Texas 2025 - 89th Regular

Texas House Bill HB490 Compare Versions

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1	1	89R1251 RDS-D
2	2	By: Bell of Montgomery H.B. No. 490
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25	25	1.12(d), Tax Code, effective January 1, 2027, is repealed.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), (c), and (e) and adding Subsections (c-2),
32	32	(c-3), (c-4), and (h) to read as follows:
33	33	(a) Notwithstanding the requirements of Section 25.18 and
34	34	regardless of whether the appraisal office has appraised the
35	35	property and determined the market value of the property for the tax
36	36	year, an appraisal office may increase the appraised value of real
37	37	property [a residence homestead] for a tax year to an amount not to
38	38	exceed the lesser of:
39	39	(1) the market value of the property for the most
40	40	recent tax year that the market value was determined by the
41	41	appraisal office; or
42	42	(2) the sum of:
43	43	(A) five [10] percent of the appraised value of
44	44	the property for the preceding tax year;
45	45	(B) the appraised value of the property for the
46	46	preceding tax year; and
47	47	(C) the market value of all new improvements to
48	48	the property.
49	49	(b) When appraising real property [a residence homestead],
50	50	the chief appraiser shall:
51	51	(1) appraise the property at its market value; and
52	52	(2) include in the appraisal records both the market
53	53	value of the property and the amount computed under Subsection
54	54	(a)(2).
55	55	(c) The limitation provided by Subsection (a) takes effect
56	56	on January 1 of the tax year following the first tax year in which
57	57	the owner owns the property on January 1 [as to a residence
58	58	homestead on January 1 of the tax year following the first tax year
59	59	the owner qualifies the property for an exemption under Section
60	60	11.13]. Except as provided by Subsection (c-2) or (c-3), the [The]
61	61	limitation expires on January 1 of the first tax year following the
62	62	year in which [that neither] the owner of the property ceases to own
63	63	the property.
64	64	(c-2) If property subject to a limitation under this section
65	65	qualifies for an exemption under Section 11.13 when the ownership
66	66	of the property is transferred to the owner's spouse or surviving
67	67	spouse, the limitation expires on January 1 of the first tax year
68	68	following the year in which [when the limitation took effect nor]
69	69	the owner's spouse or surviving spouse ceases to own the property,
70	70	unless the limitation is further continued under this subsection on
71	71	the subsequent transfer to a spouse or surviving spouse [qualifies
72	72	for an exemption under Section 11.13].
73	73	(c-3) If property subject to a limitation under Subsection
74	74	(a), other than a residence homestead, is owned by two or more
75	75	persons, the limitation expires on January 1 of the first tax year
76	76	following the year in which the ownership of at least a 50 percent
77	77	interest in the property is sold or otherwise transferred.
78	78	(c-4) For purposes of applying the limitation provided by
79	79	this section, a person who acquired real property in a tax year
80	80	before the 2025 tax year, other than property that qualified as the
81	81	residence homestead of the person under Section 11.13 in the 2025
82	82	tax year, is considered to have acquired the property on January 1,
83	83	2025.
84	84	(e) In this section, "new improvement" means an improvement
85	85	to real property [a residence homestead] made after the most recent
86	86	appraisal of the property that increases the market value of the
87	87	property and the value of which is not included in the appraised
88	88	value of the property for the preceding tax year. The term does not
89	89	include repairs to or ordinary maintenance of an existing structure
90	90	or the grounds or another feature of the property.
91	91	(h) In this section, "real property" includes a
92	92	manufactured home as that term is defined by Section 1201.003,
93	93	Occupations Code, that qualifies as a residence homestead under
94	94	Section 11.13 of this code, regardless of whether the owner of the
95	95	manufactured home elects to treat the manufactured home as real
96	96	property under Section 1201.2055, Occupations Code.
