88R4342 LHC-D
By: Cook H.B. No. 4261
A BILL TO BE ENTITLED
AN ACT
relating to a limitation on increases in the appraised value for ad
valorem tax purposes of the residence homesteads of military
veterans, individuals who are disabled or 65 years of age or older,
and their surviving spouses.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1.12(d), Tax Code, is amended to read as
follows:
(d) For purposes of this section, the appraisal ratio of a
homestead to which Section 23.23 or 23.231 applies is the ratio of
the property's market value as determined by the appraisal district
or appraisal review board, as applicable, to the market value of the
property according to law. The appraisal ratio is not calculated
according to the appraised value of the property as limited by
Section 23.23 or 23.231.
SECTION 2. Subchapter B, Chapter 23, Tax Code, is amended by
adding Section 23.231 to read as follows:
Sec. 23.231. LIMITATION ON APPRAISED VALUE OF RESIDENCE
HOMESTEADS OF CERTAIN INDIVIDUALS. (a) In this section:
(1) "Disaster recovery program" means the disaster
recovery program administered by the General Land Office or by a
political subdivision of this state that is funded with community
development block grant disaster recovery money authorized by
federal law.
(2) "New improvement" means an improvement to a
residence homestead made after the most recent appraisal of the
property that increases the market value of the property and the
value of which is not included in the appraised value of the
property for the preceding tax year. The term does not include
repairs to or ordinary maintenance of an existing structure or the
grounds or another feature of the property.
(3) "Residence homestead" has the meaning assigned by
Section 11.13.
(4) "Veteran" means an individual who:
(A) has served in:
(i) an active or reserve component of the
army, navy, air force, coast guard, or marine corps of the United
States; or
(ii) the Texas National Guard, as defined
by Section 431.001, Government Code; and
(B) has been discharged or released from the
branch of the service in which the individual served under
conditions other than dishonorable.
(b) This section applies only to a residence homestead owned
by:
(1) a veteran;
(2) an individual who receives an exemption under
Section 11.13(c); or
(3) the surviving spouse of a person described by
Subdivision (1) or (2).
(c) Notwithstanding the requirements of Sections 23.23 and
25.18, and regardless of whether the appraisal office has appraised
the property and determined the market value of the property for the
tax year, an appraisal office may increase the appraised value of a
residence homestead to which this section applies for a tax year to
an amount not to exceed the lowest of:
(1) the market value of the property for the most
recent tax year that the market value was determined by the
appraisal office;
(2) the sum of:
(A) the appraised value of the property for the
tax year in which the owner first qualified the property for the
limitation provided by this section; and
(B) the market value of all new improvements to
the property; or
(3) the sum of:
(A) the appraised value of the property for the
preceding tax year; and
(B) the market value of all new improvements to
the property.
(d) When appraising a residence homestead to which this
section applies, the chief appraiser shall:
(1) appraise the property at its market value; and
(2) include in the appraisal records both the market
value of the property and the amounts computed under Subsections
(c)(2) and (3).
(e) The limitation provided by Subsection (c) takes effect
as to a residence homestead on January 1 of the tax year following
the first tax year in which the owner owns the property on January 1
and in which the owner qualifies the property for the
limitation. The limitation expires on January 1 of the first tax
year that neither the owner of the property when the limitation took
effect nor the owner's spouse or surviving spouse qualifies for the
limitation.
(f) For purposes of Subsection (e), a person who acquired a
residence homestead to which this section applies before the 2023
tax year is considered to have acquired the property on January 1,
2023.
(g) This section does not apply to property appraised under
Subchapter C, D, E, F, or G.
(h) Notwithstanding Subsection (c), and except as provided
by Subdivision (2), an improvement to property that would otherwise
constitute a new improvement is not treated as a new improvement if
the improvement is a replacement structure for a structure that was
rendered uninhabitable or unusable by a casualty or by wind, fire,
or water damage. For purposes of appraising the property under
Subsection (c) in the tax year in which the structure would have
constituted a new improvement:
(1) the appraised value the property would have had in
the preceding tax year if the casualty or damage had not occurred is
considered to be the appraised value of the property for that year,
regardless of whether that appraised value exceeds the actual
appraised value of the property for that year as limited by
Subsection (c); and
(2) the replacement structure is considered to be a
new improvement only if:
(A) the square footage of the replacement
structure exceeds that of the replaced structure as that structure
existed before the casualty or damage occurred; or
(B) the exterior of the replacement structure is
of higher quality construction and composition than that of the
replaced structure.
