Texas 2023 - 88th 2nd C.S.

Texas House Bill HB58 Compare Versions

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1	1	By: Schofield H.B. No. 58
2	2
3	3
4	4	A BILL TO BE ENTITLED
5	5	AN ACT
6	6	relating to an exemption from ad valorem taxation by a school
7	7	district of a dollar amount or a percentage, whichever is greater,
8	8	of the appraised value of a residence homestead, an adjustment of
9	9	the limitation on the total amount of ad valorem taxes that may be
10	10	imposed by a school district on the homestead of a person who is
11	11	elderly or disabled to reflect increases in the exemption amount,
12	12	and the protection of school districts against the resulting loss
13	13	in local revenue.
14	14	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
15	15	SECTION 1. Section 11.13(b), Tax Code, is amended to read as
16	16	follows:
17	17	(b) An adult is entitled to exemption from taxation by a
18	18	school district of $40,000 of the appraised value of the adult's
19	19	residence homestead or 26.7 percent of the appraised value of the
20	20	adult's residence homestead, whichever is greater, except that only
21	21	$5,000 of the exemption applies to an entity operating under former
22	22	Chapter 17, 18, 25, 26, 27, or 28, Education Code, as those chapters
23	23	existed on May 1, 1995, as permitted by Section 11.301, Education
24	24	Code.
25	25	SECTION 2. Section 11.26, Tax Code, is amended by amending
26	26	Subsections (a), (a-10), and (o) and adding Subsections (a-11) and
27	27	(a-12) to read as follows:
28	28	(a) The tax officials shall appraise the property to which
29	29	this section applies and calculate taxes as on other property, but
30	30	if the tax so calculated exceeds the limitation imposed by this
31	31	section, the tax imposed is the amount of the tax as limited by this
32	32	section, except as otherwise provided by this section. A school
33	33	district may not increase the total annual amount of ad valorem tax
34	34	it imposes on the residence homestead of an individual 65 years of
35	35	age or older or on the residence homestead of an individual who is
36	36	disabled, as defined by Section 11.13, above the amount of the tax
37	37	it imposed in the first tax year in which the individual qualified
38	38	that residence homestead for the applicable exemption provided by
39	39	Section 11.13(c) for an individual who is 65 years of age or older
40	40	or is disabled. If the individual qualified that residence
41	41	homestead for the exemption after the beginning of that first year
42	42	and the residence homestead remains eligible for the same exemption
43	43	for the next year, and if the school district taxes imposed on the
44	44	residence homestead in the next year are less than the amount of
45	45	taxes imposed in that first year, a school district may not
46	46	subsequently increase the total annual amount of ad valorem taxes
47	47	it imposes on the residence homestead above the amount it imposed in
48	48	the year immediately following the first year for which the
49	49	individual qualified that residence homestead for the same
50	50	exemption, except as provided by Subsection (b). [If the first tax
51	51	year the individual qualified the residence homestead for the
52	52	exemption provided by Section 11.13(c) for individuals 65 years of
53	53	age or older or disabled was a tax year before the 2015 tax year, the
54	54	amount of the limitation provided by this section is the amount of
55	55	tax the school district imposed for the 2014 tax year less an amount
56	56	equal to the amount determined by multiplying $10,000 times the tax
57	57	rate of the school district for the 2015 tax year, plus any 2015 tax
58	58	attributable to improvements made in 2014, other than improvements
59	59	made to comply with governmental regulations or repairs.]
60	60	(a-10) For purposes of this section, "maximum compressed
61	61	rate" means the maximum compressed rate of a school district as
62	62	calculated under Section 48.2551, Education Code. Notwithstanding
63	63	the other provisions of this section, if in the 2024 or a subsequent
64	64	tax year an individual qualifies for a limitation on tax increases
65	65	provided by this section on the individual's residence homestead,
66	66	the amount of the limitation provided by this section on the
67	67	homestead is equal to the amount computed by:
68	68	(1) multiplying the taxable value of the homestead in
69	69	the preceding tax year by a tax rate equal to the difference between
70	70	the school district's maximum compressed rate for the preceding tax
71	71	year and the district's maximum compressed rate for the current tax
72	72	year;
73	73	(2) subtracting the amount computed under Subdivision
74	74	(1) from the amount of tax the district imposed on the homestead in
75	75	the preceding tax year; and
76	76	(3) adding any tax imposed in the current tax year
77	77	attributable to improvements made in the preceding tax year as
78	78	provided by Subsection (b) to the amount computed under Subdivision
79	79	(2).
