89R358 SHH-D
By: Kolkhorst S.B. No. 488
A BILL TO BE ENTITLED
AN ACT
relating to the authority of a taxing unit other than a school
district to establish a limitation on the amount of ad valorem taxes
that the taxing unit may impose on the residence homesteads of
individuals who are disabled or elderly and their surviving
spouses.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The heading to Section 11.261, Tax Code, is
amended to read as follows:
Sec. 11.261. LIMITATION OF TAX IMPOSED BY TAXING UNIT OTHER
THAN SCHOOL DISTRICT [COUNTY, MUNICIPAL, OR JUNIOR COLLEGE DISTRICT
TAX] ON HOMESTEADS OF INDIVIDUALS WHO ARE DISABLED OR [AND]
ELDERLY.
SECTION 2. Sections 11.261(a), (b), (c), (d), (e), (g),
(h), (i), (j), (k), and (l), Tax Code, are amended to read as
follows:
(a) This section applies only to a taxing unit that:
(1) is not a school [a county, municipality, or junior
college] district; and
(2) [that] has established a limitation on the total
amount of taxes that may be imposed by the taxing unit [county,
municipality, or junior college district] on the residence
homestead of an [a disabled] individual who is disabled or is [an
individual] 65 years of age or older under Section 1-b(h), Article
VIII, Texas Constitution.
(b) The tax officials shall appraise the property to which
the limitation applies and calculate taxes as on other property,
but if the tax so calculated exceeds the limitation provided by this
section, the tax imposed by a taxing unit is the amount of the tax as
limited by this section, except as otherwise provided by this
section. The taxing unit [county, municipality, or junior college
district] may not increase the total annual amount of ad valorem
taxes the taxing unit [county, municipality, or junior college
district] imposes on the residence homestead of an [a disabled]
individual who is disabled or is [an individual] 65 years of age or
older above the amount of the taxes the taxing unit [county,
municipality, or junior college district] imposed on the residence
homestead in the first tax year, other than a tax year preceding the
tax year in which the taxing unit [county, municipality, or junior
college district] established the limitation described by
Subsection (a), in which the individual qualified that residence
homestead for the exemption provided by Section 11.13(c) for an [a
disabled] individual who is disabled or is [an individual] 65 years
of age or older. If the individual qualified that residence
homestead for the exemption after the beginning of that first year
and the residence homestead remains eligible for the exemption for
the next year, and if the [county, municipal, or junior college
district] taxes imposed by the taxing unit on the residence
homestead in the next year are less than the amount of taxes imposed
in that first year, the taxing unit [a county, municipality, or
junior college district] may not subsequently increase the total
annual amount of ad valorem taxes it imposes on the residence
homestead above the amount it imposed on the residence homestead in
the year immediately following the first year, other than a tax year
preceding the tax year in which the taxing unit [county,
municipality, or junior college district] established the
limitation described by Subsection (a), for which the individual
qualified that residence homestead for the exemption.
(c) If an individual makes improvements to the individual's
residence homestead, other than repairs and other than improvements
required to comply with governmental requirements, the taxing unit
[county, municipality, or junior college district] may increase the
amount of taxes on the homestead in the first year the value of the
homestead is increased on the appraisal roll because of the
enhancement of value by the improvements. The amount of the tax
increase is determined by applying the current tax rate to the
difference between the appraised value of the homestead with the
improvements and the appraised value the homestead [it] would have
had without the improvements. A limitation provided by this
section then applies to the increased amount of [county, municipal,
or junior college district] taxes on the residence homestead until
more improvements, if any, are made.
(d) A limitation on [county, municipal, or junior college
district] tax increases by a taxing unit provided by this section
expires if on January 1:
(1) none of the owners of the structure who qualify for
the exemption provided by Section 11.13(c) for an [a disabled]
individual who is disabled or is [an individual] 65 years of age or
older and who owned the structure when the limitation provided by
this section first took effect is using the structure as a residence
homestead; or
(2) none of the owners of the structure qualifies for
the exemption provided by Section 11.13(c) for an [a disabled]
individual who is disabled or is [an individual] 65 years of age or
older.
