Texas 2025 - 89th Regular

Texas House Bill HB4082 Compare Versions

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Old	New	Differences
1	1	89R3283 DRS-D
2	2	By: Vasut H.B. No. 4082
3	3
4	4
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to a limitation on increases in the appraised value of real
10	10	property for ad valorem tax purposes.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. (a) Section 1.12(d), Tax Code, as amended by
13	13	Section 4.01, Chapter 1 (S.B. 2), Acts of the 88th Legislature, 2nd
14	14	Called Session, 2023, and effective until January 1, 2027, is
15	15	amended to read as follows:
16	16	(d) For purposes of this section, the appraisal ratio of
17	17	property to which Section 23.23 [or 23.231] applies is the ratio of
18	18	the property's market value as determined by the appraisal district
19	19	or appraisal review board, as applicable, to the market value of the
20	20	property according to law. The appraisal ratio is not calculated
21	21	according to the appraised value of the property as limited by
22	22	Section 23.23 [or 23.231].
23	23	(b) Section 4.02, Chapter 1 (S.B. 2), Acts of the 88th
24	24	Legislature, 2nd Called Session, 2023, which amended Section
25	25	1.12(d), Tax Code, effective January 1, 2027, is repealed.
26	26	SECTION 2. The heading to Section 23.23, Tax Code, is
27	27	amended to read as follows:
28	28	Sec. 23.23. LIMITATION ON APPRAISED VALUE OF REAL PROPERTY
29	29	[RESIDENCE HOMESTEAD].
30	30	SECTION 3. Section 23.23, Tax Code, is amended by amending
31	31	Subsections (a), (b), and (c) and adding Subsections (a-1), (a-2),
32	32	(a-3), (a-4), (a-5), (a-6), (a-7), (a-8), (c-2), (c-3), (c-4), and
33	33	(h) to read as follows:
34	34	(a) The appraised value of a parcel of real property for the
35	35	first tax year in which the owner owns the property on January 1 is
36	36	equal to the market value of the property. Notwithstanding Section
37	37	23.01, the appraised value of the property for each subsequent tax
38	38	year until the tax year in which the limitation provided by this
39	39	subsection expires is equal to the appraised value of the property
40	40	for the preceding tax year as increased by the chief appraiser for
41	41	the current tax year using the percentage by which the appraised
42	42	value may be increased as determined by the comptroller under
43	43	Subsection (a-8) [Notwithstanding the requirements of Section
44	44	25.18 and regardless of whether the appraisal office has appraised
45	45	the property and determined the market value of the property for the
46	46	tax year, an appraisal office may increase the appraised value of a
47	47	residence homestead for a tax year to an amount not to exceed the
48	48	lesser of:
49	49	[(1) the market value of the property for the most
50	50	recent tax year that the market value was determined by the
51	51	appraisal office; or
52	52	[(2) the sum of:
53	53	[(A) 10 percent of the appraised value of the
54	54	property for the preceding tax year;
55	55	[(B) the appraised value of the property for the
56	56	preceding tax year; and
57	57	[(C) the market value of all new improvements to
58	58	the property].
59	59	(a-1) Notwithstanding Subsection (a), if the owner of real
60	60	property acquired the property as a bona fide purchaser for value,
61	61	the purchase price of the property paid by the property owner is
62	62	considered to be the market value of the property for the first tax
63	63	year in which the owner owns the property on January 1.
64	64	(a-2) If the first tax year the property owner owned the
65	65	property on January 1 was a tax year before the 2026 tax year:
66	66	(1) the property owner is considered to have acquired
67	67	the property on January 1, 2025; and
68	68	(2) the appraised value of the property as shown on the
69	69	2025 appraisal roll is considered to be the market value of the
70	70	property for that tax year for purposes of Subsection (a).
