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Texas House Bill HB4478

Texas 2023 - 88th Regular

Texas House Bill HB4478 Compare Versions

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11 88R4241 MLH-F
22 By: Button H.B. No. 4478
33
44
55 A BILL TO BE ENTITLED
66 AN ACT
77 relating to the establishment of a limitation on the total amount of
88 ad valorem taxes that a county may impose on the residence
99 homesteads of individuals who are disabled or elderly and their
1010 surviving spouses.
1111 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1212 SECTION 1. The heading to Section 11.261, Tax Code, is
1313 amended to read as follows:
1414 Sec. 11.261. LIMITATION OF [COUNTY,] MUNICIPAL[,] OR JUNIOR
1515 COLLEGE DISTRICT TAX ON HOMESTEADS OF INDIVIDUALS WHO ARE DISABLED
1616 OR [AND] ELDERLY.
1717 SECTION 2. Sections 11.261(a), (b), (c), (d), (e), (g),
1818 (h), (i), (j), (k), and (l), Tax Code, are amended to read as
1919 follows:
2020 (a) This section applies only to a [county,]
2121 municipality[,] or junior college district that has established a
2222 limitation on the total amount of taxes that may be imposed by the
2323 [county,] municipality[,] or junior college district on the
2424 residence homestead of an individual who is [a] disabled
2525 [individual] or is [an individual] 65 years of age or older under
2626 Section 1-b(h), Article VIII, Texas Constitution.
2727 (b) The tax officials shall appraise the property to which
2828 this section [the limitation] applies and calculate taxes as on
2929 other property, but if the tax so calculated exceeds the limitation
3030 provided by this section, the tax imposed is the amount of the tax
3131 as limited by this section, except as otherwise provided by this
3232 section. The [county,] municipality[,] or junior college district
3333 may not increase the total annual amount of ad valorem taxes the
3434 [county,] municipality[,] or junior college district imposes on the
3535 residence homestead of an individual who is [a] disabled
3636 [individual] or is [an individual] 65 years of age or older above
3737 the amount of the taxes the [county,] municipality[,] or junior
3838 college district imposed on the residence homestead in the first
3939 tax year, other than a tax year preceding the tax year in which the
4040 [county,] municipality[,] or junior college district established
4141 the limitation described by Subsection (a), in which the individual
4242 qualified that residence homestead for the exemption provided by
4343 Section 11.13(c) for an individual who is [a] disabled [individual]
4444 or is [an individual] 65 years of age or older. If the individual
4545 qualified that residence homestead for the exemption after the
4646 beginning of that first year and the residence homestead remains
4747 eligible for the exemption for the next year, and if the [county,]
4848 municipal[,] or junior college district taxes imposed on the
4949 residence homestead in the next year are less than the amount of
5050 taxes imposed in that first year, a [county,] municipality[,] or
5151 junior college district may not subsequently increase the total
5252 annual amount of ad valorem taxes it imposes on the residence
5353 homestead above the amount it imposed on the residence homestead in
5454 the year immediately following the first year, other than a tax year
5555 preceding the tax year in which the [county,] municipality[,] or
5656 junior college district established the limitation described by
5757 Subsection (a), for which the individual qualified that residence
5858 homestead for the exemption.
5959 (c) If an individual makes improvements to the individual's
6060 residence homestead, other than repairs and other than improvements
6161 required to comply with governmental requirements, the [county,]
6262 municipality[,] or junior college district may increase the amount
6363 of taxes on the homestead in the first year the value of the
6464 homestead is increased on the appraisal roll because of the
6565 enhancement of value by the improvements. The amount of the tax
6666 increase is determined by applying the current tax rate to the
6767 difference between the appraised value of the homestead with the
6868 improvements and the appraised value the homestead [it] would have
6969 had without the improvements. The [A] limitation provided by this
7070 section then applies to the increased amount of [county,]
7171 municipal[,] or junior college district taxes on the residence
7272 homestead until more improvements, if any, are made.
