Bill Text: TX HB2 | 2023 | 88th Legislature 2nd Special Session | Comm Sub

Texas House Bill 2 (Prior Session Legislation)

Bill Title: Relating to providing property tax relief through the public school finance system, exemptions, limitations on appraisals and taxes, and property tax administration; authorizing the imposition of a fee.

Sponsorship: Strong Partisan Bill (Republican 64-7)

Status: (Introduced - Dead) 2023-07-13 - Laid on the table subject to call [HB2 Detail]

Download: Texas-2023-HB2-Comm_Sub.html

	88S20223 CJC/TJB/KJE-D

	By: Meyer, Metcalf, Burrows, Raymond,	H.B. No. 2
	Thierry, et al.



	A BILL TO BE ENTITLED
	AN ACT
	relating to providing property tax relief through the public school
	finance system, exemptions, limitations on appraisals and taxes,
	and property tax administration; authorizing the imposition of a
	fee.
	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 Sections 48.2555 and 48.283 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 $0.107.
	(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);
	(6) Section 48.2556; and
	(7) 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.
	Sec. 48.283. ADDITIONAL STATE AID FOR CERTAIN DISTRICTS
	IMPACTED BY COMPRESSION. A school district that received an
	adjustment under Section 48.257(b) for the 2022-2023 school year is
	entitled to additional state aid for each school year in an amount
	equal to the amount of that adjustment for the 2022-2023 school year
	less the difference, if the difference is greater than zero,
	between:
	(1) the amount to which the district is entitled under
	this chapter for the current school year; and
	(2) the amount to which the district would be entitled
	under this chapter for the current school year if the district's
	maximum compressed tax rate had not been reduced under Section
	48.2555, as added by S.B. 2, Acts of the 88th Legislature, 2nd
	Called Session, 2023.
	ARTICLE 3. SCHOOL DISTRICT RESIDENCE HOMESTEAD EXEMPTION
	SECTION 3.01. Section 11.13(b), Tax Code, is amended to
	read as follows:
	(b) An adult is entitled to exemption from taxation by a
	school district of $100,000 [~~$40,000~~] of the appraised value of the
	adult's residence homestead, except that only $5,000 of the
	exemption applies to an entity operating under former Chapter 17,
	18, 25, 26, 27, or 28, Education Code, as those chapters existed on
	May 1, 1995, as permitted by Section 11.301, Education Code.
	SECTION 3.02. Section 11.26, Tax Code, is amended by
	amending Subsections (a), (a-10), and (o) and adding Subsections
	(a-11) and (a-12) to read as follows:
	(a) The tax officials shall appraise the property to which
	this section applies and calculate taxes as on other property, but
	if the tax so calculated exceeds the limitation imposed by this
	section, the tax imposed is the amount of the tax as limited by this
	section, except as otherwise provided by this section. A school
	district may not increase the total annual amount of ad valorem tax
	it imposes on the residence homestead of an individual 65 years of
	age or older or on the residence homestead of an individual who is
	disabled, as defined by Section 11.13, above the amount of the tax
	it imposed in the first tax year in which the individual qualified
	that residence homestead for the applicable exemption provided by
	Section 11.13(c) for an individual who is 65 years of age or older
	or is disabled. 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 same exemption
	for the next year, and if the school district taxes imposed on the
	residence homestead in the next year are less than the amount of
	taxes imposed in that first year, a school district may not
	subsequently increase the total annual amount of ad valorem taxes
	it imposes on the residence homestead above the amount it imposed in
	the year immediately following the first year for which the
	individual qualified that residence homestead for the same
	exemption, except as provided by Subsection (b). [~~If the first tax~~
	~~year the individual qualified the residence homestead for the~~
	~~exemption provided by Section 11.13(c) for individuals 65 years of~~
	~~age or older or disabled was a tax year before the 2015 tax year, the~~
	~~amount of the limitation provided by this section is the amount of~~
	~~tax the school district imposed for the 2014 tax year less an amount~~
	~~equal to the amount determined by multiplying $10,000 times the tax~~
	~~rate of the school district for the 2015 tax year, plus any 2015 tax~~
	~~attributable to improvements made in 2014, other than improvements~~
	~~made to comply with governmental regulations or repairs.~~]
	(a-10) Notwithstanding the other provisions of this
	section, if in the 2024 or a subsequent tax year an individual
	qualifies for a limitation on tax increases provided by this
	section on the individual's residence homestead, the amount of the
	limitation provided by this section on the homestead is equal to the
	amount computed by:
	(1) multiplying the taxable value of the homestead in
	the preceding tax year by a tax rate equal to the difference between
	the school district's maximum compressed rate for the preceding tax
	year and the district's maximum compressed rate for the current tax
	year;
	(2) subtracting the amount computed under Subdivision
	(1) from the amount of tax the district imposed on the homestead in
	the preceding tax year; [~~and~~]
	(3) adding any tax imposed in the current tax year
	attributable to improvements made in the preceding tax year as
	provided by Subsection (b) to the amount computed under Subdivision
	(2);
	(4) multiplying the amount of any increase in the
	current tax year as compared to the preceding tax year in the
	aggregate amount of the exemptions to which the individual is
	entitled under Sections 11.13(b) and (c) by the school district's
	tax rate for the current tax year; and
	(5) subtracting the amount computed under Subdivision
	(4) from the amount computed under Subdivision (3).
	(a-11) This subsection applies only to an individual who in
	the 2023 tax year qualifies for a limitation under this section and
	for whom the 2022 tax year or an earlier tax year was the first tax
	year the individual or the individual's spouse qualified for an
	exemption under Section 11.13(c). The amount of the limitation
	provided by this section on the residence homestead of an
	individual to which this subsection applies for the 2023 tax year is
	the amount of the limitation as computed under Subsection (a-5),
	(a-6), (a-7), (a-8), or (a-9) of this section, as applicable, less
	an amount equal to the product of $60,000 and the tax rate of the
	school district for the 2023 tax year. This subsection expires
	January 1, 2025.
	(a-12) This subsection applies only to an individual who in
	the 2023 tax year qualifies for a limitation under this section and
	for whom the 2021 tax year or an earlier tax year was the first tax
	year the individual or the individual's spouse qualified for an
	exemption under Section 11.13(c). The amount of the limitation
	provided by this section on the residence homestead of an
	individual to which this subsection applies for the 2023 tax year is
	the amount of the limitation as computed under Subsection (a-11) of
	this section less an amount equal to the product of $15,000 and the
	tax rate of the school district for the 2022 tax year. This
	subsection expires January 1, 2025.
	(o) Notwithstanding Subsections (a)[~~, (a-3),~~] and (b), an
	improvement to property that would otherwise constitute an
	improvement under Subsection (b) is not treated as an improvement
	under that subsection if the improvement is a replacement structure
	for a structure that was rendered uninhabitable or unusable by a
	casualty or by wind or water damage. For purposes of appraising the
	property in the tax year in which the structure would have
	constituted an improvement under Subsection (b), the replacement
	structure is considered to be an improvement under that subsection
	only if:
	(1) the square footage of the replacement structure
	exceeds that of the replaced structure as that structure existed
	before the casualty or damage occurred; or
	(2) the exterior of the replacement structure is of
	higher quality construction and composition than that of the
	replaced structure.
