88R4241 MLH-F
By: Button H.B. No. 4478
A BILL TO BE ENTITLED
AN ACT
relating to the establishment of a limitation on the total amount of
ad valorem taxes that a county may impose on the residence
homesteads of individuals who are disabled or elderly and their
surviving spouses.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The heading to Section 11.261, Tax Code, is
amended to read as follows:
Sec. 11.261. LIMITATION OF [COUNTY,] MUNICIPAL[,] OR JUNIOR
COLLEGE DISTRICT TAX ON HOMESTEADS OF INDIVIDUALS WHO ARE DISABLED
OR [AND] ELDERLY.
SECTION 2. Sections 11.261(a), (b), (c), (d), (e), (g),
(h), (i), (j), (k), and (l), Tax Code, are amended to read as
follows:
(a) This section applies only to a [county,]
municipality[,] or junior college district that has established a
limitation on the total amount of taxes that may be imposed by the
[county,] municipality[,] or junior college district on the
residence homestead of an individual who is [a] disabled
[individual] or is [an individual] 65 years of age or older under
Section 1-b(h), Article VIII, Texas Constitution.
(b) The tax officials shall appraise the property to which
this section [the limitation] applies and calculate taxes as on
other property, but if the tax so calculated exceeds the limitation
provided by this section, the tax imposed is the amount of the tax
as limited by this section, except as otherwise provided by this
section. The [county,] municipality[,] or junior college district
may not increase the total annual amount of ad valorem taxes the
[county,] municipality[,] or junior college district imposes on the
residence homestead of an individual who is [a] disabled
[individual] or is [an individual] 65 years of age or older above
the amount of the taxes the [county,] municipality[,] or junior
college district imposed on the residence homestead in the first
tax year, other than a tax year preceding the tax year in which the
[county,] municipality[,] or junior college district established
the limitation described by Subsection (a), in which the individual
qualified that residence homestead for the exemption provided by
Section 11.13(c) for an individual who is [a] disabled [individual]
or is [an individual] 65 years of age or older. If the individual
qualified that residence homestead for the exemption after the
beginning of that first year and the residence homestead remains
eligible for the exemption for the next year, and if the [county,]
municipal[,] or junior college district taxes imposed on the
residence homestead in the next year are less than the amount of
taxes imposed in that first year, a [county,] municipality[,] or
junior college district may not subsequently increase the total
annual amount of ad valorem taxes it imposes on the residence
homestead above the amount it imposed on the residence homestead in
the year immediately following the first year, other than a tax year
preceding the tax year in which the [county,] municipality[,] or
junior college district established the limitation described by
Subsection (a), for which the individual qualified that residence
homestead for the exemption.
(c) If an individual makes improvements to the individual's
residence homestead, other than repairs and other than improvements
required to comply with governmental requirements, the [county,]
municipality[,] or junior college district may increase the amount
of taxes on the homestead in the first year the value of the
homestead is increased on the appraisal roll because of the
enhancement of value by the improvements. The amount of the tax
increase is determined by applying the current tax rate to the
difference between the appraised value of the homestead with the
improvements and the appraised value the homestead [it] would have
had without the improvements. The [A] limitation provided by this
section then applies to the increased amount of [county,]
municipal[,] or junior college district taxes on the residence
homestead until more improvements, if any, are made.
(d) A limitation on [county,] municipal[,] or junior
college district tax increases provided by this section expires if
on January 1:
(1) none of the owners of the structure who qualify for
the exemption provided by Section 11.13(c) for an individual who is
[a] disabled [individual] or is [an individual] 65 years of age or
older and who owned the structure when the limitation [provided by
this section] first took effect is using the structure as a
residence homestead; or
(2) none of the owners of the structure qualifies for
the exemption provided by Section 11.13(c) for an individual who is
[a] disabled [individual] or is [an individual] 65 years of age or
older.
