Texas 2023 - 88th Regular

Texas House Bill HB794 Compare Versions

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1	1	By: Schatzline H.B. No. 794
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to limitations on increases in the appraised value for ad
7	7	valorem tax purposes of residence homesteads and single-family
8	8	residences other than residence homesteads.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 1.12(d), Tax Code, is amended to read as
11	11	follows:
12	12	(d) For purposes of this section, the appraisal ratio of
13	13	property [a homestead] to which Section 23.23 or 23.231 applies is
14	14	the ratio of the property's market value as determined by the
15	15	appraisal district or appraisal review board, as applicable, to the
16	16	market value of the property according to law. The appraisal ratio
17	17	is not calculated according to the appraised value of the property
18	18	as limited by Section 23.23 or 23.231.
19	19	SECTION 2. Section 23.23(a), Tax Code, is amended to read as
20	20	follows:
21	21	(a) Notwithstanding the requirements of Section 25.18 and
22	22	regardless of whether the appraisal office has appraised the
23	23	property and determined the market value of the property for the tax
24	24	year, an appraisal office may increase the appraised value of a
25	25	residence homestead for a tax year to an amount not to exceed the
26	26	lesser of:
27	27	(1) the market value of the property for the most
28	28	recent tax year that the market value was determined by the
29	29	appraisal office; or
30	30	(2) the sum of:
31	31	(A) five [10] percent of the appraised value of
32	32	the property for the preceding tax year;
33	33	(B) the appraised value of the property for the
34	34	preceding tax year; and
35	35	(C) the market value of all new improvements to
36	36	the property.
37	37	SECTION 3. Subchapter B, Chapter 23, Tax Code, is amended by
38	38	adding Section 23.231 to read as follows:
39	39	Sec. 23.231. LIMITATION ON APPRAISED VALUE OF SINGLE-FAMILY
40	40	RESIDENCE OTHER THAN RESIDENCE HOMESTEAD. (a) In this section:
41	41	(1) "Disaster recovery program" means the disaster
42	42	recovery program administered by the General Land Office or by a
43	43	political subdivision of this state that is funded with community
44	44	development block grant disaster recovery money authorized by
45	45	federal law.
46	46	(2) "New improvement" means an improvement to real
47	47	property made after the most recent appraisal of the property that
48	48	increases the market value of the property and the value of which is
49	49	not included in the appraised value of the property for the
50	50	preceding tax year. The term does not include repairs to or
51	51	ordinary maintenance of an existing structure or the grounds or
52	52	another feature of the property.
53	53	(3) "Qualifying trust" has the meaning assigned by
54	54	Section 11.13.
55	55	(4) "Single-family residence" means a structure,
56	56	including a mobile home, together with the land, not to exceed 20
57	57	acres, and improvements used in the residential occupancy of the
58	58	structure, if the structure and the land and improvements have
59	59	identical ownership, that:
60	60	(A) is owned by one or more individuals, either
61	61	directly or through a beneficial interest in a qualifying trust;
62	62	(B) is designed or adapted for human residence;
63	63	and
64	64	(C) is used as a single-family residence.
65	65	(b) This section does not apply to:
66	66	(1) a residence homestead that qualifies for an
67	67	exemption under Section 11.13; or
68	68	(2) property appraised under Subchapter C, D, E, F, G,
69	69	or H.
70	70	(c) Notwithstanding the requirements of Section 25.18 and
71	71	regardless of whether the appraisal office has appraised the
72	72	property and determined the market value of the property for the tax
73	73	year, an appraisal office may increase the appraised value of a
74	74	single-family residence to which this section applies for a tax
75	75	year to an amount not to exceed the lesser of:
76	76	(1) the market value of the property for the most
77	77	recent tax year that the market value was determined by the
78	78	appraisal office; or
79	79	(2) the sum of:
80	80	(A) 10 percent of the appraised value of the
81	81	property for the preceding tax year;
82	82	(B) the appraised value of the property for the
83	83	preceding tax year; and
84	84	(C) the market value of all new improvements to
85	85	the property.
86	86	(d) When appraising a single-family residence to which this
87	87	section applies, the chief appraiser shall:
88	88	(1) appraise the property at its market value; and
89	89	(2) include in the appraisal records both the market
90	90	value of the property and the amount computed under Subsection
91	91	(c)(2).
92	92	(e) The limitation provided by Subsection (c) takes effect
93	93	as to a single-family residence on January 1 of the tax year
94	94	following the first tax year in which the owner owns the property on
95	95	January 1 and in which the property is used as a single-family
96	96	residence. The limitation expires on January 1 of the tax year
97	97	following the tax year in which the owner of the property ceases to
98	98	own the property or the property ceases to be used as a
99	99	single-family residence.