	SECTION 3.03. Section 46.071, Education Code, is amended by
	amending Subsections (a-1) and (b-1) and adding Subsections (a-2),
	(b-2), and (c-2) to read as follows:
	(a-1) For [~~Beginning with~~] the 2022-2023 school year, a
	school district is entitled to additional state aid under this
	subchapter to the extent that state and local revenue used to
	service debt eligible under this chapter is less than the state and
	local revenue that would have been available to the district under
	this chapter as it existed on September 1, 2021, if any increase in
	the residence homestead exemption under Section 1-b(c), Article
	VIII, Texas Constitution, as proposed by the 87th Legislature, 3rd
	Called Session, 2021, had not occurred.
	(a-2) Beginning with the 2023-2024 school year, a school
	district is entitled to additional state aid under this subchapter
	to the extent that state and local revenue used to service debt
	eligible under this chapter is less than the state and local revenue
	that would have been available to the district under this chapter as
	it existed on September 1, 2022, if any increase in a residence
	homestead exemption under Section 1-b(c), Article VIII, Texas
	Constitution, and any additional limitation on tax increases under
	Section 1-b(d) of that article as proposed by the 88th Legislature,
	2nd Called Session, 2023, had not occurred.
	(b-1) Subject to Subsections (c-1), (d), and (e),
	additional state aid under this section for [~~beginning with~~] the
	2022-2023 school year is equal to the amount by which the loss of
	local interest and sinking revenue for debt service attributable to
	any increase in the residence homestead exemption under Section
	1-b(c), Article VIII, Texas Constitution, as proposed by the 87th
	Legislature, 3rd Called Session, 2021, is not offset by a gain in
	state aid under this chapter.
	(b-2) Subject to Subsections (c-2), (d), and (e),
	additional state aid under this section beginning with the
	2023-2024 school year is equal to the amount by which the loss of
	local interest and sinking revenue for debt service attributable to
	any increase in a residence homestead exemption under Section
	1-b(c), Article VIII, Texas Constitution, and any additional
	limitation on tax increases under Section 1-b(d) of that article as
	proposed by the 88th Legislature, 2nd Called Session, 2023, is not
	offset by a gain in state aid under this chapter.
	(c-2) For the purpose of determining state aid under
	Subsections (a-2) and (b-2), local interest and sinking revenue for
	debt service is limited to revenue required to service debt
	eligible under this chapter as of September 1, 2022, including
	refunding of that debt, subject to Section 46.061. The limitation
	imposed by Section 46.034(a) does not apply for the purpose of
	determining state aid under this section.
	SECTION 3.04. Section 48.2542, Education Code, is amended
	to read as follows:
	Sec. 48.2542. ADDITIONAL STATE AID FOR ADJUSTMENT OF
	LIMITATION ON TAX INCREASES ON HOMESTEAD OF ELDERLY OR DISABLED.
	Notwithstanding any other provision of this chapter, if a school
	district is not fully compensated through state aid or the
	calculation of excess local revenue under this chapter based on the
	determination of the district's taxable value of property under
	Subchapter M, Chapter 403, Government Code, the district is
	entitled to additional state aid in the amount necessary to fully
	compensate the district for the amount of ad valorem tax revenue
	lost due to a reduction of the amount of the limitation on tax
	increases provided by Sections 11.26(a-4), (a-5), (a-6), (a-7),
	(a-8), (a-9), [~~and~~] (a-10), (a-11), and (a-12), Tax Code, as
	applicable.
	SECTION 3.05. Effective January 1, 2025, Section 48.2542,
	Education Code, is amended to read as follows:
	Sec. 48.2542. ADDITIONAL STATE AID FOR ADJUSTMENT OF
	LIMITATION ON TAX INCREASES ON HOMESTEAD OF ELDERLY OR DISABLED.
	Notwithstanding any other provision of this chapter, if a school
	district is not fully compensated through state aid or the
	calculation of excess local revenue under this chapter based on the
	determination of the district's taxable value of property under
	Subchapter M, Chapter 403, Government Code, the district is
	entitled to additional state aid in the amount necessary to fully
	compensate the district for the amount of ad valorem tax revenue
	lost due to a reduction of the amount of the limitation on tax
	increases provided by Section 11.26(a-10) [~~Sections 11.26(a-4),~~
	~~(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10)~~], Tax Code[~~, as~~
	~~applicable~~].
	SECTION 3.06. Section 48.2543, Education Code, is amended
	to read as follows:
	Sec. 48.2543. ADDITIONAL STATE AID FOR HOMESTEAD EXEMPTION.
	(a) For [~~Beginning with~~] the 2022-2023 school year, a school
	district is entitled to additional state aid to the extent that
	state and local revenue under this chapter and Chapter 49 is less
	than the state and local revenue that would have been available to
	the district under this chapter and Chapter 49 as those chapters
	existed on September 1, 2021, if any increase in the residence
	homestead exemption under Section 1-b(c), Article VIII, Texas
	Constitution, as proposed by the 87th Legislature, 3rd Called
	Session, 2021, had not occurred.
	(a-1) Beginning with the 2023-2024 school year, a school
	district is entitled to additional state aid to the extent that
	state and local revenue under this chapter and Chapter 49 is less
	than the state and local revenue that would have been available to
	the district under this chapter and Chapter 49 as those chapters
	existed on September 1, 2022, if any increase in a residence
	homestead exemption under Section 1-b(c), Article VIII, Texas
	Constitution, and any additional limitation on tax increases under
	Section 1-b(d) of that article as proposed by the 88th Legislature,
	2nd Called Session, 2023, had not occurred.
	(b) The lesser of the school district's currently adopted
	maintenance and operations tax rate or the adopted maintenance and
	operations tax rate for:
	(1) the 2021 tax year is used for the purpose of
	determining additional state aid under Subsection (a); and
	(2) the 2022 tax year is used for the purpose of
	determining additional state aid under Subsection (a-1).
	SECTION 3.07. Section 48.2556(a), Education Code, is
	amended to read as follows:
	(a) The agency shall post the following information on the
	agency's Internet website for purposes of allowing the chief
	appraiser of each appraisal district and the assessor for each
	school district to make the calculations required by Sections
	11.26(a-5), (a-6), (a-7), (a-8), (a-9), [~~and~~] (a-10), (a-11), and
	(a-12), Tax Code:
	(1) each school district's maximum compressed rate, as
	determined under Section 48.2551, for each tax year beginning with
	the 2019 tax year; and
	(2) each school district's tier one maintenance and
	operations tax rate, as provided by Section 45.0032(a), for the
	2018 tax year.
	SECTION 3.08. Effective January 1, 2025, Section
	48.2556(a), Education Code, is amended to read as follows:
	(a) For purposes of allowing the chief appraiser of each
	appraisal district and the assessor for each school district to
	make the calculations required by Section 11.26(a-10), Tax Code,
	the [~~The~~] agency shall post [~~the following information~~] on the
	agency's Internet website [~~for purposes of allowing the chief~~
	~~appraiser of each appraisal district and the assessor for each~~
	~~school district to make the calculations required by Sections~~
	~~11.26(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10), Tax Code:~~
	[~~(1)~~] each school district's maximum compressed rate,
	as determined under Section 48.2551, for the current [~~each~~] tax
	year and the preceding [~~beginning with the 2019~~] tax year[~~; and~~
	[~~(2)~~ ~~each school district's tier one maintenance and~~
	~~operations tax rate, as provided by Section 45.0032(a), for the~~
	~~2018 tax year~~].
	SECTION 3.09. Section 49.004, Education Code, is amended by
	adding Subsections (a-1), (b-1), and (c-1) to read as follows:
	(a-1) This subsection applies only if the constitutional
	amendment proposed by H.J.R. 2, 88th Legislature, 2nd Called
	Session, 2023, is approved by the voters in an election held for
	that purpose. As soon as practicable after receiving revised
	property values that reflect adoption of the constitutional
	amendment, the commissioner shall review the local revenue level of
	districts in the state and revise as necessary the notifications
	provided under Subsection (a) for the 2023-2024 school year. This
	subsection expires September 1, 2024.
