Bill Text: TX SB1791 | 2019-2020 | 86th Legislature | Introduced
Bill Title: Relating to the authority of the governing body of a taxing unit in a county in which home prices are appreciating rapidly to adopt a limitation on increases in the appraised value for purposes of ad valorem taxation by the taxing unit of residence homesteads in certain low-income areas.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2019-03-18 - Referred to Property Tax [SB1791 Detail]
Download: Texas-2019-SB1791-Introduced.html
86R12812 SMH-D | ||
By: Zaffirini | S.B. No. 1791 |
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relating to the authority of the governing body of a taxing unit in | ||
a county in which home prices are appreciating rapidly to adopt a | ||
limitation on increases in the appraised value for purposes of ad | ||
valorem taxation by the taxing unit of residence homesteads in | ||
certain low-income areas. | ||
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 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 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 RESIDENCE | ||
HOMESTEAD IN LOW-INCOME AREA. (a) In this section: | ||
(1) "Qualifying census tract" means a census tract | ||
delineated by the United States Bureau of the Census in the most | ||
recent decennial census in which: | ||
(A) the median family income is less than 60 | ||
percent of the area median family income for the county or | ||
metropolitan statistical area in which the census tract is located, | ||
as determined annually by the United States Department of Housing | ||
and Urban Development; or | ||
(B) the poverty rate is at least 25 percent. | ||
(2) "Qualifying county" means a county in which the | ||
rate of increase in the unadjusted median value of the sales price | ||
of existing homes over the preceding three years, as calculated by | ||
the United States Department of Housing and Urban Development for | ||
purposes of the HOME and Housing Trust Fund programs, is greater | ||
than 2.5 times the amount computed by averaging the rate of increase | ||
in each of the counties in this state for the same period. | ||
(b) The governing body of a taxing unit all or part of the | ||
territory of which is located in a qualifying county in the manner | ||
provided by law for official action by the governing body may | ||
provide that, 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 located in a qualifying census tract in the | ||
taxing unit for a tax year for purposes of taxation by the taxing | ||
unit 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) the greater of the following amounts: | ||
(i) the percentage specified by the | ||
governing body, expressed as a decimal, multiplied by the appraised | ||
value of the property for the preceding tax year; or | ||
(ii) the amount computed by averaging the | ||
percentage increase, expressed as a decimal, in the unadjusted | ||
median value of the sales price of existing homes in each of the | ||
counties in this state for the preceding year as calculated by the | ||
United States Department of Housing and Urban Development for | ||
purposes of the HOME and Housing Trust Fund programs and | ||
multiplying that amount by 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. | ||
(c) The governing body of a taxing unit that adopts a | ||
limitation on increases in appraised value under this section may | ||
amend or repeal the limitation. The adoption, amendment, or repeal | ||
of a limitation applies beginning with the tax year in which the | ||
action is taken if the action is taken before July 1 and takes | ||
effect beginning with the following tax year if the action is taken | ||
on or after that date. | ||
(d) When appraising a residence homestead that is subject to | ||
a limitation on increases in appraised value under this section for | ||
purposes of taxation of the homestead by the taxing unit that | ||
adopted the limitation, 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 | ||
(b)(2). | ||
(e) Notwithstanding Subsection (b), the appraised value of | ||
a residence homestead that is subject to a limitation on increases | ||
in appraised value under this section is, for purposes of taxation | ||
of the homestead by the taxing unit that adopted the limitation, | ||
equal to the lesser of the amount computed under Section 23.23 or | ||
the amount computed under Subsection (b). | ||
(f) A limitation adopted under Subsection (b) takes effect | ||
as to a residence homestead on January 1 of the tax year following | ||
the first tax year in which the owner qualifies the property for an | ||
exemption under Section 11.13 and the homestead is located in a | ||
qualifying census tract. The limitation expires on January 1 of the | ||
first tax year in which neither the owner of the property when the | ||
limitation took effect nor the owner's spouse or surviving spouse | ||
