Bill Text: TX HB3757 | 2023-2024 | 88th Legislature | Engrossed

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Bill Title: Relating to the authority of a taxing unit other than a school district, county, municipality, or junior college district to establish a limitation on the amount of ad valorem taxes that the taxing unit may impose on the residence homesteads of individuals who are disabled or elderly and their surviving spouses and to the information required to be included in a tax bill.

Spectrum: Bipartisan Bill

Status: (Engrossed - Dead) 2023-05-12 - Referred to Local Government [HB3757 Detail]

Download: Texas-2023-HB3757-Engrossed.html

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By: Wilson, Raymond, Morales of Maverick, H.B. No. 3757
et al.

A BILL TO BE ENTITLED
AN ACT
relating to the authority of a taxing unit other than a school
district, county, municipality, or junior college district to
establish a limitation on the amount of ad valorem taxes that the
taxing unit may impose on the residence homesteads of individuals
who are disabled or elderly and their surviving spouses and to the
information required to be included in a tax bill.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter B, Chapter 11, Tax Code, is amended by
adding Section 11.262 to read as follows:
Sec. 11.262. LIMITATION OF TAX IMPOSED BY CERTAIN TAXING
UNITS ON HOMESTEADS OF INDIVIDUALS WHO ARE DISABLED OR
ELDERLY. (a) In this section:
(1) "Eligible individual" means an individual who
meets any income eligibility requirements for a limitation on tax
increases provided by this section prescribed by the qualifying
taxing unit that established the limitation. If the qualifying
taxing unit does not prescribe income eligibility requirements for
the limitation on tax increases provided by this section, an
eligible individual is any individual who is otherwise eligible for
the limitation provided by this section.
(2) "Qualifying taxing unit" means a taxing unit other
than a school district, county, municipality, or junior college
district.
(3) "Residence homestead" has the meaning assigned by
Section 11.13.
(b) This section applies only to a qualifying taxing unit
that establishes a limitation under Section 1-b(h-1), Article VIII,
Texas Constitution, on the total amount of taxes that may be imposed
by the taxing unit on the residence homestead of an eligible
individual who is disabled or is 65 years of age or older.
(c) The governing body of a qualifying taxing unit that
establishes a limitation on tax increases provided by this section
may elect to provide the limitation to all individuals who are
disabled or are 65 years of age or older or to provide the
limitation only to those individuals who are disabled or are 65
years of age or older and who meet certain income eligibility
requirements established by the governing body. If the governing
body establishes income eligibility requirements for the
limitation on tax increases provided by this section, those
requirements must be based on an individual having a household
income that does not exceed 200 percent of the federal poverty
level. For purposes of income eligibility requirements established
under this subsection, if an individual's household income was
initially determined using only the income of the individual and
the individual's spouse, on the death of the individual or the
individual's spouse, the surviving spouse's household income must
be calculated as though two persons still reside in the household.
(d) The tax officials shall appraise the residence
homestead of an eligible individual who is disabled or is 65 years
of age or older and calculate taxes on that residence homestead in
the same manner as other residence homesteads, but if the tax so
calculated exceeds the limitation provided by this section, the tax
imposed is the amount of the tax as limited by this section, except
as otherwise provided by this section.
(e) A qualifying taxing unit may not increase the total
annual amount of ad valorem taxes the taxing unit imposes on the
residence homestead of an eligible individual who is disabled or is
65 years of age or older above the amount of the taxes the taxing
unit imposed on the residence homestead in the first tax year in
which the eligible individual qualified that residence homestead
for the exemption provided by Section 11.13(c) for an individual
who is disabled or is 65 years of age or older and was an eligible
individual. If the eligible individual qualified that residence
homestead for the exemption after the beginning of that first year
and the residence homestead remains eligible for the exemption for
the next year, and if the taxes imposed by the taxing unit on the
residence homestead in the next year are less than the amount of
those taxes imposed in that first year, the taxing unit may not
subsequently increase the total annual amount of ad valorem taxes
it imposes on the residence homestead above the amount it imposed on
the residence homestead in the year immediately following the first
year for which the individual qualified that residence homestead
for the exemption and was an eligible individual.
(f) If an eligible individual who is disabled or is 65 years
of age or older makes improvements to the individual's residence
homestead, other than repairs and other than improvements required
to comply with governmental requirements, the qualifying taxing
unit may increase the amount of taxes on the homestead in the first
year the value of the homestead is increased on the appraisal roll
because of the enhancement of value by the improvements. The
amount of the tax increase is determined by applying the current tax
rate of the qualifying taxing unit to the difference between the
appraised value of the homestead with the improvements and the
appraised value the homestead would have had without the
improvements. The limitation provided by this section then
applies to the increased amount of taxes on the residence homestead
until more improvements, if any, are made.
(g) A limitation on tax increases provided by this section
expires if on January 1:
(1) none of the owners of the structure who qualify for
the exemption provided by Section 11.13(c) for an individual who is
disabled or is 65 years of age or older and who owned the structure
when the limitation first took effect are using the structure as a