	(b-1) This subsection applies only to a district that has
	not previously held an election under this chapter. Notwithstanding
	Subsection (b), a district that enters into an agreement to
	exercise an option to reduce the district's local revenue level in
	excess of entitlement under Section 49.002(3), (4), or (5) for the
	2023-2024 school year may request and, as provided by Section
	49.0042(a), receive approval from the commissioner to delay the
	date of the election otherwise required to be ordered before
	September 1. This subsection expires September 1, 2024.
	(c-1) Notwithstanding Subsection (c), a district that
	receives approval from the commissioner to delay an election as
	provided by Subsection (b-1) may adopt a tax rate for the 2023 tax
	year before the commissioner certifies that the district has
	reduced its local revenue level to the level established by Section
	48.257. This subsection expires September 1, 2024.
	SECTION 3.10. Subchapter A, Chapter 49, Education Code, is
	amended by adding Section 49.0042 to read as follows:
	Sec. 49.0042. TRANSITIONAL PROVISIONS: INCREASED HOMESTEAD
	EXEMPTION AND LIMITATION ON TAX INCREASES. (a) The commissioner
	shall approve a district's request under Section 49.004(b-1) to
	delay the date of an election required under this chapter if the
	commissioner determines that the district would not have a local
	revenue level in excess of entitlement if the constitutional
	amendment proposed by H.J.R. 2, 88th Legislature, 2nd Called
	Session, 2023, were approved by the voters.
	(b) The commissioner shall set a date by which each district
	that receives approval under this section must order the election.
	(c) Not later than the 2024-2025 school year, the
	commissioner shall order detachment and annexation of property
	under Subchapter G or consolidation under Subchapter H as necessary
	to reduce the district's local revenue level to the level
	established by Section 48.257 for a district that receives approval
	under this section and subsequently:
	(1) fails to hold the election; or
	(2) does not receive voter approval at the election.
	(d) This section expires September 1, 2025.
	SECTION 3.11. Subchapter A, Chapter 49, Education Code, is
	amended by adding Section 49.0121 to read as follows:
	Sec. 49.0121. TRANSITIONAL ELECTION DATES. (a) This
	section applies only to an election under this chapter that occurs
	during the 2023-2024 school year.
	(b) Section 49.012 does not apply to a district that
	receives approval of a request under Section 49.0042. The district
	shall hold the election on a Tuesday or Saturday on or before a date
	specified by the commissioner. Section 41.001, Election Code, does
	not apply to the election.
	(c) This section expires September 1, 2024.
	SECTION 3.12. Section 49.154, Education Code, is amended by
	adding Subsections (a-2) and (a-3) to read as follows:
	(a-2) Notwithstanding Subsections (a) and (a-1), a district
	that receives approval of a request under Section 49.0042 shall pay
	for credit purchased:
	(1) in equal monthly payments as determined by the
	commissioner beginning March 15, 2024, and ending August 15, 2024;
	or
	(2) in the manner provided by Subsection (a)(2),
	provided that the district notifies the commissioner of the
	district's election to pay in that manner not later than March 15,
	2024.
	(a-3) Subsection (a-2) and this subsection expire September
	1, 2024.
	SECTION 3.13. Section 49.308, Education Code, is amended by
	adding Subsection (a-1) to read as follows:
	(a-1) Notwithstanding Subsection (a), for the 2023-2024
	school year, the commissioner shall order any detachments and
	annexations of property under this subchapter as soon as
	practicable after the canvass of the votes on the constitutional
	amendment proposed by H.J.R. 2, 88th Legislature, 2nd Called
	Session, 2023. This subsection expires September 1, 2024.
	SECTION 3.14. Section 403.302, Government Code, is amended
	by amending Subsection (j-1) and adding Subsection (j-2) to read as
	follows:
	(j-1) In the final certification of the study under
	Subsection (j), the comptroller shall separately identify the final
	taxable value for each school district as adjusted to account for
	the reduction of the amount of the limitation on tax increases
	provided by Section 11.26(a-10) [~~Sections 11.26(a-4), (a-5),~~
	~~(a-6), (a-7), (a-8), (a-9), and (a-10)~~], Tax Code[~~, as applicable~~].
	(j-2) In the final certification of the study under
	Subsection (j), the comptroller shall separately identify the final
	taxable value for each school district as adjusted to account for
	the reduction of the amount of the limitation on tax increases
	provided by Sections 11.26(a-5), (a-6), (a-7), (a-8), (a-9),
	(a-10), (a-11), and (a-12), Tax Code. This subsection expires
	January 1, 2025.
	SECTION 3.15. (a) Sections 11.26(a-1), (a-2), and (a-3),
	Tax Code, are repealed.
	(b) Effective January 1, 2025, Sections 11.26(a-5), (a-6),
	(a-7), (a-8), and (a-9), Tax Code, are repealed.
	SECTION 3.16. Sections 11.13 and 11.26, Tax Code, as
	amended by this article, apply only to an ad valorem tax year that
	begins on or after January 1, 2023.
	ARTICLE 4. LIMITATION ON INCREASES IN VALUE OF REAL PROPERTY OTHER
	THAN RESIDENCE HOMESTEAD
	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 or 23.231 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 or 23.231.
	SECTION 4.02. Effective January 1, 2027, Section 1.12(d),
	Tax Code, is amended to read as follows:
	(d) For purposes of this section, the appraisal ratio of 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 4.03. Subchapter B, Chapter 23, Tax Code, is
	amended by adding Section 23.231 to read as follows:
	Sec. 23.231. LIMITATION ON APPRAISED VALUE OF REAL PROPERTY
	OTHER THAN RESIDENCE HOMESTEAD. (a) In this section:
	(1) "Consumer price index" means the average over a
	state fiscal year of the Consumer Price Index for All Urban
	Consumers (CPI-U), U.S. City Average, published monthly by the
	United States Bureau of Labor Statistics, or its successor in
	function.
	(2) "Disaster recovery program" means a disaster
	recovery program funded with community development block grant
	disaster recovery money authorized by federal law.
	(3) "New improvement" means an improvement to real
	property 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.
	(b) This section applies only to real property with an
	appraised value of not more than the amount determined under
	Subsection (j) for the tax year in which the property first
	qualifies for the limitation authorized by this section.
	(c) This section does not apply to:
	(1) a residence homestead that qualifies for an
	exemption under Section 11.13; or
	(2) property appraised under Subchapter C, D, E, F, G,
	or H.
	(d) 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 to which this section applies 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) 20 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.
	(e) When appraising real property to which this section
	applies, 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
	(d)(2).
	(f) The limitation provided by Subsection (d) takes effect
	as to a parcel of real property on January 1 of the tax year
	following the first tax year in which the owner owns the property on
	January 1. The limitation expires on January 1 of the tax year
	following the tax year in which the owner of the property ceases to
	own the property.
	(g) For purposes of Subsection (f), a person who acquired
	real property to which this section applies before the 2023 tax year
	is considered to have acquired the property on January 1, 2023.
