88R10899 LHC-D
By: Miles S.B. No. 2131
A BILL TO BE ENTITLED
AN ACT
relating to the treatment of a replacement structure for a
structure that was rendered uninhabitable or unusable by a casualty
or by wind or water damage as a new improvement for ad valorem tax
purposes.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 11.26(o), Tax Code, is amended to read as
follows:
(o) Notwithstanding Subsections (a), (a-3), and (b), an
improvement to property that would otherwise constitute an
improvement under Subsection (b) 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 (b), 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].
SECTION 2. Section 11.261(m), Tax Code, is amended to read
as follows:
(m) Notwithstanding Subsections (b) and (c), an improvement
to property that would otherwise constitute an improvement under
Subsection (c) 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 (c), 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].
SECTION 3. Sections 23.23(f) and (g), Tax Code, are amended
to read as follows:
(f) Notwithstanding Subsections (a) and (e) and except as
provided by Subdivision (2), an improvement to property that would
otherwise constitute a new improvement is not treated as a new
improvement 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 under Subsection (a) in the tax year in which the structure
would have constituted a new improvement:
(1) the appraised value the property would have had in
the preceding tax year if the casualty or damage had not occurred is
considered to be the appraised value of the property for that year,
regardless of whether that appraised value exceeds the actual
appraised value of the property for that year as limited by
Subsection (a); and
(2) the replacement structure is considered to be a
new improvement only if[:
[(A)] the square footage of the replacement
structure exceeds that of the replaced structure as that structure
existed before the casualty or damage occurred[; or
[(B) the exterior of the replacement structure is
of higher quality construction and composition than that of the
replaced structure].
(g) In this subsection, "disaster recovery program" means
the disaster recovery program administered by the General Land
Office or by a political subdivision of this state that is funded
with community development block grant disaster recovery money
authorized by federal law. Notwithstanding Subsection (f)(2), and
only to the extent necessary to satisfy the requirements of the
disaster recovery program, a replacement structure described by
that subdivision is not considered to be a new improvement if to
satisfy the requirements of the disaster recovery program it was
necessary that [:
[(1)] the square footage of the replacement structure
exceed that of the replaced structure as that structure existed
before the casualty or damage occurred [; or
[(2) the exterior of the replacement structure be of
higher quality construction and composition than that of the
replaced structure].
SECTION 4. This Act applies only to ad valorem taxes imposed
for a tax year beginning on or after the effective date of this Act.
SECTION 5. This Act takes effect January 1, 2024.