Texas 2023 - 88th 1st C.S.

Texas House Bill HB35 Compare Versions

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1	1	By: Vasut H.B. No. 35
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to a limitation on increases in the appraised value of real
7	7	property for ad valorem tax purposes.
8	8	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	9	SECTION 1. Section 1.12(d), Tax Code, is amended to read as
10	10	follows:
11	11	(d) For purposes of this section, the appraisal ratio of
12	12	real property [a homestead] to which Section 23.23 applies is the
13	13	ratio of the property's market value as determined by the appraisal
14	14	district or appraisal review board, as applicable, to the market
15	15	value of the property according to law. The appraisal ratio is not
16	16	calculated according to the appraised value of the property as
17	17	limited by Section 23.23.
18	18	SECTION 2. The heading to Section 23.23, Tax Code, is
19	19	amended to read as follows:
20	20	Sec. 23.23. LIMITATION ON APPRAISED VALUE OF REAL PROPERTY
21	21	[RESIDENCE HOMESTEAD].
22	22	SECTION 3. Section 23.23, Tax Code, is amended by amending
23	23	Subsections (a), (b), (c), and (e) and adding Subsections (c-2),
24	24	(c-3), and (c-4) to read as follows:
25	25	(a) Notwithstanding the requirements of Section 25.18 and
26	26	regardless of whether the appraisal office has appraised the
27	27	property and determined the market value of the property for the tax
28	28	year, an appraisal office may increase the appraised value of real
29	29	property [a residence homestead] for a tax year to an amount not to
30	30	exceed the lesser of:
31	31	(1) the market value of the property for the most
32	32	recent tax year that the market value was determined by the
33	33	appraisal office; or
34	34	(2) the sum of:
35	35	(A) 5 [10] percent of the appraised value of the
36	36	property for the preceding tax year;
37	37	(B) the appraised value of the property for the
38	38	preceding tax year; and
39	39	(C) the market value of all new improvements to
40	40	the property.
41	41	(b) When appraising real property [a residence homestead],
42	42	the chief appraiser shall:
43	43	(1) appraise the property at its market value; and
44	44	(2) include in the appraisal records both the market
45	45	value of the property and the amount computed under Subsection
46	46	(a)(2).
47	47	(c) The limitation provided by Subsection (a) takes effect
48	48	on January 1 of the tax year following the first tax year in which
49	49	the owner owns the property on January 1 [as to a residence
50	50	homestead on January 1 of the tax year following the first tax year
51	51	the owner qualifies the property for an exemption under Section
52	52	11.13]. Except as provided by Subsection (c-2) or (c-3), the [The]
53	53	limitation expires on January 1 of the first tax year following the
54	54	year in which [that neither] the owner of the property ceases to own
55	55	the property.
56	56	(c-2) If property subject to a limitation under this section
57	57	qualifies for an exemption under Section 11.13 when the ownership
58	58	of the property is transferred to the owner's spouse or surviving
59	59	spouse, the limitation expires on January 1 of the first tax year
60	60	following the year in which [when the limitation took effect nor]
61	61	the owner's spouse or surviving spouse ceases to own the property,
62	62	unless the limitation is further continued under this subsection on
63	63	the subsequent transfer to a spouse or surviving spouse [qualifies
64	64	for an exemption under Section 11.13].
65	65	(c-3) If property subject to a limitation under Subsection
66	66	(a), other than a residence homestead, is owned by two or more
67	67	persons, the limitation expires on January 1 of the first tax year
68	68	following the year in which the ownership of at least a 50 percent
69	69	interest in the property is sold or otherwise transferred.
70	70	(c-4) For purposes of applying the limitation provided by
71	71	this section, a person who acquired real property in a tax year
72	72	before the 2023 tax year, other than property that qualified as the
73	73	residence homestead of the person under Section 11.13 in the 2023
74	74	tax year, is considered to have acquired the property on January 1,
75	75	2023.
76	76	(e) In this section, "new improvement" means an improvement
77	77	to real property [a residence homestead] made after the most recent
78	78	appraisal of the property that increases the market value of the
79	79	property and the value of which is not included in the appraised
80	80	value of the property for the preceding tax year. The term does not
81	81	include repairs to or ordinary maintenance of an existing structure
82	82	or the grounds or another feature of the property.
83	83	SECTION 4. Section 42.26(d), Tax Code, is amended to read as
84	84	follows:
85	85	(d) For purposes of this section, the value of the property
86	86	subject to the suit and the value of a comparable property or sample
87	87	property that is used for comparison must be the market value
88	88	determined by the appraisal district when the property is [a
89	89	residence homestead] subject to the limitation on appraised value
90	90	imposed by Section 23.23.