	(h) Notwithstanding Subsections (a) and (d) and except as
	provided by Subdivision (2) of this subsection, an improvement to
	real property that would otherwise constitute a new improvement is
	not treated as a new improvement if the improvement is a replacement
	structure for a structure that was rendered uninhabitable or
	unusable by a casualty or by wind or water damage. For purposes of
	appraising the property under Subsection (d) in the tax year in
	which the structure would have constituted a new improvement:
	(1) the appraised value the property would have had in
	the preceding tax year if the casualty or damage had not occurred is
	considered to be the appraised value of the property for that year,
	regardless of whether that appraised value exceeds the actual
	appraised value of the property for that year as limited by
	Subsection (d); and
	(2) the replacement structure is considered to be a
	new improvement only if:
	(A) the square footage of the replacement
	structure exceeds that of the replaced structure as that structure
	existed before the casualty or damage occurred; or
	(B) the exterior of the replacement structure is
	of higher quality construction and composition than that of the
	replaced structure.
	(i) Notwithstanding Subsection (h)(2), and only to the
	extent necessary to satisfy the requirements of a disaster recovery
	program, a replacement structure described by that subdivision is
	not considered to be a new improvement if to satisfy the
	requirements of the disaster recovery program it was necessary
	that:
	(1) the square footage of the replacement structure
	exceed that of the replaced structure as that structure existed
	before the casualty or damage occurred; or
	(2) the exterior of the replacement structure be of
	higher quality construction and composition than that of the
	replaced structure.
	(j) For the purpose of Subsection (b), for the 2024 tax
	year, the amount is $5 million. For the 2025 tax year, the
	comptroller shall determine the amount for purposes of Subsection
	(b) by increasing or decreasing, as applicable, the amount in
	effect for the 2024 tax year by an amount equal to $5 million
	multiplied by the percentage increase or decrease during the
	preceding state fiscal year in the consumer price index. For each
	subsequent tax year, the comptroller shall determine the amount for
	purposes of Subsection (b) by increasing or decreasing, as
	applicable, the amount in effect for the preceding tax year by an
	amount equal to that amount multiplied by the percentage increase
	or decrease during the preceding state fiscal year in the consumer
	price index, rounded to the nearest $10,000. The comptroller shall
	publish the amount in effect for a tax year under this subsection as
	soon as practicable after January 1 of the tax year.
	(k) This section expires December 31, 2026.
	SECTION 4.04. Sections 25.19(b) and (g), Tax Code, are
	amended to read as follows:
	(b) The chief appraiser shall separate real from personal
	property and include in the notice for each:
	(1) a list of the taxing units in which the property is
	taxable;
	(2) the appraised value of the property in the
	preceding year;
	(3) the taxable value of the property in the preceding
	year for each taxing unit taxing the property;
	(4) the appraised value of the property for the
	current year, the kind and amount of each exemption and partial
	exemption, if any, approved for the property for the current year
	and for the preceding year, and, if an exemption or partial
	exemption that was approved for the preceding year was canceled or
	reduced for the current year, the amount of the exemption or partial
	exemption canceled or reduced;
	(4-a) a statement of whether the property qualifies for
	the limitation on appraised value provided by Section 23.231;
	(5) in italic typeface, the following statement: "The
	Texas Legislature does not set the amount of your local taxes. Your
	property tax burden is decided by your locally elected officials,
	and all inquiries concerning your taxes should be directed to those
	officials";
	(6) a detailed explanation of the time and procedure
	for protesting the value;
	(7) the date and place the appraisal review board will
	begin hearing protests;
	(8) an explanation of the availability and purpose of
	an informal conference with the appraisal office before a hearing
	on a protest; and
	(9) a brief explanation that the governing body of
	each taxing unit decides whether or not taxes on the property will
	increase and the appraisal district only determines the value of
	the property.
	(g) By April 1 or as soon thereafter as practicable if the
	property is a single-family residence that qualifies for an
	exemption under Section 11.13, or by May 1 or as soon thereafter as
	practicable in connection with any other property, the chief
	appraiser shall deliver a written notice to the owner of each
	property not included in a notice required to be delivered under
	Subsection (a), if the property was reappraised in the current tax
	year, if the ownership of the property changed during the preceding
	year, or if the property owner or the agent of a property owner
	authorized under Section 1.111 makes a written request for the
	notice. The chief appraiser shall separate real from personal
	property and include in the notice for each property:
	(1) the appraised value of the property in the
	preceding year;
	(2) the appraised value of the property for the
	current year and the kind of each partial exemption, if any,
	approved for the current year;
	(2-a) a statement of whether the property qualifies for
	the limitation on appraised value provided by Section 23.231;
	(3) a detailed explanation of the time and procedure
	for protesting the value; and
	(4) the date and place the appraisal review board will
	begin hearing protests.
	SECTION 4.05. Effective January 1, 2027, Sections 25.19(b)
	and (g), Tax Code, are amended to read as follows:
	(b) The chief appraiser shall separate real from personal
	property and include in the notice for each:
	(1) a list of the taxing units in which the property is
	taxable;
	(2) the appraised value of the property in the
	preceding year;
	(3) the taxable value of the property in the preceding
	year for each taxing unit taxing the property;
	(4) the appraised value of the property for the
	current year, the kind and amount of each exemption and partial
	exemption, if any, approved for the property for the current year
	and for the preceding year, and, if an exemption or partial
	exemption that was approved for the preceding year was canceled or
	reduced for the current year, the amount of the exemption or partial
	exemption canceled or reduced;
	(5) in italic typeface, the following statement: "The
	Texas Legislature does not set the amount of your local taxes. Your
	property tax burden is decided by your locally elected officials,
	and all inquiries concerning your taxes should be directed to those
	officials";
	(6) a detailed explanation of the time and procedure
	for protesting the value;
	(7) the date and place the appraisal review board will
	begin hearing protests;
	(8) an explanation of the availability and purpose of
	an informal conference with the appraisal office before a hearing
	on a protest; and
	(9) a brief explanation that the governing body of
	each taxing unit decides whether or not taxes on the property will
	increase and the appraisal district only determines the value of
	the property.
	(g) By April 1 or as soon thereafter as practicable if the
	property is a single-family residence that qualifies for an
	exemption under Section 11.13, or by May 1 or as soon thereafter as
	practicable in connection with any other property, the chief
	appraiser shall deliver a written notice to the owner of each
	property not included in a notice required to be delivered under
	Subsection (a), if the property was reappraised in the current tax
	year, if the ownership of the property changed during the preceding
	year, or if the property owner or the agent of a property owner
	authorized under Section 1.111 makes a written request for the
	notice. The chief appraiser shall separate real from personal
	property and include in the notice for each property:
	(1) the appraised value of the property in the
	preceding year;
	(2) the appraised value of the property for the
	current year and the kind of each partial exemption, if any,
	approved for the current year;
	(3) a detailed explanation of the time and procedure
	for protesting the value; and
	(4) the date and place the appraisal review board will
	begin hearing protests.
	SECTION 4.06. Section 25.19, Tax Code, is amended by adding
	Subsection (o) to read as follows:
	(o) A notice required under Subsection (a) or (g) to be
	delivered to the owner of real property other than a single-family
	residence that qualifies for an exemption under Section 11.13 must
	include the following statement: "Under Section 23.231, Tax Code,
	for the 2024, 2025, and 2026 tax years, the appraised value of real
	property other than a residence homestead for ad valorem tax
	purposes may not be increased by more than 20 percent each year,
	with certain exceptions. The limitation provided under Section
	23.231, Tax Code, expires December 31, 2026. Unless this
	expiration date is extended by the Texas Legislature, beginning in
	the 2027 tax year, the limitation provided under Section 23.231,
	Tax Code, will no longer be in effect and may result in an increase
	in ad valorem taxes imposed on real property previously subject to
	the limitation." This subsection expires December 31, 2027.