(e) If the appraisal roll provides for taxation of appraised
value for a prior year because a residence homestead exemption for
an individual who is disabled [individuals] or is [individuals] 65
years of age or older was erroneously allowed, the tax assessor for
the applicable [county,] municipality[,] or junior college
district shall add, as back taxes due as provided by Section
26.09(d), the positive difference, if any, between the tax that
should have been imposed for that year and the tax that was imposed
under [because of] the provisions of this section.
(g) Except as provided by Subsection (c), if an individual
who receives a limitation on [county,] municipal[,] or junior
college district tax increases provided by this section
subsequently qualifies a different residence homestead in the same
[county,] municipality[,] or junior college district for an
exemption under Section 11.13, the [county,] municipality[,] or
junior college district may not impose ad valorem taxes on the
subsequently qualified homestead in a year in an amount that
exceeds the amount of taxes the [county,] municipality[,] or junior
college district would have imposed on the subsequently qualified
homestead in the first year in which the individual receives that
exemption for the subsequently qualified homestead had the
limitation on tax increases provided by this section not been in
effect, multiplied by a fraction the numerator of which is the total
amount of taxes the [county,] municipality[,] or junior college
district imposed on the former homestead in the last year in which
the individual received that exemption for the former homestead and
the denominator of which is the total amount of taxes the [county,]
municipality[,] or junior college district would have imposed on
the former homestead in the last year in which the individual
received that exemption for the former homestead had the limitation
on tax increases provided by this section not been in effect.
(h) An individual who receives a limitation on [county,]
municipal[,] or junior college district tax increases under this
section and who subsequently qualifies a different residence
homestead in the same [county,] municipality[,] or junior college
district for an exemption under Section 11.13, or an agent of the
individual, is entitled to receive from the chief appraiser of the
appraisal district in which the former homestead was located a
written certificate providing the information necessary to
determine whether the individual may qualify for a limitation on
the subsequently qualified homestead under Subsection (g) and to
calculate the amount of taxes the [county,] municipality[,] or
junior college district may impose on the subsequently qualified
homestead.
(i) If an individual who qualifies for a limitation on
[county,] municipal[,] or junior college district tax increases
under this section dies, the surviving spouse of the individual is
entitled to the limitation on taxes imposed by the [county,]
municipality[,] or junior college district on the residence
homestead of the individual if:
(1) the surviving spouse is disabled or is 55 years of
age or older when the individual dies; and
(2) the residence homestead of the individual:
(A) is the residence homestead of the surviving
spouse on the date that the individual dies; and
(B) remains the residence homestead of the
surviving spouse.
(j) If an individual who is 65 years of age or older and
qualifies for a limitation on [county,] municipal[,] or junior
college district tax increases for the elderly under this section
dies in the first year in which the individual qualified for the
limitation and the individual first qualified for the limitation
after the beginning of that year, except as provided by Subsection
(k), the amount to which the surviving spouse's [county,]
municipal[,] or junior college district taxes are limited under
Subsection (i) is the amount of taxes imposed by the [county,]
municipality[,] or junior college district, as applicable, on the
residence homestead in that year determined as if the individual
qualifying for the exemption had lived for the entire year.
(k) If in the first tax year after the year in which an
individual who is 65 years of age or older dies under the
circumstances described by Subsection (j) the amount of taxes
imposed by a [county,] municipality[,] or junior college district
on the residence homestead of the surviving spouse is less than the
amount of taxes imposed by the [county,] municipality[,] or junior
college district in the preceding year as limited by Subsection
(j), in a subsequent tax year the surviving spouse's taxes imposed
by the [county,] municipality[,] or junior college district on that
residence homestead are limited to the amount of taxes imposed by
the [county,] municipality[,] or junior college district in that
first tax year after the year in which the individual dies.
(l) Notwithstanding Subsection (d), a limitation on
[county,] municipal[,] or junior college district tax increases
provided by this section does not expire if the owner of the
structure qualifies for an exemption under Section 11.13 under the
circumstances described by Section 11.135(a).
