Texas 2023 - 88th Regular

Texas House Bill HB4029 Compare Versions

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1	1	88R2338 SMH/MEW-D
2	2	By: Schofield H.B. No. 4029
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to an exemption from ad valorem taxation by a school
8	8	district of a dollar amount or a percentage, whichever is greater,
9	9	of the appraised value of a residence homestead, an adjustment of
10	10	the limitation on the total amount of ad valorem taxes that may be
11	11	imposed by a school district on the homestead of a person who is
12	12	elderly or disabled to reflect increases in the exemption amount,
13	13	and the protection of school districts against the resulting loss
14	14	in local revenue.
15	15	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
16	16	SECTION 1. Section 11.13(b), Tax Code, is amended to read as
17	17	follows:
18	18	(b) An adult is entitled to exemption from taxation by a
19	19	school district of $40,000 of the appraised value of the adult's
20	20	residence homestead or 26.7 percent of the appraised value of the
21	21	adult's residence homestead, whichever is greater, except that only
22	22	$5,000 of the exemption applies to an entity operating under former
23	23	Chapter 17, 18, 25, 26, 27, or 28, Education Code, as those chapters
24	24	existed on May 1, 1995, as permitted by Section 11.301, Education
25	25	Code.
26	26	SECTION 2. Section 11.26, Tax Code, is amended by amending
27	27	Subsections (a), (a-10), and (o) and adding Subsections (a-11) and
28	28	(a-12) to read as follows:
29	29	(a) The tax officials shall appraise the property to which
30	30	this section applies and calculate taxes as on other property, but
31	31	if the tax so calculated exceeds the limitation imposed by this
32	32	section, the tax imposed is the amount of the tax as limited by this
33	33	section, except as otherwise provided by this section. A school
34	34	district may not increase the total annual amount of ad valorem tax
35	35	it imposes on the residence homestead of an individual 65 years of
36	36	age or older or on the residence homestead of an individual who is
37	37	disabled, as defined by Section 11.13, above the amount of the tax
38	38	it imposed in the first tax year in which the individual qualified
39	39	that residence homestead for the applicable exemption provided by
40	40	Section 11.13(c) for an individual who is 65 years of age or older
41	41	or is disabled. If the individual qualified that residence
42	42	homestead for the exemption after the beginning of that first year
43	43	and the residence homestead remains eligible for the same exemption
44	44	for the next year, and if the school district taxes imposed on the
45	45	residence homestead in the next year are less than the amount of
46	46	taxes imposed in that first year, a school district may not
47	47	subsequently increase the total annual amount of ad valorem taxes
48	48	it imposes on the residence homestead above the amount it imposed in
49	49	the year immediately following the first year for which the
50	50	individual qualified that residence homestead for the same
51	51	exemption, except as provided by Subsection (b). [If the first tax
52	52	year the individual qualified the residence homestead for the
53	53	exemption provided by Section 11.13(c) for individuals 65 years of
54	54	age or older or disabled was a tax year before the 2015 tax year, the
55	55	amount of the limitation provided by this section is the amount of
56	56	tax the school district imposed for the 2014 tax year less an amount
57	57	equal to the amount determined by multiplying $10,000 times the tax
58	58	rate of the school district for the 2015 tax year, plus any 2015 tax
59	59	attributable to improvements made in 2014, other than improvements
60	60	made to comply with governmental regulations or repairs.]
61	61	(a-10) For purposes of this section, "maximum compressed
62	62	rate" means the maximum compressed rate of a school district as
63	63	calculated under Section 48.2551, Education Code. Notwithstanding
64	64	the other provisions of this section, if in the 2024 or a subsequent
65	65	tax year an individual qualifies for a limitation on tax increases
66	66	provided by this section on the individual's residence homestead,
67	67	the amount of the limitation provided by this section on the
68	68	homestead is equal to the amount computed by:
69	69	(1) multiplying the taxable value of the homestead in
70	70	the preceding tax year by a tax rate equal to the difference between
71	71	the school district's maximum compressed rate for the preceding tax
72	72	year and the district's maximum compressed rate for the current tax
73	73	year;
74	74	(2) subtracting the amount computed under Subdivision
75	75	(1) from the amount of tax the district imposed on the homestead in
76	76	the preceding tax year; and
77	77	(3) adding any tax imposed in the current tax year
78	78	attributable to improvements made in the preceding tax year as
79	79	provided by Subsection (b) to the amount computed under Subdivision
80	80	(2).
