| 1 | 1 | | 89R4377 CS-D |
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| 2 | 2 | | By: Eckhardt, Gutierrez S.B. No. 634 |
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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 authority of the governing body of a taxing unit to |
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| 10 | 10 | | adopt an exemption from ad valorem taxation of a portion, expressed |
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| 11 | 11 | | as a dollar amount, of the appraised value of an individual's |
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| 12 | 12 | | residence homestead. |
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| 13 | 13 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 14 | 14 | | SECTION 1. Section 11.13, Tax Code, is amended by amending |
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| 15 | 15 | | Subsection (i) and adding Subsection (n-2) to read as follows: |
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| 16 | 16 | | (i) The assessor and collector for a taxing unit may |
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| 17 | 17 | | disregard the exemptions authorized by Subsection (b), (c), (d), |
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| 18 | 18 | | [or] (n), or (n-2) [of this section] and assess and collect a tax |
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| 19 | 19 | | pledged for payment of debt without deducting the amount of the |
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| 20 | 20 | | exemption if: |
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| 21 | 21 | | (1) prior to adoption of the exemption, the unit |
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| 22 | 22 | | pledged the taxes for the payment of a debt; and |
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| 23 | 23 | | (2) granting the exemption would impair the obligation |
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| 24 | 24 | | of the contract creating the debt. |
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| 25 | 25 | | (n-2) The governing body of a taxing unit, in the manner |
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| 26 | 26 | | provided by law for official action by the body, may adopt an |
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| 27 | 27 | | exemption from taxation by the taxing unit of a portion, expressed |
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| 28 | 28 | | as a dollar amount, of the appraised value of an individual's |
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| 29 | 29 | | residence homestead. The exemption must be adopted by the |
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| 30 | 30 | | governing body before July 1 of the tax year in which the exemption |
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| 31 | 31 | | applies. If the governing body adopts an exemption under this |
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| 32 | 32 | | subsection, the amount of the exemption in a tax year may not be |
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| 33 | 33 | | less than $5,000. An individual is entitled to an exemption adopted |
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| 34 | 34 | | under this subsection in addition to any other exemptions provided |
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| 35 | 35 | | by this section. |
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| 36 | 36 | | SECTION 2. Section 45.006(f), Education Code, is amended to |
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| 37 | 37 | | read as follows: |
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| 38 | 38 | | (f) The governing body of a school district that adopts a |
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| 39 | 39 | | tax rate that exceeds $1.50 per $100 valuation of taxable property |
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| 40 | 40 | | may set the amount of the exemption from taxation authorized by |
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| 41 | 41 | | Section 11.13(n) or (n-2), Tax Code, at any time before the date the |
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| 42 | 42 | | governing body adopts the district's tax rate for the tax year in |
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| 43 | 43 | | which the election approving the additional taxes is held. |
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| 44 | 44 | | SECTION 3. Section 48.259(a), Education Code, is amended to |
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| 45 | 45 | | read as follows: |
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| 46 | 46 | | (a) In any school year, the commissioner may not provide |
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| 47 | 47 | | funding under this chapter or Chapter 46 based on a school |
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| 48 | 48 | | district's taxable value of property computed in accordance with |
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| 49 | 49 | | Section 403.302(d)(2), Government Code, unless: |
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| 50 | 50 | | (1) funds are specifically appropriated for purposes |
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| 51 | 51 | | of this section; or |
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| 52 | 52 | | (2) the commissioner determines that the total amount |
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| 53 | 53 | | of state funds appropriated for purposes of the Foundation School |
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| 54 | 54 | | Program for the school year exceeds the amount of state funds |
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| 55 | 55 | | distributed to school districts in accordance with Section 48.266 |
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| 56 | 56 | | based on the taxable values of property in school districts |
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| 57 | 57 | | computed in accordance with Section 403.302(d), Government Code, |
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| 58 | 58 | | without any deduction for residence homestead exemptions granted |
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| 59 | 59 | | under Section 11.13(n) or (n-2), Tax Code. |
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| 60 | 60 | | SECTION 4. Section 403.302(d), Government Code, effective |
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| 61 | 61 | | until January 1, 2027, is amended to read as follows: |
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| 62 | 62 | | (d) For the purposes of this section, "taxable value" means |
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| 63 | 63 | | the market value of all taxable property less: |
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| 64 | 64 | | (1) the total dollar amount of any residence homestead |
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| 65 | 65 | | exemptions lawfully granted under Section 11.13(b) or (c), Tax |
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| 66 | 66 | | Code, in the year that is the subject of the study for each school |
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| 67 | 67 | | district; |
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| 68 | 68 | | (2) one-half of the total dollar amount of any |
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| 69 | 69 | | residence homestead exemptions granted under Section 11.13(n) or |
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| 70 | 70 | | (n-2), Tax Code, in the year that is the subject of the study for |