97	97	SECTION 4. (a) Sections 25.19(b) and (g), Tax Code, as
98	98	amended by Section 4.04, Chapter 1 (S.B. 2), Acts of the 88th
99	99	Legislature, 2nd Called Session, 2023, and effective until January
100	100	1, 2027, are amended to read as follows:
101	101	(b) The chief appraiser shall separate real from personal
102	102	property and include in the notice for each:
103	103	(1) a list of the taxing units in which the property is
104	104	taxable;
105	105	(2) the appraised value of the property in the
106	106	preceding year;
107	107	(3) the taxable value of the property in the preceding
108	108	year for each taxing unit taxing the property;
109	109	(4) the appraised value of the property for the
110	110	current year, the kind and amount of each exemption and partial
111	111	exemption, if any, approved for the property for the current year
112	112	and for the preceding year, and, if an exemption or partial
113	113	exemption that was approved for the preceding year was canceled or
114	114	reduced for the current year, the amount of the exemption or partial
115	115	exemption canceled or reduced;
116	116	[(4-a) a statement of whether the property qualifies
117	117	for the circuit breaker limitation on appraised value provided by
118	118	Section 23.231;]
119	119	(5) in italic typeface, the following
120	120	statement: "The Texas Legislature does not set the amount of your
121	121	local taxes. Your property tax burden is decided by your locally
122	122	elected officials, and all inquiries concerning your taxes should
123	123	be directed to those officials";
124	124	(6) a detailed explanation of the time and procedure
125	125	for protesting the value;
126	126	(7) the date and place the appraisal review board will
127	127	begin hearing protests;
128	128	(8) an explanation of the availability and purpose of
129	129	an informal conference with the appraisal office before a hearing
130	130	on a protest; and
131	131	(9) a brief explanation that the governing body of
132	132	each taxing unit decides whether or not taxes on the property will
133	133	increase and the appraisal district only determines the value of
134	134	the property.
135	135	(g) By April 1 or as soon thereafter as practicable if the
136	136	property is a single-family residence that qualifies for an
137	137	exemption under Section 11.13, or by May 1 or as soon thereafter as
138	138	practicable in connection with any other property, the chief
139	139	appraiser shall deliver a written notice to the owner of each
140	140	property not included in a notice required to be delivered under
141	141	Subsection (a), if the property was reappraised in the current tax
142	142	year, if the ownership of the property changed during the preceding
143	143	year, or if the property owner or the agent of a property owner
144	144	authorized under Section 1.111 makes a written request for the
145	145	notice. The chief appraiser shall separate real from personal
146	146	property and include in the notice for each property:
147	147	(1) the appraised value of the property in the
148	148	preceding year;
149	149	(2) the appraised value of the property for the
150	150	current year and the kind of each partial exemption, if any,
151	151	approved for the current year;
152	152	[(2-a) a statement of whether the property qualifies
153	153	for the circuit breaker limitation on appraised value provided by
154	154	Section 23.231;]
155	155	(3) a detailed explanation of the time and procedure
156	156	for protesting the value; and
157	157	(4) the date and place the appraisal review board will
158	158	begin hearing protests.
159	159	(b) Section 4.05, Chapter 1 (S.B. 2), Acts of the 88th
160	160	Legislature, 2nd Called Session, 2023, which amended Sections
161	161	25.19(b) and (g), Tax Code, effective January 1, 2027, is repealed.
162	162	SECTION 5. (a) Section 41.41(a), Tax Code, as amended by
163	163	Section 4.07, Chapter 1 (S.B. 2), Acts of the 88th Legislature, 2nd
164	164	Called Session, 2023, and effective until January 1, 2027, is
165	165	amended to read as follows:
166	166	(a) A property owner is entitled to protest before the
167	167	appraisal review board the following actions:
168	168	(1) determination of the appraised value of the
169	169	owner's property or, in the case of land appraised as provided by
170	170	Subchapter C, D, E, or H, Chapter 23, determination of its appraised
171	171	or market value;
172	172	(2) unequal appraisal of the owner's property;
173	173	(3) inclusion of the owner's property on the appraisal
174	174	records;
175	175	(4) denial to the property owner in whole or in part of
176	176	a partial exemption;
177	177	[(4-a) determination that the owner's property does
178	178	not qualify for the circuit breaker limitation on appraised value
179	179	provided by Section 23.231;]
180	180	(5) determination that the owner's land does not
181	181	qualify for appraisal as provided by Subchapter C, D, E, or H,
182	182	Chapter 23;
183	183	(6) identification of the taxing units in which the
184	184	owner's property is taxable in the case of the appraisal district's
185	185	appraisal roll;
186	186	(7) determination that the property owner is the owner
187	187	of property;
188	188	(8) a determination that a change in use of land
189	189	appraised under Subchapter C, D, E, or H, Chapter 23, has occurred;
190	190	or
191	191	(9) any other action of the chief appraiser, appraisal
192	192	district, or appraisal review board that applies to and adversely
193	193	affects the property owner.