81	81	(a-11) This subsection applies only to an individual who in
82	82	the 2024 tax year qualifies for a limitation under this section and
83	83	for whom the 2021 tax year or an earlier tax year was the first tax
84	84	year the individual or the individual's spouse qualified for an
85	85	exemption under Section 11.13(c). The amount of the limitation
86	86	provided by this section on the residence homestead of an
87	87	individual to which this subsection applies for the 2024 tax year is
88	88	the amount of the limitation for the 2024 tax year as otherwise
89	89	computed under this section less an amount equal to the product of
90	90	$15,000 and the tax rate of the school district for the 2022 tax
91	91	year. This subsection expires January 1, 2025.
92	92	(a-12) This subsection applies only to an individual who in
93	93	the 2024 tax year qualifies for a limitation under this section and
94	94	whose residence homestead has an appraised value for the 2024 tax
95	95	year of more than $149,813. The amount of the limitation provided
96	96	by this section on the residence homestead of an individual to which
97	97	this subsection applies for the 2024 tax year is the amount of the
98	98	limitation for the 2024 tax year as otherwise computed under this
99	99	section less an amount equal to the amount computed by subtracting
100	100	$40,000 from an amount equal to 26.7 percent of the appraised value
101	101	of the homestead for the 2024 tax year and multiplying that amount
102	102	by the tax rate of the school district for the 2024 tax year. This
103	103	subsection expires January 1, 2025.
104	104	(o) Notwithstanding Subsections (a)[, (a-3),] and (b), an
105	105	improvement to property that would otherwise constitute an
106	106	improvement under Subsection (b) is not treated as an improvement
107	107	under that subsection if the improvement is a replacement structure
108	108	for a structure that was rendered uninhabitable or unusable by a
109	109	casualty or by wind or water damage. For purposes of appraising the
110	110	property in the tax year in which the structure would have
111	111	constituted an improvement under Subsection (b), the replacement
112	112	structure is considered to be an improvement under that subsection
113	113	only if:
114	114	(1) the square footage of the replacement structure
115	115	exceeds that of the replaced structure as that structure existed
116	116	before the casualty or damage occurred; or
117	117	(2) the exterior of the replacement structure is of
118	118	higher quality construction and composition than that of the
119	119	replaced structure.
120	120	SECTION 3. Section 46.071, Education Code, is amended by
121	121	amending Subsections (a-1) and (b-1) and adding Subsections (a-2),
122	122	(b-2), and (c-2) to read as follows:
123	123	(a-1) For [Beginning with] the 2022-2023 and 2023-2024
124	124	school years [year], a school district is entitled to additional
125	125	state aid under this subchapter to the extent that state and local
126	126	revenue used to service debt eligible under this chapter is less
127	127	than the state and local revenue that would have been available to
128	128	the district under this chapter as it existed on September 1, 2021,
129	129	if any increase in the residence homestead exemption under Section
130	130	1-b(c), Article VIII, Texas Constitution, as proposed by the 87th
131	131	Legislature, 3rd Called Session, 2021, had not occurred.
132	132	(a-2) Beginning with the 2024-2025 school year, a school
133	133	district is entitled to additional state aid under this subchapter
134	134	to the extent that state and local revenue used to service debt
135	135	eligible under this chapter is less than the state and local revenue
136	136	that would have been available to the district under this chapter as
137	137	it existed on September 1, 2023, if any increase in the residence
138	138	homestead exemption under Section 1-b(c), Article VIII, Texas
139	139	Constitution, and any additional limitation on tax increases under
140	140	Section 1-b(d) of that article as proposed by the 88th Legislature,
141	141	Regular Session, 2023, had not occurred.
142	142	(b-1) Subject to Subsections (c-1), (d), and (e),
143	143	additional state aid under this section for [beginning with] the
144	144	2022-2023 and 2023-2024 school years [year] is equal to the amount
145	145	by which the loss of local interest and sinking revenue for debt
146	146	service attributable to any increase in the residence homestead
147	147	exemption under Section 1-b(c), Article VIII, Texas Constitution,
148	148	as proposed by the 87th Legislature, 3rd Called Session, 2021, is
149	149	not offset by a gain in state aid under this chapter.