qualifies for an exemption under Section 11.13 or the homestead | ||
ceases to be located in a qualifying census tract. | ||
(g) Sections 23.23(d), (e), (f), and (g) apply to a | ||
limitation under this section in the same manner as those | ||
subsections apply to a limitation under Section 23.23. | ||
SECTION 3. 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. Section 44.004(c), Education Code, is amended to | ||
read as follows: | ||
(c) The notice of public meeting to discuss and adopt the | ||
budget and the proposed tax rate may not be smaller than one-quarter | ||
page of a standard-size or a tabloid-size newspaper, and the | ||
headline on the notice must be in 18-point or larger type. Subject | ||
to Subsection (d), the notice must: | ||
(1) contain a statement in the following form: | ||
"NOTICE OF PUBLIC MEETING TO DISCUSS BUDGET AND PROPOSED TAX RATE | ||
"The (name of school district) will hold a public meeting at | ||
(time, date, year) in (name of room, building, physical location, | ||
city, state). The purpose of this meeting is to discuss the school | ||
district's budget that will determine the tax rate that will be | ||
adopted. Public participation in the discussion is invited." The | ||
statement of the purpose of the meeting must be in bold type. In | ||
reduced type, the notice must state: "The tax rate that is | ||
ultimately adopted at this meeting or at a separate meeting at a | ||
later date may not exceed the proposed rate shown below unless the | ||
district publishes a revised notice containing the same information | ||
and comparisons set out below and holds another public meeting to | ||
discuss the revised notice."; | ||
(2) contain a section entitled "Comparison of Proposed | ||
Budget with Last Year's Budget," which must show the difference, | ||
expressed as a percent increase or decrease, as applicable, in the | ||
amounts budgeted for the preceding fiscal year and the amount | ||
budgeted for the fiscal year that begins in the current tax year for | ||
each of the following: | ||
(A) maintenance and operations; | ||
(B) debt service; and | ||
(C) total expenditures; | ||
(3) contain a section entitled "Total Appraised Value | ||
and Total Taxable Value," which must show the total appraised value | ||
and the total taxable value of all property and the total appraised | ||
value and the total taxable value of new property taxable by the | ||
district in the preceding tax year and the current tax year as | ||
calculated under Section 26.04, Tax Code; | ||
(4) contain a statement of the total amount of the | ||
outstanding and unpaid bonded indebtedness of the school district; | ||
(5) contain a section entitled "Comparison of Proposed | ||
Rates with Last Year's Rates," which must: | ||
(A) show in rows the tax rates described by | ||
Subparagraphs (i)-(iii), expressed as amounts per $100 valuation of | ||
property, for columns entitled "Maintenance & Operations," | ||
"Interest & Sinking Fund," and "Total," which is the sum of | ||
"Maintenance & Operations" and "Interest & Sinking Fund": | ||
(i) the school district's "Last Year's | ||
Rate"; | ||
(ii) the "Rate to Maintain Same Level of | ||
Maintenance & Operations Revenue & Pay Debt Service," which: | ||
(a) in the case of "Maintenance & | ||
Operations," is the tax rate that, when applied to the current | ||
taxable value for the district, as certified by the chief appraiser | ||
under Section 26.01, Tax Code, and as adjusted to reflect changes | ||
made by the chief appraiser as of the time the notice is prepared, | ||
would impose taxes in an amount that, when added to state funds to | ||
be distributed to the district under Chapter 42, would provide the | ||
same amount of maintenance and operations taxes and state funds | ||
distributed under Chapter 42 per student in average daily | ||
attendance for the applicable school year that was available to the | ||
district in the preceding school year; and | ||
(b) in the case of "Interest & Sinking | ||
Fund," is the tax rate that, when applied to the current taxable | ||
value for the district, as certified by the chief appraiser under | ||
Section 26.01, Tax Code, and as adjusted to reflect changes made by | ||
the chief appraiser as of the time the notice is prepared, and when | ||
multiplied by the district's anticipated collection rate, would | ||
impose taxes in an amount that, when added to state funds to be | ||
distributed to the district under Chapter 46 and any excess taxes | ||
collected to service the district's debt during the preceding tax | ||
year but not used for that purpose during that year, would provide | ||
the amount required to service the district's debt; and | ||
(iii) the "Proposed Rate"; | ||
(B) contain fourth and fifth columns aligned with | ||
the columns required by Paragraph (A) that show, for each row | ||
required by Paragraph (A): | ||
(i) the "Local Revenue per Student," which | ||