SECTION 3. Subchapter B, Chapter 11, Tax Code, is amended by
adding Section 11.262 to read as follows:
Sec. 11.262. LIMITATION OF COUNTY TAX ON HOMESTEADS OF
INDIVIDUALS WHO ARE DISABLED OR ELDERLY. (a) The tax officials
shall appraise the property to which this section applies and
calculate taxes as on other property, but if the tax so calculated
exceeds the limitation required by this section, the tax imposed is
the amount of the tax as limited by this section, except as
otherwise provided by this section.
(b) A county may not increase the total annual amount of ad
valorem taxes the county imposes on the residence homestead of an
individual who is disabled or is 65 years of age or older above the
amount of the taxes the county imposed on the residence homestead in
the first tax year in which the individual qualified that residence
homestead for the exemption provided by Section 11.13(c) for an
individual who is disabled or is 65 years of age or older. If the
individual qualified that residence homestead for the exemption
after the beginning of that first year and the residence homestead
remains eligible for the exemption for the next year, and if the
taxes imposed by the county on the residence homestead in the next
year are less than the amount of those taxes imposed in that first
year, the county may not subsequently increase the total annual
amount of ad valorem taxes it imposes on the residence homestead
above the amount it imposed on the residence homestead in the year
immediately following the first year for which the individual
qualified that residence homestead for the exemption.
(c) If the first tax year the individual qualified the
residence homestead for the exemption provided by Section 11.13(c)
for individuals who are disabled or are 65 years of age or older was
a tax year before the 2024 tax year and the homestead qualified for
a limitation on county taxes under Section 11.261, as that section
existed on January 1, 2023, for the 2024 tax year, the amount of the
limitation on county taxes required by this section is the amount of
the tax imposed by the county for the 2023 tax year, plus any 2024
tax attributable to improvements made in 2023, other than
improvements made to comply with governmental regulations or
repairs.
(d) Except as provided by Subsection (c), for the purpose of
calculating a limitation on tax increases by a county under this
section, an individual who qualified a residence homestead before
January 1, 2024, for an exemption under Section 11.13(c) for
individuals who are disabled or are 65 years of age or older is
considered to have qualified the homestead for that exemption on
January 1, 2024.
(e) If an individual makes improvements to the individual's
residence homestead, other than repairs and other than improvements
required to comply with governmental requirements, the county may
increase the amount of taxes on the homestead in the first year the
value of the homestead is increased on the appraisal roll because of
the enhancement of value by the improvements. The amount of the tax
increase is determined by applying the current tax rate of the
county to the difference between the appraised value of the
homestead with the improvements and the appraised value the
homestead would have had without the improvements. The limitation
provided by this section then applies to the increased amount of
county taxes on the residence homestead until more improvements, if
any, are made.
(f) A limitation on county tax increases required by this
section expires if on January 1:
(1) none of the owners of the structure who qualify for
the exemption provided by Section 11.13(c) for an individual who is
disabled or is 65 years of age or older and who owned the structure
when the limitation first took effect is using the structure as a
residence homestead; or
(2) none of the owners of the structure qualifies for
the exemption provided by Section 11.13(c) for an individual who is
disabled or is 65 years of age or older.
(g) If the appraisal roll provides for taxation of appraised
value for a prior year because a residence homestead exemption for
an individual who is disabled or is 65 years of age or older was
erroneously allowed, the tax assessor for the applicable county
shall add, as back taxes due as provided by Section 26.09(d), the
positive difference, if any, between the tax that should have been
imposed for that year and the tax that was imposed under the
requirements of this section.
(h) A limitation on county tax increases required by this
section does not expire because the owner of an interest in the
structure conveys the interest to a qualifying trust as defined by
Section 11.13(j) if the owner or the owner's spouse is a trustor of
the trust and is entitled to occupy the structure.
