| 1 | 1 | | 89R2999 DRS-D |
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| 2 | 2 | | By: Kolkhorst S.B. No. 322 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | |
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| 6 | 6 | | |
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| 7 | 7 | | A BILL TO BE ENTITLED |
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| 8 | 8 | | AN ACT |
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| 9 | 9 | | relating to the limitation on increases in the appraised value of |
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| 10 | 10 | | certain real property for ad valorem tax purposes. |
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| 11 | 11 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 12 | 12 | | SECTION 1. Sections 23.231(c), (d), and (k), Tax Code, are |
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| 13 | 13 | | amended to read as follows: |
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| 14 | 14 | | (c) This section does not apply to: |
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| 15 | 15 | | (1) a residence homestead that qualifies for an |
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| 16 | 16 | | exemption under Section 11.13; [or] |
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| 17 | 17 | | (2) property appraised under Subchapter C, D, E, F, G, |
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| 18 | 18 | | or H; or |
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| 19 | 19 | | (3) a mineral interest. |
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| 20 | 20 | | (d) Notwithstanding the requirements of Section 25.18 and |
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| 21 | 21 | | regardless of whether the appraisal office has appraised the |
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| 22 | 22 | | property and determined the market value of the property for the tax |
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| 23 | 23 | | year, an appraisal office may increase the appraised value of real |
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| 24 | 24 | | property to which this section applies for a tax year to an amount |
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| 25 | 25 | | not to exceed the lesser of: |
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| 26 | 26 | | (1) the market value of the property for the most |
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| 27 | 27 | | recent tax year that the market value was determined by the |
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| 28 | 28 | | appraisal office; or |
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| 29 | 29 | | (2) the sum of: |
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| 30 | 30 | | (A) 10 [20] percent of the appraised value of the |
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| 31 | 31 | | property for the preceding tax year; |
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| 32 | 32 | | (B) the appraised value of the property for the |
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| 33 | 33 | | preceding tax year; and |
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| 34 | 34 | | (C) the market value of all new improvements to |
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| 35 | 35 | | the property. |
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| 36 | 36 | | (k) This section expires December 31, 2031 [2026]. |
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| 37 | 37 | | SECTION 2. Section 25.19(o), Tax Code, is amended to read as |
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| 38 | 38 | | follows: |
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| 39 | 39 | | (o) A notice required under Subsection (a) or (g) to be |
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| 40 | 40 | | delivered to the owner of real property other than a single-family |
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| 41 | 41 | | residence that qualifies for an exemption under Section 11.13 must |
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| 42 | 42 | | include the following statement: "Under Section 23.231, Tax Code, |
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| 43 | 43 | | for the [2024, 2025, and] 2026, 2027, 2028, 2029, 2030, and 2031 tax |
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| 44 | 44 | | years, the appraised value of real property other than a residence |
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| 45 | 45 | | homestead for ad valorem tax purposes may not be increased by more |
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| 46 | 46 | | than 10 [20] percent each year, with certain exceptions. The |
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| 47 | 47 | | circuit breaker limitation provided under Section 23.231, Tax Code, |
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| 48 | 48 | | expires December 31, 2031 [2026]. Unless this expiration date is |
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| 49 | 49 | | extended by the Texas Legislature, beginning in the 2032 [2027] tax |
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| 50 | 50 | | year, the circuit breaker limitation provided under Section 23.231, |
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| 51 | 51 | | Tax Code, will no longer be in effect and may result in an increase |
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| 52 | 52 | | in ad valorem taxes imposed on real property previously subject to |
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| 53 | 53 | | the limitation." This subsection expires December 31, 2032 [2027]. |
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| 54 | 54 | | SECTION 3. Notwithstanding Chapter 1 (S.B. 2), Acts of the |
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| 55 | 55 | | 88th Legislature, 2nd Called Session, 2023, the following |
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| 56 | 56 | | provisions are effective January 1, 2032: |
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| 57 | 57 | | (1) Section 4.02, Chapter 1 (S.B. 2), Acts of the 88th |
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| 58 | 58 | | Legislature, 2nd Called Session, 2023, which amended Section |
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| 59 | 59 | | 1.12(d), Tax Code; |
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| 60 | 60 | | (2) Section 4.05, Chapter 1 (S.B. 2), Acts of the 88th |
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| 61 | 61 | | Legislature, 2nd Called Session, 2023, which amended Sections |
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| 62 | 62 | | 25.19(b) and (g), Tax Code; |
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| 63 | 63 | | (3) Section 4.08, Chapter 1 (S.B. 2), Acts of the 88th |
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| 64 | 64 | | Legislature, 2nd Called Session, 2023, which amended Section |
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| 65 | 65 | | 41.41(a), Tax Code; |
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| 66 | 66 | | (4) Section 4.10, Chapter 1 (S.B. 2), Acts of the 88th |
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| 67 | 67 | | Legislature, 2nd Called Session, 2023, which amended Section |
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| 68 | 68 | | 42.26(d), Tax Code; and |
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| 69 | 69 | | (5) Section 4.12, Chapter 1 (S.B. 2), Acts of the 88th |
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| 70 | 70 | | Legislature, 2nd Called Session, 2023, which amended Sections |
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| 71 | 71 | | 403.302(d) and (i), Government Code. |
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| 72 | 72 | | SECTION 4. Sections 23.231(c) and (d), Tax Code, as amended |
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| 73 | 73 | | by this Act, apply only to the appraisal of real property for ad |
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| 74 | 74 | | valorem tax purposes for a tax year that begins on or after the |
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| 75 | 75 | | effective date of this Act. |
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| 76 | 76 | | SECTION 5. (a) Except as otherwise provided by this |
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| 77 | 77 | | section, this Act takes effect January 1, 2026. |
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| 78 | 78 | | (b) Sections 23.231(d) and (k) and 25.19(o), Tax Code, as |
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| 79 | 79 | | amended by this Act, and Section 3 of this Act take effect January |
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| 80 | 80 | | 1, 2026, but only if the constitutional amendment proposed by the |
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| 81 | 81 | | 89th Legislature, Regular Session, 2025, to authorize the |
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| 82 | 82 | | legislature to set a lower limit on the maximum appraised value of |
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| 83 | 83 | | real property other than a residence homestead for ad valorem tax |
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| 84 | 84 | | purposes and to postpone the expiration of the limit is approved by |
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| 85 | 85 | | the voters. If that amendment is not approved by the voters, |
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| 86 | 86 | | Sections 23.231(d) and (k) and 25.19(o), Tax Code, as amended by |
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| 87 | 87 | | this Act, and Section 3 of this Act have no effect. |
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