194	194	(b) Section 4.08, Chapter 1 (S.B. 2), Acts of the 88th
195	195	Legislature, 2nd Called Session, 2023, which amended Section
196	196	41.41(a), Tax Code, effective January 1, 2027, is repealed.
197	197	SECTION 6. (a) Section 42.26(d), Tax Code, as amended by
198	198	Section 4.09, Chapter 1 (S.B. 2), Acts of the 88th Legislature, 2nd
199	199	Called Session, 2023, and effective until January 1, 2027, is
200	200	amended to read as follows:
201	201	(d) For purposes of this section, the value of the property
202	202	subject to the suit and the value of a comparable property or sample
203	203	property that is used for comparison must be the market value
204	204	determined by the appraisal district when the property is subject
205	205	to the limitation on appraised value imposed by Section 23.23 [or
206	206	23.231].
207	207	(b) Section 4.10, Chapter 1 (S.B. 2), Acts of the 88th
208	208	Legislature, 2nd Called Session, 2023, which amended Section
209	209	42.26(d), Tax Code, effective January 1, 2027, is repealed.
210	210	SECTION 7. (a) Sections 403.302(d) and (i), Government
211	211	Code, as amended by Section 4.11, Chapter 1 (S.B. 2), Acts of the
212	212	88th Legislature, 2nd Called Session, 2023, and effective until
213	213	January 1, 2027, are amended to read as follows:
214	214	(d) For the purposes of this section, "taxable value" means
215	215	the market value of all taxable property less:
216	216	(1) the total dollar amount of any residence homestead
217	217	exemptions lawfully granted under Section 11.13(b) or (c), Tax
218	218	Code, in the year that is the subject of the study for each school
219	219	district;
220	220	(2) one-half of the total dollar amount of any
221	221	residence homestead exemptions granted under Section 11.13(n), Tax
222	222	Code, in the year that is the subject of the study for each school
223	223	district;
224	224	(3) the total dollar amount of any exemptions granted
225	225	before May 31, 1993, within a reinvestment zone under agreements
226	226	authorized by Chapter 312, Tax Code;
227	227	(4) subject to Subsection (e), the total dollar amount
228	228	of any captured appraised value of property that:
229	229	(A) is within a reinvestment zone created on or
230	230	before May 31, 1999, or is proposed to be included within the
231	231	boundaries of a reinvestment zone as the boundaries of the zone and
232	232	the proposed portion of tax increment paid into the tax increment
233	233	fund by a school district are described in a written notification
234	234	provided by the municipality or the board of directors of the zone
235	235	to the governing bodies of the other taxing units in the manner
236	236	provided by former Section 311.003(e), Tax Code, before May 31,
237	237	1999, and within the boundaries of the zone as those boundaries
238	238	existed on September 1, 1999, including subsequent improvements to
239	239	the property regardless of when made;
240	240	(B) generates taxes paid into a tax increment
241	241	fund created under Chapter 311, Tax Code, under a reinvestment zone
242	242	financing plan approved under Section 311.011(d), Tax Code, on or
243	243	before September 1, 1999; and
244	244	(C) is eligible for tax increment financing under
245	245	Chapter 311, Tax Code;
246	246	(5) the total dollar amount of any captured appraised
247	247	value of property that:
248	248	(A) is within a reinvestment zone:
249	249	(i) created on or before December 31, 2008,
250	250	by a municipality with a population of less than 18,000; and
251	251	(ii) the project plan for which includes
252	252	the alteration, remodeling, repair, or reconstruction of a
253	253	structure that is included on the National Register of Historic
254	254	Places and requires that a portion of the tax increment of the zone
255	255	be used for the improvement or construction of related facilities
256	256	or for affordable housing;
257	257	(B) generates school district taxes that are paid
258	258	into a tax increment fund created under Chapter 311, Tax Code; and
259	259	(C) is eligible for tax increment financing under
260	260	Chapter 311, Tax Code;
261	261	(6) the total dollar amount of any exemptions granted
262	262	under Section 11.251 or 11.253, Tax Code;
263	263	(7) the difference between the comptroller's estimate
264	264	of the market value and the productivity value of land that
265	265	qualifies for appraisal on the basis of its productive capacity,
266	266	except that the productivity value estimated by the comptroller may
267	267	not exceed the fair market value of the land;
268	268	(8) the portion of the appraised value of residence
