Texas 2023 - 88th Regular

Texas House Bill HB5046 Compare Versions

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1	1	88R7156 CJC/MEW-D
2	2	By: Toth H.B. No. 5046
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to an increase in the amount of the exemption of residence
8	8	homesteads from ad valorem taxation by a school district, an
9	9	adjustment in the amount of the limitation on school district ad
10	10	valorem taxes imposed on the residence homesteads of the elderly or
11	11	disabled to reflect increases in the exemption amount, and the
12	12	protection of school districts against the resulting loss in local
13	13	revenue.
14	14	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
15	15	SECTION 1. Section 11.13(b), Tax Code, is amended to read as
16	16	follows:
17	17	(b) An adult is entitled to exemption from taxation by a
18	18	school district of $70,000 [$40,000] of the appraised value of the
19	19	adult's residence homestead, except that only $5,000 of the
20	20	exemption applies to an entity operating under former Chapter 17,
21	21	18, 25, 26, 27, or 28, Education Code, as those chapters existed on
22	22	May 1, 1995, as permitted by Section 11.301, Education Code.
23	23	SECTION 2. Section 11.26, Tax Code, is amended by amending
24	24	Subsections (a), (a-10), and (o) and adding Subsection (a-11) to
25	25	read as follows:
26	26	(a) The tax officials shall appraise the property to which
27	27	this section applies and calculate taxes as on other property, but
28	28	if the tax so calculated exceeds the limitation imposed by this
29	29	section, the tax imposed is the amount of the tax as limited by this
30	30	section, except as otherwise provided by this section. A school
31	31	district may not increase the total annual amount of ad valorem tax
32	32	it imposes on the residence homestead of an individual 65 years of
33	33	age or older or on the residence homestead of an individual who is
34	34	disabled, as defined by Section 11.13, above the amount of the tax
35	35	it imposed in the first tax year in which the individual qualified
36	36	that residence homestead for the applicable exemption provided by
37	37	Section 11.13(c) for an individual who is 65 years of age or older
38	38	or is disabled. If the individual qualified that residence
39	39	homestead for the exemption after the beginning of that first year
40	40	and the residence homestead remains eligible for the same exemption
41	41	for the next year, and if the school district taxes imposed on the
42	42	residence homestead in the next year are less than the amount of
43	43	taxes imposed in that first year, a school district may not
44	44	subsequently increase the total annual amount of ad valorem taxes
45	45	it imposes on the residence homestead above the amount it imposed in
46	46	the year immediately following the first year for which the
47	47	individual qualified that residence homestead for the same
48	48	exemption, except as provided by Subsection (b). [If the first tax
49	49	year the individual qualified the residence homestead for the
50	50	exemption provided by Section 11.13(c) for individuals 65 years of
51	51	age or older or disabled was a tax year before the 2015 tax year, the
52	52	amount of the limitation provided by this section is the amount of
53	53	tax the school district imposed for the 2014 tax year less an amount
54	54	equal to the amount determined by multiplying $10,000 times the tax
55	55	rate of the school district for the 2015 tax year, plus any 2015 tax
56	56	attributable to improvements made in 2014, other than improvements
57	57	made to comply with governmental regulations or repairs.]
58	58	(a-10) For purposes of this section, "maximum compressed
59	59	rate" means the maximum compressed rate of a school district as
60	60	calculated under Section 48.2551, Education Code. Notwithstanding
61	61	the other provisions of this section, if in the 2024 or a subsequent
62	62	tax year an individual qualifies for a limitation on tax increases
63	63	provided by this section on the individual's residence homestead,
64	64	the amount of the limitation provided by this section on the
65	65	homestead is equal to the amount computed by:
66	66	(1) multiplying the taxable value of the homestead in
67	67	the preceding tax year by a tax rate equal to the difference between
68	68	the school district's maximum compressed rate for the preceding tax
69	69	year and the district's maximum compressed rate for the current tax
70	70	year;
71	71	(2) subtracting the amount computed under Subdivision
72	72	(1) from the amount of tax the district imposed on the homestead in
73	73	the preceding tax year; [and]
74	74	(3) adding any tax imposed in the current tax year
75	75	attributable to improvements made in the preceding tax year as
76	76	provided by Subsection (b) to the amount computed under Subdivision
77	77	(2);
78	78	(4) multiplying the amount of any increase in the
79	79	current tax year as compared to the preceding tax year in the amount
80	80	of the exemption to which the individual is entitled under Section
81	81	11.13(b) by the school district's tax rate for the current tax year;
82	82	and
83	83	(5) subtracting the amount computed under Subdivision
84	84	(4) from the amount computed under Subdivision (3).