150	150	(b-2) Subject to Subsections (c-2), (d), and (e),
151	151	additional state aid under this section beginning with the
152	152	2024-2025 school year is equal to the amount by which the loss of
153	153	local interest and sinking revenue for debt service attributable to
154	154	any increase in the residence homestead exemption under Section
155	155	1-b(c), Article VIII, Texas Constitution, and any additional
156	156	limitation on tax increases under Section 1-b(d) of that article as
157	157	proposed by the 88th Legislature, Regular Session, 2023, is not
158	158	offset by a gain in state aid under this chapter.
159	159	(c-2) For the purpose of determining state aid under
160	160	Subsections (a-2) and (b-2), local interest and sinking revenue for
161	161	debt service is limited to revenue required to service debt
162	162	eligible under this chapter as of September 1, 2024, including
163	163	refunding of that debt, subject to Section 46.061. The limitation
164	164	imposed by Section 46.034(a) does not apply for the purpose of
165	165	determining state aid under this section.
166	166	SECTION 4. Section 48.2542, Education Code, is amended to
167	167	read as follows:
168	168	Sec. 48.2542. ADDITIONAL STATE AID FOR ADJUSTMENT OF
169	169	LIMITATION ON TAX INCREASES ON HOMESTEAD OF ELDERLY OR DISABLED.
170	170	Notwithstanding any other provision of this chapter, if a school
171	171	district is not fully compensated through state aid or the
172	172	calculation of excess local revenue under this chapter based on the
173	173	determination of the district's taxable value of property under
174	174	Subchapter M, Chapter 403, Government Code, the district is
175	175	entitled to additional state aid in the amount necessary to fully
176	176	compensate the district for the amount of ad valorem tax revenue
177	177	lost due to a reduction of the amount of the limitation on tax
178	178	increases provided by Sections 11.26(a-10), (a-11), and (a-12)
179	179	[11.26(a-4), (a-5), (a-6), (a-7), (a-8), (a-9), and (a-10)], Tax
180	180	Code, as applicable.
181	181	SECTION 5. Effective January 1, 2025, Section 48.2542,
182	182	Education Code, is amended to read as follows:
183	183	Sec. 48.2542. ADDITIONAL STATE AID FOR ADJUSTMENT OF
184	184	LIMITATION ON TAX INCREASES ON HOMESTEAD OF ELDERLY OR DISABLED.
185	185	Notwithstanding any other provision of this chapter, if a school
186	186	district is not fully compensated through state aid or the
187	187	calculation of excess local revenue under this chapter based on the
188	188	determination of the district's taxable value of property under
189	189	Subchapter M, Chapter 403, Government Code, the district is
190	190	entitled to additional state aid in the amount necessary to fully
191	191	compensate the district for the amount of ad valorem tax revenue
192	192	lost due to a reduction of the amount of the limitation on tax
193	193	increases provided by Section 11.26(a-10) [Sections 11.26(a-4),
194	194	(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10)], Tax Code[, as
195	195	applicable].
196	196	SECTION 6. Section 48.2543, Education Code, is amended to
197	197	read as follows:
198	198	Sec. 48.2543. ADDITIONAL STATE AID FOR HOMESTEAD
199	199	EXEMPTION. (a) For [Beginning with] the 2022-2023 and 2023-2024
200	200	school years [year], a school district is entitled to additional
201	201	state aid to the extent that state and local revenue under this
202	202	chapter and Chapter 49 is less than the state and local revenue that
203	203	would have been available to the district under this chapter and
204	204	Chapter 49 as those chapters existed on September 1, 2021, if any
205	205	increase in the residence homestead exemption under Section 1-b(c),
206	206	Article VIII, Texas Constitution, as proposed by the 87th
207	207	Legislature, 3rd Called Session, 2021, had not occurred.
208	208	(a-1) Beginning with the 2024-2025 school year, a school
209	209	district is entitled to additional state aid to the extent that
210	210	state and local revenue under this chapter and Chapter 49 is less
211	211	than the state and local revenue that would have been available to
212	212	the district under this chapter and Chapter 49 as those chapters
213	213	existed on September 1, 2023, if any increase in the residence
214	214	homestead exemption under Section 1-b(c), Article VIII, Texas
215	215	Constitution, and any additional limitation on tax increases under
216	216	Section 1-b(d) of that article as proposed by the 88th Legislature,
217	217	Regular Session, 2023, had not occurred.