269	269	homesteads of individuals who receive a tax limitation under
270	270	Section 11.26, Tax Code, on which school district taxes are not
271	271	imposed in the year that is the subject of the study, calculated as
272	272	if the residence homesteads were appraised at the full value
273	273	required by law;
274	274	(9) a portion of the market value of property not
275	275	otherwise fully taxable by the district at market value because of
276	276	action required by statute or the constitution of this state, other
277	277	than Section 11.311, Tax Code, that, if the tax rate adopted by the
278	278	district is applied to it, produces an amount equal to the
279	279	difference between the tax that the district would have imposed on
280	280	the property if the property were fully taxable at market value and
281	281	the tax that the district is actually authorized to impose on the
282	282	property, if this subsection does not otherwise require that
283	283	portion to be deducted;
284	284	(10) the market value of all tangible personal
285	285	property, other than manufactured homes, owned by a family or
286	286	individual and not held or used for the production of income;
287	287	(11) the appraised value of property the collection of
288	288	delinquent taxes on which is deferred under Section 33.06, Tax
289	289	Code;
290	290	(12) the portion of the appraised value of property
291	291	the collection of delinquent taxes on which is deferred under
292	292	Section 33.065, Tax Code;
293	293	(13) the amount by which the market value of property
294	294	to which Section 23.23 [or 23.231], Tax Code, applies exceeds the
295	295	appraised value of that property as calculated under that section
296	296	[Section 23.23 or 23.231, Tax Code, as applicable]; and
297	297	(14) the total dollar amount of any exemptions granted
298	298	under Section 11.35, Tax Code.
299	299	(i) If the comptroller determines in the study that the
300	300	market value of property in a school district as determined by the
301	301	appraisal district that appraises property for the school district,
302	302	less the total of the amounts and values listed in Subsection (d) as
303	303	determined by that appraisal district, is valid, the comptroller,
304	304	in determining the taxable value of property in the school district
305	305	under Subsection (d), shall for purposes of Subsection (d)(13)
306	306	subtract from the market value as determined by the appraisal
307	307	district of properties to which Section 23.23 [or 23.231], Tax
308	308	Code, applies the amount by which that amount exceeds the appraised
309	309	value of those properties as calculated by the appraisal district
310	310	under Section 23.23 [or 23.231], Tax Code[, as applicable]. If the
311	311	comptroller determines in the study that the market value of
312	312	property in a school district as determined by the appraisal
313	313	district that appraises property for the school district, less the
314	314	total of the amounts and values listed in Subsection (d) as
315	315	determined by that appraisal district, is not valid, the
316	316	comptroller, in determining the taxable value of property in the
317	317	school district under Subsection (d), shall for purposes of
318	318	Subsection (d)(13) subtract from the market value as estimated by
319	319	the comptroller of properties to which Section 23.23 [or 23.231],
320	320	Tax Code, applies the amount by which that amount exceeds the
321	321	appraised value of those properties as calculated by the appraisal
322	322	district under Section 23.23 [or 23.231], Tax Code[, as
323	323	applicable].
324	324	(b) Section 4.12, Chapter 1 (S.B. 2), Acts of the 88th
325	325	Legislature, 2nd Called Session, 2023, which amended Sections
326	326	403.302(d) and (i), Government Code, effective January 1, 2027, is
327	327	repealed.
328	328	SECTION 8. Sections 23.23(c-1), 23.231, and 25.19(o), Tax
329	329	Code, are repealed.
330	330	SECTION 9. This Act applies only to the appraisal for ad
331	331	valorem tax purposes of real property for a tax year that begins on
332	332	or after the effective date of this Act.
333	333	SECTION 10. This Act takes effect January 1, 2026, but only
334	334	if the constitutional amendment proposed by the 89th Legislature,
335	335	Regular Session, 2025, to authorize the legislature to limit the
336	336	maximum appraised value of real property for ad valorem tax
337	337	purposes to 105 percent or more of the appraised value of the
338	338	property for the preceding tax year is approved by the voters. If
339	339	that amendment is not approved by the voters, this Act has no
340	340	effect.