(i) Notwithstanding Subsection (h)(2), and only to the
extent necessary to satisfy the requirements of a disaster recovery
program, a replacement structure described by that subdivision is
not considered to be a new improvement if to satisfy the
requirements of the disaster recovery program it was necessary
that:
(1) the square footage of the replacement structure
exceed that of the replaced structure as that structure existed
before the casualty or damage occurred; or
(2) the exterior of the replacement structure be of
higher quality construction and composition than that of the
replaced structure.
(j) To receive a limitation under Subsection (c), a person
claiming the limitation must apply for the limitation by filing an
application with the chief appraiser of the appraisal
district. The application must be filed not later than May 1 of the
year for which the person claims the limitation. The chief
appraiser shall accept and approve or deny an application. For
property appraised by more than one appraisal district, a separate
application must be filed in each appraisal district to receive the
limitation in that district.
(k) A limitation provided by Subsection (c), once allowed,
need not be claimed in subsequent years and applies to the property
until the limitation expires as provided by this section or until
the person's qualification for the limitation ends. However, the
chief appraiser may require a person allowed a limitation in a prior
year to file a new application to confirm the person's current
qualification for the limitation by delivering not later than April
1 a written notice that a new application is required, accompanied
by an appropriate application form, to the person previously
allowed the limitation.
(l) The comptroller, in prescribing the contents of the
application form for a limitation under Subsection (c), shall
ensure that the form requires an applicant to provide the
information necessary to determine the validity of the limitation
claim.
SECTION 3. Section 41.41(a), Tax Code, is amended to read as
follows:
(a) A property owner is entitled to protest before the
appraisal review board the following actions:
(1) determination of the appraised value of the
owner's property or, in the case of land appraised as provided by
Subchapter C, D, E, or H, Chapter 23, determination of its appraised
or market value;
(2) unequal appraisal of the owner's property;
(3) inclusion of the owner's property on the appraisal
records;
(4) denial to the property owner in whole or in part of
a partial exemption;
(4-a) determination that the owner's property does not
qualify for the limitation on appraised value provided by Section
23.231;
(5) determination that the owner's land does not
qualify for appraisal as provided by Subchapter C, D, E, or H,
Chapter 23;
(6) identification of the taxing units in which the
owner's property is taxable in the case of the appraisal district's
appraisal roll;
(7) determination that the property owner is the owner
of property;
(8) a determination that a change in use of land
appraised under Subchapter C, D, E, or H, Chapter 23, has occurred;
or
(9) any other action of the chief appraiser, appraisal
district, or appraisal review board that applies to and adversely
affects the property owner.
SECTION 4. Section 42.26(d), Tax Code, is amended to read as
follows:
(d) For purposes of this section, the value of the property
subject to the suit and the value of a comparable property or sample
property that is used for comparison must be the market value
determined by the appraisal district when the property is a
residence homestead subject to the limitation on appraised value
imposed by Section 23.23 or 23.231.
