Texas 2023 - 88th Regular

Texas Senate Bill SB1019 Compare Versions

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1	1	88R9138 RDS-D
2	2	By: Hughes S.B. No. 1019
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to a limitation on increases in the appraised value of real
8	8	property other than a residence homestead for ad valorem tax
9	9	purposes.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Section 1.12(d), Tax Code, is amended to read as
12	12	follows:
13	13	(d) For purposes of this section, the appraisal ratio of
14	14	property [a homestead] to which Section 23.23 or 23.231 applies is
15	15	the ratio of the property's market value as determined by the
16	16	appraisal district or appraisal review board, as applicable, to the
17	17	market value of the property according to law. The appraisal ratio
18	18	is not calculated according to the appraised value of the property
19	19	as limited by Section 23.23 or 23.231.
20	20	SECTION 2. Subchapter B, Chapter 23, Tax Code, is amended by
21	21	adding Section 23.231 to read as follows:
22	22	Sec. 23.231. LIMITATION ON APPRAISED VALUE OF REAL PROPERTY
23	23	OTHER THAN RESIDENCE HOMESTEAD. (a) In this section:
24	24	(1) "Disaster recovery program" means a disaster
25	25	recovery program funded with community development block grant
26	26	disaster recovery money authorized by federal law.
27	27	(2) "New improvement" means an improvement to real
28	28	property made after the most recent appraisal of the property that
29	29	increases the market value of the property and the value of which is
30	30	not included in the appraised value of the property for the
31	31	preceding tax year. The term does not include repairs to or
32	32	ordinary maintenance of an existing structure or the grounds or
33	33	another feature of the property.
34	34	(b) This section does not apply to:
35	35	(1) a residence homestead that qualifies for an
36	36	exemption under Section 11.13; or
37	37	(2) property appraised under Subchapter C, D, E, F, G,
38	38	or H.
39	39	(c) Notwithstanding the requirements of Section 25.18 and
40	40	regardless of whether the appraisal office has appraised the
41	41	property and determined the market value of the property for the tax
42	42	year, an appraisal office may increase the appraised value of real
43	43	property to which this section applies for a tax year to an amount
44	44	not to exceed the lesser of:
45	45	(1) the market value of the property for the most
46	46	recent tax year that the market value was determined by the
47	47	appraisal office; or
48	48	(2) the sum of:
49	49	(A) 15 percent of the appraised value of the
50	50	property for the preceding tax year;
51	51	(B) the appraised value of the property for the
52	52	preceding tax year; and
53	53	(C) the market value of all new improvements to
54	54	the property.
55	55	(d) When appraising real property to which this section
56	56	applies, the chief appraiser shall:
57	57	(1) appraise the property at its market value; and
58	58	(2) include in the appraisal records both the market
59	59	value of the property and the amount computed under Subsection
60	60	(c)(2).
61	61	(e) The limitation provided by Subsection (c) takes effect
62	62	as to a parcel of real property on January 1 of the tax year
63	63	following the first tax year in which the owner owns the property on
64	64	January 1. The limitation expires on January 1 of the tax year
65	65	following the tax year in which the owner of the property ceases to
66	66	own the property.
67	67	(f) For purposes of Subsection (e), a person who acquired
68	68	real property to which this section applies before the 2023 tax year
69	69	is considered to have acquired the property on January 1, 2023.
70	70	(g) Notwithstanding Subsections (a) and (c) and except as
71	71	provided by Subdivision (2) of this subsection, an improvement to
72	72	real property that would otherwise constitute a new improvement is
73	73	not treated as a new improvement if the improvement is a replacement
74	74	structure for a structure that was rendered uninhabitable or
75	75	unusable by a casualty or by wind or water damage. For purposes of
76	76	appraising the property under Subsection (c) in the tax year in
77	77	which the structure would have constituted a new improvement:
78	78	(1) the appraised value the property would have had in
79	79	the preceding tax year if the casualty or damage had not occurred is
80	80	considered to be the appraised value of the property for that year,
81	81	regardless of whether that appraised value exceeds the actual
82	82	appraised value of the property for that year as limited by
83	83	Subsection (c); and
84	84	(2) the replacement structure is considered to be a
85	85	new improvement only if:
86	86	(A) the square footage of the replacement
87	87	structure exceeds that of the replaced structure as that structure
88	88	existed before the casualty or damage occurred; or
89	89	(B) the exterior of the replacement structure is
90	90	of higher quality construction and composition than that of the
91	91	replaced structure.