91	91	SECTION 5. Sections 403.302(d) and (i), Government Code,
92	92	are amended to read as follows:
93	93	(d) For the purposes of this section, "taxable value" means
94	94	the market value of all taxable property less:
95	95	(1) the total dollar amount of any residence homestead
96	96	exemptions lawfully granted under Section 11.13(b) or (c), Tax
97	97	Code, in the year that is the subject of the study for each school
98	98	district;
99	99	(2) one-half of the total dollar amount of any
100	100	residence homestead exemptions granted under Section 11.13(n), Tax
101	101	Code, in the year that is the subject of the study for each school
102	102	district;
103	103	(3) the total dollar amount of any exemptions granted
104	104	before May 31, 1993, within a reinvestment zone under agreements
105	105	authorized by Chapter 312, Tax Code;
106	106	(4) subject to Subsection (e), the total dollar amount
107	107	of any captured appraised value of property that:
108	108	(A) is within a reinvestment zone created on or
109	109	before May 31, 1999, or is proposed to be included within the
110	110	boundaries of a reinvestment zone as the boundaries of the zone and
111	111	the proposed portion of tax increment paid into the tax increment
112	112	fund by a school district are described in a written notification
113	113	provided by the municipality or the board of directors of the zone
114	114	to the governing bodies of the other taxing units in the manner
115	115	provided by former Section 311.003(e), Tax Code, before May 31,
116	116	1999, and within the boundaries of the zone as those boundaries
117	117	existed on September 1, 1999, including subsequent improvements to
118	118	the property regardless of when made;
119	119	(B) generates taxes paid into a tax increment
120	120	fund created under Chapter 311, Tax Code, under a reinvestment zone
121	121	financing plan approved under Section 311.011(d), Tax Code, on or
122	122	before September 1, 1999; and
123	123	(C) is eligible for tax increment financing under
124	124	Chapter 311, Tax Code;
125	125	(5) the total dollar amount of any captured appraised
126	126	value of property that:
127	127	(A) is within a reinvestment zone:
128	128	(i) created on or before December 31, 2008,
129	129	by a municipality with a population of less than 18,000; and
130	130	(ii) the project plan for which includes
131	131	the alteration, remodeling, repair, or reconstruction of a
132	132	structure that is included on the National Register of Historic
133	133	Places and requires that a portion of the tax increment of the zone
134	134	be used for the improvement or construction of related facilities
135	135	or for affordable housing;
136	136	(B) generates school district taxes that are paid
137	137	into a tax increment fund created under Chapter 311, Tax Code; and
138	138	(C) is eligible for tax increment financing under
139	139	Chapter 311, Tax Code;
140	140	(6) the total dollar amount of any exemptions granted
141	141	under Section 11.251 or 11.253, Tax Code;
142	142	(7) the difference between the comptroller's estimate
143	143	of the market value and the productivity value of land that
144	144	qualifies for appraisal on the basis of its productive capacity,
145	145	except that the productivity value estimated by the comptroller may
146	146	not exceed the fair market value of the land;
147	147	(8) the portion of the appraised value of residence
148	148	homesteads of individuals who receive a tax limitation under
149	149	Section 11.26, Tax Code, on which school district taxes are not
150	150	imposed in the year that is the subject of the study, calculated as
151	151	if the residence homesteads were appraised at the full value
152	152	required by law;
153	153	(9) a portion of the market value of property not
154	154	otherwise fully taxable by the district at market value because of
155	155	action required by statute or the constitution of this state, other
156	156	than Section 11.311, Tax Code, that, if the tax rate adopted by the
157	157	district is applied to it, produces an amount equal to the
158	158	difference between the tax that the district would have imposed on
159	159	the property if the property were fully taxable at market value and
160	160	the tax that the district is actually authorized to impose on the
161	161	property, if this subsection does not otherwise require that
162	162	portion to be deducted;
163	163	(10) the market value of all tangible personal
164	164	property, other than manufactured homes, owned by a family or
165	165	individual and not held or used for the production of income;
166	166	(11) the appraised value of property the collection of
167	167	delinquent taxes on which is deferred under Section 33.06, Tax
168	168	Code;
169	169	(12) the portion of the appraised value of property
170	170	the collection of delinquent taxes on which is deferred under
171	171	Section 33.065, Tax Code;
172	172	(13) the amount by which the market value of real
173	173	property [a residence homestead] to which Section 23.23, Tax Code,
174	174	applies exceeds the appraised value of that property as calculated
175	175	under that section; and
176	176	(14) the total dollar amount of any exemptions granted
177	177	under Section 11.35, Tax Code.
178	178	(i) If the comptroller determines in the study that the
179	179	market value of property in a school district as determined by the
180	180	appraisal district that appraises property for the school district,
181	181	less the total of the amounts and values listed in Subsection (d) as
182	182	determined by that appraisal district, is valid, the comptroller,
183	183	in determining the taxable value of property in the school district
184	184	under Subsection (d), shall for purposes of Subsection (d)(13)
185	185	subtract from the market value as determined by the appraisal
186	186	district of properties [residence homesteads] to which Section
187	187	23.23, Tax Code, applies the amount by which that amount exceeds the
188	188	appraised value of those properties as calculated by the appraisal
189	189	district under Section 23.23, Tax Code. If the comptroller
190	190	determines in the study that the market value of property in a
191	191	school district as determined by the appraisal district that
192	192	appraises property for the school district, less the total of the
193	193	amounts and values listed in Subsection (d) as determined by that
194	194	appraisal district, is not valid, the comptroller, in determining
195	195	the taxable value of property in the school district under
196	196	Subsection (d), shall for purposes of Subsection (d)(13) subtract
197	197	from the market value as estimated by the comptroller of properties
198	198	[residence homesteads] to which Section 23.23, Tax Code, applies
199	199	the amount by which that amount exceeds the appraised value of those
200	200	properties as calculated by the appraisal district under Section
201	201	23.23, Tax Code.
202	202	SECTION 6. Section 23.23(c-1), Tax Code, is repealed.
203	203	SECTION 7. This Act applies only to the appraisal for ad
204	204	valorem tax purposes of real property for a tax year that begins on
205	205	or after the effective date of this Act.
206	206	SECTION 8. This Act takes effect January 1, 2024, but only
207	207	if the constitutional amendment proposed by the 88th Legislature,
208	208	First Called Session, 2023, to authorize the legislature to limit
209	209	the maximum appraised value of real property for ad valorem tax
210	210	purposes to 105 percent or more of the appraised value of the
211	211	property for the preceding tax year is approved by the voters. If
212	212	that amendment is not approved by the voters, this Act has no
213	213	effect.