Bill Text: TX SB1391 | 2019-2020 | 86th Legislature | Introduced


Bill Title: Relating to an increase in the amount of the residence homestead exemption from ad valorem taxation by a school district and the increase of the exemption amount in subsequent years to reflect inflation in homestead values, a reduction of the limitation on the total amount of ad valorem taxes that may be imposed by a school district on the homestead of a disabled or elderly person to reflect the increased exemption amounts, and the protection of school districts against the resulting loss in local revenue.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Introduced - Dead) 2019-03-19 - Co-author authorized [SB1391 Detail]

Download: Texas-2019-SB1391-Introduced.html
 
 
  By: Menéndez, Johnson S.B. No. 1391
 
 
 
   
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to an increase in the amount of the residence homestead
  exemption from ad valorem taxation by a school district and the
  increase of the exemption amount in subsequent years to reflect
  inflation in homestead values, a reduction of the limitation on the
  total amount of ad valorem taxes that may be imposed by a school
  district on the homestead of a disabled or elderly person to reflect
  the increased exemption amounts, and the protection of school
  districts against the resulting loss in local revenue.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 11.13, Tax Code, is amended by amending
  Subsection (b) and adding Subsection (b-1) to read as follows:
         (b) An adult is entitled to exemption from taxation by a
  school district of a portion [$15,000] of the appraised value of the
  adult's residence homestead in the amount provided by this
  subsection, except that only $5,000 [$10,000] of the exemption
  applies [does not apply] 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. For the 2020 tax year, the amount of the exemption is $50,000.
  For each subsequent tax year, the amount of the exemption shall be
  calculated by the comptroller by multiplying the amount of the
  exemption under this subsection for the preceding tax year by the
  residence homestead inflation rate and adding that amount to the
  amount of that exemption for the preceding tax year. Each year, not
  later than March 15, the comptroller shall calculate the amount of
  the exemption for the current tax year and publish that amount in
  the Texas Register.
         (b-1) In this section, "residence homestead inflation rate"
  means the positive amount, if any, expressed in decimal form
  rounded to the nearest thousandth, computed by determining the
  percentage change in the median market value of residence
  homesteads in this state for the preceding calendar year as
  compared to the calendar year preceding that calendar year.
         SECTION 2.  Section 11.26(a), Tax Code, is amended 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 2020 [1997] tax
  year, the amount of the limitation provided by this section is the
  amount of tax the school district imposed for the 2019 [1996] tax
  year less an amount equal to the amount determined by multiplying
  $20,000 [$10,000] times the tax rate of the school district for the
  2020 [1997] tax year, plus any 2020 [1997] tax attributable to
  improvements made in 2019 [1996], other than improvements made to
  comply with governmental regulations or repairs. 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 a tax year in which
  the amount of the exemption provided by Section 11.13(b) is
  increased to reflect inflation in residence homestead values, the
  amount of the limitation provided by this section is the amount of
  tax the school district imposed for the tax year preceding the tax
  year in which the amount of the exemption is increased less an
  amount equal to the amount determined by multiplying the amount of
  the increase times the tax rate of the school district for the year
  in which the amount of the exemption is increased, plus any tax for
  the tax year in which the amount of the exemption is increased
  attributable to improvements made in the preceding tax year, other
  than improvements made to comply with governmental regulations or
  repairs. Except as provided by Subsection (b), a limitation on tax
  increases provided by this section on a residence homestead
  computed under this subsection continues to apply to the homestead
  in subsequent tax years until the limitation expires.
         SECTION 3.  Subchapter A, Chapter 41, Education Code, is
  amended by adding Section 41.0011 to read as follows:
         Sec. 41.0011.  COMPUTATION OF WEALTH PER STUDENT FOR SCHOOL
  YEAR IN WHICH HOMESTEAD EXEMPTION INCREASED.  Notwithstanding any
  other provision of this chapter, in computing a school district's
  wealth per student for a school year that begins in a tax year in
  which the amount of the residence homestead exemption under Section
  1-b(c), Article VIII, Texas Constitution, is increased and the
  amount of the limitation on tax increases under Section 1-b(d),
  Article VIII, Texas Constitution, is reduced to reflect the
  increased exemption amount, a school district's taxable value of
  property under Subchapter M, Chapter 403, Government Code, is
  determined as if the increase in the homestead exemption under
  Section 1-b(c), Article VIII, Texas Constitution, and the
  additional limitation on tax increases under Section 1-b(d),
  Article VIII, Texas Constitution, had been in effect for the
  preceding tax year.
         SECTION 4.  Subchapter E, Chapter 42, Education Code, is
  amended by adding Section 42.2512 to read as follows:
         Sec. 42.2512.  ADDITIONAL STATE AID FOR HOMESTEAD EXEMPTION.  