92	92	(h) Notwithstanding Subsection (g)(2), and only to the
93	93	extent necessary to satisfy the requirements of a disaster recovery
94	94	program, a replacement structure described by that subdivision is
95	95	not considered to be a new improvement if to satisfy the
96	96	requirements of the disaster recovery program it was necessary
97	97	that:
98	98	(1) the square footage of the replacement structure
99	99	exceed that of the replaced structure as that structure existed
100	100	before the casualty or damage occurred; or
101	101	(2) the exterior of the replacement structure be of
102	102	higher quality construction and composition than that of the
103	103	replaced structure.
104	104	SECTION 3. Sections 25.19(b) and (g), Tax Code, are amended
105	105	to read as follows:
106	106	(b) The chief appraiser shall separate real from personal
107	107	property and include in the notice for each:
108	108	(1) a list of the taxing units in which the property is
109	109	taxable;
110	110	(2) the appraised value of the property in the
111	111	preceding year;
112	112	(3) the taxable value of the property in the preceding
113	113	year for each taxing unit taxing the property;
114	114	(4) the appraised value of the property for the
115	115	current year, the kind and amount of each exemption and partial
116	116	exemption, if any, approved for the property for the current year
117	117	and for the preceding year, and, if an exemption or partial
118	118	exemption that was approved for the preceding year was canceled or
119	119	reduced for the current year, the amount of the exemption or partial
120	120	exemption canceled or reduced;
121	121	(4-a) a statement of whether the property qualifies for
122	122	the limitation on appraised value provided by Section 23.231;
123	123	(5) in italic typeface, the following statement: "The
124	124	Texas Legislature does not set the amount of your local taxes. Your
125	125	property tax burden is decided by your locally elected officials,
126	126	and all inquiries concerning your taxes should be directed to those
127	127	officials";
128	128	(6) a detailed explanation of the time and procedure
129	129	for protesting the value;
130	130	(7) the date and place the appraisal review board will
131	131	begin hearing protests;
132	132	(8) an explanation of the availability and purpose of
133	133	an informal conference with the appraisal office before a hearing
134	134	on a protest; and
135	135	(9) a brief explanation that the governing body of
136	136	each taxing unit decides whether or not taxes on the property will
137	137	increase and the appraisal district only determines the value of
138	138	the property.
139	139	(g) By April 1 or as soon thereafter as practicable if the
140	140	property is a single-family residence that qualifies for an
141	141	exemption under Section 11.13, or by May 1 or as soon thereafter as
142	142	practicable in connection with any other property, the chief
143	143	appraiser shall deliver a written notice to the owner of each
144	144	property not included in a notice required to be delivered under
145	145	Subsection (a), if the property was reappraised in the current tax
146	146	year, if the ownership of the property changed during the preceding
147	147	year, or if the property owner or the agent of a property owner
148	148	authorized under Section 1.111 makes a written request for the
149	149	notice. The chief appraiser shall separate real from personal
150	150	property and include in the notice for each property:
151	151	(1) the appraised value of the property in the
152	152	preceding year;
153	153	(2) the appraised value of the property for the
154	154	current year and the kind of each partial exemption, if any,
155	155	approved for the current year;
156	156	(2-a) a statement of whether the property qualifies for
157	157	the limitation on appraised value provided by Section 23.231;
158	158	(3) a detailed explanation of the time and procedure
159	159	for protesting the value; and
160	160	(4) the date and place the appraisal review board will
161	161	begin hearing protests.
