| 1 | 1 | | By: Wilson H.B. No. 982 |
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| 2 | 2 | | |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | |
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| 6 | 6 | | A BILL TO BE ENTITLED |
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| 7 | 7 | | AN ACT |
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| 8 | 8 | | relating to the authority of a taxing unit other than a school |
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| 9 | 9 | | district, county, municipality, or junior college district to |
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| 10 | 10 | | establish a limitation on the amount of ad valorem taxes that the |
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| 11 | 11 | | taxing unit may impose on the residence homesteads of certain |
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| 12 | 12 | | low-income individuals who are disabled or elderly and their |
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| 13 | 13 | | surviving spouses. |
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| 14 | 14 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 15 | 15 | | SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by |
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| 16 | 16 | | adding Section 11.262 to read as follows: |
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| 17 | 17 | | Sec. 11.262. LIMITATION OF TAX IMPOSED BY CERTAIN TAXING |
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| 18 | 18 | | UNITS ON HOMESTEADS OF LOW-INCOME INDIVIDUALS WHO ARE DISABLED OR |
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| 19 | 19 | | ELDERLY. (a) In this section: |
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| 20 | 20 | | (1) "Eligible individual" means an individual whose |
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| 21 | 21 | | household income does not exceed 200 percent of the federal poverty |
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| 22 | 22 | | level. |
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| 23 | 23 | | (2) "Qualifying taxing unit" means a taxing unit other |
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| 24 | 24 | | than a school district, county, municipality, or junior college |
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| 25 | 25 | | district. |
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| 26 | 26 | | (3) "Residence homestead" has the meaning assigned by |
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| 27 | 27 | | Section 11.13. |
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| 28 | 28 | | (b) This section applies only to a qualifying taxing unit |
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| 29 | 29 | | that establishes a limitation under Section 1-b(h-1), Article VIII, |
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| 30 | 30 | | Texas Constitution, on the total amount of taxes that may be imposed |
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| 31 | 31 | | by the taxing unit on the residence homestead of an eligible |
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| 32 | 32 | | individual who is disabled or is 65 years of age or older. |
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| 33 | 33 | | (c) The tax officials shall appraise the residence |
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| 34 | 34 | | homestead of an eligible individual who is disabled or is 65 years |
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| 35 | 35 | | of age or older and calculate taxes on that residence homestead in |
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| 36 | 36 | | the same manner as other residence homesteads, but if the tax so |
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| 37 | 37 | | calculated exceeds the limitation provided by this section, the tax |
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| 38 | 38 | | imposed is the amount of the tax as limited by this section, except |
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| 39 | 39 | | as otherwise provided by this section. |
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| 40 | 40 | | (d) A qualifying taxing unit may not increase the total |
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| 41 | 41 | | annual amount of ad valorem taxes the taxing unit imposes on the |
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| 42 | 42 | | residence homestead of an eligible individual who is disabled or is |
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| 43 | 43 | | 65 years of age or older above the amount of the taxes the taxing |
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| 44 | 44 | | unit imposed on the residence homestead in the first tax year in |
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| 45 | 45 | | which the eligible individual qualified that residence homestead |
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| 46 | 46 | | for the exemption provided by Section 11.13(c) for an individual |
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| 47 | 47 | | who is disabled or is 65 years of age or older and was an eligible |
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| 48 | 48 | | individual. If the eligible individual qualified that residence |
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| 49 | 49 | | homestead for the exemption after the beginning of that first year |
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| 50 | 50 | | and the residence homestead remains eligible for the exemption for |
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| 51 | 51 | | the next year, and if the taxes imposed by the taxing unit on the |
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| 52 | 52 | | residence homestead in the next year are less than the amount of |
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| 53 | 53 | | those taxes imposed in that first year, the taxing unit may not |
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| 54 | 54 | | subsequently increase the total annual amount of ad valorem taxes |
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| 55 | 55 | | it imposes on the residence homestead above the amount it imposed on |
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| 56 | 56 | | the residence homestead in the year immediately following the first |
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| 57 | 57 | | year for which the individual qualified that residence homestead |
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| 58 | 58 | | for the exemption and was an eligible individual. |
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| 59 | 59 | | (e) If an eligible individual who is disabled or is 65 years |
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| 60 | 60 | | of age or older makes improvements to the individual's residence |
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| 61 | 61 | | homestead, other than repairs and other than improvements required |
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| 62 | 62 | | to comply with governmental requirements, the qualifying taxing |
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| 63 | 63 | | unit may increase the amount of taxes on the homestead in the first |
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| 64 | 64 | | year the value of the homestead is increased on the appraisal roll |