71	71	(a-3) Subsection (a-1) does not apply to real property if:
72	72	(1) the purchase was made:
73	73	(A) pursuant to a court order;
74	74	(B) from a trustee in bankruptcy;
75	75	(C) by one co-owner from one or more other
76	76	co-owners;
77	77	(D) from a spouse or a person or persons within
78	78	the first or second degree of lineal consanguinity of one or more of
79	79	the purchasers; or
80	80	(E) from a governmental entity; or
81	81	(2) the chief appraiser determines that the applicant
82	82	was not a bona fide purchaser for value under criteria established
83	83	by rules adopted by the comptroller for that purpose.
84	84	(a-4) To receive a limitation on appraised value under
85	85	Subsection (a) computed in accordance with Subsection (a-1), an
86	86	owner of the property must apply for the limitation. To apply for
87	87	the limitation, the owner must file an application with the chief
88	88	appraiser for each appraisal district in which the property subject
89	89	to the claimed limitation is located. The application must be filed
90	90	not later than April 30. The comptroller by rule shall prescribe
91	91	the form for the application to ensure that the applicant provides
92	92	the information necessary to determine the applicant's eligibility
93	93	for the limitation, including the purchase price of the property
94	94	paid by the applicant.
95	95	(a-5) An application filed with a chief appraiser under
96	96	Subsection (a-4) is confidential and not open to public inspection.
97	97	The application and the information it contains may not be
98	98	disclosed to another person other than an employee of the appraisal
99	99	district who appraises property, except as provided by Subsection
100	100	(a-6).
101	101	(a-6) Information that is confidential under Subsection
102	102	(a-5) may be disclosed:
103	103	(1) in a judicial or administrative proceeding under a
104	104	lawful subpoena;
105	105	(2) to a purchaser, grantee, seller, or grantor named
106	106	in the application or in the deed to which the application applies
107	107	or to a representative of the purchaser, grantee, seller, or
108	108	grantor under a written authorization signed by the purchaser,
109	109	grantee, seller, or grantor;
110	110	(3) to the comptroller or to an assessor for a taxing
111	111	unit in which the property described in the application is located;
112	112	(4) in a judicial or administrative proceeding related
113	113	to real property taxation:
114	114	(A) to which the purchaser, grantee, seller, or
115	115	grantor is a party;
116	116	(B) to which an owner of the property described
117	117	in the application is a party; or
118	118	(C) by the appraisal district for the purpose of
119	119	establishing a value of the property or of providing evidence of
120	120	comparable sales to appraise another property;
121	121	(5) for statistical purposes if the information is
122	122	provided in a form that does not identify a specific property or
123	123	specific purchaser, grantee, seller, or grantor;
124	124	(6) if and to the extent that the information is
125	125	required to be included in a public document or record that the
126	126	appraisal office is required to prepare or maintain; or
127	127	(7) to a taxing unit or its legal representative that
128	128	is engaged in the collection of delinquent taxes on the property
129	129	described in the application.
130	130	(a-7) Information that is disclosed under Subsection (a-6)
131	131	does not lose its confidential character.
132	132	(a-8) For each tax year, using the index that the
133	133	comptroller considers to most accurately report changes in the
134	134	purchasing power of the dollar for consumers in this state, the
135	135	comptroller shall determine and publicize the percentage by which
136	136	the appraised value of real property may be increased under
137	137	Subsection (a). Each chief appraiser shall use the percentage
138	138	determined by the comptroller under this subsection to determine
139	139	the appraised value under Subsection (a) of real property appraised
140	140	by that chief appraiser.
141	141	(b) When appraising real property [a residence homestead],
142	142	the chief appraiser shall:
143	143	(1) appraise the property at its market value; and
144	144	(2) include in the appraisal records both the market
145	145	value of the property and the amount computed under Subsection (a)
146	146	[(a)(2)].