85	85	(a-11) This subsection applies only to an individual who in
86	86	the 2024 tax year qualifies for a limitation under this section and
87	87	for whom the 2021 tax year or an earlier tax year was the first tax
88	88	year the individual or the individual's spouse qualified for an
89	89	exemption under Section 11.13(c). The amount of the limitation
90	90	provided by this section on the residence homestead of an
91	91	individual to which this subsection applies for the 2024 tax year is
92	92	the amount of the limitation as computed under Subsection (a-10) of
93	93	this section less an amount equal to the product of $15,000 and the
94	94	tax rate of the school district for the 2022 tax year. This
95	95	subsection expires January 1, 2025.
96	96	(o) Notwithstanding Subsections (a)[, (a-3),] and (b), an
97	97	improvement to property that would otherwise constitute an
98	98	improvement under Subsection (b) is not treated as an improvement
99	99	under that subsection if the improvement is a replacement structure
100	100	for a structure that was rendered uninhabitable or unusable by a
101	101	casualty or by wind or water damage. For purposes of appraising the
102	102	property in the tax year in which the structure would have
103	103	constituted an improvement under Subsection (b), the replacement
104	104	structure is considered to be an improvement under that subsection
105	105	only if:
106	106	(1) the square footage of the replacement structure
107	107	exceeds that of the replaced structure as that structure existed
108	108	before the casualty or damage occurred; or
109	109	(2) the exterior of the replacement structure is of
110	110	higher quality construction and composition than that of the
111	111	replaced structure.
112	112	SECTION 3. Section 46.071, Education Code, is amended by
113	113	amending Subsections (a-1) and (b-1) and adding Subsections (a-2),
114	114	(b-2), and (c-2) to read as follows:
115	115	(a-1) For [Beginning with] the 2022-2023 and 2023-2024
116	116	school years [year], a school district is entitled to additional
117	117	state aid under this subchapter to the extent that state and local
118	118	revenue used to service debt eligible under this chapter is less
119	119	than the state and local revenue that would have been available to
120	120	the district under this chapter as it existed on September 1, 2021,
121	121	if any increase in the residence homestead exemption under Section
122	122	1-b(c), Article VIII, Texas Constitution, as proposed by the 87th
123	123	Legislature, 3rd Called Session, 2021, had not occurred.
124	124	(a-2) Beginning with the 2024-2025 school year, a school
125	125	district is entitled to additional state aid under this subchapter
126	126	to the extent that state and local revenue used to service debt
127	127	eligible under this chapter is less than the state and local revenue
128	128	that would have been available to the district under this chapter as
129	129	it existed on September 1, 2023, if any increase in the residence
130	130	homestead exemption under Section 1-b(c), Article VIII, Texas
131	131	Constitution, and any additional limitation on tax increases under
132	132	Section 1-b(d) of that article as proposed by the 88th Legislature,
133	133	Regular Session, 2023, had not occurred.
134	134	(b-1) Subject to Subsections (c-1), (d), and (e),
135	135	additional state aid under this section for [beginning with] the
136	136	2022-2023 and 2023-2024 school years [year] is equal to the amount
137	137	by which the loss of local interest and sinking revenue for debt
138	138	service attributable to any increase in the residence homestead
139	139	exemption under Section 1-b(c), Article VIII, Texas Constitution,
140	140	as proposed by the 87th Legislature, 3rd Called Session, 2021, is
141	141	not offset by a gain in state aid under this chapter.