(i) Except as provided by Subsection (e), if an individual
who receives a limitation on county tax increases required by this
section, including a surviving spouse who receives a limitation
under Subsection (k), subsequently qualifies a different residence
homestead for an exemption under Section 11.13, a county may not
impose ad valorem taxes on the subsequently qualified homestead in
a year in an amount that exceeds the amount of taxes the county
would have imposed on the subsequently qualified homestead in the
first year in which the individual receives that exemption for the
subsequently qualified homestead had the limitation on tax
increases required by this section not been in effect, multiplied
by a fraction the numerator of which is the total amount of county
taxes imposed on the former homestead in the last year in which the
individual received that exemption for the former homestead and the
denominator of which is the total amount of county taxes that would
have been imposed on the former homestead in the last year in which
the individual received that exemption for the former homestead had
the limitation on tax increases required by this section not been in
effect.
(j) An individual who receives a limitation on county tax
increases under this section, including a surviving spouse who
receives a limitation under Subsection (k), and who subsequently
qualifies a different residence homestead for an exemption under
Section 11.13, or an agent of the individual, is entitled to receive
from the chief appraiser of the appraisal district in which the
former homestead was located a written certificate providing the
information necessary to determine whether the individual may
qualify for a limitation on the subsequently qualified homestead
under Subsection (i) and to calculate the amount of taxes the county
may impose on the subsequently qualified homestead.
(k) If an individual who qualifies for a limitation on
county tax increases under this section dies, the surviving spouse
of the individual is entitled to the limitation on taxes imposed by
the county on the residence homestead of the individual if:
(1) the surviving spouse is disabled or is 55 years of
age or older when the individual dies; and
(2) the residence homestead of the individual:
(A) is the residence homestead of the surviving
spouse on the date that the individual dies; and
(B) remains the residence homestead of the
surviving spouse.
(l) If an individual who is 65 years of age or older and
qualifies for a limitation on county tax increases for the elderly
under this section dies in the first year in which the individual
qualified for the limitation and the individual first qualified for
the limitation after the beginning of that year, except as provided
by Subsection (m), the amount to which the surviving spouse's
county taxes are limited under Subsection (k) is the amount of taxes
imposed by the county on the residence homestead in that year
determined as if the individual qualifying for the exemption had
lived for the entire year.
(m) If in the first tax year after the year in which an
individual who is 65 years of age or older dies under the
circumstances described by Subsection (l) the amount of taxes
imposed by a county on the residence homestead of the surviving
spouse is less than the amount of taxes imposed by the county in the
preceding year as limited by Subsection (l), in a subsequent tax
year the surviving spouse's taxes imposed by the county on that
residence homestead are limited to the amount of taxes imposed by
the county in that first tax year after the year in which the
individual dies.
(n) Notwithstanding Subsection (f), a limitation on county
tax increases required by this section does not expire if the owner
of the structure qualifies for an exemption under Section 11.13
under the circumstances described by Section 11.135(a).
(o) Notwithstanding Subsections (a) and (e), an improvement
to property that would otherwise constitute an improvement under
Subsection (e) is not treated as an improvement under that
subsection if the improvement is a replacement structure for a
structure that was rendered uninhabitable or unusable by a casualty
or by wind or water damage. For purposes of appraising the property
in the tax year in which the structure would have constituted an
improvement under Subsection (e), the replacement structure is
considered to be an improvement under that subsection only if:
(1) the square footage of the replacement structure
exceeds that of the replaced structure as that structure existed
before the casualty or damage occurred; or
(2) the exterior of the replacement structure is of
higher quality construction and composition than that of the
replaced structure.
(p) An heir property owner who qualifies heir property as
the owner's residence homestead under this chapter is considered
the sole owner of the property for the purposes of this section.
SECTION 4. Sections 23.19(b) and (g), Tax Code, are amended
to read as follows:
(b) If an appraisal district receives a written request for
the appraisal of real property and improvements of a cooperative
housing corporation according to the separate interests of the
corporation's stockholders, the chief appraiser shall separately
appraise the interests described by Subsection (d) if the
conditions required by Subsections (e) and (f) have been
met. Separate appraisal under this section is for the purposes of
administration of tax exemptions, determination of applicable
limitations of taxes under Section 11.26, [or] 11.261, or 11.262,
and apportionment by a cooperative housing corporation of property
taxes among its stockholders but is not the basis for determining
value on which a tax is imposed under this title. A stockholder
whose interest is separately appraised under this section may
protest and appeal the appraised value in the manner provided by
this title for protest and appeal of the appraised value of other
property.