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| 71 | 71 | | each school district; |
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| 72 | 72 | | (3) the total dollar amount of any exemptions granted |
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| 73 | 73 | | before May 31, 1993, within a reinvestment zone under agreements |
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| 74 | 74 | | authorized by Chapter 312, Tax Code; |
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| 75 | 75 | | (4) subject to Subsection (e), the total dollar amount |
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| 76 | 76 | | of any captured appraised value of property that: |
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| 77 | 77 | | (A) is within a reinvestment zone created on or |
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| 78 | 78 | | before May 31, 1999, or is proposed to be included within the |
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| 79 | 79 | | boundaries of a reinvestment zone as the boundaries of the zone and |
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| 80 | 80 | | the proposed portion of tax increment paid into the tax increment |
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| 81 | 81 | | fund by a school district are described in a written notification |
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| 82 | 82 | | provided by the municipality or the board of directors of the zone |
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| 83 | 83 | | to the governing bodies of the other taxing units in the manner |
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| 84 | 84 | | provided by former Section 311.003(e), Tax Code, before May 31, |
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| 85 | 85 | | 1999, and within the boundaries of the zone as those boundaries |
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| 86 | 86 | | existed on September 1, 1999, including subsequent improvements to |
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| 87 | 87 | | the property regardless of when made; |
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| 88 | 88 | | (B) generates taxes paid into a tax increment |
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| 89 | 89 | | fund created under Chapter 311, Tax Code, under a reinvestment zone |
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| 90 | 90 | | financing plan approved under Section 311.011(d), Tax Code, on or |
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| 91 | 91 | | before September 1, 1999; and |
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| 92 | 92 | | (C) is eligible for tax increment financing under |
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| 93 | 93 | | Chapter 311, Tax Code; |
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| 94 | 94 | | (5) the total dollar amount of any captured appraised |
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| 95 | 95 | | value of property that: |
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| 96 | 96 | | (A) is within a reinvestment zone: |
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| 97 | 97 | | (i) created on or before December 31, 2008, |
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| 98 | 98 | | by a municipality with a population of less than 18,000; and |
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| 99 | 99 | | (ii) the project plan for which includes |
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| 100 | 100 | | the alteration, remodeling, repair, or reconstruction of a |
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| 101 | 101 | | structure that is included on the National Register of Historic |
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| 102 | 102 | | Places and requires that a portion of the tax increment of the zone |
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| 103 | 103 | | be used for the improvement or construction of related facilities |
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| 104 | 104 | | or for affordable housing; |
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| 105 | 105 | | (B) generates school district taxes that are paid |
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| 106 | 106 | | into a tax increment fund created under Chapter 311, Tax Code; and |
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| 107 | 107 | | (C) is eligible for tax increment financing under |
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| 108 | 108 | | Chapter 311, Tax Code; |
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| 109 | 109 | | (6) the total dollar amount of any exemptions granted |
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| 110 | 110 | | under Section 11.251 or 11.253, Tax Code; |
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| 111 | 111 | | (7) the difference between the comptroller's estimate |
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| 112 | 112 | | of the market value and the productivity value of land that |
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| 113 | 113 | | qualifies for appraisal on the basis of its productive capacity, |
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| 114 | 114 | | except that the productivity value estimated by the comptroller may |
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| 115 | 115 | | not exceed the fair market value of the land; |
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| 116 | 116 | | (8) the portion of the appraised value of residence |
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| 117 | 117 | | homesteads of individuals who receive a tax limitation under |
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| 118 | 118 | | Section 11.26, Tax Code, on which school district taxes are not |
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| 119 | 119 | | imposed in the year that is the subject of the study, calculated as |
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| 120 | 120 | | if the residence homesteads were appraised at the full value |
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| 121 | 121 | | required by law; |
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| 122 | 122 | | (9) a portion of the market value of property not |
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| 123 | 123 | | otherwise fully taxable by the district at market value because of |
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| 124 | 124 | | action required by statute or the constitution of this state, other |
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| 125 | 125 | | than Section 11.311, Tax Code, that, if the tax rate adopted by the |
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| 126 | 126 | | district is applied to it, produces an amount equal to the |
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| 127 | 127 | | difference between the tax that the district would have imposed on |
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| 128 | 128 | | the property if the property were fully taxable at market value and |
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| 129 | 129 | | the tax that the district is actually authorized to impose on the |
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| 130 | 130 | | property, if this subsection does not otherwise require that |
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| 131 | 131 | | portion to be deducted; |
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| 132 | 132 | | (10) the market value of all tangible personal |