is computed by multiplying the district's total taxable value of | ||
property, as certified by the chief appraiser for the applicable | ||
school year under Section 26.01, Tax Code, and as adjusted to | ||
reflect changes made by the chief appraiser as of the time the | ||
notice is prepared, by the total tax rate, and dividing the product | ||
by the number of students in average daily attendance in the | ||
district for the applicable school year; and | ||
(ii) the "State Revenue per Student," which | ||
is computed by determining the amount of state aid received or to be | ||
received by the district under Chapters 42, 43, and 46 and dividing | ||
that amount by the number of students in average daily attendance in | ||
the district for the applicable school year; and | ||
(C) contain an asterisk after each calculation | ||
for "Interest & Sinking Fund" and a footnote to the section that, in | ||
reduced type, states "The Interest & Sinking Fund tax revenue is | ||
used to pay for bonded indebtedness on construction, equipment, or | ||
both. The bonds, and the tax rate necessary to pay those bonds, | ||
were approved by the voters of this district."; | ||
(6) contain a section entitled "Comparison of Proposed | ||
Levy with Last Year's Levy on Average Residence," which must: | ||
(A) show in rows the information described by | ||
Subparagraphs (i)-(iv), rounded to the nearest dollar, for columns | ||
entitled "Last Year" and "This Year": | ||
(i) "Average Market Value of Residences," | ||
determined using the same group of residences for each year; | ||
(ii) "Average Taxable Value of Residences," | ||
determined after taking into account the limitation on the | ||
appraised value of residences under Section 23.23 or 23.231, Tax | ||
Code, and after subtracting all homestead exemptions applicable in | ||
each year, other than exemptions available only to disabled persons | ||
or persons 65 years of age or older or their surviving spouses, and | ||
using the same group of residences for each year; | ||
(iii) "Last Year's Rate Versus Proposed | ||
Rate per $100 Value"; and | ||
(iv) "Taxes Due on Average Residence," | ||
determined using the same group of residences for each year; and | ||
(B) contain the following | ||
information: "Increase (Decrease) in Taxes" expressed in dollars | ||
and cents, which is computed by subtracting the "Taxes Due on | ||
Average Residence" for the preceding tax year from the "Taxes Due on | ||
Average Residence" for the current tax year; | ||
(7) contain the following statement in bold | ||
print: "Under state law, the dollar amount of school taxes imposed | ||
on the residence of a person 65 years of age or older or of the | ||
surviving spouse of such a person, if the surviving spouse was 55 | ||
years of age or older when the person died, may not be increased | ||
above the amount paid in the first year after the person turned 65, | ||
regardless of changes in tax rate or property value."; | ||
(8) contain the following statement in bold | ||
print: "Notice of Rollback Rate: The highest tax rate the | ||
district can adopt before requiring voter approval at an election | ||
is (the school district rollback rate determined under Section | ||
26.08, Tax Code). This election will be automatically held if the | ||
district adopts a rate in excess of the rollback rate of (the school | ||
district rollback rate)."; and | ||
(9) contain a section entitled "Fund Balances," which | ||
must include the estimated amount of interest and sinking fund | ||
balances and the estimated amount of maintenance and operation or | ||
general fund balances remaining at the end of the current fiscal | ||
year that are not encumbered with or by corresponding debt | ||
obligation, less estimated funds necessary for the operation of the | ||
district before the receipt of the first payment under Chapter 42 in | ||
the succeeding school year. | ||
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 a | ||
residence homestead to which Section 23.23 or 23.231, 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 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. 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 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. | ||
SECTION 6. This Act applies only to the appraisal of certain | ||
residence homesteads 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, 2020, but only | ||
if the constitutional amendment proposed by the 86th Legislature, | ||
Regular Session, 2019, to authorize the legislature to permit the | ||
governing body of a political subdivision in a county in which home | ||
prices are appreciating rapidly to adopt a limitation on increases | ||
in the appraised value for purposes of ad valorem taxation by the | ||
political subdivision of residence homesteads in certain | ||
low-income areas is approved by the voters. If that amendment is | ||
not approved by the voters, this Act has no effect. |