142	142	(b-2) Subject to Subsections (c-2), (d), and (e),
143	143	additional state aid under this section beginning with the
144	144	2024-2025 school year is equal to the amount by which the loss of
145	145	local interest and sinking revenue for debt service attributable to
146	146	any increase in the residence homestead exemption under Section
147	147	1-b(c), Article VIII, Texas Constitution, and any additional
148	148	limitation on tax increases under Section 1-b(d) of that article as
149	149	proposed by the 88th Legislature, Regular Session, 2023, is not
150	150	offset by a gain in state aid under this chapter.
151	151	(c-2) For the purpose of determining state aid under
152	152	Subsections (a-2) and (b-2), local interest and sinking revenue for
153	153	debt service is limited to revenue required to service debt
154	154	eligible under this chapter as of September 1, 2024, including
155	155	refunding of that debt, subject to Section 46.061. The limitation
156	156	imposed by Section 46.034(a) does not apply for the purpose of
157	157	determining state aid under this section.
158	158	SECTION 4. Section 48.2542, Education Code, is amended to
159	159	read as follows:
160	160	Sec. 48.2542. ADDITIONAL STATE AID FOR ADJUSTMENT OF
161	161	LIMITATION ON TAX INCREASES ON HOMESTEAD OF ELDERLY OR DISABLED.
162	162	Notwithstanding any other provision of this chapter, if a school
163	163	district is not fully compensated through state aid or the
164	164	calculation of excess local revenue under this chapter based on the
165	165	determination of the district's taxable value of property under
166	166	Subchapter M, Chapter 403, Government Code, the district is
167	167	entitled to additional state aid in the amount necessary to fully
168	168	compensate the district for the amount of ad valorem tax revenue
169	169	lost due to a reduction of the amount of the limitation on tax
170	170	increases provided by Sections 11.26(a-10) and (a-11) [11.26(a-4),
171	171	(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10)], Tax Code, as
172	172	applicable.
173	173	SECTION 5. Effective January 1, 2025, Section 48.2542,
174	174	Education Code, is amended to read as follows:
175	175	Sec. 48.2542. ADDITIONAL STATE AID FOR ADJUSTMENT OF
176	176	LIMITATION ON TAX INCREASES ON HOMESTEAD OF ELDERLY OR DISABLED.
177	177	Notwithstanding any other provision of this chapter, if a school
178	178	district is not fully compensated through state aid or the
179	179	calculation of excess local revenue under this chapter based on the
180	180	determination of the district's taxable value of property under
181	181	Subchapter M, Chapter 403, Government Code, the district is
182	182	entitled to additional state aid in the amount necessary to fully
183	183	compensate the district for the amount of ad valorem tax revenue
184	184	lost due to a reduction of the amount of the limitation on tax
185	185	increases provided by Section 11.26(a-10) [Sections 11.26(a-4),
186	186	(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10)], Tax Code[, as
187	187	applicable].
188	188	SECTION 6. Section 48.2543, Education Code, is amended to
189	189	read as follows:
190	190	Sec. 48.2543. ADDITIONAL STATE AID FOR HOMESTEAD
191	191	EXEMPTION. (a) For [Beginning with] the 2022-2023 and 2023-2024
192	192	school years [year], a school district is entitled to additional
193	193	state aid to the extent that state and local revenue under this
194	194	chapter and Chapter 49 is less than the state and local revenue that
195	195	would have been available to the district under this chapter and
196	196	Chapter 49 as those chapters existed on September 1, 2021, if any
197	197	increase in the residence homestead exemption under Section 1-b(c),
198	198	Article VIII, Texas Constitution, as proposed by the 87th
199	199	Legislature, 3rd Called Session, 2021, had not occurred.
200	200	(a-1) Beginning with the 2024-2025 school year, a school
201	201	district is entitled to additional state aid to the extent that
202	202	state and local revenue under this chapter and Chapter 49 is less
203	203	than the state and local revenue that would have been available to
204	204	the district under this chapter and Chapter 49 as those chapters
205	205	existed on September 1, 2023, if any increase in the residence
206	206	homestead exemption under Section 1-b(c), Article VIII, Texas
207	207	Constitution, and any additional limitation on tax increases under
208	208	Section 1-b(d) of that article as proposed by the 88th Legislature,
209	209	Regular Session, 2023, had not occurred.