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| 133 | 133 | | property, other than manufactured homes, owned by a family or |
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| 134 | 134 | | individual and not held or used for the production of income; |
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| 135 | 135 | | (11) the appraised value of property the collection of |
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| 136 | 136 | | delinquent taxes on which is deferred under Section 33.06, Tax |
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| 137 | 137 | | Code; |
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| 138 | 138 | | (12) the portion of the appraised value of property |
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| 139 | 139 | | the collection of delinquent taxes on which is deferred under |
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| 140 | 140 | | Section 33.065, Tax Code; |
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| 141 | 141 | | (13) the amount by which the market value of property |
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| 142 | 142 | | to which Section 23.23 or 23.231, Tax Code, applies exceeds the |
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| 143 | 143 | | appraised value of that property as calculated under Section 23.23 |
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| 144 | 144 | | or 23.231, Tax Code, as applicable; and |
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| 145 | 145 | | (14) the total dollar amount of any exemptions granted |
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| 146 | 146 | | under Section 11.35, Tax Code. |
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| 147 | 147 | | SECTION 5. Section 403.302(d), Government Code, as |
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| 148 | 148 | | effective January 1, 2027, is amended to read as follows: |
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| 149 | 149 | | (d) For the purposes of this section, "taxable value" means |
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| 150 | 150 | | the market value of all taxable property less: |
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| 151 | 151 | | (1) the total dollar amount of any residence homestead |
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| 152 | 152 | | exemptions lawfully granted under Section 11.13(b) or (c), Tax |
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| 153 | 153 | | Code, in the year that is the subject of the study for each school |
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| 154 | 154 | | district; |
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| 155 | 155 | | (2) one-half of the total dollar amount of any |
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| 156 | 156 | | residence homestead exemptions granted under Section 11.13(n) or |
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| 157 | 157 | | (n-2), Tax Code, in the year that is the subject of the study for |
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| 158 | 158 | | each school district; |
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| 159 | 159 | | (3) the total dollar amount of any exemptions granted |
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| 160 | 160 | | before May 31, 1993, within a reinvestment zone under agreements |
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| 161 | 161 | | authorized by Chapter 312, Tax Code; |
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| 162 | 162 | | (4) subject to Subsection (e), the total dollar amount |
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| 163 | 163 | | of any captured appraised value of property that: |
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| 164 | 164 | | (A) is within a reinvestment zone created on or |
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| 165 | 165 | | before May 31, 1999, or is proposed to be included within the |
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| 166 | 166 | | boundaries of a reinvestment zone as the boundaries of the zone and |
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| 167 | 167 | | the proposed portion of tax increment paid into the tax increment |
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| 168 | 168 | | fund by a school district are described in a written notification |
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| 169 | 169 | | provided by the municipality or the board of directors of the zone |
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| 170 | 170 | | to the governing bodies of the other taxing units in the manner |
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| 171 | 171 | | provided by former Section 311.003(e), Tax Code, before May 31, |
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| 172 | 172 | | 1999, and within the boundaries of the zone as those boundaries |
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| 173 | 173 | | existed on September 1, 1999, including subsequent improvements to |
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| 174 | 174 | | the property regardless of when made; |
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| 175 | 175 | | (B) generates taxes paid into a tax increment |
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| 176 | 176 | | fund created under Chapter 311, Tax Code, under a reinvestment zone |
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| 177 | 177 | | financing plan approved under Section 311.011(d), Tax Code, on or |
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| 178 | 178 | | before September 1, 1999; and |
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| 179 | 179 | | (C) is eligible for tax increment financing under |
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| 180 | 180 | | Chapter 311, Tax Code; |
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| 181 | 181 | | (5) the total dollar amount of any captured appraised |
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| 182 | 182 | | value of property that: |
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| 183 | 183 | | (A) is within a reinvestment zone: |
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| 184 | 184 | | (i) created on or before December 31, 2008, |
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| 185 | 185 | | by a municipality with a population of less than 18,000; and |
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| 186 | 186 | | (ii) the project plan for which includes |
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| 187 | 187 | | the alteration, remodeling, repair, or reconstruction of a |
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| 188 | 188 | | structure that is included on the National Register of Historic |
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| 189 | 189 | | Places and requires that a portion of the tax increment of the zone |
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| 190 | 190 | | be used for the improvement or construction of related facilities |
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| 191 | 191 | | or for affordable housing; |
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| 192 | 192 | | (B) generates school district taxes that are paid |
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| 193 | 193 | | into a tax increment fund created under Chapter 311, Tax Code; and |
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| 194 | 194 | | (C) is eligible for tax increment financing under |
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| 195 | 195 | | Chapter 311, Tax Code; |
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| 196 | 196 | | (6) the total dollar amount of any exemptions granted |
