88R1084 TJB-D
 
  By: Davis H.B. No. 1189
 
 
 
A BILL TO BE ENTITLED
 
AN ACT
  relating to limitations on the appraised value of certain real
  property in specified areas 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, 23.231, or
  23.232 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, 23.231, or
  23.232.
         SECTION 2.  Subchapter B, Chapter 23, Tax Code, is amended by
  adding Sections 23.231 and 23.232 to read as follows:
         Sec. 23.231.  TEMPORARY LIMITATION ON APPRAISED VALUE OF
  CERTAIN REAL PROPERTY IN SPECIFIED AREAS. (a)  In this section:
               (1)  "Census tract" means the geographic area
  identified as a "tract" on the 2020 Census TIGER/Line Shapefiles,
  prepared by the federal Bureau of the Census for the Twenty-fourth
  Decennial Census of the United States, enumerated as of April 1,
  2020.
               (2)  "Eligible property" means real property that:
                     (A)  is:
                           (i)  a residence homestead; or
                           (ii)  an undeveloped lot, subject to
  Subsection (f); and
                     (B)  is located in one of the following census
  tracts:
                           (i)  Dallas County tract 002703; or
                           (ii)  Harris County tract 210900, 211000,
  211101, 211102, 211200, or 211700.
               (3)  "Residence homestead" has the meaning assigned by
  Section 11.13.
         (b)  The governing body of a municipality, county, or school
  district may by official action adopt a limitation as prescribed by
  this section on the appraised value of all eligible property
  located in the taxing unit adopting the limitation.  The governing
  body of a municipality, county, or school district may not repeal,
  rescind, or take other action to negate the adoption of the
  limitation once adopted under this subsection.
         (c)  Notwithstanding the requirements of Sections 23.23 and
  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
  eligible property for a tax year to which a limitation under this
  section applies for purposes of taxation of the property by the
  taxing unit that adopted the limitation to an amount not to exceed
  the lesser of:
               (1)  the appraised value of the property as otherwise
  determined by law; or
               (2)  the appraised value of the property for the tax
  year preceding the tax year in which the limitation adopted by that
  taxing unit first applies, as provided by Subsection (e).
         (d)  When appraising eligible property, the chief appraiser
  shall:
               (1)  appraise the property as otherwise determined by
  law; and
               (2)  include in the appraisal records:
                     (A)  the appraised value of the property
  determined under Subdivision (1); and
                     (B)  the amount determined under Subsection
  (c)(2) applicable to each taxing unit that has adopted the
  limitation.
         (e)  Except as provided by Subsection (f), a limitation once
  adopted by a governing body under this section applies to each tax
  year:
               (1)  beginning with:
                     (A)  the tax year in which the governing body
  adopts the limitation, if the governing body adopts the limitation
  on or before April 1; or
                     (B)  the tax year following the tax year in which
  the governing body adopts the limitation, if the governing body
  adopts the limitation after April 1; and
               (2)  ending with the 2039 tax year.
         (f)  A limitation adopted under this section as applied to a
  vacant lot expires on the earlier of:
               (1)  January 1 following the end of the fifth tax year
  for which the limitation applies, unless:
                     (A)  a single-family residence has been
  constructed on the property; and
                     (B)  the owner of the residence has qualified the
  property as the owner's residence homestead; or
               (2)  January 1 of the tax year in which the vacant lot
  is:
                     (A)  developed for a purpose other than as a
  single-family residence; or
                     (B)  developed as a single-family residence but
  not qualified as the residence homestead of an owner of the
  property.
         (g)  This section expires January 1, 2040.
         Sec. 23.232.  LIMITATION ON APPRAISED VALUE OF RAPIDLY
  APPRECIATING RESIDENCE HOMESTEADS IN SPECIFIED AREAS. (a) In this
  section:
               (1)  "Census tract" means the geographic area
  identified as a "tract" on the 2020 Census TIGER/Line Shapefiles,
  prepared by the federal Bureau of the Census for the Twenty-fourth
  Decennial Census of the United States, enumerated as of April 1,
  2020.
               (2)  "Disaster recovery program" means the disaster
  recovery program administered by the General Land Office or by a
  political subdivision of this state that is funded with community
  development block grant disaster recovery money authorized by
  federal law.
               (3)  "New improvement" means an improvement to a
  rapidly appreciating 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.
               (4)  "Rapidly appreciating residence homestead" means
  real property:
                     (A)  that is a residence homestead;
                     (B)  that is located in Dallas County census tract
  004300, 010101, 010102, 010500, 010601, 010602, or 020500;
                     (C)  for which the owner was granted a residence
  homestead exemption in the 2017, 2018, 2019, 2020, 2021, 2022,
  2023, and 2024 tax years; and
                     (D)  for which the market value for the 2024 tax
  year is at least 25 percent higher than the market value of the
  property for the 2017 tax year.
               (5)  "Residence homestead" has the meaning assigned by
  Section 11.13.
         (b)  Notwithstanding the requirements of Sections 23.23 and
  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
  rapidly appreciating 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)  the appraised value of the property for the
  2017 tax year; and
                     (B)  the market value of all new improvements to
  the property.
         (c)  When appraising a rapidly appreciating residence
  homestead, the chief appraiser shall:
               (1)  appraise the property at its market value; and
               (2)  include in the appraisal records:
                     (A)  the market value of the property; and
                     (B)  the amount determined under Subsection
  (b)(2).
         (d)  The limitation provided by Subsection (b) expires on
  January 1 of the first tax year that 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.
         (e)  Notwithstanding Subsection (b), and except as provided
  by Subdivision (2), 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 uninhabitable or unusable by a casualty or by wind, fire,
  or water damage. For purposes of appraising the property under
  Subsection (b) 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 (b); 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.
         (f)  Notwithstanding Subsection (e)(2), and only to the
  extent necessary to satisfy the requirements of the 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 a limitation on appraised value under Section 23.231 or 23.232;
               (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 a limitation on appraised value under Section 23.231 or 23.232;
               (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 a limitation on appraised value under Section 23.231 or
  23.232;
               (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 [a
  residence homestead] subject to a [the] limitation on appraised
  value under [imposed by] Section 23.23, 23.231, or 23.232.
         SECTION 6.  This Act applies only to the appraisal of real
  property 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, 2024, but only
  if the constitutional amendment proposed by the 88th Legislature,
  Regular Session, 2023, to authorize the legislature to provide for
  limitations on the appraised value of certain real property in
  specified areas for ad valorem tax purposes is approved by the
  voters. If that amendment is not approved by the voters, this Act
  has no effect.