7373 (d) A limitation on [county,] municipal[,] or junior
7474 college district tax increases provided by this section expires if
7575 on January 1:
7676 (1) none of the owners of the structure who qualify for
7777 the exemption provided by Section 11.13(c) for an individual who is
7878 [a] disabled [individual] or is [an individual] 65 years of age or
7979 older and who owned the structure when the limitation [provided by
8080 this section] first took effect is using the structure as a
8181 residence homestead; or
8282 (2) none of the owners of the structure qualifies for
8383 the exemption provided by Section 11.13(c) for an individual who is
8484 [a] disabled [individual] or is [an individual] 65 years of age or
8585 older.
8686 (e) If the appraisal roll provides for taxation of appraised
8787 value for a prior year because a residence homestead exemption for
8888 an individual who is disabled [individuals] or is [individuals] 65
8989 years of age or older was erroneously allowed, the tax assessor for
9090 the applicable [county,] municipality[,] or junior college
9191 district shall add, as back taxes due as provided by Section
9292 26.09(d), the positive difference, if any, between the tax that
9393 should have been imposed for that year and the tax that was imposed
9494 under [because of] the provisions of this section.
9595 (g) Except as provided by Subsection (c), if an individual
9696 who receives a limitation on [county,] municipal[,] or junior
9797 college district tax increases provided by this section
9898 subsequently qualifies a different residence homestead in the same
9999 [county,] municipality[,] or junior college district for an
100100 exemption under Section 11.13, the [county,] municipality[,] or
101101 junior college district may not impose ad valorem taxes on the
102102 subsequently qualified homestead in a year in an amount that
103103 exceeds the amount of taxes the [county,] municipality[,] or junior
104104 college district would have imposed on the subsequently qualified
105105 homestead in the first year in which the individual receives that
106106 exemption for the subsequently qualified homestead had the
107107 limitation on tax increases provided by this section not been in
108108 effect, multiplied by a fraction the numerator of which is the total
109109 amount of taxes the [county,] municipality[,] or junior college
110110 district imposed on the former homestead in the last year in which
111111 the individual received that exemption for the former homestead and
112112 the denominator of which is the total amount of taxes the [county,]
113113 municipality[,] or junior college district would have imposed on
114114 the former homestead in the last year in which the individual
115115 received that exemption for the former homestead had the limitation
116116 on tax increases provided by this section not been in effect.
117117 (h) An individual who receives a limitation on [county,]
118118 municipal[,] or junior college district tax increases under this
119119 section and who subsequently qualifies a different residence
120120 homestead in the same [county,] municipality[,] or junior college
121121 district for an exemption under Section 11.13, or an agent of the
122122 individual, is entitled to receive from the chief appraiser of the
123123 appraisal district in which the former homestead was located a
124124 written certificate providing the information necessary to
125125 determine whether the individual may qualify for a limitation on
126126 the subsequently qualified homestead under Subsection (g) and to
127127 calculate the amount of taxes the [county,] municipality[,] or
128128 junior college district may impose on the subsequently qualified
129129 homestead.
130130 (i) If an individual who qualifies for a limitation on
131131 [county,] municipal[,] or junior college district tax increases
132132 under this section dies, the surviving spouse of the individual is
133133 entitled to the limitation on taxes imposed by the [county,]
134134 municipality[,] or junior college district on the residence
135135 homestead of the individual if:
136136 (1) the surviving spouse is disabled or is 55 years of
137137 age or older when the individual dies; and
138138 (2) the residence homestead of the individual:
139139 (A) is the residence homestead of the surviving
140140 spouse on the date that the individual dies; and
141141 (B) remains the residence homestead of the
142142 surviving spouse.