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| 197 | 197 | | under Section 11.251 or 11.253, Tax Code; |
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| 198 | 198 | | (7) the difference between the comptroller's estimate |
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| 199 | 199 | | of the market value and the productivity value of land that |
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| 200 | 200 | | qualifies for appraisal on the basis of its productive capacity, |
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| 201 | 201 | | except that the productivity value estimated by the comptroller may |
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| 202 | 202 | | not exceed the fair market value of the land; |
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| 203 | 203 | | (8) the portion of the appraised value of residence |
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| 204 | 204 | | homesteads of individuals who receive a tax limitation under |
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| 205 | 205 | | Section 11.26, Tax Code, on which school district taxes are not |
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| 206 | 206 | | imposed in the year that is the subject of the study, calculated as |
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| 207 | 207 | | if the residence homesteads were appraised at the full value |
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| 208 | 208 | | required by law; |
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| 209 | 209 | | (9) a portion of the market value of property not |
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| 210 | 210 | | otherwise fully taxable by the district at market value because of |
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| 211 | 211 | | action required by statute or the constitution of this state, other |
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| 212 | 212 | | than Section 11.311, Tax Code, that, if the tax rate adopted by the |
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| 213 | 213 | | district is applied to it, produces an amount equal to the |
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| 214 | 214 | | difference between the tax that the district would have imposed on |
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| 215 | 215 | | the property if the property were fully taxable at market value and |
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| 216 | 216 | | the tax that the district is actually authorized to impose on the |
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| 217 | 217 | | property, if this subsection does not otherwise require that |
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| 218 | 218 | | portion to be deducted; |
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| 219 | 219 | | (10) the market value of all tangible personal |
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| 220 | 220 | | property, other than manufactured homes, owned by a family or |
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| 221 | 221 | | individual and not held or used for the production of income; |
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| 222 | 222 | | (11) the appraised value of property the collection of |
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| 223 | 223 | | delinquent taxes on which is deferred under Section 33.06, Tax |
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| 224 | 224 | | Code; |
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| 225 | 225 | | (12) the portion of the appraised value of property |
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| 226 | 226 | | the collection of delinquent taxes on which is deferred under |
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| 227 | 227 | | Section 33.065, Tax Code; |
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| 228 | 228 | | (13) the amount by which the market value of a |
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| 229 | 229 | | residence homestead to which Section 23.23, Tax Code, applies |
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| 230 | 230 | | exceeds the appraised value of that property as calculated under |
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| 231 | 231 | | that section; and |
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| 232 | 232 | | (14) the total dollar amount of any exemptions granted |
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| 233 | 233 | | under Section 11.35, Tax Code. |
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| 234 | 234 | | SECTION 6. Section 25.23(a), Tax Code, is amended to read as |
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| 235 | 235 | | follows: |
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| 236 | 236 | | (a) After submission of appraisal records, the chief |
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| 237 | 237 | | appraiser shall prepare supplemental appraisal records listing: |
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| 238 | 238 | | (1) each taxable property the chief appraiser |
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| 239 | 239 | | discovers that is not included in the records already submitted, |
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| 240 | 240 | | including property that was omitted from an appraisal roll in a |
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| 241 | 241 | | prior tax year; |
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| 242 | 242 | | (2) property on which the appraisal review board has |
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| 243 | 243 | | not determined a protest at the time of its approval of the |
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| 244 | 244 | | appraisal records; and |
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| 245 | 245 | | (3) property that qualifies for an exemption under |
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| 246 | 246 | | Section 11.13(n) or (n-2) that was adopted by the governing body of |
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| 247 | 247 | | a taxing unit after the date the appraisal records were submitted. |
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| 248 | 248 | | SECTION 7. This Act applies only to ad valorem taxes imposed |
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| 249 | 249 | | for a tax year that begins on or after the effective date of this |
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| 250 | 250 | | Act. |
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| 251 | 251 | | SECTION 8. This Act takes effect January 1, 2026, but only |
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| 252 | 252 | | if the constitutional amendment proposed by the 89th Legislature, |
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| 253 | 253 | | Regular Session, 2025, authorizing the governing body of a |
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| 254 | 254 | | political subdivision to adopt an exemption from ad valorem |
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| 255 | 255 | | taxation of a portion, expressed as a dollar amount, of the market |
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| 256 | 256 | | value of an individual's residence homestead is approved by the |
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| 257 | 257 | | voters. If that amendment is not approved by the voters, this Act |
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| 258 | 258 | | has no effect. |
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