residence homestead;
(2) none of the owners of the structure qualify for the
exemption provided by Section 11.13(c) for an individual who is
disabled or is 65 years of age or older; or
(3) none of the owners of the structure are eligible
individuals.
(h) If the appraisal roll provides for taxation of appraised
value for a prior year because a residence homestead exemption for
an eligible individual who is disabled or is 65 years of age or
older was erroneously allowed or because an individual was
erroneously considered to be an eligible individual, the tax
assessor for the applicable county shall add, as back taxes due as
provided by Section 26.09(d), the positive difference, if any,
between the tax that should have been imposed for that year and the
tax that was imposed under the requirements of this section.
(i) A limitation on tax increases provided by this section
does not expire because the owner of an interest in the structure
conveys the interest to a qualifying trust as defined by Section
11.13(j) if the owner or the owner's spouse is a trustor of the
trust and is entitled to occupy the structure.
(j) Except as provided by Subsection (f), if an eligible
individual who receives a limitation on tax increases provided by
this section, including a surviving spouse who receives a
limitation under Subsection (l), subsequently qualifies a
different residence homestead in the same qualifying taxing unit
for an exemption under Section 11.13, the taxing unit may not impose
ad valorem taxes on the subsequently qualified homestead in a year
in an amount that exceeds the amount of taxes the taxing unit would
have imposed on the subsequently qualified homestead in the first
year in which the individual receives that exemption for the
subsequently qualified homestead had the limitation on tax
increases required by this section not been in effect, multiplied
by a fraction the numerator of which is the total amount of taxes
imposed on the former homestead by the taxing unit in the last year
in which the individual received that exemption for the former
homestead and the denominator of which is the total amount of taxes
that would have been imposed on the former homestead by the taxing
unit in the last year in which the individual received that
exemption for the former homestead had the limitation on tax
increases provided by this section not been in effect.
(k) An eligible individual who receives a limitation on tax
increases under this section, including a surviving spouse who
receives a limitation under Subsection (l), and who subsequently
qualifies a different residence homestead for an exemption under
Section 11.13, or an agent of the individual, is entitled to receive
from the chief appraiser of the appraisal district in which the
former homestead was located a written certificate providing the
information necessary to determine whether the individual may
qualify for a limitation on the subsequently qualified homestead
under Subsection (j) and to calculate the amount of taxes the
qualifying taxing unit may impose on the subsequently qualified
homestead.
(l) If an eligible individual who qualifies for a limitation
on tax increases under this section dies, the surviving spouse of
the individual is entitled to the limitation on taxes imposed by the
qualifying taxing unit on the residence homestead of the individual
if:
(1) the surviving spouse:
(A) is disabled or is 55 years of age or older
when the individual dies; and
(B) is an eligible individual; and
(2) the residence homestead of the individual:
(A) is the residence homestead of the surviving
spouse on the date that the individual dies; and
(B) remains the residence homestead of the
surviving spouse.
(m) If an eligible individual who is 65 years of age or older
and qualifies for a limitation on tax increases for the elderly
under this section dies in the first year in which the individual
qualified for the limitation and the individual first qualified for
the limitation after the beginning of that year, except as provided
by Subsection (n), the amount to which the surviving spouse's taxes
are limited under Subsection (l) is the amount of taxes imposed by
the qualifying taxing unit on the residence homestead in that year
determined as if the individual qualifying for the exemption had
lived for the entire year.
(n) If in the first tax year after the year in which an
eligible individual who is 65 years of age or older dies under the
circumstances described by Subsection (m), the amount of taxes
imposed by the qualifying taxing unit on the residence homestead of
the surviving spouse is less than the amount of taxes imposed by the
taxing unit in the preceding year as limited by Subsection (m), in a
subsequent tax year the surviving spouse's taxes imposed by the
taxing unit on that residence homestead are limited to the amount of
taxes imposed by the taxing unit in that first tax year after the
year in which the individual dies.
(o) Notwithstanding Subsection (g), a limitation on tax
increases provided by this section does not expire if the owner of
the structure qualifies for an exemption under Section 11.13 under
the circumstances described by Section 11.135(a).
(p) Notwithstanding Subsections (d) and (f), an improvement
to property that would otherwise constitute an improvement under
Subsection (f) is not treated as an improvement under that
subsection if the improvement is a replacement structure for a
structure that was rendered uninhabitable or unusable by a casualty
or by wind or water damage. For purposes of appraising the
property in the tax year in which the structure would have
constituted an improvement under Subsection (f), the replacement
structure is considered to be an improvement under that subsection
only if:
(1) the square footage of the replacement structure
exceeds that of the replaced structure as that structure existed
before the casualty or damage occurred; or
(2) the exterior of the replacement structure is of
higher quality construction and composition than that of the
replaced structure.
(q) An heir property owner who qualifies heir property as
the owner's residence homestead under this chapter is considered
the sole owner of the property for the purposes of this section.
(r) The chief appraiser for an appraisal district in which a
qualifying taxing unit participates may require an individual to