80	80	(a-11) This subsection applies only to an individual who in
81	81	the 2024 tax year qualifies for a limitation under this section and
82	82	for whom the 2021 tax year or an earlier tax year was the first tax
83	83	year the individual or the individual's spouse qualified for an
84	84	exemption under Section 11.13(c). The amount of the limitation
85	85	provided by this section on the residence homestead of an
86	86	individual to which this subsection applies for the 2024 tax year is
87	87	the amount of the limitation for the 2024 tax year as otherwise
88	88	computed under this section less an amount equal to the product of
89	89	$15,000 and the tax rate of the school district for the 2022 tax
90	90	year. This subsection expires January 1, 2025.
91	91	(a-12) This subsection applies only to an individual who in
92	92	the 2024 tax year qualifies for a limitation under this section and
93	93	whose residence homestead has an appraised value for the 2024 tax
94	94	year of more than $149,813. The amount of the limitation provided by
95	95	this section on the residence homestead of an individual to which
96	96	this subsection applies for the 2024 tax year is the amount of the
97	97	limitation for the 2024 tax year as otherwise computed under this
98	98	section less an amount equal to the amount computed by subtracting
99	99	$40,000 from an amount equal to 26.7 percent of the appraised value
100	100	of the homestead for the 2024 tax year and multiplying that amount
101	101	by the tax rate of the school district for the 2024 tax year. This
102	102	subsection expires January 1, 2025.
103	103	(o) Notwithstanding Subsections (a)[, (a-3),] and (b), an
104	104	improvement to property that would otherwise constitute an
105	105	improvement under Subsection (b) is not treated as an improvement
106	106	under that subsection if the improvement is a replacement structure
107	107	for a structure that was rendered uninhabitable or unusable by a
108	108	casualty or by wind or water damage. For purposes of appraising the
109	109	property in the tax year in which the structure would have
110	110	constituted an improvement under Subsection (b), the replacement
111	111	structure is considered to be an improvement under that subsection
112	112	only if:
113	113	(1) the square footage of the replacement structure
114	114	exceeds that of the replaced structure as that structure existed
115	115	before the casualty or damage occurred; or
116	116	(2) the exterior of the replacement structure is of
117	117	higher quality construction and composition than that of the
118	118	replaced structure.
119	119	SECTION 3. Section 46.071, Education Code, is amended by
120	120	amending Subsections (a-1) and (b-1) and adding Subsections (a-2),
121	121	(b-2), and (c-2) to read as follows:
122	122	(a-1) For [Beginning with] the 2022-2023 and 2023-2024
123	123	school years [year], a school district is entitled to additional
124	124	state aid under this subchapter to the extent that state and local
125	125	revenue used to service debt eligible under this chapter is less
126	126	than the state and local revenue that would have been available to
127	127	the district under this chapter as it existed on September 1, 2021,
128	128	if any increase in the residence homestead exemption under Section
129	129	1-b(c), Article VIII, Texas Constitution, as proposed by the 87th
130	130	Legislature, 3rd Called Session, 2021, had not occurred.
131	131	(a-2) Beginning with the 2024-2025 school year, a school
132	132	district is entitled to additional state aid under this subchapter
133	133	to the extent that state and local revenue used to service debt
134	134	eligible under this chapter is less than the state and local revenue
135	135	that would have been available to the district under this chapter as
136	136	it existed on September 1, 2023, if any increase in the residence
137	137	homestead exemption under Section 1-b(c), Article VIII, Texas
138	138	Constitution, and any additional limitation on tax increases under
139	139	Section 1-b(d) of that article as proposed by the 88th Legislature,
140	140	Regular Session, 2023, had not occurred.
141	141	(b-1) Subject to Subsections (c-1), (d), and (e),
142	142	additional state aid under this section for [beginning with] the
143	143	2022-2023 and 2023-2024 school years [year] is equal to the amount
144	144	by which the loss of local interest and sinking revenue for debt
145	145	service attributable to any increase in the residence homestead
146	146	exemption under Section 1-b(c), Article VIII, Texas Constitution,
147	147	as proposed by the 87th Legislature, 3rd Called Session, 2021, is
148	148	not offset by a gain in state aid under this chapter.
