Texas Senate Bill SB47

Texas 2025 - 89th 1st C.S.

• Filed: 7/24/25

Caption

Relating to the treatment of a replacement structure for a structure that was rendered uninhabitable or unusable by a casualty, a natural disaster, or wind or water damage as a new improvement for ad valorem tax purposes.

Impact

The implementation of SB47 may significantly impact property owners who have faced damage due to natural disasters. It allows for a more favorable appraisal of replacement structures by ensuring that they are not immediately classified as improvements, which would typically increase the property's taxable value. Potentially, this could ease the financial burden on property owners who are working to rebuild or repair their homes. Furthermore, by stipulating that older materials are considered if not available, it provides flexibility in construction while still maintaining quality standards.

Summary

SB47 addresses the treatment of replacement structures that have been rendered uninhabitable or unusable due to casualties, natural disasters, or specific types of damage such as wind or water. The bill amends the Texas Tax Code to stipulate that a replacement structure is not automatically treated as an improvement for ad valorem tax purposes unless it meets certain criteria. Specifically, the square footage of the replacement must exceed that of the replaced structure, or the exterior of the replacement must reflect a higher quality of construction.

Contention

Notable points of contention surrounding SB47 may include concerns from local governments over the implications of reduced tax revenue linked to changes in property appraisals. Critics could argue that while the intent is to support homeowners after disasters, the long-term effects on local funding mechanisms might warrant debate. Moreover, defining what constitutes 'higher quality' or 'exceeding square footage' could also lead to disagreements, as subjective interpretations could vary among assessors, homeowners, and developers.

Texas Constitutional Statutes Affected

Tax Code

• Chapter 11. Taxable Property And Exemptions
  • Section: New Section
  • Section: 261

• Chapter 23. Appraisal Methods And Procedures
  • Section: New Section