Bill Text: TX SB634 | 2025-2026 | 89th Legislature | Introduced

---

Bill Title: Relating to the authority of the governing body of a taxing unit to adopt an exemption from ad valorem taxation of a portion, expressed as a dollar amount, of the appraised value of an individual's residence homestead.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced) 2024-12-17 - Filed [SB634 Detail]

Download: Texas-2025-SB634-Introduced.html

---

89R4377 CS-D
By: Eckhardt, Gutierrez S.B. No. 634

A BILL TO BE ENTITLED
AN ACT
relating to the authority of the governing body of a taxing unit to
adopt an exemption from ad valorem taxation of a portion, expressed
as a dollar amount, of the appraised value of an individual's
residence homestead.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 11.13, Tax Code, is amended by amending
Subsection (i) and adding Subsection (n-2) to read as follows:
(i) The assessor and collector for a taxing unit may
disregard the exemptions authorized by Subsection (b), (c), (d),
[or] (n), or (n-2) [of this section] and assess and collect a tax
pledged for payment of debt without deducting the amount of the
exemption if:
(1) prior to adoption of the exemption, the unit
pledged the taxes for the payment of a debt; and
(2) granting the exemption would impair the obligation
of the contract creating the debt.
(n-2) The governing body of a taxing unit, in the manner
provided by law for official action by the body, may adopt an
exemption from taxation by the taxing unit of a portion, expressed
as a dollar amount, of the appraised value of an individual's
residence homestead. The exemption must be adopted by the
governing body before July 1 of the tax year in which the exemption
applies. If the governing body adopts an exemption under this
subsection, the amount of the exemption in a tax year may not be
less than $5,000. An individual is entitled to an exemption adopted
under this subsection in addition to any other exemptions provided
by this section.
SECTION 2. Section 45.006(f), Education Code, is amended to
read as follows:
(f) The governing body of a school district that adopts a
tax rate that exceeds $1.50 per $100 valuation of taxable property
may set the amount of the exemption from taxation authorized by
Section 11.13(n) or (n-2), Tax Code, at any time before the date the
governing body adopts the district's tax rate for the tax year in
which the election approving the additional taxes is held.
SECTION 3. Section 48.259(a), Education Code, is amended to
read as follows:
(a) In any school year, the commissioner may not provide
funding under this chapter or Chapter 46 based on a school
district's taxable value of property computed in accordance with
Section 403.302(d)(2), Government Code, unless:
(1) funds are specifically appropriated for purposes
of this section; or
(2) the commissioner determines that the total amount
of state funds appropriated for purposes of the Foundation School
Program for the school year exceeds the amount of state funds
distributed to school districts in accordance with Section 48.266
based on the taxable values of property in school districts
computed in accordance with Section 403.302(d), Government Code,
without any deduction for residence homestead exemptions granted
under Section 11.13(n) or (n-2), Tax Code.
SECTION 4. Section 403.302(d), Government Code, effective
until January 1, 2027, is 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) or
(n-2), 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
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; and
(14) the total dollar amount of any exemptions granted
under Section 11.35, Tax Code.
SECTION 5. Section 403.302(d), Government Code, as
effective January 1, 2027, is 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) or
(n-2), 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 a
residence homestead to which Section 23.23, Tax Code, applies
exceeds the appraised value of that property as calculated under
that section; and
(14) the total dollar amount of any exemptions granted
under Section 11.35, Tax Code.
SECTION 6. Section 25.23(a), Tax Code, is amended to read as
follows:
(a) After submission of appraisal records, the chief
appraiser shall prepare supplemental appraisal records listing:
(1) each taxable property the chief appraiser
discovers that is not included in the records already submitted,
including property that was omitted from an appraisal roll in a
prior tax year;
(2) property on which the appraisal review board has
not determined a protest at the time of its approval of the
appraisal records; and
(3) property that qualifies for an exemption under
Section 11.13(n) or (n-2) that was adopted by the governing body of
a taxing unit after the date the appraisal records were submitted.
SECTION 7. This Act applies only to ad valorem taxes imposed
for a tax year that begins on or after the effective date of this
Act.
SECTION 8. This Act takes effect January 1, 2026, but only
if the constitutional amendment proposed by the 89th Legislature,
Regular Session, 2025, authorizing the governing body of a
political subdivision to adopt an exemption from ad valorem
taxation of a portion, expressed as a dollar amount, of the market
value of an individual's residence homestead is approved by the
voters. If that amendment is not approved by the voters, this Act
has no effect.