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| 65 | 65 | | because of the enhancement of value by the improvements. The |
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| 66 | 66 | | amount of the tax increase is determined by applying the current tax |
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| 67 | 67 | | rate of the qualifying taxing unit to the difference between the |
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| 68 | 68 | | appraised value of the homestead with the improvements and the |
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| 69 | 69 | | appraised value the homestead would have had without the |
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| 70 | 70 | | improvements. The limitation provided by this section then |
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| 71 | 71 | | applies to the increased amount of taxes on the residence homestead |
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| 72 | 72 | | until more improvements, if any, are made. |
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| 73 | 73 | | (f) A limitation on tax increases provided by this section |
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| 74 | 74 | | expires if on January 1: |
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| 75 | 75 | | (1) none of the owners of the structure who qualify for |
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| 76 | 76 | | the exemption provided by Section 11.13(c) for an individual who is |
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| 77 | 77 | | disabled or is 65 years of age or older and who owned the structure |
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| 78 | 78 | | when the limitation first took effect are using the structure as a |
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| 79 | 79 | | residence homestead; |
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| 80 | 80 | | (2) none of the owners of the structure qualify for the |
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| 81 | 81 | | exemption provided by Section 11.13(c) for an individual who is |
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| 82 | 82 | | disabled or is 65 years of age or older; or |
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| 83 | 83 | | (3) none of the owners of the structure are eligible |
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| 84 | 84 | | individuals. |
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| 85 | 85 | | (g) If the appraisal roll provides for taxation of appraised |
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| 86 | 86 | | value for a prior year because a residence homestead exemption for |
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| 87 | 87 | | an eligible individual who is disabled or is 65 years of age or |
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| 88 | 88 | | older was erroneously allowed or because an individual was |
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| 89 | 89 | | erroneously considered to be an eligible individual, the tax |
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| 90 | 90 | | assessor for the applicable county shall add, as back taxes due as |
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| 91 | 91 | | provided by Section 26.09(d), the positive difference, if any, |
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| 92 | 92 | | between the tax that should have been imposed for that year and the |
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| 93 | 93 | | tax that was imposed under the requirements of this section. |
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| 94 | 94 | | (h) A limitation on tax increases provided by this section |
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| 95 | 95 | | does not expire because the owner of an interest in the structure |
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| 96 | 96 | | conveys the interest to a qualifying trust as defined by Section |
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| 97 | 97 | | 11.13(j) if the owner or the owner's spouse is a trustor of the |
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| 98 | 98 | | trust and is entitled to occupy the structure. |
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| 99 | 99 | | (i) Except as provided by Subsection (e), if an eligible |
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| 100 | 100 | | individual who receives a limitation on tax increases provided by |
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| 101 | 101 | | this section, including a surviving spouse who receives a |
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| 102 | 102 | | limitation under Subsection (k), subsequently qualifies a |
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| 103 | 103 | | different residence homestead in the same qualifying taxing unit |
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| 104 | 104 | | for an exemption under Section 11.13, the taxing unit may not impose |
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| 105 | 105 | | ad valorem taxes on the subsequently qualified homestead in a year |
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| 106 | 106 | | in an amount that exceeds the amount of taxes the taxing unit would |
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| 107 | 107 | | have imposed on the subsequently qualified homestead in the first |
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| 108 | 108 | | year in which the individual receives that exemption for the |
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| 109 | 109 | | subsequently qualified homestead had the limitation on tax |
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| 110 | 110 | | increases required by this section not been in effect, multiplied |
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| 111 | 111 | | by a fraction the numerator of which is the total amount of taxes |
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| 112 | 112 | | imposed on the former homestead by the taxing unit in the last year |
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| 113 | 113 | | in which the individual received that exemption for the former |
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| 114 | 114 | | homestead and the denominator of which is the total amount of taxes |
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| 115 | 115 | | that would have been imposed on the former homestead by the taxing |
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| 116 | 116 | | unit in the last year in which the individual received that |
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| 117 | 117 | | exemption for the former homestead had the limitation on tax |
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| 118 | 118 | | increases provided by this section not been in effect. |
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| 119 | 119 | | (j) An eligible individual who receives a limitation on tax |
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| 120 | 120 | | increases under this section, including a surviving spouse who |
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| 121 | 121 | | receives a limitation under Subsection (k), and who subsequently |
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| 122 | 122 | | qualifies a different residence homestead for an exemption under |
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| 123 | 123 | | Section 11.13, or an agent of the individual, is entitled to receive |
