Bill Text: TX HB2 | 2023-2024 | 88th Legislature | Engrossed

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Bill Title: Relating to providing property tax relief through the public school finance system and property tax appraisal and administration.

Spectrum: Moderate Partisan Bill (Republican 81-13)

Status: (Engrossed - Dead) 2023-05-02 - Referred to Local Government [HB2 Detail]

Download: Texas-2023-HB2-Engrossed.html

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88R18893 CJC/TJB/KJE-F
By: Meyer, Bonnen, Burrows, Thierry, Raymond, H.B. No. 2
et al.

A BILL TO BE ENTITLED
AN ACT
relating to providing property tax relief through the public school
finance system and property tax appraisal and administration.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. SHORT TITLE
SECTION 1.01. This Act may be cited as the Property Tax
Relief Act.
ARTICLE 2. SCHOOL DISTRICT TAX RATE COMPRESSION
SECTION 2.01. Subchapter F, Chapter 48, Education Code, is
amended by adding Section 48.2555 to read as follows:
Sec. 48.2555. MAXIMUM COMPRESSED TAX RATE FOR 2023-2024
SCHOOL YEAR. (a) Notwithstanding any other provision of this title
or Chapter 26, Tax Code, for the 2023-2024 school year, the
commissioner shall calculate the value of a school district's
maximum compressed tax rate by determining the district's maximum
compressed rate under Section 48.2551 or 48.2552(b), if applicable,
and reducing the tax rate determined under the applicable section
by $0.15.
(b) If a school district's maximum compressed tax rate as
calculated under Subsection (a) would be less than 90 percent of
another school district's maximum compressed tax rate under
Subsection (a), the district's maximum compressed tax rate is the
value at which the district's maximum compressed tax rate would be
equal to 90 percent of the other district's maximum compressed tax
rate.
(c) Notwithstanding any other provision of this title or
Chapter 26, Tax Code, for purposes of determining funding for
school districts for the 2023-2024 school year, a reference in any
of the following provisions of law to a school district's maximum
compressed tax rate or maximum compressed rate as determined under
Section 48.2551 means the maximum compressed tax rate determined
for the district under this section:
(1) Section 13.054(f);
(2) Section 45.003(d);
(3) Section 45.0032(a);
(4) Section 48.051(a);
(5) Sections 48.2553(a) and (e); and
(6) Section 26.08(n), Tax Code.
(d) For purposes of Section 30.003(f-1), a reference in that
section to Section 48.2551 includes this section.
(e) Notwithstanding any other provision of this title, for
purposes of determining a school district's maximum compressed tax
rate under Section 48.2551 for the 2024-2025 school year, the value
of the district's "PYMCR" is the maximum compressed tax rate
determined for the district under this section for the preceding
school year.
(f) This section expires September 1, 2025.
ARTICLE 3. ESCROW ACCOUNTS
SECTION 3.01. Section 31.072(a), Tax Code, is amended to
read as follows:
(a) At the request of a property owner, the [The] collector
for a taxing unit shall [may] enter a contract with the [a] property
owner under which the property owner deposits money in an escrow
account maintained by the collector to provide for the payment of
property taxes collected by the collector on any property the
person owns.
SECTION 3.02. Sections 31.072(h) and (i), Tax Code, are
repealed.
SECTION 3.03. This article applies only to a tax year that
begins on or after the effective date of this article.
ARTICLE 4. LIMITATION ON INCREASES IN VALUE OF REAL PROPERTY
SECTION 4.01. Section 1.12(d), Tax Code, is amended to read
as follows:
(d) For purposes of this section, the appraisal ratio of
property [a homestead] to which Section 23.23 applies is the ratio
of the property's market value as determined by the appraisal
district or appraisal review board, as applicable, to the market
value of the property according to law. The appraisal ratio is not
calculated according to the appraised value of the property as
limited by Section 23.23.
SECTION 4.02. The heading to Section 23.23, Tax Code, is
amended to read as follows:
Sec. 23.23. LIMITATION ON APPRAISED VALUE OF REAL PROPERTY
[RESIDENCE HOMESTEAD].
SECTION 4.03. Section 23.23, Tax Code, is amended by
amending Subsections (a), (b), (c), and (e) and adding Subsections
(c-2), (c-3), (c-4), and (h) to read as follows:
(a) Notwithstanding the requirements of Section 25.18 and
regardless of whether the appraisal office has appraised the
property and determined the market value of the property for the tax
year, an appraisal office may increase the appraised value of real
property [a residence homestead] for a tax year to an amount not to
exceed the lesser of:
(1) the market value of the property for the most
recent tax year that the market value was determined by the
appraisal office; or
(2) the sum of:
(A) five [10] percent of the appraised value of
the property for the preceding tax year;
(B) the appraised value of the property for the
preceding tax year; and
(C) the market value of all new improvements to