SECTION 5. Sections 403.302(d) and (i), Government Code,
are amended to read as follows:
(d) For the purposes of this section, "taxable value" means
the market value of all taxable property less:
(1) the total dollar amount of any residence homestead
exemptions lawfully granted under Section 11.13(b) or (c), Tax
Code, in the year that is the subject of the study for each school
district;
(2) one-half of the total dollar amount of any
residence homestead exemptions granted under Section 11.13(n), Tax
Code, in the year that is the subject of the study for each school
district;
(3) the total dollar amount of any exemptions granted
before May 31, 1993, within a reinvestment zone under agreements
authorized by Chapter 312, Tax Code;
(4) subject to Subsection (e), the total dollar amount
of any captured appraised value of property that:
(A) is within a reinvestment zone created on or
before May 31, 1999, or is proposed to be included within the
boundaries of a reinvestment zone as the boundaries of the zone and
the proposed portion of tax increment paid into the tax increment
fund by a school district are described in a written notification
provided by the municipality or the board of directors of the zone
to the governing bodies of the other taxing units in the manner
provided by former Section 311.003(e), Tax Code, before May 31,
1999, and within the boundaries of the zone as those boundaries
existed on September 1, 1999, including subsequent improvements to
the property regardless of when made;
(B) generates taxes paid into a tax increment
fund created under Chapter 311, Tax Code, under a reinvestment zone
financing plan approved under Section 311.011(d), Tax Code, on or
before September 1, 1999; and
(C) is eligible for tax increment financing under
Chapter 311, Tax Code;
(5) the total dollar amount of any captured appraised
value of property that:
(A) is within a reinvestment zone:
(i) created on or before December 31, 2008,
by a municipality with a population of less than 18,000; and
(ii) the project plan for which includes
the alteration, remodeling, repair, or reconstruction of a
structure that is included on the National Register of Historic
Places and requires that a portion of the tax increment of the zone
be used for the improvement or construction of related facilities
or for affordable housing;
(B) generates school district taxes that are paid
into a tax increment fund created under Chapter 311, Tax Code; and
(C) is eligible for tax increment financing under
Chapter 311, Tax Code;
(6) the total dollar amount of any exemptions granted
under Section 11.251 or 11.253, Tax Code;
(7) the difference between the comptroller's estimate
of the market value and the productivity value of land that
qualifies for appraisal on the basis of its productive capacity,
except that the productivity value estimated by the comptroller may
not exceed the fair market value of the land;
(8) the portion of the appraised value of residence
homesteads of individuals who receive a tax limitation under
Section 11.26, Tax Code, on which school district taxes are not
imposed in the year that is the subject of the study, calculated as
if the residence homesteads were appraised at the full value
required by law;
(9) a portion of the market value of property not
otherwise fully taxable by the district at market value because of
action required by statute or the constitution of this state, other
than Section 11.311, Tax Code, that, if the tax rate adopted by the
district is applied to it, produces an amount equal to the
difference between the tax that the district would have imposed on
the property if the property were fully taxable at market value and
the tax that the district is actually authorized to impose on the
property, if this subsection does not otherwise require that
portion to be deducted;
(10) the market value of all tangible personal
property, other than manufactured homes, owned by a family or
individual and not held or used for the production of income;
(11) the appraised value of property the collection of
delinquent taxes on which is deferred under Section 33.06, Tax
Code;
(12) the portion of the appraised value of property
the collection of delinquent taxes on which is deferred under
Section 33.065, Tax Code;
(13) the amount by which the market value of a
residence homestead to which Section 23.23 or 23.231, Tax Code,
applies exceeds the appraised value of that property as calculated
under Section 23.23 or 23.231, Tax Code, as applicable [that
section]; and
(14) the total dollar amount of any exemptions granted
under Section 11.35, Tax Code.
(i) If the comptroller determines in the study that the
market value of property in a school district as determined by the
appraisal district that appraises property for the school district,
less the total of the amounts and values listed in Subsection (d) as
determined by that appraisal district, is valid, the comptroller,
in determining the taxable value of property in the school district
under Subsection (d), shall for purposes of Subsection (d)(13)
subtract from the market value as determined by the appraisal
district of residence homesteads to which Section 23.23 or 23.231,
Tax Code, applies the amount by which that amount exceeds the
appraised value of those properties as calculated by the appraisal
district under Section 23.23 or 23.231, Tax Code, as
applicable. If the comptroller determines in the study that the
market value of property in a school district as determined by the
appraisal district that appraises property for the school district,
less the total of the amounts and values listed in Subsection (d) as
determined by that appraisal district, is not valid, the
comptroller, in determining the taxable value of property in the
school district under Subsection (d), shall for purposes of
Subsection (d)(13) subtract from the market value as estimated by
the comptroller of residence homesteads to which Section 23.23 or
23.231, Tax Code, applies the amount by which that amount exceeds
the appraised value of those properties as calculated by the
appraisal district under Section 23.23 or 23.231, Tax Code, as
applicable.
SECTION 6. This Act applies only to the appraisal of
residence homesteads for ad valorem tax purposes for a tax year that
begins on or after the effective date of this Act.
SECTION 7. This Act takes effect January 1, 2024, but only
if a constitutional amendment proposed by the 88th Legislature,
Regular Session, 2023, authorizing the legislature to limit the
appraised value for ad valorem tax purposes of residence homesteads
of military veterans, individuals who are disabled or 65 years of
age or older, and their surviving spouses is approved by the
voters. If such an amendment is not approved by the voters, this
Act has no effect.