	SECTION 4.07. Section 41.41(a), Tax Code, is amended to
	read as follows:
	(a) A property owner is entitled to protest before the
	appraisal review board the following actions:
	(1) determination of the appraised value of the
	owner's property or, in the case of land appraised as provided by
	Subchapter C, D, E, or H, Chapter 23, determination of its appraised
	or market value;
	(2) unequal appraisal of the owner's property;
	(3) inclusion of the owner's property on the appraisal
	records;
	(4) denial to the property owner in whole or in part of
	a partial exemption;
	(4-a) determination that the owner's property does not
	qualify for the limitation on appraised value provided by Section
	23.231;
	(5) determination that the owner's land does not
	qualify for appraisal as provided by Subchapter C, D, E, or H,
	Chapter 23;
	(6) identification of the taxing units in which the
	owner's property is taxable in the case of the appraisal district's
	appraisal roll;
	(7) determination that the property owner is the owner
	of property;
	(8) a determination that a change in use of land
	appraised under Subchapter C, D, E, or H, Chapter 23, has occurred;
	or
	(9) any other action of the chief appraiser, appraisal
	district, or appraisal review board that applies to and adversely
	affects the property owner.
	SECTION 4.08. Effective January 1, 2027, Section 41.41(a),
	Tax Code, is amended to read as follows:
	(a) A property owner is entitled to protest before the
	appraisal review board the following actions:
	(1) determination of the appraised value of the
	owner's property or, in the case of land appraised as provided by
	Subchapter C, D, E, or H, Chapter 23, determination of its appraised
	or market value;
	(2) unequal appraisal of the owner's property;
	(3) inclusion of the owner's property on the appraisal
	records;
	(4) denial to the property owner in whole or in part of
	a partial exemption;
	(5) determination that the owner's land does not
	qualify for appraisal as provided by Subchapter C, D, E, or H,
	Chapter 23;
	(6) identification of the taxing units in which the
	owner's property is taxable in the case of the appraisal district's
	appraisal roll;
	(7) determination that the property owner is the owner
	of property;
	(8) a determination that a change in use of land
	appraised under Subchapter C, D, E, or H, Chapter 23, has occurred;
	or
	(9) any other action of the chief appraiser, appraisal
	district, or appraisal review board that applies to and adversely
	affects the property owner.
	SECTION 4.09. 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 or 23.231.
	SECTION 4.10. Effective January 1, 2027, 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 4.11. 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 or 23.231, Tax Code,
	applies exceeds the appraised value of that property as calculated
	under Section 23.23 or 23.231, Tax Code, as applicable [~~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 or 23.231, 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 or 23.231, Tax Code, as
	applicable. 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 or 23.231, 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 or 23.231,
	Tax Code, as applicable.
	SECTION 4.12. Effective January 1, 2027, 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 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 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 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 4.13. Section 23.231, Tax Code, as added by this
	article, applies only to the appraisal of real property other than a
	residence homestead for ad valorem tax purposes for a tax year that
	begins on or after the effective date of this article.
	ARTICLE 5. BOARDS OF DIRECTORS OF APPRAISAL DISTRICTS
	SECTION 5.01. The heading to Section 6.03, Tax Code, is
	amended to read as follows:
	Sec. 6.03. BOARD OF DIRECTORS IN LESS POPULOUS COUNTIES.
	SECTION 5.02. Section 6.03, Tax Code, is amended by
	amending Subsection (a) and adding Subsection (a-1) to read as
	follows:
	(a) This section applies only to an appraisal district
	established in a county with a population of less than 75,000.
	(a-1) The appraisal district is governed by a board of
	directors. Five directors are appointed by the taxing units that
	participate in the district as provided by this section. If the
	county assessor-collector is not appointed to the board, the county
	assessor-collector serves as a nonvoting director. The county
	assessor-collector is ineligible to serve if the board enters into
	a contract under Section 6.05(b) or if the commissioners court of
	the county enters into a contract under Section 6.24(b). To be
	eligible to serve on the board of directors, an individual other
	than a county assessor-collector serving as a nonvoting director
	must be a resident of the district and must have resided in the
	district for at least two years immediately preceding the date the
	individual takes office. An individual who is otherwise eligible
	to serve on the board is not ineligible because of membership on the
	governing body of a taxing unit. An employee of a taxing unit that
	participates in the district is not eligible to serve on the board
	unless the individual is also a member of the governing body or an
	elected official of a taxing unit that participates in the
	district.
	SECTION 5.03. Subchapter A, Chapter 6, Tax Code, is amended
	by adding Section 6.0301 to read as follows:
	Sec. 6.0301. BOARD OF DIRECTORS IN POPULOUS COUNTIES. (a)
	This section applies only to an appraisal district established in a
	county with a population of 75,000 or more.
	(b) Sections 6.031, 6.034, and 6.10 do not apply to an
	appraisal district to which this section applies.
	(c) The appraisal district is governed by a board of nine
	directors. Five directors are appointed by the taxing units that
	participate in the district in the manner prescribed by Section
	6.03. Three directors are elected by majority vote at the general
	election for state and county officers by the voters of the county
	in which the district is established. The county assessor-collector
	serves as an ex officio director.
	(d) To be eligible to serve on the board of directors, an
	individual other than the county assessor-collector must be a
	resident of the district and must have resided in the district for
	at least two years immediately preceding the date the individual
	takes office. An individual who is otherwise eligible to serve on
	the board is not ineligible because of membership on the governing
	body of a taxing unit. An employee of a taxing unit that
	participates in the district is not eligible to serve on the board
	unless the individual is also a member of the governing body or an
	elected official of a taxing unit that participates in the
	district.
	(e) Members of the board of directors appointed by the
	taxing units participating in the district serve staggered
	four-year terms beginning on January 1 of every other even-numbered
	year. Elected members of the board of directors serve staggered
	four-year terms beginning on January 1 of every other odd-numbered
	year.
	(f) If a vacancy occurs in an appointive position on the
	board of directors, each taxing unit that is entitled to vote under
	Section 6.03 may nominate by resolution adopted by its governing
	body a candidate to fill the vacancy. The taxing unit shall submit
	the name of its nominee to the chief appraiser within 45 days after
	notification from the board of directors of the existence of the
	vacancy, and the chief appraiser shall prepare and deliver to the
	board of directors within the next five days a list of the nominees.
	The board of directors shall appoint by majority vote of its members
	one of the nominees to fill the vacancy.
	(g) If a vacancy occurs in an elective position on the board
	of directors, the board of directors shall appoint by majority vote
	of its members a person to fill the vacancy. A person appointed to
	fill a vacancy in an elective position must have the qualifications
	required of a director elected at a general election.
	SECTION 5.04. Subchapter A, Chapter 6, Tax Code, is amended
	by adding Section 6.032 to read as follows:
	Sec. 6.032. BALLOT PROCEDURES FOR ELECTED DIRECTORS; FILING
	FEE. (a) Except as provided by this section, Chapter 144, Election
	Code, applies to a candidate for an elective position on an
	appraisal district board of directors.
	(b) An application for a place on the ballot must be filed
	with the county judge of the county in which the appraisal district
	is established and be accompanied by a filing fee of:
	(1) $400 for a county with a population of 200,000 or
	more; or
	(2) $200 for a county with a population of less than
	200,000.
	(c) A filing fee received under this section shall be
	deposited in the county treasury to the credit of the county general
	fund.
	SECTION 5.05. The heading to Section 6.033, Tax Code, is
	amended to read as follows:
	Sec. 6.033. RECALL OF APPOINTED DIRECTOR.
