Bill Text: TX HB298 | 2017 | 85th Legislature 1st Special Session | Introduced


Bill Title: Relating to limitations on increases in the appraised value for ad valorem tax purposes of residence homesteads and other real property.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2017-07-25 - Referred to Ways & Means [HB298 Detail]

Download: Texas-2017-HB298-Introduced.html
  85S10266 LHC-D
 
  By: Cosper H.B. No. 298
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to limitations on increases in the appraised value for ad
  valorem tax purposes of residence homesteads and other real
  property.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  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 or of other real property
  to which Section 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 2.  Section 23.23(a), Tax Code, is amended 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 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)  seven [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.
         SECTION 3.  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, "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 does not apply to a residence homestead
  that qualifies for an exemption under Section 11.13.
         (c)  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.
         (d)  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
  (c)(2).
         (e)  The limitation provided by Subsection (c) 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.
         (f)  Notwithstanding Subsections (a) and (c) 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 (c) 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 (c); 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.
         (g)  In this subsection, "disaster recovery program" means
  the disaster recovery program administered by the General Land
  Office that is funded with community development block grant
  disaster recovery money authorized by the Consolidated Security,
  Disaster Assistance, and Continuing Appropriations Act, 2009 (Pub.
  L. No. 110-329), and the Consolidated and Further Continuing
  Appropriations Act, 2012 (Pub. L. No. 112-55).  Notwithstanding
  Subsection (f)(2), and only to the extent necessary to satisfy the
  requirements of the 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.
         SECTION 4.  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 5.  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:
                     (A)  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; or
                     (B)  action taken by the district under Subchapter
  B or C, Chapter 313, Tax Code, before the expiration of the
  subchapter;
               (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; and
               (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].
         (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 6.  This Act applies only to the appraisal of real
  property for ad valorem tax purposes for a tax year that begins on
  or after the effective date of this Act.
         SECTION 7.  This Act takes effect January 1, 2018, but only
  if the constitutional amendment proposed by the 85th Legislature,
  1st Called Session, 2017, to authorize the legislature to establish
  a lower limit on the maximum appraised value of residence
  homesteads for ad valorem tax purposes and to establish a limit on
  the value of other real property for those purposes is approved by
  the voters. If that amendment is not approved by the voters, this
  Act has no effect.
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