the property.
(b) When appraising real property [a residence homestead],
the chief appraiser shall:
(1) appraise the property at its market value; and
(2) include in the appraisal records both the market
value of the property and the amount computed under Subsection
(a)(2).
(c) The limitation provided by Subsection (a) takes effect
on January 1 of the tax year following the first tax year in which
the owner owns the property on January 1 [as to a residence
homestead on January 1 of the tax year following the first tax year
the owner qualifies the property for an exemption under Section
11.13]. Except as provided by Subsection (c-2) or (c-3), the [The]
limitation expires on January 1 of the first tax year following the
year in which [that neither] the owner of the property ceases to own
the property.
(c-2) If property subject to a limitation under this section
qualifies for an exemption under Section 11.13 when the ownership
of the property is transferred to the owner's spouse or surviving
spouse, the limitation expires on January 1 of the first tax year
following the year in which [when the limitation took effect nor]
the owner's spouse or surviving spouse ceases to own the property,
unless the limitation is further continued under this subsection on
the subsequent transfer to a spouse or surviving spouse [qualifies
for an exemption under Section 11.13].
(c-3) If property subject to a limitation under Subsection
(a), other than a residence homestead, is owned by two or more
persons, the limitation expires on January 1 of the first tax year
following the year in which the ownership of at least a 50 percent
interest in the property is sold or otherwise transferred.
(c-4) For purposes of applying the limitation provided by
this section, a person who acquired real property in a tax year
before the 2023 tax year, other than property that qualified as the
residence homestead of the person under Section 11.13 in the 2023
tax year, is considered to have acquired the property on January 1,
2023.
(e) In this section, "new improvement" means an improvement
to real property [a residence homestead] made after the most recent
appraisal of the property that increases the market value of the
property and the value of which is not included in the appraised
value of the property for the preceding tax year. The term does not
include repairs to or ordinary maintenance of an existing structure
or the grounds or another feature of the property.
(h) In this section, "real property" includes a
manufactured home as that term is defined by Section 1201.003,
Occupations Code, that qualifies as a residence homestead under
Section 11.13 of this code, regardless of whether the owner of the
manufactured home elects to treat the manufactured home as real
property under Section 1201.2055, Occupations Code.
SECTION 4.04. Section 42.26(d), Tax Code, is amended to
read as follows:
(d) For purposes of this section, the value of the property
subject to the suit and the value of a comparable property or sample
property that is used for comparison must be the market value
determined by the appraisal district when the property is [a
residence homestead] subject to the limitation on appraised value
imposed by Section 23.23.
SECTION 4.05. Sections 403.302(d) and (i), Government Code,
are amended to read as follows:
(d) For the purposes of this section, "taxable value" means
the market value of all taxable property less:
(1) the total dollar amount of any residence homestead
exemptions lawfully granted under Section 11.13(b) or (c), Tax
Code, in the year that is the subject of the study for each school
district;
(2) one-half of the total dollar amount of any
residence homestead exemptions granted under Section 11.13(n), Tax
Code, in the year that is the subject of the study for each school
district;
(3) the total dollar amount of any exemptions granted
before May 31, 1993, within a reinvestment zone under agreements
authorized by Chapter 312, Tax Code;
(4) subject to Subsection (e), the total dollar amount
of any captured appraised value of property that:
(A) is within a reinvestment zone created on or
before May 31, 1999, or is proposed to be included within the
boundaries of a reinvestment zone as the boundaries of the zone and
the proposed portion of tax increment paid into the tax increment
fund by a school district are described in a written notification
provided by the municipality or the board of directors of the zone
to the governing bodies of the other taxing units in the manner
provided by former Section 311.003(e), Tax Code, before May 31,
1999, and within the boundaries of the zone as those boundaries
existed on September 1, 1999, including subsequent improvements to
the property regardless of when made;
(B) generates taxes paid into a tax increment
fund created under Chapter 311, Tax Code, under a reinvestment zone
financing plan approved under Section 311.011(d), Tax Code, on or
before September 1, 1999; and
(C) is eligible for tax increment financing under
Chapter 311, Tax Code;
(5) the total dollar amount of any captured appraised
value of property that:
(A) is within a reinvestment zone:
(i) created on or before December 31, 2008,
by a municipality with a population of less than 18,000; and
(ii) the project plan for which includes
the alteration, remodeling, repair, or reconstruction of a
structure that is included on the National Register of Historic
Places and requires that a portion of the tax increment of the zone
be used for the improvement or construction of related facilities
or for affordable housing;
(B) generates school district taxes that are paid
into a tax increment fund created under Chapter 311, Tax Code; and
(C) is eligible for tax increment financing under
Chapter 311, Tax Code;
(6) the total dollar amount of any exemptions granted
under Section 11.251 or 11.253, Tax Code;
(7) the difference between the comptroller's estimate
of the market value and the productivity value of land that
qualifies for appraisal on the basis of its productive capacity,
except that the productivity value estimated by the comptroller may
not exceed the fair market value of the land;
(8) the portion of the appraised value of residence
homesteads of individuals who receive a tax limitation under
Section 11.26, Tax Code, on which school district taxes are not
imposed in the year that is the subject of the study, calculated as
if the residence homesteads were appraised at the full value
required by law;
(9) a portion of the market value of property not
otherwise fully taxable by the district at market value because of
action required by statute or the constitution of this state, other
than Section 11.311, Tax Code, that, if the tax rate adopted by the
district is applied to it, produces an amount equal to the
difference between the tax that the district would have imposed on
the property if the property were fully taxable at market value and
the tax that the district is actually authorized to impose on the
property, if this subsection does not otherwise require that
portion to be deducted;
(10) the market value of all tangible personal
property, other than manufactured homes, owned by a family or
individual and not held or used for the production of income;
(11) the appraised value of property the collection of
delinquent taxes on which is deferred under Section 33.06, Tax
Code;
(12) the portion of the appraised value of property
the collection of delinquent taxes on which is deferred under
Section 33.065, Tax Code;
(13) the amount by which the market value of property
[a residence homestead] to which Section 23.23, Tax Code, applies
exceeds the appraised value of that property as calculated under
that section; and
(14) the total dollar amount of any exemptions granted
under Section 11.35, Tax Code.
(i) If the comptroller determines in the study that the
market value of property in a school district as determined by the
appraisal district that appraises property for the school district,
less the total of the amounts and values listed in Subsection (d) as
determined by that appraisal district, is valid, the comptroller,
in determining the taxable value of property in the school district
under Subsection (d), shall for purposes of Subsection (d)(13)
subtract from the market value as determined by the appraisal
district of properties [residence homesteads] to which Section
23.23, Tax Code, applies the amount by which that amount exceeds the
appraised value of those properties as calculated by the appraisal
district under Section 23.23, Tax Code. If the comptroller
determines in the study that the market value of property in a
school district as determined by the appraisal district that
appraises property for the school district, less the total of the
amounts and values listed in Subsection (d) as determined by that
appraisal district, is not valid, the comptroller, in determining
the taxable value of property in the school district under
Subsection (d), shall for purposes of Subsection (d)(13) subtract
from the market value as estimated by the comptroller of properties
[residence homesteads] to which Section 23.23, Tax Code, applies
the amount by which that amount exceeds the appraised value of those
properties as calculated by the appraisal district under Section
23.23, Tax Code.
SECTION 4.06. Section 23.23(c-1), Tax Code, is repealed.
SECTION 4.07. This article applies only to the appraisal
for ad valorem tax purposes of property for a tax year that begins
on or after the effective date of this article.
ARTICLE 5. EFFECTIVE DATES
SECTION 5.01. Except as otherwise provided by this article,
this Act takes effect September 1, 2023.
SECTION 5.02. Article 3 of this Act takes effect January 1,
2024.
SECTION 5.03. Article 4 of this Act takes effect January 1,
2024, but only if the constitutional amendment proposed by the 88th
Legislature, Regular Session, 2023, to authorize the legislature to
limit the maximum appraised value of real property for ad valorem
tax purposes and to except certain appropriations to pay for ad
valorem tax relief from the constitutional limitation on the rate
of growth of appropriations is approved by the voters. If that
amendment is not approved by the voters, Article 4 of this Act has
no effect.