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| 124 | 124 | | from the chief appraiser of the appraisal district in which the |
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| 125 | 125 | | former homestead was located a written certificate providing the |
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| 126 | 126 | | information necessary to determine whether the individual may |
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| 127 | 127 | | qualify for a limitation on the subsequently qualified homestead |
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| 128 | 128 | | under Subsection (i) and to calculate the amount of taxes the |
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| 129 | 129 | | qualifying taxing unit may impose on the subsequently qualified |
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| 130 | 130 | | homestead. |
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| 131 | 131 | | (k) If an eligible individual who qualifies for a limitation |
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| 132 | 132 | | on tax increases under this section dies, the surviving spouse of |
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| 133 | 133 | | the individual is entitled to the limitation on taxes imposed by the |
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| 134 | 134 | | qualifying taxing unit on the residence homestead of the individual |
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| 135 | 135 | | if: |
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| 136 | 136 | | (1) the surviving spouse: |
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| 137 | 137 | | (A) is disabled or is 55 years of age or older |
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| 138 | 138 | | when the individual dies; and |
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| 139 | 139 | | (B) is an eligible individual; and |
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| 140 | 140 | | (2) the residence homestead of the individual: |
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| 141 | 141 | | (A) is the residence homestead of the surviving |
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| 142 | 142 | | spouse on the date that the individual dies; and |
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| 143 | 143 | | (B) remains the residence homestead of the |
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| 144 | 144 | | surviving spouse. |
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| 145 | 145 | | (l) If an eligible individual who is 65 years of age or older |
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| 146 | 146 | | and qualifies for a limitation on tax increases for the elderly |
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| 147 | 147 | | under this section dies in the first year in which the individual |
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| 148 | 148 | | qualified for the limitation and the individual first qualified for |
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| 149 | 149 | | the limitation after the beginning of that year, except as provided |
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| 150 | 150 | | by Subsection (m), the amount to which the surviving spouse's taxes |
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| 151 | 151 | | are limited under Subsection (k) is the amount of taxes imposed by |
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| 152 | 152 | | the qualifying taxing unit on the residence homestead in that year |
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| 153 | 153 | | determined as if the individual qualifying for the exemption had |
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| 154 | 154 | | lived for the entire year. |
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| 155 | 155 | | (m) If in the first tax year after the year in which an |
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| 156 | 156 | | eligible individual who is 65 years of age or older dies under the |
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| 157 | 157 | | circumstances described by Subsection (l), the amount of taxes |
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| 158 | 158 | | imposed by the qualifying taxing unit on the residence homestead of |
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| 159 | 159 | | the surviving spouse is less than the amount of taxes imposed by the |
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| 160 | 160 | | taxing unit in the preceding year as limited by Subsection (l), in a |
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| 161 | 161 | | subsequent tax year the surviving spouse's taxes imposed by the |
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| 162 | 162 | | taxing unit on that residence homestead are limited to the amount of |
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| 163 | 163 | | taxes imposed by the taxing unit in that first tax year after the |
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| 164 | 164 | | year in which the individual dies. |
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| 165 | 165 | | (n) Notwithstanding Subsection (f), a limitation on tax |
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| 166 | 166 | | increases provided by this section does not expire if the owner of |
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| 167 | 167 | | the structure qualifies for an exemption under Section 11.13 under |
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| 168 | 168 | | the circumstances described by Section 11.135(a). |
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| 169 | 169 | | (o) Notwithstanding Subsections (c) and (e), an improvement |
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| 170 | 170 | | to property that would otherwise constitute an improvement under |
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| 171 | 171 | | Subsection (e) is not treated as an improvement under that |
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| 172 | 172 | | subsection if the improvement is a replacement structure for a |
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| 173 | 173 | | structure that was rendered uninhabitable or unusable by a casualty |
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| 174 | 174 | | or by wind or water damage. For purposes of appraising the |
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| 175 | 175 | | property in the tax year in which the structure would have |
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| 176 | 176 | | constituted an improvement under Subsection (e), the replacement |
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| 177 | 177 | | structure is considered to be an improvement under that subsection |
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| 178 | 178 | | only if: |
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| 179 | 179 | | (1) the square footage of the replacement structure |
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| 180 | 180 | | exceeds that of the replaced structure as that structure existed |
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| 181 | 181 | | before the casualty or damage occurred; or |
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| 182 | 182 | | (2) the exterior of the replacement structure is of |
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| 183 | 183 | | higher quality construction and composition than that of the |