162	162	SECTION 4. Section 41.41(a), Tax Code, is amended to read as
163	163	follows:
164	164	(a) A property owner is entitled to protest before the
165	165	appraisal review board the following actions:
166	166	(1) determination of the appraised value of the
167	167	owner's property or, in the case of land appraised as provided by
168	168	Subchapter C, D, E, or H, Chapter 23, determination of its appraised
169	169	or market value;
170	170	(2) unequal appraisal of the owner's property;
171	171	(3) inclusion of the owner's property on the appraisal
172	172	records;
173	173	(4) denial to the property owner in whole or in part of
174	174	a partial exemption;
175	175	(4-a) determination that the owner's property does not
176	176	qualify for the limitation on appraised value provided by Section
177	177	23.231;
178	178	(5) determination that the owner's land does not
179	179	qualify for appraisal as provided by Subchapter C, D, E, or H,
180	180	Chapter 23;
181	181	(6) identification of the taxing units in which the
182	182	owner's property is taxable in the case of the appraisal district's
183	183	appraisal roll;
184	184	(7) determination that the property owner is the owner
185	185	of property;
186	186	(8) a determination that a change in use of land
187	187	appraised under Subchapter C, D, E, or H, Chapter 23, has occurred;
188	188	or
189	189	(9) any other action of the chief appraiser, appraisal
190	190	district, or appraisal review board that applies to and adversely
191	191	affects the property owner.
192	192	SECTION 5. Section 42.26(d), Tax Code, is amended to read as
193	193	follows:
194	194	(d) For purposes of this section, the value of the property
195	195	subject to the suit and the value of a comparable property or sample
196	196	property that is used for comparison must be the market value
197	197	determined by the appraisal district when the property is [a
198	198	residence homestead] subject to the limitation on appraised value
199	199	imposed by Section 23.23 or 23.231.
200	200	SECTION 6. Sections 403.302(d) and (i), Government Code,
201	201	are amended to read as follows:
202	202	(d) For the purposes of this section, "taxable value" means
203	203	the market value of all taxable property less:
204	204	(1) the total dollar amount of any residence homestead
205	205	exemptions lawfully granted under Section 11.13(b) or (c), Tax
206	206	Code, in the year that is the subject of the study for each school
207	207	district;
208	208	(2) one-half of the total dollar amount of any
209	209	residence homestead exemptions granted under Section 11.13(n), Tax
210	210	Code, in the year that is the subject of the study for each school
211	211	district;
212	212	(3) the total dollar amount of any exemptions granted
213	213	before May 31, 1993, within a reinvestment zone under agreements
214	214	authorized by Chapter 312, Tax Code;
215	215	(4) subject to Subsection (e), the total dollar amount
216	216	of any captured appraised value of property that:
217	217	(A) is within a reinvestment zone created on or
218	218	before May 31, 1999, or is proposed to be included within the
219	219	boundaries of a reinvestment zone as the boundaries of the zone and
220	220	the proposed portion of tax increment paid into the tax increment
221	221	fund by a school district are described in a written notification
222	222	provided by the municipality or the board of directors of the zone
223	223	to the governing bodies of the other taxing units in the manner
224	224	provided by former Section 311.003(e), Tax Code, before May 31,
225	225	1999, and within the boundaries of the zone as those boundaries
226	226	existed on September 1, 1999, including subsequent improvements to
227	227	the property regardless of when made;
228	228	(B) generates taxes paid into a tax increment
229	229	fund created under Chapter 311, Tax Code, under a reinvestment zone
230	230	financing plan approved under Section 311.011(d), Tax Code, on or
231	231	before September 1, 1999; and
232	232	(C) is eligible for tax increment financing under
233	233	Chapter 311, Tax Code;
234	234	(5) the total dollar amount of any captured appraised
235	235	value of property that:
236	236	(A) is within a reinvestment zone:
237	237	(i) created on or before December 31, 2008,
238	238	by a municipality with a population of less than 18,000; and
239	239	(ii) the project plan for which includes
240	240	the alteration, remodeling, repair, or reconstruction of a
241	241	structure that is included on the National Register of Historic
242	242	Places and requires that a portion of the tax increment of the zone
243	243	be used for the improvement or construction of related facilities
244	244	or for affordable housing;
245	245	(B) generates school district taxes that are paid
246	246	into a tax increment fund created under Chapter 311, Tax Code; and
247	247	(C) is eligible for tax increment financing under
248	248	Chapter 311, Tax Code;