100	100	(f) For purposes of Subsection (e), a person who acquired a
101	101	single-family residence to which this section applies before the
102	102	2023 tax year is considered to have acquired the property on January
103	103	1, 2023.
104	104	(g) Notwithstanding Subsections (a) and (c) and except as
105	105	provided by Subdivision (2) of this subsection, an improvement to
106	106	real property that would otherwise constitute a new improvement is
107	107	not treated as a new improvement if the improvement is a replacement
108	108	structure for a structure that was rendered uninhabitable or
109	109	unusable by a casualty or by wind or water damage. For purposes of
110	110	appraising the property under Subsection (c) in the tax year in
111	111	which the structure would have constituted a new improvement:
112	112	(1) the appraised value the property would have had in
113	113	the preceding tax year if the casualty or damage had not occurred is
114	114	considered to be the appraised value of the property for that year,
115	115	regardless of whether that appraised value exceeds the actual
116	116	appraised value of the property for that year as limited by
117	117	Subsection (c); and
118	118	(2) the replacement structure is considered to be a
119	119	new improvement only if:
120	120	(A) the square footage of the replacement
121	121	structure exceeds that of the replaced structure as that structure
122	122	existed before the casualty or damage occurred; or
123	123	(B) the exterior of the replacement structure is
124	124	of higher quality construction and composition than that of the
125	125	replaced structure.
126	126	(h) Notwithstanding Subsection (g)(2), and only to the
127	127	extent necessary to satisfy the requirements of the disaster
128	128	recovery program, a replacement structure described by that
129	129	subdivision is not considered to be a new improvement if to satisfy
130	130	the requirements of the disaster recovery program it was necessary
131	131	that:
132	132	(1) the square footage of the replacement structure
133	133	exceed that of the replaced structure as that structure existed
134	134	before the casualty or damage occurred; or
135	135	(2) the exterior of the replacement structure be of
136	136	higher quality construction and composition than that of the
137	137	replaced structure.
138	138	SECTION 4. Sections 25.19(b) and (g), Tax Code, are amended
139	139	to read as follows:
140	140	(b) The chief appraiser shall separate real from personal
141	141	property and include in the notice for each:
142	142	(1) a list of the taxing units in which the property is
143	143	taxable;
144	144	(2) the appraised value of the property in the
145	145	preceding year;
146	146	(3) the taxable value of the property in the preceding
147	147	year for each taxing unit taxing the property;
148	148	(4) the appraised value of the property for the
149	149	current year, the kind and amount of each exemption and partial
150	150	exemption, if any, approved for the property for the current year
151	151	and for the preceding year, and, if an exemption or partial
152	152	exemption that was approved for the preceding year was canceled or
153	153	reduced for the current year, the amount of the exemption or partial
154	154	exemption canceled or reduced;
155	155	(4-a) a statement of whether the property qualifies for
156	156	the limitation on appraised value provided by Section 23.231;
157	157	(5) in italic typeface, the following statement: "The
158	158	Texas Legislature does not set the amount of your local taxes. Your
159	159	property tax burden is decided by your locally elected officials,
160	160	and all inquiries concerning your taxes should be directed to those
161	161	officials";
162	162	(6) a detailed explanation of the time and procedure
163	163	for protesting the value;
164	164	(7) the date and place the appraisal review board will
165	165	begin hearing protests;
166	166	(8) an explanation of the availability and purpose of
167	167	an informal conference with the appraisal office before a hearing
168	168	on a protest; and
169	169	(9) a brief explanation that the governing body of
170	170	each taxing unit decides whether or not taxes on the property will
171	171	increase and the appraisal district only determines the value of
172	172	the property.
173	173	(g) By April 1 or as soon thereafter as practicable if the
174	174	property is a single-family residence that qualifies for an
175	175	exemption under Section 11.13, or by May 1 or as soon thereafter as
176	176	practicable in connection with any other property, the chief
177	177	appraiser shall deliver a written notice to the owner of each
178	178	property not included in a notice required to be delivered under
179	179	Subsection (a), if the property was reappraised in the current tax
180	180	year, if the ownership of the property changed during the preceding
181	181	year, or if the property owner or the agent of a property owner
182	182	authorized under Section 1.111 makes a written request for the
183	183	notice. The chief appraiser shall separate real from personal
184	184	property and include in the notice for each property:
185	185	(1) the appraised value of the property in the
186	186	preceding year;
187	187	(2) the appraised value of the property for the
188	188	current year and the kind of each partial exemption, if any,
189	189	approved for the current year;
190	190	(2-a) a statement of whether the property qualifies for
191	191	the limitation on appraised value provided by Section 23.231;
192	192	(3) a detailed explanation of the time and procedure
193	193	for protesting the value; and
194	194	(4) the date and place the appraisal review board will
195	195	begin hearing protests.
