By: Bettencourt, et al. S.J.R. No. 3
(In the Senate - Filed March 1, 2023; March 3, 2023, read
first time and referred to Committee on Local Government;
March 13, 2023, rereferred to Committee on Finance;
March 21, 2023, reported adversely, with favorable Committee
Substitute by the following vote: Yeas 16, Nays 0; March 21, 2023,
sent to printer.)
Click here to see the committee vote
COMMITTEE SUBSTITUTE FOR S.J.R. No. 3 By: Bettencourt
SENATE JOINT RESOLUTION
proposing a constitutional amendment to authorize the legislature
to exempt from ad valorem taxation a portion of the market value of
tangible personal property that is held or used for the production
of income, to increase the amount of certain exemptions from ad
valorem taxation by a school district applicable to residence
homesteads, to adjust the amount of the limitation on school
district ad valorem taxes imposed on the residence homesteads of
the elderly or disabled to reflect increases in the exemption
amounts, and to except certain appropriations to pay for school
district ad valorem tax relief from the constitutional limitation
on the rate of growth of appropriations.
BE IT RESOLVED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1(g), Article VIII, Texas Constitution,
is amended to read as follows:
(g) The Legislature by general law may exempt from ad
valorem taxation $25,000 of the market value of tangible personal
property that is held or used for the production of income [and has
a taxable value of less than the minimum amount sufficient to
recover the costs of the administration of the taxes on the
property, as determined by or under the general law granting the
exemption].
SECTION 2. Sections 1-b(c) and (d), Article VIII, Texas
Constitution, are amended to read as follows:
(c) The amount of $70,000 [$40,000] of the market value of
the residence homestead of a married or unmarried adult, including
one living alone, is exempt from ad valorem taxation for general
elementary and secondary public school purposes. The legislature
by general law may provide that all or part of the exemption does
not apply to a district or political subdivision that imposes ad
valorem taxes for public education purposes but is not the
principal school district providing general elementary and
secondary public education throughout its territory. In addition
to this exemption, the legislature by general law may exempt an
amount not to exceed $30,000 [$10,000] of the market value of the
residence homestead of a person who is disabled as defined in
Subsection (b) of this section and of a person 65 years of age or
older from ad valorem taxation for general elementary and secondary
public school purposes. The legislature by general law may base the
amount of and condition eligibility for the additional exemption
authorized by this subsection for disabled persons and for persons
65 years of age or older on economic need. An eligible disabled
person who is 65 years of age or older may not receive both
exemptions from a school district but may choose either. An
eligible person is entitled to receive both the exemption required
by this subsection for all residence homesteads and any exemption
adopted pursuant to Subsection (b) of this section, but the
legislature shall provide by general law whether an eligible
disabled or elderly person may receive both the additional
exemption for the elderly and disabled authorized by this
subsection and any exemption for the elderly or disabled adopted
pursuant to Subsection (b) of this section. Where ad valorem tax
has previously been pledged for the payment of debt, the taxing
officers of a school district may continue to levy and collect the
tax against the value of homesteads exempted under this subsection
until the debt is discharged if the cessation of the levy would
impair the obligation of the contract by which the debt was created.
The legislature shall provide for formulas to protect school
districts against all or part of the revenue loss incurred by the
implementation of this subsection, Subsection (d) of this section,
and Section 1-d-1 of this article. The legislature by general law
may define residence homestead for purposes of this section.