143143 (j) If an individual who is 65 years of age or older and
144144 qualifies for a limitation on [county,] municipal[,] or junior
145145 college district tax increases for the elderly under this section
146146 dies in the first year in which the individual qualified for the
147147 limitation and the individual first qualified for the limitation
148148 after the beginning of that year, except as provided by Subsection
149149 (k), the amount to which the surviving spouse's [county,]
150150 municipal[,] or junior college district taxes are limited under
151151 Subsection (i) is the amount of taxes imposed by the [county,]
152152 municipality[,] or junior college district, as applicable, on the
153153 residence homestead in that year determined as if the individual
154154 qualifying for the exemption had lived for the entire year.
155155 (k) If in the first tax year after the year in which an
156156 individual who is 65 years of age or older dies under the
157157 circumstances described by Subsection (j) the amount of taxes
158158 imposed by a [county,] municipality[,] or junior college district
159159 on the residence homestead of the surviving spouse is less than the
160160 amount of taxes imposed by the [county,] municipality[,] or junior
161161 college district in the preceding year as limited by Subsection
162162 (j), in a subsequent tax year the surviving spouse's taxes imposed
163163 by the [county,] municipality[,] or junior college district on that
164164 residence homestead are limited to the amount of taxes imposed by
165165 the [county,] municipality[,] or junior college district in that
166166 first tax year after the year in which the individual dies.
167167 (l) Notwithstanding Subsection (d), a limitation on
168168 [county,] municipal[,] or junior college district tax increases
169169 provided by this section does not expire if the owner of the
170170 structure qualifies for an exemption under Section 11.13 under the
171171 circumstances described by Section 11.135(a).
172172 SECTION 3. Subchapter B, Chapter 11, Tax Code, is amended by
173173 adding Section 11.262 to read as follows:
174174 Sec. 11.262. LIMITATION OF COUNTY TAX ON HOMESTEADS OF
175175 INDIVIDUALS WHO ARE DISABLED OR ELDERLY. (a) The tax officials
176176 shall appraise the property to which this section applies and
177177 calculate taxes as on other property, but if the tax so calculated
178178 exceeds the limitation required by this section, the tax imposed is
179179 the amount of the tax as limited by this section, except as
180180 otherwise provided by this section.
181181 (b) A county may not increase the total annual amount of ad
182182 valorem taxes the county imposes on the residence homestead of an
183183 individual who is disabled or is 65 years of age or older above the
184184 amount of the taxes the county imposed on the residence homestead in
185185 the first tax year in which the individual qualified that residence
186186 homestead for the exemption provided by Section 11.13(c) for an
187187 individual who is disabled or is 65 years of age or older. If the
188188 individual qualified that residence homestead for the exemption
189189 after the beginning of that first year and the residence homestead
190190 remains eligible for the exemption for the next year, and if the
191191 taxes imposed by the county on the residence homestead in the next
192192 year are less than the amount of those taxes imposed in that first
193193 year, the county may not subsequently increase the total annual
194194 amount of ad valorem taxes it imposes on the residence homestead
195195 above the amount it imposed on the residence homestead in the year
196196 immediately following the first year for which the individual
197197 qualified that residence homestead for the exemption.
198198 (c) If the first tax year the individual qualified the
199199 residence homestead for the exemption provided by Section 11.13(c)
200200 for individuals who are disabled or are 65 years of age or older was
201201 a tax year before the 2024 tax year and the homestead qualified for
202202 a limitation on county taxes under Section 11.261, as that section
203203 existed on January 1, 2023, for the 2024 tax year, the amount of the
204204 limitation on county taxes required by this section is the amount of
205205 the tax imposed by the county for the 2023 tax year, plus any 2024
206206 tax attributable to improvements made in 2023, other than
207207 improvements made to comply with governmental regulations or
208208 repairs.
