Texas 2025 - 89th Regular

Texas House Bill HB398 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	89R3806 DRS-D
2	2	By: Tepper H.B. No. 398
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7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to the limitations on increases in the appraised value of
10	10	certain property for ad valorem tax purposes.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Section 23.23(a), Tax Code, is amended to read as
13	13	follows:
14	14	(a) Notwithstanding the requirements of Section 25.18 and
15	15	regardless of whether the appraisal office has appraised the
16	16	property and determined the market value of the property for the tax
17	17	year, an appraisal office may increase the appraised value of a
18	18	residence homestead for a tax year to an amount not to exceed the
19	19	lesser of:
20	20	(1) the market value of the property for the most
21	21	recent tax year that the market value was determined by the
22	22	appraisal office; or
23	23	(2) the sum of:
24	24	(A) 2.5 [10] percent of the appraised value of
25	25	the property for the preceding tax year;
26	26	(B) the appraised value of the property for the
27	27	preceding tax year; and
28	28	(C) the market value of all new improvements to
29	29	the property.
30	30	SECTION 2. Sections 23.231(a), (d), and (g), Tax Code, are
31	31	amended to read as follows:
32	32	(a) In this section:
33	33	(1) ["Consumer price index" means the average over a
34	34	state fiscal year of the Consumer Price Index for All Urban
35	35	Consumers (CPI-U), U.S. City Average, published monthly by the
36	36	United States Bureau of Labor Statistics, or its successor in
37	37	function.
38	38	[(2)] "Disaster recovery program" means a disaster
39	39	recovery program funded with community development block grant
40	40	disaster recovery money authorized by federal law.
41	41	(2) [(3)] "New improvement" means an improvement to
42	42	real property made after the most recent appraisal of the property
43	43	that increases the market value of the property and the value of
44	44	which is not included in the appraised value of the property for the
45	45	preceding tax year. The term does not include repairs to or
46	46	ordinary maintenance of an existing structure or the grounds or
47	47	another feature of the property.
48	48	(d) Notwithstanding the requirements of Section 25.18 and
49	49	regardless of whether the appraisal office has appraised the
50	50	property and determined the market value of the property for the tax
51	51	year, an appraisal office may increase the appraised value of real
52	52	property to which this section applies for a tax year to an amount
53	53	not to exceed the lesser of:
54	54	(1) the market value of the property for the most
55	55	recent tax year that the market value was determined by the
56	56	appraisal office; or
57	57	(2) the sum of:
58	58	(A) eight [20] percent of the appraised value of
59	59	the property for the preceding tax year;
60	60	(B) the appraised value of the property for the
61	61	preceding tax year; and
62	62	(C) the market value of all new improvements to
63	63	the property.
64	64	(g) For purposes of Subsection (f):
65	65	(1) [,] a person who, before the 2023 tax year,
66	66	acquired real property to which this section applied as this
67	67	section existed on January 1, 2024, [applies before the 2023 tax
68	68	year] is considered to have acquired the property on January 1,
69	69	2023; and
70	70	(2) a person who, before the 2025 tax year, acquired
71	71	real property, other than property described by Subdivision (1), to
72	72	which this section applies is considered to have acquired the
73	73	property on January 1, 2025.
74	74	SECTION 3. Section 25.19(o), Tax Code, is amended to read as
75	75	follows:
76	76	(o) A notice required under Subsection (a) or (g) to be
77	77	delivered to the owner of real property other than a single-family
78	78	residence that qualifies for an exemption under Section 11.13 must
79	79	include the following statement: "Under Section 23.231, Tax Code,
80	80	[for the 2024, 2025, and 2026 tax years,] the appraised value of
81	81	real property other than a residence homestead for ad valorem tax
82	82	purposes may not be increased by more than eight [20] percent each
83	83	year, with certain exceptions." [The circuit breaker limitation
84	84	provided under Section 23.231, Tax Code, expires December 31, 2026.
85	85	Unless this expiration date is extended by the Texas Legislature,
86	86	beginning in the 2027 tax year, the circuit breaker limitation
87	87	provided under Section 23.231, Tax Code, will no longer be in effect
88	88	and may result in an increase in ad valorem taxes imposed on real
89	89	property previously subject to the limitation." This subsection
90	90	expires December 31, 2027.]
91	91	SECTION 4. The following provisions are repealed:
92	92	(1) Sections 23.231(b), (j), and (k), Tax Code;
93	93	(2) Section 4.02, Chapter 1 (S.B. 2), Acts of the 88th
94	94	Legislature, 2nd Called Session, 2023, which amended Section
95	95	1.12(d), Tax Code, as effective January 1, 2027;
96	96	(3) Section 4.05, Chapter 1 (S.B. 2), Acts of the 88th
97	97	Legislature, 2nd Called Session, 2023, which amended Sections
98	98	25.19(b) and (g), Tax Code, as effective January 1, 2027;
99	99	(4) Section 4.08, Chapter 1 (S.B. 2), Acts of the 88th
100	100	Legislature, 2nd Called Session, 2023, which amended Section
101	101	41.41(a), Tax Code, as effective January 1, 2027;
102	102	(5) Section 4.10, Chapter 1 (S.B. 2), Acts of the 88th
103	103	Legislature, 2nd Called Session, 2023, which amended Section
104	104	42.26(d), Tax Code, as effective January 1, 2027; and
105	105	(6) Section 4.12, Chapter 1 (S.B. 2), Acts of the 88th
106	106	Legislature, 2nd Called Session, 2023, which amended Sections
107	107	403.302(d) and (i), Government Code, as effective January 1, 2027.
108	108	SECTION 5. This Act applies only to the appraisal of
109	109	property for ad valorem tax purposes for a tax year that begins on
110	110	or after the effective date of this Act.
111	111	SECTION 6. This Act takes effect January 1, 2026, but only
112	112	if the constitutional amendment proposed by the 89th Legislature,
113	113	Regular Session, 2025, to authorize the legislature to set lower
114	114	limits on the maximum appraised value of residence homesteads and
115	115	of real property other than a residence homestead for ad valorem tax
116	116	purposes and to make permanent the limit on the maximum appraised
117	117	value of real property other than a residence homestead is approved
118	118	by the voters. If that amendment is not approved by the voters,
119	119	this Act has no effect.