249	249	(6) the total dollar amount of any exemptions granted
250	250	under Section 11.251 or 11.253, Tax Code;
251	251	(7) the difference between the comptroller's estimate
252	252	of the market value and the productivity value of land that
253	253	qualifies for appraisal on the basis of its productive capacity,
254	254	except that the productivity value estimated by the comptroller may
255	255	not exceed the fair market value of the land;
256	256	(8) the portion of the appraised value of residence
257	257	homesteads of individuals who receive a tax limitation under
258	258	Section 11.26, Tax Code, on which school district taxes are not
259	259	imposed in the year that is the subject of the study, calculated as
260	260	if the residence homesteads were appraised at the full value
261	261	required by law;
262	262	(9) a portion of the market value of property not
263	263	otherwise fully taxable by the district at market value because of
264	264	action required by statute or the constitution of this state, other
265	265	than Section 11.311, Tax Code, that, if the tax rate adopted by the
266	266	district is applied to it, produces an amount equal to the
267	267	difference between the tax that the district would have imposed on
268	268	the property if the property were fully taxable at market value and
269	269	the tax that the district is actually authorized to impose on the
270	270	property, if this subsection does not otherwise require that
271	271	portion to be deducted;
272	272	(10) the market value of all tangible personal
273	273	property, other than manufactured homes, owned by a family or
274	274	individual and not held or used for the production of income;
275	275	(11) the appraised value of property the collection of
276	276	delinquent taxes on which is deferred under Section 33.06, Tax
277	277	Code;
278	278	(12) the portion of the appraised value of property
279	279	the collection of delinquent taxes on which is deferred under
280	280	Section 33.065, Tax Code;
281	281	(13) the amount by which the market value of property
282	282	[a residence homestead] to which Section 23.23 or 23.231, Tax Code,
283	283	applies exceeds the appraised value of that property as calculated
284	284	under Section 23.23 or 23.231, Tax Code, as applicable [that
285	285	section]; and
286	286	(14) the total dollar amount of any exemptions granted
287	287	under Section 11.35, Tax Code.
288	288	(i) If the comptroller determines in the study that the
289	289	market value of property in a school district as determined by the
290	290	appraisal district that appraises property for the school district,
291	291	less the total of the amounts and values listed in Subsection (d) as
292	292	determined by that appraisal district, is valid, the comptroller,
293	293	in determining the taxable value of property in the school district
294	294	under Subsection (d), shall for purposes of Subsection (d)(13)
295	295	subtract from the market value as determined by the appraisal
296	296	district of properties [residence homesteads] to which Section
297	297	23.23 or 23.231, Tax Code, applies the amount by which that amount
298	298	exceeds the appraised value of those properties as calculated by
299	299	the appraisal district under Section 23.23 or 23.231, Tax Code, as
300	300	applicable. If the comptroller determines in the study that the
301	301	market value of property in a school district as determined by the
302	302	appraisal district that appraises property for the school district,
303	303	less the total of the amounts and values listed in Subsection (d) as
304	304	determined by that appraisal district, is not valid, the
305	305	comptroller, in determining the taxable value of property in the
306	306	school district under Subsection (d), shall for purposes of
307	307	Subsection (d)(13) subtract from the market value as estimated by
308	308	the comptroller of properties [residence homesteads] to which
309	309	Section 23.23 or 23.231, Tax Code, applies the amount by which that
310	310	amount exceeds the appraised value of those properties as
311	311	calculated by the appraisal district under Section 23.23 or 23.231,
312	312	Tax Code, as applicable.
313	313	SECTION 7. This Act applies only to the appraisal of real
314	314	property other than a residence homestead for ad valorem tax
315	315	purposes for a tax year that begins on or after the effective date
316	316	of this Act.
317	317	SECTION 8. This Act takes effect January 1, 2024, but only
318	318	if the constitutional amendment proposed by the 88th Legislature,
319	319	Regular Session, 2023, to authorize the legislature to establish a
320	320	limit on the maximum appraised value of real property other than a
321	321	residence homestead for ad valorem tax purposes of 115 percent or
322	322	more of the appraised value of the property for the preceding tax
323	323	year is approved by the voters. If that amendment is not approved
324	324	by the voters, this Act has no effect.