209209 (d) Except as provided by Subsection (c), for the purpose of
210210 calculating a limitation on tax increases by a county under this
211211 section, an individual who qualified a residence homestead before
212212 January 1, 2024, for an exemption under Section 11.13(c) for
213213 individuals who are disabled or are 65 years of age or older is
214214 considered to have qualified the homestead for that exemption on
215215 January 1, 2024.
216216 (e) If an individual makes improvements to the individual's
217217 residence homestead, other than repairs and other than improvements
218218 required to comply with governmental requirements, the county may
219219 increase the amount of taxes on the homestead in the first year the
220220 value of the homestead is increased on the appraisal roll because of
221221 the enhancement of value by the improvements. The amount of the tax
222222 increase is determined by applying the current tax rate of the
223223 county to the difference between the appraised value of the
224224 homestead with the improvements and the appraised value the
225225 homestead would have had without the improvements. The limitation
226226 provided by this section then applies to the increased amount of
227227 county taxes on the residence homestead until more improvements, if
228228 any, are made.
229229 (f) A limitation on county tax increases required by this
230230 section expires if on January 1:
231231 (1) none of the owners of the structure who qualify for
232232 the exemption provided by Section 11.13(c) for an individual who is
233233 disabled or is 65 years of age or older and who owned the structure
234234 when the limitation first took effect is using the structure as a
235235 residence homestead; or
236236 (2) none of the owners of the structure qualifies for
237237 the exemption provided by Section 11.13(c) for an individual who is
238238 disabled or is 65 years of age or older.
239239 (g) If the appraisal roll provides for taxation of appraised
240240 value for a prior year because a residence homestead exemption for
241241 an individual who is disabled or is 65 years of age or older was
242242 erroneously allowed, the tax assessor for the applicable county
243243 shall add, as back taxes due as provided by Section 26.09(d), the
244244 positive difference, if any, between the tax that should have been
245245 imposed for that year and the tax that was imposed under the
246246 requirements of this section.
247247 (h) A limitation on county tax increases required by this
248248 section does not expire because the owner of an interest in the
249249 structure conveys the interest to a qualifying trust as defined by
250250 Section 11.13(j) if the owner or the owner's spouse is a trustor of
251251 the trust and is entitled to occupy the structure.
252252 (i) Except as provided by Subsection (e), if an individual
253253 who receives a limitation on county tax increases required by this
254254 section, including a surviving spouse who receives a limitation
255255 under Subsection (k), subsequently qualifies a different residence
256256 homestead for an exemption under Section 11.13, a county may not
257257 impose ad valorem taxes on the subsequently qualified homestead in
258258 a year in an amount that exceeds the amount of taxes the county
259259 would have imposed on the subsequently qualified homestead in the
260260 first year in which the individual receives that exemption for the
261261 subsequently qualified homestead had the limitation on tax
262262 increases required by this section not been in effect, multiplied
263263 by a fraction the numerator of which is the total amount of county
264264 taxes imposed on the former homestead in the last year in which the
265265 individual received that exemption for the former homestead and the
266266 denominator of which is the total amount of county taxes that would
267267 have been imposed on the former homestead in the last year in which
268268 the individual received that exemption for the former homestead had
269269 the limitation on tax increases required by this section not been in
270270 effect.
271271 (j) An individual who receives a limitation on county tax
272272 increases under this section, including a surviving spouse who
273273 receives a limitation under Subsection (k), and who subsequently
274274 qualifies a different residence homestead for an exemption under
275275 Section 11.13, or an agent of the individual, is entitled to receive
276276 from the chief appraiser of the appraisal district in which the
277277 former homestead was located a written certificate providing the
278278 information necessary to determine whether the individual may
279279 qualify for a limitation on the subsequently qualified homestead
280280 under Subsection (i) and to calculate the amount of taxes the county
281281 may impose on the subsequently qualified homestead.
282282 (k) If an individual who qualifies for a limitation on
283283 county tax increases under this section dies, the surviving spouse
284284 of the individual is entitled to the limitation on taxes imposed by
285285 the county on the residence homestead of the individual if:
286286 (1) the surviving spouse is disabled or is 55 years of
287287 age or older when the individual dies; and
288288 (2) the residence homestead of the individual:
289289 (A) is the residence homestead of the surviving
290290 spouse on the date that the individual dies; and
291291 (B) remains the residence homestead of the
292292 surviving spouse.