(e) If the appraisal roll provides for taxation of appraised
value for a prior year because a residence homestead exemption for
[disabled] individuals who are disabled or are [individuals] 65
years of age or older was erroneously allowed, the tax assessor for
the applicable taxing unit [county, municipality, or junior college
district] shall add, as back taxes due as provided by Section
26.09(d), the positive difference, if any, between the tax that
should have been imposed for that year and the tax that was imposed
because of the provisions of this section.
(g) Except as provided by Subsection (c), if an individual
who receives a limitation on [county, municipal, or junior college
district] tax increases by a taxing unit provided by this section
subsequently qualifies a different residence homestead in the same
taxing unit [county, municipality, or junior college district] for
an exemption under Section 11.13, the taxing unit [county,
municipality, or junior college district] may not impose ad valorem
taxes on the subsequently qualified homestead in a year in an amount
that exceeds the amount of taxes the taxing unit [county,
municipality, or junior college district] would have imposed on the
subsequently qualified homestead in the first year in which the
individual receives that exemption for the subsequently qualified
homestead had the limitation on tax increases provided by this
section not been in effect, multiplied by a fraction the numerator
of which is the total amount of taxes the taxing unit [county,
municipality, or junior college district] imposed on the former
homestead in the last year in which the individual received that
exemption for the former homestead and the denominator of which is
the total amount of taxes the taxing unit [county, municipality, or
junior college district] would have imposed on the former homestead
in the last year in which the individual received that exemption for
the former homestead had the limitation on tax increases provided
by this section not been in effect.
(h) An individual who receives a limitation on [county,
municipal, or junior college district] tax increases by a taxing
unit under this section and who subsequently qualifies a different
residence homestead in the same taxing unit [county, municipality,
or junior college district] for an exemption under Section 11.13,
or an agent of the individual, is entitled to receive from the chief
appraiser of the appraisal district in which the former homestead
was located a written certificate providing the information
necessary to determine whether the individual may qualify for a
limitation on the subsequently qualified homestead under
Subsection (g) and to calculate the amount of taxes the taxing unit
[county, municipality, or junior college district] may impose on
the subsequently qualified homestead.
(i) If an individual who qualifies for a limitation on
[county, municipal, or junior college district] tax increases by a
taxing unit under this section dies, the surviving spouse of the
individual is entitled to the limitation on taxes imposed by the
taxing unit [county, municipality, or junior college district] on
the residence homestead of the individual if:
(1) the surviving spouse is disabled or is 55 years of
age or older when the individual dies; and
(2) the residence homestead of the individual:
(A) is the residence homestead of the surviving
spouse on the date that the individual dies; and
(B) remains the residence homestead of the
surviving spouse.
(j) If an individual who is 65 years of age or older and
qualifies for a limitation on [county, municipal, or junior college
district] tax increases for the elderly under this section dies in
the first year in which the individual qualified for the limitation
and the individual first qualified for the limitation after the
beginning of that year, except as provided by Subsection (k), the
amount to which the surviving spouse's [county, municipal, or
junior college district] taxes are limited under Subsection (i) is
the amount of taxes imposed by the taxing unit to which the
limitation applies [county, municipality, or junior college
district, as applicable,] on the residence homestead in that year
determined as if the individual qualifying for the exemption had
lived for the entire year.
(k) If in the first tax year after the year in which an
individual who is 65 years of age or older dies under the
circumstances described by Subsection (j) the amount of taxes
imposed by a taxing unit [county, municipality, or junior college
district] on the residence homestead of the surviving spouse is
less than the amount of taxes imposed by the taxing unit [county,
municipality, or junior college district] in the preceding year as
limited by Subsection (j), in a subsequent tax year the surviving
spouse's taxes imposed by the taxing unit [county, municipality, or
junior college district] on that residence homestead are limited to
the amount of taxes imposed by the taxing unit [county,
municipality, or junior college district] in that first tax year
after the year in which the individual dies.