149	149	(b-2) Subject to Subsections (c-2), (d), and (e),
150	150	additional state aid under this section beginning with the
151	151	2024-2025 school year is equal to the amount by which the loss of
152	152	local interest and sinking revenue for debt service attributable to
153	153	any increase in the residence homestead exemption under Section
154	154	1-b(c), Article VIII, Texas Constitution, and any additional
155	155	limitation on tax increases under Section 1-b(d) of that article as
156	156	proposed by the 88th Legislature, Regular Session, 2023, is not
157	157	offset by a gain in state aid under this chapter.
158	158	(c-2) For the purpose of determining state aid under
159	159	Subsections (a-2) and (b-2), local interest and sinking revenue for
160	160	debt service is limited to revenue required to service debt
161	161	eligible under this chapter as of September 1, 2024, including
162	162	refunding of that debt, subject to Section 46.061. The limitation
163	163	imposed by Section 46.034(a) does not apply for the purpose of
164	164	determining state aid under this section.
165	165	SECTION 4. Section 48.2542, Education Code, is amended to
166	166	read as follows:
167	167	Sec. 48.2542. ADDITIONAL STATE AID FOR ADJUSTMENT OF
168	168	LIMITATION ON TAX INCREASES ON HOMESTEAD OF ELDERLY OR DISABLED.
169	169	Notwithstanding any other provision of this chapter, if a school
170	170	district is not fully compensated through state aid or the
171	171	calculation of excess local revenue under this chapter based on the
172	172	determination of the district's taxable value of property under
173	173	Subchapter M, Chapter 403, Government Code, the district is
174	174	entitled to additional state aid in the amount necessary to fully
175	175	compensate the district for the amount of ad valorem tax revenue
176	176	lost due to a reduction of the amount of the limitation on tax
177	177	increases provided by Sections 11.26(a-10), (a-11), and (a-12)
178	178	[11.26(a-4), (a-5), (a-6), (a-7), (a-8), (a-9), and (a-10)], Tax
179	179	Code, as applicable.
180	180	SECTION 5. Effective January 1, 2025, Section 48.2542,
181	181	Education Code, is amended to read as follows:
182	182	Sec. 48.2542. ADDITIONAL STATE AID FOR ADJUSTMENT OF
183	183	LIMITATION ON TAX INCREASES ON HOMESTEAD OF ELDERLY OR DISABLED.
184	184	Notwithstanding any other provision of this chapter, if a school
185	185	district is not fully compensated through state aid or the
186	186	calculation of excess local revenue under this chapter based on the
187	187	determination of the district's taxable value of property under
188	188	Subchapter M, Chapter 403, Government Code, the district is
189	189	entitled to additional state aid in the amount necessary to fully
190	190	compensate the district for the amount of ad valorem tax revenue
191	191	lost due to a reduction of the amount of the limitation on tax
192	192	increases provided by Section 11.26(a-10) [Sections 11.26(a-4),
193	193	(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10)], Tax Code[, as
194	194	applicable].
195	195	SECTION 6. Section 48.2543, Education Code, is amended to
196	196	read as follows:
197	197	Sec. 48.2543. ADDITIONAL STATE AID FOR HOMESTEAD EXEMPTION.
198	198	(a) For [Beginning with] the 2022-2023 and 2023-2024 school years
199	199	[year], a school district is entitled to additional state aid to the
200	200	extent that state and local revenue under this chapter and Chapter
201	201	49 is less than the state and local revenue that would have been
202	202	available to the district under this chapter and Chapter 49 as those
203	203	chapters existed on September 1, 2021, if any increase in the
204	204	residence homestead exemption under Section 1-b(c), Article VIII,
205	205	Texas Constitution, as proposed by the 87th Legislature, 3rd Called
206	206	Session, 2021, had not occurred.
207	207	(a-1) Beginning with the 2024-2025 school year, a school
208	208	district is entitled to additional state aid to the extent that
209	209	state and local revenue under this chapter and Chapter 49 is less
210	210	than the state and local revenue that would have been available to
211	211	the district under this chapter and Chapter 49 as those chapters
212	212	existed on September 1, 2023, if any increase in the residence
213	213	homestead exemption under Section 1-b(c), Article VIII, Texas
214	214	Constitution, and any additional limitation on tax increases under
215	215	Section 1-b(d) of that article as proposed by the 88th Legislature,
216	216	Regular Session, 2023, had not occurred.