293293 (l) If an individual who is 65 years of age or older and
294294 qualifies for a limitation on county tax increases for the elderly
295295 under this section dies in the first year in which the individual
296296 qualified for the limitation and the individual first qualified for
297297 the limitation after the beginning of that year, except as provided
298298 by Subsection (m), the amount to which the surviving spouse's
299299 county taxes are limited under Subsection (k) is the amount of taxes
300300 imposed by the county on the residence homestead in that year
301301 determined as if the individual qualifying for the exemption had
302302 lived for the entire year.
303303 (m) If in the first tax year after the year in which an
304304 individual who is 65 years of age or older dies under the
305305 circumstances described by Subsection (l) the amount of taxes
306306 imposed by a county on the residence homestead of the surviving
307307 spouse is less than the amount of taxes imposed by the county in the
308308 preceding year as limited by Subsection (l), in a subsequent tax
309309 year the surviving spouse's taxes imposed by the county on that
310310 residence homestead are limited to the amount of taxes imposed by
311311 the county in that first tax year after the year in which the
312312 individual dies.
313313 (n) Notwithstanding Subsection (f), a limitation on county
314314 tax increases required by this section does not expire if the owner
315315 of the structure qualifies for an exemption under Section 11.13
316316 under the circumstances described by Section 11.135(a).
317317 (o) Notwithstanding Subsections (a) and (e), an improvement
318318 to property that would otherwise constitute an improvement under
319319 Subsection (e) is not treated as an improvement under that
320320 subsection if the improvement is a replacement structure for a
321321 structure that was rendered uninhabitable or unusable by a casualty
322322 or by wind or water damage. For purposes of appraising the property
323323 in the tax year in which the structure would have constituted an
324324 improvement under Subsection (e), the replacement structure is
325325 considered to be an improvement under that subsection only if:
326326 (1) the square footage of the replacement structure
327327 exceeds that of the replaced structure as that structure existed
328328 before the casualty or damage occurred; or
329329 (2) the exterior of the replacement structure is of
330330 higher quality construction and composition than that of the
331331 replaced structure.
332332 (p) An heir property owner who qualifies heir property as
333333 the owner's residence homestead under this chapter is considered
334334 the sole owner of the property for the purposes of this section.
335335 SECTION 4. Sections 23.19(b) and (g), Tax Code, are amended
336336 to read as follows:
337337 (b) If an appraisal district receives a written request for
338338 the appraisal of real property and improvements of a cooperative
339339 housing corporation according to the separate interests of the
340340 corporation's stockholders, the chief appraiser shall separately
341341 appraise the interests described by Subsection (d) if the
342342 conditions required by Subsections (e) and (f) have been
343343 met. Separate appraisal under this section is for the purposes of
344344 administration of tax exemptions, determination of applicable
345345 limitations of taxes under Section 11.26, [or] 11.261, or 11.262,
346346 and apportionment by a cooperative housing corporation of property
347347 taxes among its stockholders but is not the basis for determining
348348 value on which a tax is imposed under this title. A stockholder
349349 whose interest is separately appraised under this section may
350350 protest and appeal the appraised value in the manner provided by
351351 this title for protest and appeal of the appraised value of other
352352 property.
353353 (g) A tax bill or a separate statement accompanying the tax
354354 bill to a cooperative housing corporation for which interests of
355355 stockholders are separately appraised under this section must
356356 state, in addition to the information required by Section 31.01,
357357 the appraised value and taxable value of each interest separately
358358 appraised. Each exemption claimed as provided by this title by a
359359 person entitled to the exemption shall also be deducted from the
360360 total appraised value of the property of the corporation. The
361361 total tax imposed by a school district, [county,] municipality,
362362 [or] junior college district, or county shall be reduced by any
363363 amount that represents an increase in taxes attributable to
364364 separately appraised interests of the real property and
365365 improvements that are subject to the limitation of taxes prescribed
366366 by Section 11.26, [or] 11.261, or 11.262. The corporation shall
367367 apportion among its stockholders liability for reimbursing the
368368 corporation for property taxes according to the relative taxable
369369 values of their interests.