147	147	(c) The limitation provided by Subsection (a) takes effect
148	148	on January 1 of the first tax year in which the owner owns the
149	149	property on January 1 [as to a residence homestead on January 1 of
150	150	the tax year following the first tax year the owner qualifies the
151	151	property for an exemption under Section 11.13]. Except as provided
152	152	by Subsection (c-2) or (c-3), the [The] limitation expires on
153	153	January 1 of the first tax year following the year in which [that
154	154	neither] the owner of the property ceases to own the property.
155	155	(c-2) If property subject to a limitation under this section
156	156	qualifies for an exemption under Section 11.13 when the ownership
157	157	of the property is transferred to the owner's spouse or surviving
158	158	spouse, the limitation expires on January 1 of the first tax year
159	159	following the year in which [when the limitation took effect nor]
160	160	the owner's spouse or surviving spouse ceases to own the property,
161	161	unless the limitation is further continued under this subsection on
162	162	the subsequent transfer to a spouse or surviving spouse [qualifies
163	163	for an exemption under Section 11.13].
164	164	(c-3) If property subject to a limitation under Subsection
165	165	(a), other than a residence homestead, is owned by two or more
166	166	persons, the limitation expires on January 1 of the first tax year
167	167	following the year in which the ownership of at least a 50 percent
168	168	interest in the property is sold or otherwise transferred.
169	169	(c-4) Notwithstanding Subsection (c), a limitation
170	170	established under Subsection (a) does not expire if a change in
171	171	ownership of the property occurs by inheritance or under a will as
172	172	long as the person who acquires the property qualifies for an
173	173	exemption under Section 11.13.
174	174	(h) In this section, "real property" includes a
175	175	manufactured home as that term is defined by Section 1201.003,
176	176	Occupations Code, that qualifies as a residence homestead under
177	177	Section 11.13 of this code, regardless of whether the owner of the
178	178	manufactured home elects to treat the manufactured home as real
179	179	property under Section 1201.2055, Occupations Code.
180	180	SECTION 4. (a) Sections 25.19(b) and (g), Tax Code, as
181	181	amended by Section 4.04, Chapter 1 (S.B. 2), Acts of the 88th
182	182	Legislature, 2nd Called Session, 2023, and effective until January
183	183	1, 2027, are amended to read as follows:
184	184	(b) The chief appraiser shall separate real from personal
185	185	property and include in the notice for each:
186	186	(1) a list of the taxing units in which the property is
187	187	taxable;
188	188	(2) the appraised value of the property in the
189	189	preceding year;
190	190	(3) the taxable value of the property in the preceding
191	191	year for each taxing unit taxing the property;
192	192	(4) the appraised value of the property for the
193	193	current year, the kind and amount of each exemption and partial
194	194	exemption, if any, approved for the property for the current year
195	195	and for the preceding year, and, if an exemption or partial
196	196	exemption that was approved for the preceding year was canceled or
197	197	reduced for the current year, the amount of the exemption or partial
198	198	exemption canceled or reduced;
199	199	[(4-a) a statement of whether the property qualifies
200	200	for the circuit breaker limitation on appraised value provided by
201	201	Section 23.231;]
202	202	(5) in italic typeface, the following
203	203	statement: "The Texas Legislature does not set the amount of your
204	204	local taxes. Your property tax burden is decided by your locally
205	205	elected officials, and all inquiries concerning your taxes should
206	206	be directed to those officials";
207	207	(6) a detailed explanation of the time and procedure
208	208	for protesting the value;
209	209	(7) the date and place the appraisal review board will
210	210	begin hearing protests;
211	211	(8) an explanation of the availability and purpose of
212	212	an informal conference with the appraisal office before a hearing
213	213	on a protest; and
214	214	(9) a brief explanation that the governing body of
215	215	each taxing unit decides whether or not taxes on the property will
216	216	increase and the appraisal district only determines the value of
217	217	the property.