provide any information that is reasonably necessary for the chief
appraiser to determine whether the individual is an eligible
individual for purposes of this section.
SECTION 2. Sections 23.19(b) and (g), Tax Code, are amended
to read as follows:
(b) If an appraisal district receives a written request for
the appraisal of real property and improvements of a cooperative
housing corporation according to the separate interests of the
corporation's stockholders, the chief appraiser shall separately
appraise the interests described by Subsection (d) if the
conditions required by Subsections (e) and (f) have been
met. Separate appraisal under this section is for the purposes of
administration of tax exemptions, determination of applicable
limitations of taxes under Section 11.26, [or] 11.261, or 11.262,
and apportionment by a cooperative housing corporation of property
taxes among its stockholders but is not the basis for determining
value on which a tax is imposed under this title. A stockholder
whose interest is separately appraised under this section may
protest and appeal the appraised value in the manner provided by
this title for protest and appeal of the appraised value of other
property.
(g) A tax bill or a separate statement accompanying the tax
bill to a cooperative housing corporation for which interests of
stockholders are separately appraised under this section must
state, in addition to the information required by Section 31.01,
the appraised value and taxable value of each interest separately
appraised. Each exemption claimed as provided by this title by a
person entitled to the exemption shall also be deducted from the
total appraised value of the property of the corporation. The
total tax imposed by a taxing unit [school district, county,
municipality, or junior college district] shall be reduced by any
amount that represents an increase in taxes attributable to
separately appraised interests of the real property and
improvements that are subject to the limitation of taxes prescribed
by Section 11.26, [or] 11.261, or 11.262. The corporation shall
apportion among its stockholders liability for reimbursing the
corporation for property taxes according to the relative taxable
values of their interests.
SECTION 3. Sections 26.012(6), (13), and (14), Tax Code,
are amended to read as follows:
(6) "Current total value" means the total taxable
value of property listed on the appraisal roll for the current year,
including all appraisal roll supplements and corrections as of the
date of the calculation, less the taxable value of property
exempted for the current tax year for the first time under Section
11.31 or 11.315, except that:
(A) the current total value for a school district
excludes:
(i) the total value of homesteads that
qualify for a tax limitation as provided by Section 11.26; and
(ii) new property value of property that is
subject to an agreement entered into under Chapter 313; [and]
(B) the current total value for a county,
municipality, or junior college district excludes the total value
of homesteads that qualify for a tax limitation as provided by
Section 11.261; and
(C) the current total value for a taxing unit
other than a school district, county, municipality, or junior
college district excludes the total value of homesteads that
qualify for a tax limitation as provided by Section 11.262.
(13) "Last year's levy" means the total of:
(A) the amount of taxes that would be generated
by multiplying the total tax rate adopted by the governing body in
the preceding year by the total taxable value of property on the
appraisal roll for the preceding year, including:
(i) taxable value that was reduced in an
appeal under Chapter 42;
(ii) all appraisal roll supplements and
corrections other than corrections made pursuant to Section
25.25(d), as of the date of the calculation, except that:
(a) last year's taxable value for a
school district excludes the total value of homesteads that
qualified for a tax limitation as provided by Section 11.26;
(b) [and] last year's taxable value
for a county, municipality, or junior college district excludes the
total value of homesteads that qualified for a tax limitation as
provided by Section 11.261; and
(c) last year's taxable value for a
taxing unit other than a school district, county, municipality, or
junior college district excludes the total value of homesteads that
qualified for a tax limitation as provided by Section 11.262; and
(iii) the portion of taxable value of
property that is the subject of an appeal under Chapter 42 on July
25 that is not in dispute; and
(B) the amount of taxes refunded by the taxing
unit in the preceding year for tax years before that year.
(14) "Last year's total value" means the total taxable
value of property listed on the appraisal roll for the preceding
year, including all appraisal roll supplements and corrections,
other than corrections made pursuant to Section 25.25(d), as of the
date of the calculation, except that:
(A) last year's taxable value for a school
district excludes the total value of homesteads that qualified for
a tax limitation as provided by Section 11.26; [and]
(B) last year's taxable value for a county,
municipality, or junior college district excludes the total value
of homesteads that qualified for a tax limitation as provided by
Section 11.261; and
(C) last year's taxable value for a taxing unit
other than a school district, county, municipality, or junior
college district excludes the total value of homesteads that
qualified for a tax limitation as provided by Section 11.262.
SECTION 4. Section 31.01, Tax Code, is amended by adding
Subsection (m) to read as follows:
(m) The tax bill must include the appraisal district's
account number for the property.
SECTION 5. This Act applies only to ad valorem taxes imposed
for a tax year beginning on or after the effective date of this Act.
SECTION 6. This Act takes effect January 1, 2024, but only
if the constitutional amendment proposed by the 88th Legislature,
Regular Session, 2023, to authorize a limitation on the total
amount of ad valorem taxes that a political subdivision other than a
school district, county, municipality, or junior college district
may impose on the residence homesteads of persons who are disabled
or elderly and their surviving spouses is approved by the voters.
If that amendment is not approved by the voters, this Act has no
effect.