	SECTION 5.06. Section 6.033(a), Tax Code, is amended to
	read as follows:
	(a) The governing body of a taxing unit may call for the
	recall of an appointed [a] member of the board of directors of an
	appraisal district [~~appointed under Section 6.03 of this code~~] for
	whom the taxing unit cast any of its votes in the appointment of the
	board. The call must be in the form of a resolution, be filed with
	the chief appraiser of the appraisal district, and state that the
	taxing unit is calling for the recall of the member. If a
	resolution calling for the recall of a board member is filed under
	this subsection, the chief appraiser, not later than the 10th day
	after the date of filing, shall deliver a written notice of the
	filing of the resolution and the date of its filing to the presiding
	officer of the governing body of each taxing unit entitled to vote
	in the appointment of board members.
	SECTION 5.07. Section 6.036(a), Tax Code, is amended to
	read as follows:
	(a) An individual is not eligible to be a candidate for, to
	be appointed to, or to serve on the board of directors of an
	appraisal district if the individual or a business entity in which
	the individual has a substantial interest is a party to a contract
	with:
	(1) the appraisal district; or
	(2) a taxing unit that participates in the appraisal
	district, if the contract relates to the performance of an activity
	governed by this title.
	SECTION 5.08. Section 6.052(f), Tax Code, as effective
	January 1, 2024, is amended to read as follows:
	(f) The taxpayer liaison officer is responsible for
	providing clerical assistance to the applicable appointing
	authority prescribed by Section 6.41(d) [~~local administrative~~
	~~district judge~~] in the selection of appraisal review board members
	and for publicizing the availability of positions on the appraisal
	review board. The officer shall deliver to the applicable
	appointing authority [~~local administrative district judge~~] any
	applications to serve on the board that are submitted to the officer
	and shall perform other duties as requested by the applicable
	appointing authority [~~local administrative district judge~~]. The
	officer may not influence the process for selecting appraisal
	review board members.
	SECTION 5.09. Section 6.41, Tax Code, is amended by
	amending Subsections (d), (d-1), (d-2), (d-3), (d-5), (d-9),
	(d-10), (e), (g), (i), and (j) and adding Subsection (d-2-1) to read
	as follows:
	(d) Members of the board are appointed by the applicable
	appointing authority. For an appraisal district to which Section
	6.03 applies, the appointing authority is the local administrative
	district judge under Subchapter D, Chapter 74, Government Code, in
	the county in which the appraisal district is established. For an
	appraisal district to which Section 6.0301 applies, the appointing
	authority is the board of directors of the district. A vacancy on
	the board is filled in the same manner for the unexpired portion of
	the term.
	(d-1) All applications submitted to the appraisal district
	or to the appraisal review board from persons seeking appointment
	as a member of the appraisal review board shall be delivered to the
	applicable appointing authority [~~local administrative district~~
	~~judge~~]. The appraisal district may provide the appointing
	authority [~~local administrative district judge~~] with information
	regarding whether an applicant for appointment to or a member of the
	board owes any delinquent ad valorem taxes to a taxing unit
	participating in the appraisal district.
	(d-2) A local administrative district judge acting as an
	appointing authority may make appointments to the board directly or
	may, by written order, appoint from three to five persons to perform
	the duties of appraisal review board commissioner. If the local
	administrative district judge chooses to appoint appraisal review
	board commissioners, each commissioner shall possess the same
	qualifications as those required of an appraisal review board
	member.
	(d-2-1) A board of directors acting as an appointing
	authority must make appointments to the appraisal review board by
	majority vote, with at least two members of the majority being
	elected members of the board of directors.
	(d-3) The applicable appointing authority [~~local~~
	~~administrative judge~~] shall cause the proper officer to notify
	appointees to the board of their appointment, and when and where
	they are to appear.
	(d-5) The appraisal district of the county shall provide to
	the applicable appointing authority [~~local administrative district~~
	~~judge~~], or to the appraisal review board commissioners, as the case
	may be, the number of appraisal review board positions that require
	appointment and shall provide whatever reasonable assistance is
	requested by the applicable appointing authority [~~local~~
	~~administrative district judge~~] or the commissioners.
	(d-9) In selecting individuals who are to serve as members
	of the appraisal review board for an appraisal district described
	by Subsection (b-2), the board of directors of the district [~~local~~
	~~administrative district judge~~] shall select an adequate number of
	qualified individuals to permit the chairman of the appraisal
	review board to fill the positions on each special panel
	established under Section 6.425.
	(d-10) Upon selection of the individuals who are to serve as
	members of the appraisal review board, the applicable appointing
	authority [~~local administrative district judge~~] shall enter an
	appropriate order designating such members and setting each
	member's respective term of office, as provided elsewhere in this
	section.
	(e) Members of the board hold office for terms of two years
	beginning January 1. The appraisal district board of directors by
	resolution shall provide for staggered terms, so that the terms of
	as close to one-half of the members as possible expire each
	year. In making the initial or subsequent appointments, the
	applicable appointing authority, or the local administrative
	district [~~judge or the~~] judge's designee if the appointing
	authority is the judge, shall designate those members who serve
	terms of one year as needed to comply with this subsection.
	(g) Subsection (a) does not preclude the boards of directors
	of two or more adjoining appraisal districts from providing for the
	operation of a consolidated appraisal review board by interlocal
	contract. Members of a consolidated appraisal review board are
	appointed jointly by the applicable appointing authorities [~~local~~
	~~administrative district judges~~] in the counties in which the
	appraisal districts that are parties to the contract are
	established.
	(i) A chief appraiser or another employee or agent of the
	appraisal district, a member of the appraisal review board for the
	appraisal district, a member of the board of directors of the
	appraisal district if the board is established for a district to
	which Section 6.03 applies, a property tax consultant, or an agent
	of a property owner commits an offense if the person communicates
	with the applicable appointing authority [~~local administrative~~
	~~district judge~~] regarding the appointment of appraisal review board
	members. This subsection does not apply to:
	(1) a communication between a member of the appraisal
	review board and the applicable appointing authority [~~local~~
	~~administrative district judge~~] regarding the member's
	reappointment to the board;
	(2) a communication between the taxpayer liaison
	officer for the appraisal district and the applicable appointing
	authority [~~local administrative district judge~~] in the course of
	the performance of the officer's clerical duties so long as the
	officer does not offer an opinion or comment regarding the
	appointment of appraisal review board members;
	(3) a communication between a chief appraiser or
	another employee or agent of the appraisal district, a member of the
	appraisal review board for the appraisal district, or a member of
	the board of directors of the appraisal district if the board is
	established for a district to which Section 6.03 applies and the
	applicable appointing authority [~~local administrative district~~
	~~judge~~] regarding information relating to or described by Subsection
	(d-1), (d-5), or (f) of this section or Section 411.1296,
	Government Code;
	(4) a communication between a property tax consultant
	or a property owner or an agent of the property owner and the
	taxpayer liaison officer for the appraisal district regarding
	information relating to or described by Subsection (f). The
	taxpayer liaison officer for the appraisal district shall report
	the contents of the communication relating to or described by
	Subsection (f) to the applicable appointing authority [~~local~~
	~~administrative district judge~~]; or
	(5) a communication between a property tax consultant
	or a property owner or an agent of the property owner and the
	applicable appointing authority [~~local administrative district~~
	~~judge~~] regarding information relating to or described by Subsection
	(f).
