Bill Text: TX SB1086 | 2019-2020 | 86th Legislature | Introduced


Bill Title: Relating to a limitation on increases in the appraised value of real property for ad valorem tax purposes.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2019-04-23 - Left pending in committee [SB1086 Detail]

Download: Texas-2019-SB1086-Introduced.html
  86R4963 JES-D
 
  By: Seliger S.B. No. 1086
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to a limitation on increases in the appraised value of real
  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 [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 2.  The heading to Section 23.23, Tax Code, is
  amended to read as follows:
         Sec. 23.23.  LIMITATION ON APPRAISED VALUE OF REAL PROPERTY
  [RESIDENCE HOMESTEAD].
         SECTION 3.  Section 23.23, Tax Code, is amended by amending
  Subsections (a), (b), (c), and (e) and adding Subsections (c-1),
  (c-2), and (c-3) to read as follows:
         (a)  Notwithstanding the requirements of Section 25.18 and
  regardless of whether the appraisal office has appraised the
  property and determined the market value of the property for the tax
  year, an appraisal office may increase the appraised value of real
  property [a residence homestead] for a tax year to an amount not to
  exceed the lesser of:
               (1)  the market value of the property for the most
  recent tax year that the market value was determined by the
  appraisal office; or
               (2)  the sum of:
                     (A)  five [10] percent of the appraised value of
  the property for the preceding tax year;
                     (B)  the appraised value of the property for the
  preceding tax year; and
                     (C)  the market value of all new improvements to
  the property.
         (b)  When appraising real property [a residence homestead],
  the chief appraiser shall:
               (1)  appraise the property at its market value; and
               (2)  include in the appraisal records both the market
  value of the property and the amount computed under Subsection
  (a)(2).
         (c)  The limitation provided by Subsection (a) takes effect
  on January 1 of the tax year following the first tax year in which
  the owner owns the property on January 1, or, if the property
  qualifies as the [to a] residence homestead of the owner under
  Section 11.13 in the tax year in which the owner acquires the
  property, the limitation takes effect on January 1 of the tax year
  following that [the first] tax year [the owner qualifies the
  property for an exemption under Section 11.13]. Except as provided
  by Subsection (c-1) or (c-2), the [The] limitation expires on
  January 1 of the first tax year following the year in which [that
  neither] the owner of the property ceases to own the property.
         (c-1)  If property subject to a limitation under this section
  qualifies for an exemption under Section 11.13 when the ownership
  of the property is transferred to the owner's spouse or surviving
  spouse, the limitation expires on January 1 of the first tax year
  following the year in which [when the limitation took effect nor]
  the owner's spouse or surviving spouse ceases to own the property,
  unless the limitation is further continued under this subsection on
  the subsequent transfer to a spouse or surviving spouse [qualifies
  for an exemption under Section 11.13].
         (c-2)  If property subject to a limitation under Subsection
  (a), other than a residence homestead, is owned by two or more
  persons, the limitation expires on January 1 of the first tax year
  following the year in which the ownership of at least a 50 percent
  interest in the property is sold or otherwise transferred.
         (c-3)  For purposes of applying the limitation provided by
  this section in the first tax year after the 2019 tax year in which
  the property is appraised for taxation:
               (1)  the property is considered to have been appraised
  for taxation in the 2019 tax year at a market value equal to the
  appraised value of the property for that tax year;
               (2)  a person who acquired real property in a tax year
  before the 2019 tax year is considered to have acquired the property
  on January 1, 2019; and
               (3)  a person who qualified the property for an
  exemption under Section 11.13 as the person's residence homestead
  for any portion of the 2019 tax year is considered to have acquired
  the property in the 2019 tax year.
         (e)  In this section, "new improvement" means an improvement
  to real property [a residence homestead] made after the most recent
  appraisal of the property that increases the market value of the
  property and the value of which is not included in the appraised
  value of the property for the preceding tax year. The term does not
  include repairs to or ordinary maintenance of an existing structure
  or the grounds or another feature of the property.
         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.
  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 real
  property [a residence homestead] to which Section 23.23, Tax Code,
  applies exceeds the appraised value of that property as calculated
  under 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, Tax Code, applies the amount by which that amount exceeds the
  appraised value of those properties as calculated by the appraisal
  district under Section 23.23, Tax Code.  If the comptroller
  determines in the study that the market value of property in a
  school district as determined by the appraisal district that
  appraises property for the school district, less the total of the
  amounts and values listed in Subsection (d) as determined by that
  appraisal district, is not valid, the comptroller, in determining
  the taxable value of property in the school district under
  Subsection (d), shall for purposes of Subsection (d)(13) subtract
  from the market value as estimated by the comptroller of properties
  [residence homesteads] to which Section 23.23, Tax Code, applies
  the amount by which that amount exceeds the appraised value of those
  properties as calculated by the appraisal district under Section
  23.23, Tax Code.
         SECTION 6.  This Act applies only to the appraisal for ad
  valorem tax purposes of real property for a tax year that begins on
  or after the effective date of this Act.
         SECTION 7.  This Act takes effect January 1, 2020, but only
  if the constitutional amendment proposed by the 86th Legislature,
  Regular Session, 2019, to authorize the legislature to limit the
  maximum appraised value of real property for ad valorem tax
  purposes to 105 percent or more of the appraised value of the
  property for the preceding tax year is approved by the voters. If
  that amendment is not approved by the voters, this Act has no
  effect.
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