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| 184 | 184 | | replaced structure. |
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| 185 | 185 | | (p) An heir property owner who qualifies heir property as |
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| 186 | 186 | | the owner's residence homestead under this chapter is considered |
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| 187 | 187 | | the sole owner of the property for the purposes of this section. |
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| 188 | 188 | | (q) The chief appraiser for an appraisal district in which a |
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| 189 | 189 | | qualifying taxing unit participates may require an individual to |
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| 190 | 190 | | provide any information that is reasonably necessary for the chief |
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| 191 | 191 | | appraiser to determine whether the individual is an eligible |
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| 192 | 192 | | individual for purposes of this section. |
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| 193 | 193 | | SECTION 2. Sections 23.19(b) and (g), Tax Code, are amended |
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| 194 | 194 | | to read as follows: |
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| 195 | 195 | | (b) If an appraisal district receives a written request for |
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| 196 | 196 | | the appraisal of real property and improvements of a cooperative |
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| 197 | 197 | | housing corporation according to the separate interests of the |
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| 198 | 198 | | corporation's stockholders, the chief appraiser shall separately |
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| 199 | 199 | | appraise the interests described by Subsection (d) if the |
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| 200 | 200 | | conditions required by Subsections (e) and (f) have been |
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| 201 | 201 | | met. Separate appraisal under this section is for the purposes of |
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| 202 | 202 | | administration of tax exemptions, determination of applicable |
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| 203 | 203 | | limitations of taxes under Section 11.26, [or] 11.261, or 11.262, |
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| 204 | 204 | | and apportionment by a cooperative housing corporation of property |
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| 205 | 205 | | taxes among its stockholders but is not the basis for determining |
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| 206 | 206 | | value on which a tax is imposed under this title. A stockholder |
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| 207 | 207 | | whose interest is separately appraised under this section may |
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| 208 | 208 | | protest and appeal the appraised value in the manner provided by |
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| 209 | 209 | | this title for protest and appeal of the appraised value of other |
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| 210 | 210 | | property. |
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| 211 | 211 | | (g) A tax bill or a separate statement accompanying the tax |
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| 212 | 212 | | bill to a cooperative housing corporation for which interests of |
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| 213 | 213 | | stockholders are separately appraised under this section must |
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| 214 | 214 | | state, in addition to the information required by Section 31.01, |
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| 215 | 215 | | the appraised value and taxable value of each interest separately |
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| 216 | 216 | | appraised. Each exemption claimed as provided by this title by a |
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| 217 | 217 | | person entitled to the exemption shall also be deducted from the |
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| 218 | 218 | | total appraised value of the property of the corporation. The |
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| 219 | 219 | | total tax imposed by a taxing unit [school district, county, |
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| 220 | 220 | | municipality, or junior college district] shall be reduced by any |
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| 221 | 221 | | amount that represents an increase in taxes attributable to |
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| 222 | 222 | | separately appraised interests of the real property and |
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| 223 | 223 | | improvements that are subject to the limitation of taxes prescribed |
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| 224 | 224 | | by Section 11.26, [or] 11.261, or 11.262. The corporation shall |
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| 225 | 225 | | apportion among its stockholders liability for reimbursing the |
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| 226 | 226 | | corporation for property taxes according to the relative taxable |
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| 227 | 227 | | values of their interests. |
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| 228 | 228 | | SECTION 3. Sections 26.012(6), (13), and (14), Tax Code, |
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| 229 | 229 | | are amended to read as follows: |
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| 230 | 230 | | (6) "Current total value" means the total taxable |
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| 231 | 231 | | value of property listed on the appraisal roll for the current year, |
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| 232 | 232 | | including all appraisal roll supplements and corrections as of the |
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| 233 | 233 | | date of the calculation, less the taxable value of property |
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| 234 | 234 | | exempted for the current tax year for the first time under Section |
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| 235 | 235 | | 11.31 or 11.315, except that: |
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| 236 | 236 | | (A) the current total value for a school district |
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| 237 | 237 | | excludes: |
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| 238 | 238 | | (i) the total value of homesteads that |
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| 239 | 239 | | qualify for a tax limitation as provided by Section 11.26; and |
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| 240 | 240 | | (ii) new property value of property that is |
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| 241 | 241 | | subject to an agreement entered into under Chapter 313; [and] |
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| 242 | 242 | | (B) the current total value for a county, |