218	218	(b) The lesser of the school district's currently adopted
219	219	maintenance and operations tax rate or the adopted maintenance and
220	220	operations tax rate for:
221	221	(1) the 2021 tax year is used for the purpose of
222	222	determining additional state aid under Subsection (a); and
223	223	(2) the 2023 tax year is used for the purpose of
224	224	determining additional state aid under Subsection (a-1).
225	225	SECTION 7. Section 48.2556(a), Education Code, is amended
226	226	to read as follows:
227	227	(a) For purposes of allowing the chief appraiser of each
228	228	appraisal district and the assessor for each school district to
229	229	make the calculations required by Sections 11.26(a-10), (a-11), and
230	230	(a-12), Tax Code, the [The] agency shall post [the following
231	231	information] on the agency's Internet website [for purposes of
232	232	allowing the chief appraiser of each appraisal district and the
233	233	assessor for each school district to make the calculations required
234	234	by Sections 11.26(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10), Tax
235	235	Code:
236	236	[(1)] each school district's maximum compressed rate,
237	237	as determined under Section 48.2551, for each tax year beginning
238	238	with the 2022 [2019] tax year[; and
239	239	[(2) each school district's tier one maintenance and
240	240	operations tax rate, as provided by Section 45.0032(a), for the
241	241	2018 tax year].
242	242	SECTION 8. Effective January 1, 2025, Section 48.2556(a),
243	243	Education Code, is amended to read as follows:
244	244	(a) For purposes of allowing the chief appraiser of each
245	245	appraisal district and the assessor for each school district to
246	246	make the calculations required by Section 11.26(a-10), Tax Code,
247	247	the [The] agency shall post [the following information] on the
248	248	agency's Internet website [for purposes of allowing the chief
249	249	appraiser of each appraisal district and the assessor for each
250	250	school district to make the calculations required by Sections
251	251	11.26(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10), Tax Code:
252	252	[(1)] each school district's maximum compressed rate,
253	253	as determined under Section 48.2551, for the current [each] tax
254	254	year and the preceding [beginning with the 2019] tax year[; and
255	255	[(2) each school district's tier one maintenance and
256	256	operations tax rate, as provided by Section 45.0032(a), for the
257	257	2018 tax year].
258	258	SECTION 9. Section 403.302, Government Code, is amended by
259	259	amending Subsection (j-1) and adding Subsection (j-2) to read as
260	260	follows:
261	261	(j-1) In the final certification of the study under
262	262	Subsection (j), the comptroller shall separately identify the final
263	263	taxable value for each school district as adjusted to account for
264	264	the reduction of the amount of the limitation on tax increases
265	265	provided by Section 11.26(a-10) [Sections 11.26(a-4), (a-5),
266	266	(a-6), (a-7), (a-8), (a-9), and (a-10)], Tax Code[, as applicable].
267	267	(j-2) In the final certification of the study under
268	268	Subsection (j), the comptroller shall separately identify the final
269	269	taxable value for each school district as adjusted to account for
270	270	the reduction of the amount of the limitation on tax increases
271	271	provided by Sections 11.26(a-11) and (a-12), Tax Code. This
272	272	subsection expires January 1, 2025.
273	273	SECTION 10. Sections 11.26(a-1), (a-2), (a-3), (a-4),
274	274	(a-5), (a-6), (a-7), (a-8), and (a-9), Tax Code, are repealed.
275	275	SECTION 11. The changes in law made by this Act to Sections
276	276	11.13 and 11.26, Tax Code, apply only to an ad valorem tax year that
277	277	begins on or after January 1, 2024.
278	278	SECTION 12. Except as otherwise provided by this Act, this
279	279	Act takes effect January 1, 2024, but only if the constitutional
280	280	amendment proposed by the 88th Legislature, Regular Session, 2023,
281	281	providing for an exemption from ad valorem taxation for public
282	282	school purposes of a dollar amount or a percentage, whichever is
283	283	greater, of the market value of a residence homestead and providing
284	284	for an adjustment of the limitation on the total amount of ad
285	285	valorem taxes that may be imposed for those purposes on the
286	286	homestead of a person who is elderly or disabled to reflect
287	287	increases in the exemption amount is approved by the voters. If
288	288	that amendment is not approved by the voters, this Act has no
289	289	effect.