196	196	SECTION 5. Section 41.41(a), Tax Code, is amended to read as
197	197	follows:
198	198	(a) A property owner is entitled to protest before the
199	199	appraisal review board the following actions:
200	200	(1) determination of the appraised value of the
201	201	owner's property or, in the case of land appraised as provided by
202	202	Subchapter C, D, E, or H, Chapter 23, determination of its appraised
203	203	or market value;
204	204	(2) unequal appraisal of the owner's property;
205	205	(3) inclusion of the owner's property on the appraisal
206	206	records;
207	207	(4) denial to the property owner in whole or in part of
208	208	a partial exemption;
209	209	(4-a) determination that the owner's property does not
210	210	qualify for the limitation on appraised value provided by Section
211	211	23.231;
212	212	(5) determination that the owner's land does not
213	213	qualify for appraisal as provided by Subchapter C, D, E, or H,
214	214	Chapter 23;
215	215	(6) identification of the taxing units in which the
216	216	owner's property is taxable in the case of the appraisal district's
217	217	appraisal roll;
218	218	(7) determination that the property owner is the owner
219	219	of property;
220	220	(8) a determination that a change in use of land
221	221	appraised under Subchapter C, D, E, or H, Chapter 23, has occurred;
222	222	or
223	223	(9) any other action of the chief appraiser, appraisal
224	224	district, or appraisal review board that applies to and adversely
225	225	affects the property owner.
226	226	SECTION 6. Section 42.26(d), Tax Code, is amended to read as
227	227	follows:
228	228	(d) For purposes of this section, the value of the property
229	229	subject to the suit and the value of a comparable property or sample
230	230	property that is used for comparison must be the market value
231	231	determined by the appraisal district when the property is [a
232	232	residence homestead] subject to the limitation on appraised value
233	233	imposed by Section 23.23 or 23.231.
234	234	SECTION 7. Sections 403.302(d) and (i), Government Code,
235	235	are amended to read as follows:
236	236	(d) For the purposes of this section, "taxable value" means
237	237	the market value of all taxable property less:
238	238	(1) the total dollar amount of any residence homestead
239	239	exemptions lawfully granted under Section 11.13(b) or (c), Tax
240	240	Code, in the year that is the subject of the study for each school
241	241	district;
242	242	(2) one-half of the total dollar amount of any
243	243	residence homestead exemptions granted under Section 11.13(n), Tax
244	244	Code, in the year that is the subject of the study for each school
245	245	district;
246	246	(3) the total dollar amount of any exemptions granted
247	247	before May 31, 1993, within a reinvestment zone under agreements
248	248	authorized by Chapter 312, Tax Code;
249	249	(4) subject to Subsection (e), the total dollar amount
250	250	of any captured appraised value of property that:
251	251	(A) is within a reinvestment zone created on or
252	252	before May 31, 1999, or is proposed to be included within the
253	253	boundaries of a reinvestment zone as the boundaries of the zone and
254	254	the proposed portion of tax increment paid into the tax increment
255	255	fund by a school district are described in a written notification
256	256	provided by the municipality or the board of directors of the zone
257	257	to the governing bodies of the other taxing units in the manner
258	258	provided by former Section 311.003(e), Tax Code, before May 31,
259	259	1999, and within the boundaries of the zone as those boundaries
260	260	existed on September 1, 1999, including subsequent improvements to
261	261	the property regardless of when made;
262	262	(B) generates taxes paid into a tax increment
263	263	fund created under Chapter 311, Tax Code, under a reinvestment zone
264	264	financing plan approved under Section 311.011(d), Tax Code, on or
265	265	before September 1, 1999; and
266	266	(C) is eligible for tax increment financing under
267	267	Chapter 311, Tax Code;
268	268	(5) the total dollar amount of any captured appraised
269	269	value of property that:
270	270	(A) is within a reinvestment zone:
271	271	(i) created on or before December 31, 2008,
272	272	by a municipality with a population of less than 18,000; and
273	273	(ii) the project plan for which includes
274	274	the alteration, remodeling, repair, or reconstruction of a
275	275	structure that is included on the National Register of Historic
276	276	Places and requires that a portion of the tax increment of the zone
277	277	be used for the improvement or construction of related facilities
278	278	or for affordable housing;
279	279	(B) generates school district taxes that are paid
280	280	into a tax increment fund created under Chapter 311, Tax Code; and
281	281	(C) is eligible for tax increment financing under
282	282	Chapter 311, Tax Code;
283	283	(6) the total dollar amount of any exemptions granted
284	284	under Section 11.251 or 11.253, Tax Code;