	(j) A chief appraiser or another employee or agent of an
	appraisal district commits an offense if the person communicates
	with a member of the appraisal review board for the appraisal
	district, a member of the board of directors of the appraisal
	district, or the local administrative district judge, if the judge
	is the appointing authority for the district, regarding a ranking,
	scoring, or reporting of the percentage by which the appraisal
	review board or a panel of the board reduces the appraised value of
	property.
	SECTION 5.10. Section 6.41(f), Tax Code, as amended by
	Chapters 354 (H.B. 2941) and 533 (S.B. 63), Acts of the 87th
	Legislature, Regular Session, 2021, is reenacted and amended to
	read as follows:
	(f) A member of the appraisal review board may be removed
	from the board by the applicable appointing authority, or the local
	administrative district [~~judge or the~~] judge's designee if the
	appointing authority is the judge. Not later than the 90th day after
	the date the board of directors, local administrative district
	judge, or judge's designee that appointed a member of the appraisal
	review board learns of a potential ground for removal of the member,
	the board of directors, local administrative district judge, or
	judge's designee, as applicable, shall remove the member or find by
	official action that the member's removal is not warranted.
	Grounds for removal are:
	(1) a violation of Section 6.412, 6.413, 41.66(f), or
	41.69;
	(2) good cause relating to the attendance of members
	at called meetings of the board as established by written policy
	adopted by a majority of the appraisal district board of directors;
	or
	(3) evidence of repeated bias or misconduct.
	SECTION 5.11. Section 6.42(a), Tax Code, is amended to read
	as follows:
	(a) A majority of the appraisal review board constitutes a
	quorum. The applicable appointing authority prescribed by Section
	6.41(d) [~~local administrative district judge under Subchapter D,~~
	~~Chapter 74, Government Code,~~] in the county in which the appraisal
	district is established shall select a chairman and a secretary
	from among the members of the appraisal review board. The
	applicable appointing authority [~~judge~~] is encouraged to select as
	chairman a member of the appraisal review board, if any, who has a
	background in law and property appraisal.
	SECTION 5.12. Section 6.425(e), Tax Code, is amended to
	read as follows:
	(e) Notwithstanding Subsection (d), the chairman of the
	appraisal review board may appoint to a special panel described by
	this section a member of the appraisal review board who does not
	meet the qualifications prescribed by that subsection if:
	(1) the number of persons appointed to the board [by
	~~the local administrative district judge~~] who meet those
	qualifications is not sufficient to fill the positions on each
	special panel; and
	(2) the board member being appointed to the panel
	holds a bachelor's degree in any field.
	SECTION 5.13. (a) Appraisal district directors shall be
	elected to the elective positions as provided by Section 6.0301,
	Tax Code, as added by this article, beginning with the election
	conducted on the uniform election date in May 2024. The directors
	then elected take office on July 1, 2024, and serve a term that
	expires on December 31, 2026.
	(b) Following the election of the initial elected directors
	of an appraisal district as provided by Subsection (a) of this
	section, directors shall be elected as provided by Section 6.0301,
	Tax Code, as added by this article, beginning with the general
	election conducted in November 2026. Directors then elected take
	office January 1, 2027.
	(c) At the first meeting of the board of directors of an
	appraisal district described by Section 6.0301, Tax Code, as added
	by this article, that follows the November 2026 general election of
	directors under that section, the three elected directors shall
	draw lots to determine which director shall serve a term of two
	years and which two directors shall serve a term of four years.
	Thereafter, all elected directors serve four-year terms.
	(d) The term of an appraisal district director serving on
	December 31, 2024, on the board of directors of an appraisal
	district described by Section 6.0301, Tax Code, as added by this
	article, expires on January 1, 2025. Not later than December 31,
	2024, the taxing units participating in the appraisal district that
	are entitled to appoint directors shall appoint five directors to
	serve terms that begin on January 1, 2025. Two directors shall be
	appointed to serve a term of one year, and three directors shall be
	appointed to serve a term of three years. Thereafter, all appointed
	directors serve four-year terms.
	ARTICLE 6. TRANSITIONAL TAX YEAR PROVISIONS
	SECTION 6.01. Section 25.23, Tax Code, is amended by adding
	Subsection (a-1) to read as follows:
	(a-1) This subsection applies only to the appraisal records
	for the 2023 tax year. The chief appraiser shall prepare
	supplemental appraisal records to account for the changes in law
	made by S.B. 2, Acts of the 88th Legislature, 2nd Called Session,
	2023. This subsection expires December 31, 2024.
	SECTION 6.02. Section 26.04, Tax Code, is amended by adding
	Subsections (a-1) and (c-1) to read as follows:
	(a-1) On receipt of the appraisal roll for the 2023 tax
	year, the assessor for a taxing unit shall determine the total
	taxable value of property taxable by the taxing unit and the taxable
	value of new property as if the changes in law made by S.B. 2, Acts
	of the 88th Legislature, 2nd Called Session, 2023, were in effect
	for that tax year. This subsection expires December 31, 2024.
	(c-1) An officer or employee designated by the governing
	body of a taxing unit shall calculate the no-new-revenue tax rate
	and the voter-approval tax rate of the taxing unit for the 2023 tax
	year as if the changes in law made by S.B. 2, Acts of the 88th
	Legislature, 2nd Called Session, 2023, were in effect for that tax
	year. This subsection expires December 31, 2024.
	SECTION 6.03. Chapter 26, Tax Code, is amended by adding
	Section 26.0401 to read as follows:
	Sec. 26.0401. CALCULATION OF CERTAIN TAX RATES FOR 2023 TAX
	YEAR. (a) For the purposes of calculating the no-new-revenue tax
	rate, the voter-approval tax rate, and any related tax rate for the
	2023 tax year, a taxing unit that calculates those rates under a
	provision of law other than Section 26.04 or 26.08 shall calculate
	those rates as if the changes in law made by S.B. 2, Acts of the 88th
	Legislature, 2nd Called Session, 2023, were in effect for that tax
	year.
	(b) This section expires December 31, 2024.
	SECTION 6.04. Section 26.08, Tax Code, is amended by adding
	Subsection (q) to read as follows:
	(q) For purposes of this section, the voter-approval tax
	rate of a school district for the 2023 tax year shall be calculated
	as if the changes in law made by S.B. 2, Acts of the 88th
	Legislature, 2nd Called Session, 2023, were in effect for that tax
	year. This subsection expires December 31, 2024.
	SECTION 6.05. Section 26.09, Tax Code, is amended by adding
	Subsection (c-1) to read as follows:
	(c-1) The assessor for a taxing unit shall calculate the
	amount of tax imposed by the taxing unit on property for the 2023
	tax year as if the changes in law made by S.B. 2, Acts of the 88th
	Legislature, 2nd Called Session, 2023, were in effect for that tax
	year and also as if the changes in law made by that Act were not in
	effect for that tax year. This subsection expires December 31,
	2024.
	SECTION 6.06. Section 26.15, Tax Code, is amended by adding
	Subsection (h) to read as follows:
	(h) The assessor for a taxing unit shall correct the tax
	roll for the taxing unit for the 2023 tax year to reflect the
	results of the election to approve the constitutional amendment
	proposed by H.J.R. 2, 88th Legislature, 2nd Called Session, 2023.
	This subsection expires December 31, 2024.