218	218	(g) By April 1 or as soon thereafter as practicable if the
219	219	property is a single-family residence that qualifies for an
220	220	exemption under Section 11.13, or by May 1 or as soon thereafter as
221	221	practicable in connection with any other property, the chief
222	222	appraiser shall deliver a written notice to the owner of each
223	223	property not included in a notice required to be delivered under
224	224	Subsection (a), if the property was reappraised in the current tax
225	225	year, if the ownership of the property changed during the preceding
226	226	year, or if the property owner or the agent of a property owner
227	227	authorized under Section 1.111 makes a written request for the
228	228	notice. The chief appraiser shall separate real from personal
229	229	property and include in the notice for each property:
230	230	(1) the appraised value of the property in the
231	231	preceding year;
232	232	(2) the appraised value of the property for the
233	233	current year and the kind of each partial exemption, if any,
234	234	approved for the current year;
235	235	[(2-a) a statement of whether the property qualifies
236	236	for the circuit breaker limitation on appraised value provided by
237	237	Section 23.231;]
238	238	(3) a detailed explanation of the time and procedure
239	239	for protesting the value; and
240	240	(4) the date and place the appraisal review board will
241	241	begin hearing protests.
242	242	(b) Section 4.05, Chapter 1 (S.B. 2), Acts of the 88th
243	243	Legislature, 2nd Called Session, 2023, which amended Sections
244	244	25.19(b) and (g), Tax Code, effective January 1, 2027, is repealed.
245	245	SECTION 5. (a) Section 41.41(a), Tax Code, as amended by
246	246	Section 4.07, Chapter 1 (S.B. 2), Acts of the 88th Legislature, 2nd
247	247	Called Session, 2023, and effective until January 1, 2027, is
248	248	amended to read as follows:
249	249	(a) A property owner is entitled to protest before the
250	250	appraisal review board the following actions:
251	251	(1) determination of the appraised value of the
252	252	owner's property or, in the case of land appraised as provided by
253	253	Subchapter C, D, E, or H, Chapter 23, determination of its appraised
254	254	or market value;
255	255	(2) unequal appraisal of the owner's property;
256	256	(3) inclusion of the owner's property on the appraisal
257	257	records;
258	258	(4) denial to the property owner in whole or in part of
259	259	a partial exemption;
260	260	[(4-a) determination that the owner's property does
261	261	not qualify for the circuit breaker limitation on appraised value
262	262	provided by Section 23.231;]
263	263	(5) determination that the owner's land does not
264	264	qualify for appraisal as provided by Subchapter C, D, E, or H,
265	265	Chapter 23;
266	266	(6) identification of the taxing units in which the
267	267	owner's property is taxable in the case of the appraisal district's
268	268	appraisal roll;
269	269	(7) determination that the property owner is the owner
270	270	of property;
271	271	(8) a determination that a change in use of land
272	272	appraised under Subchapter C, D, E, or H, Chapter 23, has occurred;
273	273	or
274	274	(9) any other action of the chief appraiser, appraisal
275	275	district, or appraisal review board that applies to and adversely
276	276	affects the property owner.
277	277	(b) Section 4.08, Chapter 1 (S.B. 2), Acts of the 88th
278	278	Legislature, 2nd Called Session, 2023, which amended Section
279	279	41.41(a), Tax Code, effective January 1, 2027, is repealed.
280	280	SECTION 6. (a) Section 42.26(d), Tax Code, as amended by
281	281	Section 4.09, Chapter 1 (S.B. 2), Acts of the 88th Legislature, 2nd
282	282	Called Session, 2023, and effective until January 1, 2027, is
283	283	amended to read as follows:
284	284	(d) For purposes of this section, the value of the property
285	285	subject to the suit and the value of a comparable property or sample
286	286	property that is used for comparison must be the market value
287	287	determined by the appraisal district when the property is subject
288	288	to the limitation on appraised value imposed by Section 23.23 [or
289	289	23.231].