217	217	(b) The lesser of the school district's currently adopted
218	218	maintenance and operations tax rate or the adopted maintenance and
219	219	operations tax rate for:
220	220	(1) the 2021 tax year is used for the purpose of
221	221	determining additional state aid under Subsection (a); and
222	222	(2) the 2023 tax year is used for the purpose of
223	223	determining additional state aid under Subsection (a-1).
224	224	SECTION 7. Section 48.2556(a), Education Code, is amended
225	225	to read as follows:
226	226	(a) For purposes of allowing the chief appraiser of each
227	227	appraisal district and the assessor for each school district to
228	228	make the calculations required by Sections 11.26(a-10), (a-11), and
229	229	(a-12), Tax Code, the [The] agency shall post [the following
230	230	information] on the agency's Internet website [for purposes of
231	231	allowing the chief appraiser of each appraisal district and the
232	232	assessor for each school district to make the calculations required
233	233	by Sections 11.26(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10), Tax
234	234	Code:
235	235	[(1)] each school district's maximum compressed rate,
236	236	as determined under Section 48.2551, for each tax year beginning
237	237	with the 2022 [2019] tax year[; and
238	238	[(2) each school district's tier one maintenance and
239	239	operations tax rate, as provided by Section 45.0032(a), for the
240	240	2018 tax year].
241	241	SECTION 8. Effective January 1, 2025, Section 48.2556(a),
242	242	Education Code, is amended to read as follows:
243	243	(a) For purposes of allowing the chief appraiser of each
244	244	appraisal district and the assessor for each school district to
245	245	make the calculations required by Section 11.26(a-10), Tax Code,
246	246	the [The] agency shall post [the following information] on the
247	247	agency's Internet website [for purposes of allowing the chief
248	248	appraiser of each appraisal district and the assessor for each
249	249	school district to make the calculations required by Sections
250	250	11.26(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10), Tax Code:
251	251	[(1)] each school district's maximum compressed rate,
252	252	as determined under Section 48.2551, for the current [each] tax
253	253	year and the preceding [beginning with the 2019] tax year[; and
254	254	[(2) each school district's tier one maintenance and
255	255	operations tax rate, as provided by Section 45.0032(a), for the
256	256	2018 tax year].
257	257	SECTION 9. Section 403.302, Government Code, is amended by
258	258	amending Subsection (j-1) and adding Subsection (j-2) to read as
259	259	follows:
260	260	(j-1) In the final certification of the study under
261	261	Subsection (j), the comptroller shall separately identify the final
262	262	taxable value for each school district as adjusted to account for
263	263	the reduction of the amount of the limitation on tax increases
264	264	provided by Section 11.26(a-10) [Sections 11.26(a-4), (a-5),
265	265	(a-6), (a-7), (a-8), (a-9), and (a-10)], Tax Code[, as applicable].
266	266	(j-2) In the final certification of the study under
267	267	Subsection (j), the comptroller shall separately identify the final
268	268	taxable value for each school district as adjusted to account for
269	269	the reduction of the amount of the limitation on tax increases
270	270	provided by Sections 11.26(a-11) and (a-12), Tax Code. This
271	271	subsection expires January 1, 2025.
272	272	SECTION 10. Sections 11.26(a-1), (a-2), (a-3), (a-4),
273	273	(a-5), (a-6), (a-7), (a-8), and (a-9), Tax Code, are repealed.
274	274	SECTION 11. The changes in law made by this Act to Sections
275	275	11.13 and 11.26, Tax Code, apply only to an ad valorem tax year that
276	276	begins on or after January 1, 2024.
277	277	SECTION 12. Except as otherwise provided by this Act, this
278	278	Act takes effect January 1, 2024, but only if the constitutional
279	279	amendment proposed by the 88th Legislature, Regular Session, 2023,
280	280	providing for an exemption from ad valorem taxation for public
281	281	school purposes of a dollar amount or a percentage, whichever is
282	282	greater, of the market value of a residence homestead and providing
283	283	for an adjustment of the limitation on the total amount of ad
284	284	valorem taxes that may be imposed for those purposes on the
285	285	homestead of a person who is elderly or disabled to reflect
286	286	increases in the exemption amount is approved by the voters. If that
287	287	amendment is not approved by the voters, this Act has no effect.