370370 SECTION 5. Sections 26.012(6), (13), and (14), Tax Code,
371371 are amended to read as follows:
372372 (6) "Current total value" means the total taxable
373373 value of property listed on the appraisal roll for the current year,
374374 including all appraisal roll supplements and corrections as of the
375375 date of the calculation, less the taxable value of property
376376 exempted for the current tax year for the first time under Section
377377 11.31 or 11.315, except that:
378378 (A) the current total value for a school district
379379 excludes:
380380 (i) the total value of homesteads that
381381 qualify for a tax limitation as provided by Section 11.26; and
382382 (ii) new property value of property that is
383383 subject to an agreement entered into under Chapter 313; [and]
384384 (B) the current total value for a [county,]
385385 municipality[,] or junior college district excludes the total value
386386 of homesteads that qualify for a tax limitation as provided by
387387 Section 11.261; and
388388 (C) the current total value for a county excludes
389389 the total value of homesteads that qualify for a tax limitation as
390390 provided by Section 11.262.
391391 (13) "Last year's levy" means the total of:
392392 (A) the amount of taxes that would be generated
393393 by multiplying the total tax rate adopted by the governing body in
394394 the preceding year by the total taxable value of property on the
395395 appraisal roll for the preceding year, including:
396396 (i) taxable value that was reduced in an
397397 appeal under Chapter 42;
398398 (ii) all appraisal roll supplements and
399399 corrections other than corrections made pursuant to Section
400400 25.25(d), as of the date of the calculation, except that:
401401 (a) last year's taxable value for a
402402 school district excludes the total value of homesteads that
403403 qualified for a tax limitation as provided by Section 11.26;
404404 (b) [and] last year's taxable value
405405 for a [county,] municipality[,] or junior college district excludes
406406 the total value of homesteads that qualified for a tax limitation as
407407 provided by Section 11.261; and
408408 (c) last year's taxable value for a
409409 county excludes the total value of homesteads that qualified for a
410410 tax limitation as provided by Section 11.261; and
411411 (iii) the portion of taxable value of
412412 property that is the subject of an appeal under Chapter 42 on July
413413 25 that is not in dispute; and
414414 (B) the amount of taxes refunded by the taxing
415415 unit in the preceding year for tax years before that year.
416416 (14) "Last year's total value" means the total taxable
417417 value of property listed on the appraisal roll for the preceding
418418 year, including all appraisal roll supplements and corrections,
419419 other than corrections made pursuant to Section 25.25(d), as of the
420420 date of the calculation, except that:
421421 (A) last year's taxable value for a school
422422 district excludes the total value of homesteads that qualified for
423423 a tax limitation as provided by Section 11.26; [and]
424424 (B) last year's taxable value for a [county,]
425425 municipality[,] or junior college district excludes the total value
426426 of homesteads that qualified for a tax limitation as provided by
427427 Section 11.261; and
428428 (C) last year's taxable value for a county
429429 excludes the total value of homesteads that qualified for a tax
430430 limitation as provided by Section 11.262.
431431 SECTION 6. This Act applies only to ad valorem taxes imposed
432432 for a tax year beginning on or after the effective date of this Act.
433433 SECTION 7. This Act takes effect January 1, 2024, but only
434434 if the constitutional amendment proposed by the 88th Legislature,
435435 Regular Session, 2023, establishing a limitation on the total
436436 amount of ad valorem taxes that a county may impose on the residence
437437 homesteads of persons who are disabled or elderly and their
438438 surviving spouses is approved by the voters. If that amendment is
439439 not approved by the voters, this Act has no effect.