290	290	(b) Section 4.10, Chapter 1 (S.B. 2), Acts of the 88th
291	291	Legislature, 2nd Called Session, 2023, which amended Section
292	292	42.26(d), Tax Code, effective January 1, 2027, is repealed.
293	293	SECTION 7. (a) Sections 403.302(d) and (i), Government
294	294	Code, as amended by Section 4.11, Chapter 1 (S.B. 2), Acts of the
295	295	88th Legislature, 2nd Called Session, 2023, and effective until
296	296	January 1, 2027, are amended to read as follows:
297	297	(d) For the purposes of this section, "taxable value" means
298	298	the market value of all taxable property less:
299	299	(1) the total dollar amount of any residence homestead
300	300	exemptions lawfully granted under Section 11.13(b) or (c), Tax
301	301	Code, in the year that is the subject of the study for each school
302	302	district;
303	303	(2) one-half of the total dollar amount of any
304	304	residence homestead exemptions granted under Section 11.13(n), Tax
305	305	Code, in the year that is the subject of the study for each school
306	306	district;
307	307	(3) the total dollar amount of any exemptions granted
308	308	before May 31, 1993, within a reinvestment zone under agreements
309	309	authorized by Chapter 312, Tax Code;
310	310	(4) subject to Subsection (e), the total dollar amount
311	311	of any captured appraised value of property that:
312	312	(A) is within a reinvestment zone created on or
313	313	before May 31, 1999, or is proposed to be included within the
314	314	boundaries of a reinvestment zone as the boundaries of the zone and
315	315	the proposed portion of tax increment paid into the tax increment
316	316	fund by a school district are described in a written notification
317	317	provided by the municipality or the board of directors of the zone
318	318	to the governing bodies of the other taxing units in the manner
319	319	provided by former Section 311.003(e), Tax Code, before May 31,
320	320	1999, and within the boundaries of the zone as those boundaries
321	321	existed on September 1, 1999, including subsequent improvements to
322	322	the property regardless of when made;
323	323	(B) generates taxes paid into a tax increment
324	324	fund created under Chapter 311, Tax Code, under a reinvestment zone
325	325	financing plan approved under Section 311.011(d), Tax Code, on or
326	326	before September 1, 1999; and
327	327	(C) is eligible for tax increment financing under
328	328	Chapter 311, Tax Code;
329	329	(5) the total dollar amount of any captured appraised
330	330	value of property that:
331	331	(A) is within a reinvestment zone:
332	332	(i) created on or before December 31, 2008,
333	333	by a municipality with a population of less than 18,000; and
334	334	(ii) the project plan for which includes
335	335	the alteration, remodeling, repair, or reconstruction of a
336	336	structure that is included on the National Register of Historic
337	337	Places and requires that a portion of the tax increment of the zone
338	338	be used for the improvement or construction of related facilities
339	339	or for affordable housing;
340	340	(B) generates school district taxes that are paid
341	341	into a tax increment fund created under Chapter 311, Tax Code; and
342	342	(C) is eligible for tax increment financing under
343	343	Chapter 311, Tax Code;
344	344	(6) the total dollar amount of any exemptions granted
345	345	under Section 11.251 or 11.253, Tax Code;
346	346	(7) the difference between the comptroller's estimate
347	347	of the market value and the productivity value of land that
348	348	qualifies for appraisal on the basis of its productive capacity,
349	349	except that the productivity value estimated by the comptroller may
350	350	not exceed the fair market value of the land;
351	351	(8) the portion of the appraised value of residence
352	352	homesteads of individuals who receive a tax limitation under
353	353	Section 11.26, Tax Code, on which school district taxes are not
354	354	imposed in the year that is the subject of the study, calculated as
355	355	if the residence homesteads were appraised at the full value
356	356	required by law;
357	357	(9) a portion of the market value of property not
358	358	otherwise fully taxable by the district at market value because of
359	359	action required by statute or the constitution of this state, other
360	360	than Section 11.311, Tax Code, that, if the tax rate adopted by the
361	361	district is applied to it, produces an amount equal to the
362	362	difference between the tax that the district would have imposed on
363	363	the property if the property were fully taxable at market value and
364	364	the tax that the district is actually authorized to impose on the
365	365	property, if this subsection does not otherwise require that
366	366	portion to be deducted;
367	367	(10) the market value of all tangible personal
368	368	property, other than manufactured homes, owned by a family or
369	369	individual and not held or used for the production of income;
370	370	(11) the appraised value of property the collection of
371	371	delinquent taxes on which is deferred under Section 33.06, Tax
372	372	Code;
373	373	(12) the portion of the appraised value of property
374	374	the collection of delinquent taxes on which is deferred under
375	375	Section 33.065, Tax Code;
376	376	(13) the amount by which the market value of property
377	377	to which Section 23.23 [or 23.231], Tax Code, applies exceeds the
378	378	appraised value of that property as calculated under that section
379	379	[Section 23.23 or 23.231, Tax Code, as applicable]; and
380	380	(14) the total dollar amount of any exemptions granted
381	381	under Section 11.35, Tax Code.