(d) Except as otherwise provided by this subsection, if a
person receives a residence homestead exemption prescribed by
Subsection (c) of this section for homesteads of persons who are 65
years of age or older or who are disabled, the total amount of ad
valorem taxes imposed on that homestead for general elementary and
secondary public school purposes may not be increased while it
remains the residence homestead of that person or that person's
spouse who receives the exemption. If a person who is 65 years of
age or older or who is disabled dies in a year in which the person
received the exemption, the total amount of ad valorem taxes
imposed on the homestead for general elementary and secondary
public school purposes may not be increased while it remains the
residence homestead of that person's surviving spouse if the spouse
is 55 years of age or older at the time of the person's death,
subject to any exceptions provided by general law. The
legislature, by general law, may provide for the transfer of all or
a proportionate amount of a limitation provided by this subsection
for a person who qualifies for the limitation and establishes a
different residence homestead. However, taxes otherwise limited
by this subsection may be increased to the extent the value of the
homestead is increased by improvements other than repairs or
improvements made to comply with governmental requirements and
except as may be consistent with the transfer of a limitation under
this subsection. For a residence homestead subject to the
limitation provided by this subsection in the 1996 tax year or an
earlier tax year, the legislature shall provide for a reduction in
the amount of the limitation for the 1997 tax year and subsequent
tax years in an amount equal to $10,000 multiplied by the 1997 tax
rate for general elementary and secondary public school purposes
applicable to the residence homestead. For a residence homestead
subject to the limitation provided by this subsection in the 2014
tax year or an earlier tax year, the legislature shall provide for a
reduction in the amount of the limitation for the 2015 tax year and
subsequent tax years in an amount equal to $10,000 multiplied by the
2015 tax rate for general elementary and secondary public school
purposes applicable to the residence homestead. For a residence
homestead subject to the limitation provided by this subsection in
the 2021 tax year or an earlier tax year, the legislature shall
provide for a reduction in the amount of the limitation for the 2023
tax year and subsequent tax years in an amount equal to $15,000
multiplied by the 2022 tax rate for general elementary and
secondary public school purposes applicable to the residence
homestead. Beginning with the 2023 tax year, for any tax year in
which the amount of the exemption provided by Subsection (c) of this
section applicable to the residence homestead of a married or
unmarried adult, including one living alone, or the amount of the
exemption provided by Subsection (c) of this section applicable to
the residence homestead of a person who is disabled as defined by
Subsection (b) of this section and of a person 65 years of age or
older is increased, the legislature shall provide for a reduction
for that tax year and subsequent tax years in the amount of the
limitation provided by this subsection applicable to a residence
homestead that was subject to the limitation in the tax year
preceding the tax year in which the amount of the exemption is
increased in an amount equal to the amount by which the amount of
the exemption is increased multiplied by the tax rate for general
elementary and secondary public school purposes applicable to the
residence homestead for the tax year in which the amount of the
exemption is increased.
SECTION 3. Section 22, Article VIII, Texas Constitution, is
amended by adding Subsection (a-1) to read as follows:
(a-1) Appropriations from state tax revenues not dedicated
by this constitution that are made for the purpose of paying for
school district ad valorem tax relief as identified by the
legislature by general law are not included as appropriations for
purposes of determining whether the rate of growth of
appropriations exceeds the limitation prescribed by Subsection (a)
of this section.
SECTION 4. The following temporary provision is added to
the Texas Constitution:
TEMPORARY PROVISION. (a) This temporary provision applies
to the constitutional amendment proposed by the 88th Legislature,
Regular Session, 2023, to authorize the legislature to exempt from
ad valorem taxation a portion of the market value of tangible
personal property that is held or used for the production of income,
to increase the amount of certain exemptions from ad valorem
taxation by a school district applicable to residence homesteads,
to adjust the amount of the limitation on school district ad valorem
taxes imposed on the residence homesteads of the elderly or
disabled to reflect increases in the exemption amounts, and to
except certain appropriations to pay for school district ad valorem
tax relief from the constitutional limitation on the rate of growth
of appropriations.
(b) The amendment to Section 1(g), Article VIII, of this
constitution takes effect for the tax year beginning January 1,
2024.
(c) The amendments to Sections 1-b(c) and (d), Article VIII,
of this constitution take effect for the tax year beginning January
1, 2023.
(d) The amendment to Section 22, Article VIII, of this
constitution applies to appropriations made for the state fiscal
biennium beginning September 1, 2023, and subsequent state fiscal
bienniums.
(e) This temporary provision expires January 1, 2025.
SECTION 5. This proposed constitutional amendment shall be
submitted to the voters at an election to be held November 7, 2023.
The ballot shall be printed to permit voting for or against the
proposition: "The constitutional amendment to increase the amount
of the residence homestead exemption from ad valorem taxation for
public school purposes from $40,000 to $70,000 and increase the
amount of the exemption applicable to the residence homestead of a
person who is disabled or is 65 years of age or older from ad valorem
taxation for public school purposes from $10,000 to $30,000; to
adjust the amount of the limitation on ad valorem taxes for public
school purposes imposed on the residence homestead of a person who
is disabled or is 65 years of age or older to reflect increases in
the exemption amounts; to authorize the legislature to exempt from
ad valorem taxation $25,000 of the market value of tangible
personal property that is held or used for the production of income;
and to except certain appropriations to pay for school district ad
valorem tax relief from the constitutional limitation on the rate
of growth of appropriations."
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