  (a)  This section applies only to a school year that begins in a tax
  year in which the amount of the residence homestead exemption under
  Section 1-b(c), Article VIII, Texas Constitution, is increased and
  the amount of the limitation on tax increases under Section 1-b(d),
  Article VIII, Texas Constitution, is reduced to reflect the
  increased exemption amount.
         (b)  Notwithstanding any other provision of this chapter, in
  computing state aid to a school district for a school year to which
  this section applies, the district's taxable value of property
  under Subchapter M, Chapter 403, Government Code, is determined as
  if the increase in the residence homestead exemption and the
  additional limitation on tax increases described by Subsection (a)
  had been in effect for the preceding tax year.
         (c)  A school district is entitled to additional state aid
  for a school year to which this section applies to the extent that
  state aid under this chapter based on the determination of the
  district's taxable value of property as provided by Subsection (b)
  does not fully compensate the district for ad valorem tax revenue
  lost due to the increase in the residence homestead exemption and
  the additional limitation on tax increases described by Subsection
  (a).  The commissioner, using information provided by the
  comptroller, shall compute the amount of additional state aid to
  which a district is entitled under this subsection.  A
  determination by the commissioner under this subsection is final
  and may not be appealed.
         SECTION 5.  Chapter 46, Education Code, is amended by adding
  Subchapter D to read as follows:
  SUBCHAPTER D.  ADDITIONAL STATE ASSISTANCE
         Sec. 46.101.  ADDITIONAL STATE ASSISTANCE FOR HOMESTEAD
  EXEMPTION.  (a)  A school district that does not receive state
  assistance under Subchapter B for the district's tax effort to pay
  the principal of and interest on eligible bonds, as defined by
  Section 46.033, is entitled to state assistance to fully compensate
  the district for ad valorem tax revenue for that tax effort lost due
  to an increase in the residence homestead exemption under Section
  1-b(c), Article VIII, Texas Constitution, and a reduction of the
  amount of the limitation on tax increases under Section 1-b(d),
  Article VIII, Texas Constitution, to reflect the increased
  exemption amount.
         (b)  The commissioner shall compute the amount of assistance
  to which a school district is entitled under Subsection (a). A
  determination by the commissioner under this section is final and
  may not be appealed.
         SECTION 6.   Section 403.302(j), Government Code, is amended
  to read as follows:
         (j)  For purposes of Chapter 42, Education Code, the
  comptroller shall certify to the commissioner of education:
               (1)  [a final value for each school district computed
  on a residence homestead exemption under Section 1-b(c), Article
  VIII, Texas Constitution, of $5,000;
               [(2)]  a final value for each school district computed
  on:
                     (A)  a residence homestead exemption under
  Section 1-b(c), Article VIII, Texas Constitution, of $15,000; and
                     (B)  the effect of the additional limitation on
  tax increases under Section 1-b(d), Article VIII, Texas
  Constitution, as proposed by H.J.R. No. 4, 75th Legislature,
  Regular Session, 1997; [and]
               (2) [(3)]  a final value for each school district
  computed on the effect of the reduction of the limitation on tax
  increases to reflect any reduction in the school district tax rate
  as provided by Section 11.26(a-1), (a-2), or (a-3), Tax Code, as
  applicable;
               (3)  for the 2020 tax year, a final value for each
  school district computed on:
                     (A)  a residence homestead exemption under
  Section 1-b(c), Article VIII, Texas Constitution, of $50,000; and
                     (B)  the effect of the additional limitation on ad
  valorem tax increases under Section 1-b(d), Article VIII, Texas
  Constitution, as proposed by the joint resolution to amend that
  section adopted by the 86th Legislature, Regular Session, 2019; and
               (4)  for each tax year after the 2020 tax year, a final
  value for each school district computed on:
                     (A)  the amount of the residence homestead
  exemption under Section 1-b(c), Article VIII, Texas Constitution,
  in effect for that tax year; and
                     (B)  the effect of any reduction of the limitation
  on ad valorem tax increases under Section 1-b(d), Article VIII,
  Texas Constitution, to reflect any increase in the amount of the
  exemption from the amount in effect for the 2020 tax year.
         SECTION 7.  The changes in law made by this Act to Sections
  11.13 and 11.26, Tax Code, apply only to an ad valorem tax year that
  begins on or after January 1, 2020.
         SECTION 8  This Act takes effect January 1, 2020, but only
  if the constitutional amendment proposed by the 86th Legislature,
  Regular Session, 2015, increasing the amount of the residence
  homestead exemption from ad valorem taxation for public school
  purposes from $15,000 to $50,000, providing for the increase of the
  exemption amount in subsequent years to reflect inflation in
  homestead values, and providing for a reduction of the limitation
  on the total amount of ad valorem taxes that may be imposed for
  thosepurposesonthehomesteadofadisabledorelderlypersonto
  reflect the increased exemption amounts is approved by the voters.  
  If that constitutional amendment is not approved by the voters,
  this Act has no effect.
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