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| 243 | 243 | | municipality, or junior college district excludes the total value |
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| 244 | 244 | | of homesteads that qualify for a tax limitation as provided by |
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| 245 | 245 | | Section 11.261; and |
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| 246 | 246 | | (C) the current total value for a taxing unit |
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| 247 | 247 | | other than a school district, county, municipality, or junior |
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| 248 | 248 | | college district excludes the total value of homesteads that |
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| 249 | 249 | | qualify for a tax limitation as provided by Section 11.262. |
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| 250 | 250 | | (13) "Last year's levy" means the total of: |
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| 251 | 251 | | (A) the amount of taxes that would be generated |
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| 252 | 252 | | by multiplying the total tax rate adopted by the governing body in |
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| 253 | 253 | | the preceding year by the total taxable value of property on the |
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| 254 | 254 | | appraisal roll for the preceding year, including: |
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| 255 | 255 | | (i) taxable value that was reduced in an |
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| 256 | 256 | | appeal under Chapter 42; |
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| 257 | 257 | | (ii) all appraisal roll supplements and |
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| 258 | 258 | | corrections other than corrections made pursuant to Section |
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| 259 | 259 | | 25.25(d), as of the date of the calculation, except that: |
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| 260 | 260 | | (a) last year's taxable value for a |
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| 261 | 261 | | school district excludes the total value of homesteads that |
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| 262 | 262 | | qualified for a tax limitation as provided by Section 11.26; |
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| 263 | 263 | | (b) [and] last year's taxable value |
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| 264 | 264 | | for a county, municipality, or junior college district excludes the |
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| 265 | 265 | | total value of homesteads that qualified for a tax limitation as |
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| 266 | 266 | | provided by Section 11.261; and |
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| 267 | 267 | | (c) last year's taxable value for a |
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| 268 | 268 | | taxing unit other than a school district, county, municipality, or |
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| 269 | 269 | | junior college district excludes the total value of homesteads that |
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| 270 | 270 | | qualified for a tax limitation as provided by Section 11.262; and |
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| 271 | 271 | | (iii) the portion of taxable value of |
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| 272 | 272 | | property that is the subject of an appeal under Chapter 42 on July |
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| 273 | 273 | | 25 that is not in dispute; and |
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| 274 | 274 | | (B) the amount of taxes refunded by the taxing |
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| 275 | 275 | | unit in the preceding year for tax years before that year. |
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| 276 | 276 | | (14) "Last year's total value" means the total taxable |
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| 277 | 277 | | value of property listed on the appraisal roll for the preceding |
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| 278 | 278 | | year, including all appraisal roll supplements and corrections, |
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| 279 | 279 | | other than corrections made pursuant to Section 25.25(d), as of the |
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| 280 | 280 | | date of the calculation, except that: |
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| 281 | 281 | | (A) last year's taxable value for a school |
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| 282 | 282 | | district excludes the total value of homesteads that qualified for |
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| 283 | 283 | | a tax limitation as provided by Section 11.26; [and] |
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| 284 | 284 | | (B) last year's taxable value for a county, |
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| 285 | 285 | | municipality, or junior college district excludes the total value |
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| 286 | 286 | | of homesteads that qualified for a tax limitation as provided by |
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| 287 | 287 | | Section 11.261; and |
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| 288 | 288 | | (C) last year's taxable value for a taxing unit |
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| 289 | 289 | | other than a school district, county, municipality, or junior |
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| 290 | 290 | | college district excludes the total value of homesteads that |
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| 291 | 291 | | qualified for a tax limitation as provided by Section 11.262. |
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| 292 | 292 | | SECTION 4. This Act applies only to ad valorem taxes imposed |
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| 293 | 293 | | for a tax year beginning on or after the effective date of this Act. |
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| 294 | 294 | | SECTION 5. This Act takes effect January 1, 2026, but only |
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| 295 | 295 | | if the constitutional amendment proposed by the 89th Legislature, |
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| 296 | 296 | | Regular Session, 2025, to authorize a limitation on the total |
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| 297 | 297 | | amount of ad valorem taxes that a political subdivision other than a |
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| 298 | 298 | | school district, county, municipality, or junior college district |
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| 299 | 299 | | may impose on the residence homesteads of certain low-income |
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| 300 | 300 | | persons who are disabled or elderly and their surviving spouses is |
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| 301 | 301 | | approved by the voters. If that amendment is not approved by the |
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| 302 | 302 | | voters, this Act has no effect. |
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