210	210	(b) The lesser of the school district's currently adopted
211	211	maintenance and operations tax rate or the adopted maintenance and
212	212	operations tax rate for:
213	213	(1) the 2021 tax year is used for the purpose of
214	214	determining additional state aid under Subsection (a); and
215	215	(2) the 2023 tax year is used for the purpose of
216	216	determining additional state aid under Subsection (a-1).
217	217	SECTION 7. Section 48.2556(a), Education Code, is amended
218	218	to read as follows:
219	219	(a) For purposes of allowing the chief appraiser of each
220	220	appraisal district and the assessor for each school district to
221	221	make the calculations required by Sections 11.26(a-10) and (a-11),
222	222	Tax Code, the [The] agency shall post [the following information]
223	223	on the agency's Internet website [for purposes of allowing the
224	224	chief appraiser of each appraisal district and the assessor for
225	225	each school district to make the calculations required by Sections
226	226	11.26(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10), Tax Code:
227	227	[(1)] each school district's maximum compressed rate,
228	228	as determined under Section 48.2551, for each tax year beginning
229	229	with the 2022 [2019] tax year[; and
230	230	[(2) each school district's tier one maintenance and
231	231	operations tax rate, as provided by Section 45.0032(a), for the
232	232	2018 tax year].
233	233	SECTION 8. Effective January 1, 2025, Section 48.2556(a),
234	234	Education Code, is amended to read as follows:
235	235	(a) For purposes of allowing the chief appraiser of each
236	236	appraisal district and the assessor for each school district to
237	237	make the calculations required by Section 11.26(a-10), Tax Code,
238	238	the [The] agency shall post [the following information] on the
239	239	agency's Internet website [for purposes of allowing the chief
240	240	appraiser of each appraisal district and the assessor for each
241	241	school district to make the calculations required by Sections
242	242	11.26(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10), Tax Code:
243	243	[(1)] each school district's maximum compressed rate,
244	244	as determined under Section 48.2551, for the current [each] tax
245	245	year and the preceding [beginning with the 2019] tax year[; and
246	246	[(2) each school district's tier one maintenance and
247	247	operations tax rate, as provided by Section 45.0032(a), for the
248	248	2018 tax year].
249	249	SECTION 9. Section 403.302, Government Code, is amended by
250	250	amending Subsection (j-1) and adding Subsection (j-2) to read as
251	251	follows:
252	252	(j-1) In the final certification of the study under
253	253	Subsection (j), the comptroller shall separately identify the final
254	254	taxable value for each school district as adjusted to account for
255	255	the reduction of the amount of the limitation on tax increases
256	256	provided by Section 11.26(a-10) [Sections 11.26(a-4), (a-5),
257	257	(a-6), (a-7), (a-8), (a-9), and (a-10)], Tax Code[, as applicable].
258	258	(j-2) In the final certification of the study under
259	259	Subsection (j), the comptroller shall separately identify the final
260	260	taxable value for each school district as adjusted to account for
261	261	the reduction of the amount of the limitation on tax increases
262	262	provided by Section 11.26(a-11), Tax Code. This subsection expires
263	263	January 1, 2025.
264	264	SECTION 10. Sections 11.26(a-1), (a-2), (a-3), (a-4),
265	265	(a-5), (a-6), (a-7), (a-8), and (a-9), Tax Code, are repealed.
266	266	SECTION 11. The changes in law made by this Act to Sections
267	267	11.13 and 11.26, Tax Code, apply only to an ad valorem tax year that
268	268	begins on or after January 1, 2024.
269	269	SECTION 12. Except as otherwise provided by this Act, this
270	270	Act takes effect January 1, 2024, but only if the constitutional
271	271	amendment proposed by the 88th Legislature, Regular Session, 2023,
272	272	to increase the amount of the exemption of residence homesteads
273	273	from ad valorem taxation by a school district and to adjust the
274	274	amount of the limitation on school district ad valorem taxes
275	275	imposed on the residence homesteads of the elderly or disabled to
276	276	reflect increases in the exemption amount is approved by the
277	277	voters. If that amendment is not approved by the voters, this Act
278	278	has no effect.