanation that the governing body of
162	162	each taxing unit decides whether or not taxes on the property will
163	163	increase and the appraisal district only determines the value of
164	164	the property.
165	165	(g) By April 1 or as soon thereafter as practicable if the
166	166	property is a single-family residence that qualifies for an
167	167	exemption under Section 11.13, or by May 1 or as soon thereafter as
168	168	practicable in connection with any other property, the chief
169	169	appraiser shall deliver a written notice to the owner of each
170	170	property not included in a notice required to be delivered under
171	171	Subsection (a), if the property was reappraised in the current tax
172	172	year, if the ownership of the property changed during the preceding
173	173	year, or if the property owner or the agent of a property owner
174	174	authorized under Section 1.111 makes a written request for the
175	175	notice. The chief appraiser shall separate real from personal
176	176	property and include in the notice for each property:
177	177	(1) the appraised value of the property in the
178	178	preceding year;
179	179	(2) the appraised value of the property for the
180	180	current year and the kind of each partial exemption, if any,
181	181	approved for the current year;
182	182	(2-a) a statement of whether the property qualifies for
183	183	the limitation on appraised value provided by Section 23.231;
184	184	(3) a detailed explanation of the time and procedure
185	185	for protesting the value; and
186	186	(4) the date and place the appraisal review board will
187	187	begin hearing protests.
188	188	SECTION 4. Section 41.41(a), Tax Code, is amended to read as
189	189	follows:
190	190	(a) A property owner is entitled to protest before the
191	191	appraisal review board the following actions:
192	192	(1) determination of the appraised value of the
193	193	owner's property or, in the case of land appraised as provided by
194	194	Subchapter C, D, E, or H, Chapter 23, determination of its appraised
195	195	or market value;
196	196	(2) unequal appraisal of the owner's property;
197	197	(3) inclusion of the owner's property on the appraisal
198	198	records;
199	199	(4) denial to the property owner in whole or in part of
200	200	a partial exemption;
201	201	(4-a) determination that the owner's property does not
202	202	qualify for the limitation on appraised value provided by Section
203	203	23.231;
204	204	(5) determination that the owner's land does not
205	205	qualify for appraisal as provided by Subchapter C, D, E, or H,
206	206	Chapter 23;
207	207	(6) identification of the taxing units in which the
208	208	owner's property is taxable in the case of the appraisal district's
209	209	appraisal roll;
210	210	(7) determination that the property owner is the owner
211	211	of property;
212	212	(8) a determination that a change in use of land
213	213	appraised under Subchapter C, D, E, or H, Chapter 23, has occurred;
214	214	or
215	215	(9) any other action of the chief appraiser, appraisal
216	216	district, or appraisal review board that applies to and adversely
217	217	affects the property owner.
218	218	SECTION 5. Section 42.26(d), Tax Code, is amended to read as
219	219	follows:
220	220	(d) For purposes of this section, the value of the property
221	221	subject to the suit and the value of a comparable property or sample
222	222	property that is used for comparison must be the market value
223	223	determined by the appraisal district when the property is [a
224	224	residence homestead] subject to the limitation on appraised value
225	225	imposed by Section 23.23 or 23.231.
226	226	SECTION 6. Sections 403.302(d) and (i), Government Code,
227	227	are amended to read as follows:
228	228	(d) For the purposes of this section, "taxable value" means
229	229	the market value of all taxable property less:
230	230	(1) the total dollar amount of any residence homestead
231	231	exemptions lawfully granted under Section 11.13(b) or (c), Tax
232	232	Code, in the year that is the subject of the study for each school
233	233	district;
234	234	(2) one-half of the total dollar amount of any
235	235	residence homestead exemptions granted under Section 11.13(n), Tax
236	236	Code, in the year that is the subject of the study for each school
237	237	district;
238	238	(3) the total dollar amount of any exemptions granted
239	239	before May 31, 1993, within a reinvestment zone under agreements
240	240	authorized by Chapter 312, Tax Code;
241	241	(4) subject to Subsection (e), the total dollar amount
242	242	of any captured appraised value of property that:
243	243	(A) is within a reinvestment zone created on or
244	244	before May 31, 1999, or is proposed to be included within the
245	245	boundaries of a reinvestment zone as the boundaries of the zone and
246	246	the proposed portion of tax increment paid into the tax increment
247	247	fund by a school district are described in a written notification
248	248	provided by the municipality or the board of directors of the zone
249	249	to the governing bodies of the other taxing units in the manner
250	250	provided by former Section 311.003(e), Tax Code, before May 31,
251	251	1999, and within the boundaries of the zone as those boundaries
252	252	existed on September 1, 1999, including subsequent improvements to
253	253	the property regardless of when made;
254	254	(B) generates taxes paid into a tax increment
255	255	fund created under Chapter 311, Tax Code, under a reinvestment zone
256	256	financing plan approved under Section 311.011(d), Tax Code, on or
257	257	before September 1, 1999; and
258	258	(C) is eligible for tax increment financing under
259	259	Chapter 311, Tax Code;