	SECTION 6.07. Section 31.01, Tax Code, is amended by adding
	Subsections (d-2), (d-3), (d-4), and (d-5) to read as follows:
	(d-2) This subsection and Subsections (d-3) and (d-4) apply
	only to taxes imposed by a taxing unit on property for the 2023 tax
	year and only if the changes in law made by S.B. 2, Acts of the 88th
	Legislature, 2nd Called Session, 2023, would lower the taxes
	imposed by the taxing unit on the property for that tax year. The
	assessor for the taxing unit shall compute the amount of taxes
	imposed and the other information required by this section as if the
	changes in law made by S.B. 2, Acts of the 88th Legislature, 2nd
	Called Session, 2023, were in effect for that tax year. The tax
	bill or the separate statement must indicate that the bill is a
	provisional tax bill and include a statement in substantially the
	following form:
	"If the Texas Legislature had not enacted property tax relief
	legislation during the 2023 legislative session, your tax bill
	would have been $____ (insert amount of tax bill if the changes in
	law made by S.B. 2, Acts of the 88th Legislature, 2nd Called
	Session, 2023, were not in effect for that tax year). Because of
	action by the Texas Legislature, your tax bill has been lowered by
	$____ (insert difference between amount of tax bill if the changes
	in law made by S.B. 2, Acts of the 88th Legislature, 2nd Called
	Session, 2023, were not in effect for that tax year and amount of
	tax bill if that Act were in effect for that tax year), resulting in
	a lower tax bill of $____ (insert amount of tax bill if the changes
	in law made by S.B. 2, Acts of the 88th Legislature, 2nd Called
	Session, 2023, were in effect for that tax year), contingent on the
	approval by the voters at an election to be held November 7, 2023,
	of the constitutional amendment proposed by H.J.R. 2, 88th
	Legislature, 2nd Called Session, 2023. If that constitutional
	amendment is not approved by the voters at the election, a
	supplemental tax bill in the amount of $____ (insert difference
	between amount of tax bill if the changes in law made by S.B. 2,
	Acts of the 88th Legislature, 2nd Called Session, 2023, were not in
	effect for that tax year and amount of tax bill if that Act were in
	effect for that tax year) will be mailed to you."
	(d-3) A tax bill prepared by the assessor for a taxing unit
	as provided by Subsection (d-2) and mailed as provided by
	Subsection (a) is considered to be a provisional tax bill until the
	canvass of the votes on the constitutional amendment proposed by
	H.J.R. 2, 88th Legislature, 2nd Called Session, 2023. If the
	constitutional amendment is approved by the voters, the tax bill is
	considered to be a final tax bill for the taxes imposed on the
	property for the 2023 tax year, and no additional tax bill is
	required to be mailed unless another provision of this title
	requires the mailing of a corrected tax bill. If the constitutional
	amendment is not approved by the voters:
	(1) a tax bill prepared by the assessor as provided by
	Subsection (d-2) is considered to be a final tax bill but only as to
	the portion of the taxes imposed on the property for the 2023 tax
	year that are included in the bill;
	(2) the amount of taxes imposed by each taxing unit on
	property for the 2023 tax year is calculated as if the changes in
	law made by S.B. 2, Acts of the 88th Legislature, 2nd Called
	Session, 2023, were not in effect for that tax year; and
	(3) except as provided by Subsections (f), (i-1), and
	(k), the assessor for each taxing unit shall prepare and mail a
	supplemental tax bill, by December 1 or as soon thereafter as
	practicable, in an amount equal to the difference between the
	amount of the tax bill if the changes in law made by S.B. 2, Acts of
	the 88th Legislature, 2nd Called Session, 2023, were not in effect
	for that tax year and the amount of the tax bill if that Act were in
	effect for that tax year.
	(d-4) Except as otherwise provided by Subsection (d-3), the
	provisions of this section other than Subsection (d-2) apply to a
	supplemental tax bill mailed under Subsection (d-3).
	(d-5) This subsection and Subsections (d-2), (d-3), and
	(d-4) expire December 31, 2024.
	SECTION 6.08. Section 31.02, Tax Code, is amended by adding
	Subsection (a-1) to read as follows:
	(a-1) Except as provided by Subsection (b) of this section
	and Sections 31.03 and 31.04, taxes for which a supplemental tax
	bill is mailed under Section 31.01(d-3) are due on receipt of the
	tax bill and are delinquent if not paid before March 1 of the year
	following the year in which imposed. This subsection expires
	December 31, 2024.
	ARTICLE 7. CONTINGENT ON PASSAGE OF FRANCHISE TAX REFORM
	LEGISLATION
	SECTION 7.01. This Act takes effect only if S.B. 3 or
	similar legislation of the 88th Legislature, 2nd Called Session,
	2023, relating to the amount of the total revenue exemption for the
	franchise tax and the exclusion of certain taxable entities from
	the requirement to file a franchise tax report becomes law in a
	manner described by Section 2001.006(a)(2), Government Code. If
	legislation described by this section does not become law in a
	manner described by Section 2001.006(a)(2), Government Code, this
	Act has no effect.
	ARTICLE 8. EFFECTIVE DATES
	SECTION 8.01. Except as provided by Article 7 of this Act,
	this Act takes effect as provided by this article.
	SECTION 8.02. Except as otherwise provided by this article,
	this Act takes effect on the 91st day after the last day of the
	legislative session.
	SECTION 8.03. Article 2 of this Act takes effect on the date
	on which the constitutional amendment proposed by H.J.R. 2, 88th
	Legislature, 2nd Called Session, 2023, is approved by the voters.
	If that amendment is not approved by the voters, Article 2 of this
	Act has no effect.
	SECTION 8.04. (a) Except as provided by Subsection (b) of
	this section or as otherwise provided by Article 3 of this Act:
	(1) Article 3 of this Act takes effect on the date on
	which the constitutional amendment proposed by H.J.R. 2, 88th
	Legislature, 2nd Called Session, 2023, takes effect; and
	(2) if that amendment is not approved by the voters,
	Article 3 of this Act has no effect.
	(b) Sections 49.004(a-1), (b-1), and (c-1), 49.0042,
	49.0121, 49.154(a-2) and (a-3), and 49.308(a-1), Education Code, as
	added by Article 3 of this Act, take effect immediately if this Act
	receives a vote of two-thirds of all the members elected to each
	house, as provided by Section 39, Article III, Texas Constitution.
	If this Act does not receive the vote necessary for those sections
	to have immediate effect, those sections take effect on the 91st day
	after the last day of the legislative session.
	SECTION 8.05. Article 4 of this Act takes effect January 1,
	2024, but only if the constitutional amendment proposed by
	H.J.R. 2, 88th Legislature, 2nd Called Session, 2023, is approved
	by the voters. If that amendment is not approved by the voters,
	Article 4 of this Act has no effect.
	SECTION 8.06. (a) Article 5 of this Act takes effect as
	provided by Subsections (b) and (c) of this section, but only if the
	constitutional amendment proposed by H.J.R. 2, 88th Legislature,
	2nd Called Session, 2023, is approved by the voters. If that
	amendment is not approved by the voters, Article 5 of this Act has
	no effect.
	(b) Except as provided by Subsection (c) of this section,
	Article 5 of this Act takes effect January 1, 2025.
	(c) Sections 5.04 and 5.13 of this Act take effect on the
	91st day after the last day of the legislative session.
	SECTION 8.07. Article 6 of this Act takes effect
	immediately if this Act receives a vote of two-thirds of all the
	members elected to each house, as provided by Section 39, Article
	III, Texas Constitution. If this Act does not receive the vote
	necessary for that article to have immediate effect, Article 6 of
	this Act takes effect on the 91st day after the last day of the
	legislative session.

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Bill Text: TX HB2 | 2023 | 88th Legislature 2nd Special Session | Comm Sub

Texas House Bill 2 (Prior Session Legislation)

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