Bill Text: TX HB30 | 2023 | 88th Legislature 2nd Special Session | Introduced
Bill Title: Relating to a limitation on increases in the appraised value of commercial real property and single-family rental property for ad valorem tax purposes.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2023-06-27 - Filed [HB30 Detail]
Download: Texas-2023-HB30-Introduced.html
| By: Tepper | H.B. No. 30 | |
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| relating to a limitation on increases in the appraised value of | ||
| commercial real property and single-family rental property for ad | ||
| valorem tax purposes. | ||
| 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 | ||
| real property [ |
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| 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. 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 COMMERCIAL | ||
| REAL PROPERTY AND SINGLE-FAMILY RENTAL PROPERTY. (a) In this | ||
| section: | ||
| (1) "Commercial real property" means real property | ||
| held or used for the production of income, other than property held | ||
| or used for single-family use, multifamily use, heavy industrial | ||
| use, or use as a quarry. | ||
| (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 | ||
| commercial real property or single-family rental 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. | ||
| (4) "Single-family rental property" means a | ||
| structure, including a mobile home, together with the land, not to | ||
| exceed 20 acres, and improvements used in the residential occupancy | ||
| of the structure, if the structure and the land and improvements | ||
| have identical ownership, that: | ||
| (A) is owned by one or more individuals, either | ||
| directly or through a beneficial interest in a qualifying trust; | ||
| (B) is designed or adapted for human residence; | ||
| and | ||
| (C) is used to produce rental income as a | ||
| single-family residence. | ||
| (b) This section does not apply to property appraised under | ||
| Subchapter C, D, E, F, G, or H. | ||
| (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 a | ||
| parcel of commercial real property or of a single-family rental | ||
| property 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) eight 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 a parcel of commercial real property or | ||
| a single-family rental property, 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) In order to receive a limitation on appraised value for | ||
| a single-family rental property, the owner of the property must | ||
| provide written notice to the chief appraiser that the owner holds | ||
| the property for the production of income. The owner is not required | ||
| to provide more than one notice under this subsection. The | ||
| comptroller by rule shall prescribe the form and manner of | ||
| providing notice under this subsection. | ||
| (f) The limitation provided by Subsection (c) takes effect | ||
| as to a parcel of commercial real property or a single-family rental | ||
| property on January 1 of the tax year following the first tax year | ||
| in which the owner owns the property on January 1 and in which the | ||
| property meets the definition of commercial real property or | ||
| single-family rental property, as applicable. The limitation | ||
| expires on January 1 of the tax year following the first tax year in | ||
| which the owner of the property ceases to own the property or the | ||
| property no longer meets the definition of commercial real property | ||
| or single-family rental property, as applicable. | ||
| (g) For purposes of Subsection (f), a person who acquired | ||
| commercial real property or a single-family rental 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)(3) and (c) and except | ||
| as provided by Subdivision (2) of this subsection, an improvement | ||
| to 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 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. | ||
| (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. | ||
| SECTION 3. 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. 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 5. 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 [ |
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| imposed by Section 23.23 or 23.231. | ||
| SECTION 6. 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 | ||
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| applies exceeds the appraised value of that property as calculated | ||
| under Section 23.23 or 23.231, Tax Code, as applicable [ |
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| (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 [ |
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| 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 [ |
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| 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 7. This Act applies only to the appraisal of | ||
| commercial real property or single-family rental property for ad | ||
| valorem tax purposes for a tax year that begins on or after the | ||
| effective date of this Act. | ||
| SECTION 8. This Act takes effect January 1, 2024, but only | ||
| if the constitutional amendment proposed by the 88th Legislature, | ||
| 2nd Called Session, 2023, to authorize the legislature to limit the | ||
| maximum appraised value of commercial property and rental property | ||
| for ad valorem tax purposes is approved by the voters. If that | ||
| amendment is not approved by the voters, this Act has no effect. | ||