(g) A tax bill or a separate statement accompanying the tax
bill to a cooperative housing corporation for which interests of
stockholders are separately appraised under this section must
state, in addition to the information required by Section 31.01,
the appraised value and taxable value of each interest separately
appraised. Each exemption claimed as provided by this title by a
person entitled to the exemption shall also be deducted from the
total appraised value of the property of the corporation. The
total tax imposed by a school district, [county,] municipality,
[or] junior college district, or county shall be reduced by any
amount that represents an increase in taxes attributable to
separately appraised interests of the real property and
improvements that are subject to the limitation of taxes prescribed
by Section 11.26, [or] 11.261, or 11.262. The corporation shall
apportion among its stockholders liability for reimbursing the
corporation for property taxes according to the relative taxable
values of their interests.
SECTION 5. Sections 26.012(6), (13), and (14), Tax Code,
are amended to read as follows:
(6) "Current total value" means the total taxable
value of property listed on the appraisal roll for the current year,
including all appraisal roll supplements and corrections as of the
date of the calculation, less the taxable value of property
exempted for the current tax year for the first time under Section
11.31 or 11.315, except that:
(A) the current total value for a school district
excludes:
(i) the total value of homesteads that
qualify for a tax limitation as provided by Section 11.26; and
(ii) new property value of property that is
subject to an agreement entered into under Chapter 313; [and]
(B) the current total value for a [county,]
municipality[,] or junior college district excludes the total value
of homesteads that qualify for a tax limitation as provided by
Section 11.261; and
(C) the current total value for a county excludes
the total value of homesteads that qualify for a tax limitation as
provided by Section 11.262.
(13) "Last year's levy" means the total of:
(A) the amount of taxes that would be generated
by multiplying the total tax rate adopted by the governing body in
the preceding year by the total taxable value of property on the
appraisal roll for the preceding year, including:
(i) taxable value that was reduced in an
appeal under Chapter 42;
(ii) all appraisal roll supplements and
corrections other than corrections made pursuant to Section
25.25(d), as of the date of the calculation, except that:
(a) last year's taxable value for a
school district excludes the total value of homesteads that
qualified for a tax limitation as provided by Section 11.26;
(b) [and] last year's taxable value
for a [county,] municipality[,] or junior college district excludes
the total value of homesteads that qualified for a tax limitation as
provided by Section 11.261; and
(c) last year's taxable value for a
county excludes the total value of homesteads that qualified for a
tax limitation as provided by Section 11.261; and
(iii) the portion of taxable value of
property that is the subject of an appeal under Chapter 42 on July
25 that is not in dispute; and
(B) the amount of taxes refunded by the taxing
unit in the preceding year for tax years before that year.
(14) "Last year's total value" means the total taxable
value of property listed on the appraisal roll for the preceding
year, including all appraisal roll supplements and corrections,
other than corrections made pursuant to Section 25.25(d), as of the
date of the calculation, except that:
(A) last year's taxable value for a school
district excludes the total value of homesteads that qualified for
a tax limitation as provided by Section 11.26; [and]
(B) last year's taxable value for a [county,]
municipality[,] or junior college district excludes the total value
of homesteads that qualified for a tax limitation as provided by
Section 11.261; and
(C) last year's taxable value for a county
excludes the total value of homesteads that qualified for a tax
limitation as provided by Section 11.262.
SECTION 6. This Act applies only to ad valorem taxes imposed
for a tax year beginning on or after the effective date of this Act.
SECTION 7. This Act takes effect January 1, 2024, but only
if the constitutional amendment proposed by the 88th Legislature,
Regular Session, 2023, establishing a limitation on the total
amount of ad valorem taxes that a county may impose on the residence
homesteads of persons who are disabled or elderly and their
surviving spouses is approved by the voters. If that amendment is
not approved by the voters, this Act has no effect.