260	260	(5) the total dollar amount of any captured appraised
261	261	value of property that:
262	262	(A) is within a reinvestment zone:
263	263	(i) created on or before December 31, 2008,
264	264	by a municipality with a population of less than 18,000; and
265	265	(ii) the project plan for which includes
266	266	the alteration, remodeling, repair, or reconstruction of a
267	267	structure that is included on the National Register of Historic
268	268	Places and requires that a portion of the tax increment of the zone
269	269	be used for the improvement or construction of related facilities
270	270	or for affordable housing;
271	271	(B) generates school district taxes that are paid
272	272	into a tax increment fund created under Chapter 311, Tax Code; and
273	273	(C) is eligible for tax increment financing under
274	274	Chapter 311, Tax Code;
275	275	(6) the total dollar amount of any exemptions granted
276	276	under Section 11.251 or 11.253, Tax Code;
277	277	(7) the difference between the comptroller's estimate
278	278	of the market value and the productivity value of land that
279	279	qualifies for appraisal on the basis of its productive capacity,
280	280	except that the productivity value estimated by the comptroller may
281	281	not exceed the fair market value of the land;
282	282	(8) the portion of the appraised value of residence
283	283	homesteads of individuals who receive a tax limitation under
284	284	Section 11.26, Tax Code, on which school district taxes are not
285	285	imposed in the year that is the subject of the study, calculated as
286	286	if the residence homesteads were appraised at the full value
287	287	required by law;
288	288	(9) a portion of the market value of property not
289	289	otherwise fully taxable by the district at market value because of
290	290	action required by statute or the constitution of this state, other
291	291	than Section 11.311, Tax Code, that, if the tax rate adopted by the
292	292	district is applied to it, produces an amount equal to the
293	293	difference between the tax that the district would have imposed on
294	294	the property if the property were fully taxable at market value and
295	295	the tax that the district is actually authorized to impose on the
296	296	property, if this subsection does not otherwise require that
297	297	portion to be deducted;
298	298	(10) the market value of all tangible personal
299	299	property, other than manufactured homes, owned by a family or
300	300	individual and not held or used for the production of income;
301	301	(11) the appraised value of property the collection of
302	302	delinquent taxes on which is deferred under Section 33.06, Tax
303	303	Code;
304	304	(12) the portion of the appraised value of property
305	305	the collection of delinquent taxes on which is deferred under
306	306	Section 33.065, Tax Code;
307	307	(13) the amount by which the market value of property
308	308	[a residence homestead] to which Section 23.23 or 23.231, Tax Code,
309	309	applies exceeds the appraised value of that property as calculated
310	310	under Section 23.23 or 23.231, Tax Code, as applicable [that
311	311	section]; and
312	312	(14) the total dollar amount of any exemptions granted
313	313	under Section 11.35, Tax Code.
314	314	(i) If the comptroller determines in the study that the
315	315	market value of property in a school district as determined by the
316	316	appraisal district that appraises property for the school district,
317	317	less the total of the amounts and values listed in Subsection (d) as
318	318	determined by that appraisal district, is valid, the comptroller,
319	319	in determining the taxable value of property in the school district
320	320	under Subsection (d), shall for purposes of Subsection (d)(13)
321	321	subtract from the market value as determined by the appraisal
322	322	district of properties [residence homesteads] to which Section
323	323	23.23 or 23.231, Tax Code, applies the amount by which that amount
324	324	exceeds the appraised value of those properties as calculated by
325	325	the appraisal district under Section 23.23 or 23.231, Tax Code, as
326	326	applicable. If the comptroller determines in the study that the
327	327	market value of property in a school district as determined by the
328	328	appraisal district that appraises property for the school district,
329	329	less the total of the amounts and values listed in Subsection (d) as
330	330	determined by that appraisal district, is not valid, the
331	331	comptroller, in determining the taxable value of property in the
332	332	school district under Subsection (d), shall for purposes of
333	333	Subsection (d)(13) subtract from the market value as estimated by
334	334	the comptroller of properties [residence homesteads] to which
335	335	Section 23.23 or 23.231, Tax Code, applies the amount by which that
336	336	amount exceeds the appraised value of those properties as
337	337	calculated by the appraisal district under Section 23.23 or 23.231,
338	338	Tax Code, as applicable.
339	339	SECTION 7. This Act applies only to the appraisal of
340	340	commercial real property or single-family rental property for ad
341	341	valorem tax purposes for a tax year that begins on or after the
342	342	effective date of this Act.
343	343	SECTION 8. This Act takes effect January 1, 2024, but only
344	344	if the constitutional amendment proposed by the 88th Legislature,
345	345	Regular Session, 2023, to authorize the legislature to limit the
346	346	maximum appraised value of commercial property and rental property
347	347	for ad valorem tax purposes is approved by the voters. If that
348	348	amendment is not approved by the voters, this Act has no effect.