(l) Notwithstanding Subsection (d), a limitation on
[county, municipal, or junior college district] tax increases by a
taxing unit provided by this section does not expire if the owner of
the structure qualifies for an exemption under Section 11.13 under
the circumstances described by Section 11.135(a).
SECTION 3. Section 23.19(g), Tax Code, is amended to read as
follows:
(g) A tax bill or a separate statement accompanying the tax
bill to a cooperative housing corporation for which interests of
stockholders are separately appraised under this section must
state, in addition to the information required by Section 31.01,
the appraised value and taxable value of each interest separately
appraised. Each exemption claimed as provided by this title by a
person entitled to the exemption shall also be deducted from the
total appraised value of the property of the corporation. The total
tax imposed by a school district or other taxing unit [, county,
municipality, or junior college district] shall be reduced by any
amount that represents an increase in taxes attributable to
separately appraised interests of the real property and
improvements that are subject to the limitation of taxes prescribed
by Section 11.26 or 11.261. The corporation shall apportion among
its stockholders liability for reimbursing the corporation for
property taxes according to the relative taxable values of their
interests.
SECTION 4. Sections 26.012(6), (13), and (14), Tax Code,
are amended to read as follows:
(6) "Current total value" means the total taxable
value of property listed on the appraisal roll for the current year,
including all appraisal roll supplements and corrections as of the
date of the calculation, less the taxable value of property
exempted for the current tax year for the first time under Section
11.31 or 11.315, except that:
(A) the current total value for a school district
excludes:
(i) the total value of homesteads that
qualify for a tax limitation as provided by Section 11.26;
(ii) new property value of property that is
subject to an agreement entered into under former Subchapter B or C,
Chapter 313; and
(iii) new property value of property that
is subject to an agreement entered into under Subchapter T, Chapter
403, Government Code; and
(B) the current total value for a taxing unit
other than a school [county, municipality, or junior college]
district excludes the total value of homesteads that qualify for a
tax limitation provided by Section 11.261.
(13) "Last year's levy" means the total of:
(A) the amount of taxes that would be generated
by multiplying the total tax rate adopted by the governing body in
the preceding year by the total taxable value of property on the
appraisal roll for the preceding year, including:
(i) taxable value that was reduced in an
appeal under Chapter 42;
(ii) all appraisal roll supplements and
corrections other than corrections made pursuant to Section
25.25(d), as of the date of the calculation, except that last year's
taxable value for a school district excludes the total value of
homesteads that qualified for a tax limitation as provided by
Section 11.26 and last year's taxable value for a taxing unit other
than a school [county, municipality, or junior college] district
excludes the total value of homesteads that qualified for a tax
limitation as provided by Section 11.261; and
(iii) the portion of taxable value of
property that is the subject of an appeal under Chapter 42 on July
25 that is not in dispute; and
(B) the amount of taxes refunded by the taxing
unit in the preceding year for tax years before that year.
(14) "Last year's total value" means the total taxable
value of property listed on the appraisal roll for the preceding
year, including all appraisal roll supplements and corrections,
other than corrections made pursuant to Section 25.25(d), as of the
date of the calculation, except that:
(A) last year's taxable value for a school
district excludes the total value of homesteads that qualified for
a tax limitation as provided by Section 11.26; and
(B) last year's taxable value for a taxing unit
other than a school [county, municipality, or junior college]
district excludes the total value of homesteads that qualified for
a tax limitation as provided by Section 11.261.
SECTION 5. This Act applies only to ad valorem taxes imposed
for a tax year that begins on or after the effective date of this
Act.
SECTION 6. This Act takes effect January 1, 2026, but only
if the constitutional amendment proposed by the 89th Legislature,
Regular Session, 2025, to authorize a political subdivision other
than a school district to establish a limitation on the amount of ad
valorem taxes that the political subdivision may impose on the
residence homesteads of persons who are disabled or elderly and
their surviving spouses is approved by the voters. If that
amendment is not approved by the voters, this Act has no effect.