382	382	(i) If the comptroller determines in the study that the
383	383	market value of property in a school district as determined by the
384	384	appraisal district that appraises property for the school district,
385	385	less the total of the amounts and values listed in Subsection (d) as
386	386	determined by that appraisal district, is valid, the comptroller,
387	387	in determining the taxable value of property in the school district
388	388	under Subsection (d), shall for purposes of Subsection (d)(13)
389	389	subtract from the market value as determined by the appraisal
390	390	district of properties to which Section 23.23 [or 23.231], Tax
391	391	Code, applies the amount by which that amount exceeds the appraised
392	392	value of those properties as calculated by the appraisal district
393	393	under Section 23.23 [or 23.231], Tax Code[, as applicable]. If the
394	394	comptroller determines in the study that the market value of
395	395	property in a school district as determined by the appraisal
396	396	district that appraises property for the school district, less the
397	397	total of the amounts and values listed in Subsection (d) as
398	398	determined by that appraisal district, is not valid, the
399	399	comptroller, in determining the taxable value of property in the
400	400	school district under Subsection (d), shall for purposes of
401	401	Subsection (d)(13) subtract from the market value as estimated by
402	402	the comptroller of properties to which Section 23.23 [or 23.231],
403	403	Tax Code, applies the amount by which that amount exceeds the
404	404	appraised value of those properties as calculated by the appraisal
405	405	district under Section 23.23 [or 23.231], Tax Code[, as
406	406	applicable].
407	407	(b) Section 4.12, Chapter 1 (S.B. 2), Acts of the 88th
408	408	Legislature, 2nd Called Session, 2023, which amended Sections
409	409	403.302(d) and (i), Government Code, effective January 1, 2027, is
410	410	repealed.
411	411	SECTION 8. The following provisions of the Tax Code are
412	412	repealed:
413	413	(1) Sections 23.23(c-1), (e), (f), and (g);
414	414	(2) Section 23.231; and
415	415	(3) Section 25.19(o).
416	416	SECTION 9. This Act applies only to ad valorem taxes imposed
417	417	for a tax year beginning on or after the effective date of this Act.
418	418	SECTION 10. This Act takes effect January 1, 2026, but only
419	419	if the constitutional amendment proposed by the 89th Legislature,
420	420	Regular Session, 2025, authorizing the legislature to provide that
421	421	the appraised value of a parcel of real property for ad valorem tax
422	422	purposes for the first tax year in which the owner owns the property
423	423	on January 1 is the market value of the property and that, if the
424	424	owner purchased the property, the purchase price of the property is
425	425	considered to be the market value of the property for that tax year
426	426	and to limit increases in the appraised value of the property for
427	427	subsequent tax years based on the inflation rate is approved by the
428	428	voters. If that amendment is not approved by the voters, this Act
429	429	has no effect.