285	285	(7) the difference between the comptroller's estimate
286	286	of the market value and the productivity value of land that
287	287	qualifies for appraisal on the basis of its productive capacity,
288	288	except that the productivity value estimated by the comptroller may
289	289	not exceed the fair market value of the land;
290	290	(8) the portion of the appraised value of residence
291	291	homesteads of individuals who receive a tax limitation under
292	292	Section 11.26, Tax Code, on which school district taxes are not
293	293	imposed in the year that is the subject of the study, calculated as
294	294	if the residence homesteads were appraised at the full value
295	295	required by law;
296	296	(9) a portion of the market value of property not
297	297	otherwise fully taxable by the district at market value because of
298	298	action required by statute or the constitution of this state, other
299	299	than Section 11.311, Tax Code, that, if the tax rate adopted by the
300	300	district is applied to it, produces an amount equal to the
301	301	difference between the tax that the district would have imposed on
302	302	the property if the property were fully taxable at market value and
303	303	the tax that the district is actually authorized to impose on the
304	304	property, if this subsection does not otherwise require that
305	305	portion to be deducted;
306	306	(10) the market value of all tangible personal
307	307	property, other than manufactured homes, owned by a family or
308	308	individual and not held or used for the production of income;
309	309	(11) the appraised value of property the collection of
310	310	delinquent taxes on which is deferred under Section 33.06, Tax
311	311	Code;
312	312	(12) the portion of the appraised value of property
313	313	the collection of delinquent taxes on which is deferred under
314	314	Section 33.065, Tax Code;
315	315	(13) the amount by which the market value of property
316	316	[a residence homestead] to which Section 23.23 or 23.231, Tax Code,
317	317	applies exceeds the appraised value of that property as calculated
318	318	under Section 23.23 or 23.231, Tax Code, as applicable [that
319	319	section]; and
320	320	(14) the total dollar amount of any exemptions granted
321	321	under Section 11.35, Tax Code.
322	322	(i) If the comptroller determines in the study that the
323	323	market value of property in a school district as determined by the
324	324	appraisal district that appraises property for the school district,
325	325	less the total of the amounts and values listed in Subsection (d) as
326	326	determined by that appraisal district, is valid, the comptroller,
327	327	in determining the taxable value of property in the school district
328	328	under Subsection (d), shall for purposes of Subsection (d)(13)
329	329	subtract from the market value as determined by the appraisal
330	330	district of properties [residence homesteads] to which Section
331	331	23.23 or 23.231, Tax Code, applies the amount by which that amount
332	332	exceeds the appraised value of those properties as calculated by
333	333	the appraisal district under Section 23.23 or 23.231, Tax Code, as
334	334	applicable. If the comptroller determines in the study that the
335	335	market value of property in a school district as determined by the
336	336	appraisal district that appraises property for the school district,
337	337	less the total of the amounts and values listed in Subsection (d) as
338	338	determined by that appraisal district, is not valid, the
339	339	comptroller, in determining the taxable value of property in the
340	340	school district under Subsection (d), shall for purposes of
341	341	Subsection (d)(13) subtract from the market value as estimated by
342	342	the comptroller of properties [residence homesteads] to which
343	343	Section 23.23 or 23.231, Tax Code, applies the amount by which that
344	344	amount exceeds the appraised value of those properties as
345	345	calculated by the appraisal district under Section 23.23 or 23.231,
346	346	Tax Code, as applicable.
347	347	SECTION 8. This Act applies only to the appraisal of
348	348	property for ad valorem tax purposes for a tax year that begins on
349	349	or after the effective date of this Act.
350	350	SECTION 9. This Act takes effect January 1, 2024, but only
351	351	if the constitutional amendment proposed by the 88th Legislature,
352	352	Regular Session, 2023, to authorize the legislature to limit the
353	353	maximum appraised value of a residence homestead for ad valorem tax
354	354	purposes to 105 percent or more of the appraised value of the
355	355	property for the preceding tax year and to limit the maximum
356	356	appraised value of a single-family residence other than a residence
357	357	homestead for those purposes to 110 percent or more of the appraised
358	358	value of the property for the preceding tax year is approved by the
359	359	voters. If that amendment is not approved by the voters, this Act
360	360	has no effect.