Bill Text: TX HB4029 | 2023-2024 | 88th Legislature | Introduced

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Bill Title: Relating to an exemption from ad valorem taxation by a school district of a dollar amount or a percentage, whichever is greater, of the appraised value of a residence homestead, an adjustment of the limitation on the total amount of ad valorem taxes that may be imposed by a school district on the homestead of a person who is elderly or disabled to reflect increases in the exemption amount, and the protection of school districts against the resulting loss in local revenue.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2023-03-20 - Referred to Ways & Means [HB4029 Detail]

Download: Texas-2023-HB4029-Introduced.html

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88R2338 SMH/MEW-D
By: Schofield H.B. No. 4029

A BILL TO BE ENTITLED
AN ACT
relating to an exemption from ad valorem taxation by a school
district of a dollar amount or a percentage, whichever is greater,
of the appraised value of a residence homestead, an adjustment of
the limitation on the total amount of ad valorem taxes that may be
imposed by a school district on the homestead of a person who is
elderly or disabled to reflect increases in the exemption amount,
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(b), Tax Code, is amended to read as
follows:
(b) An adult is entitled to exemption from taxation by a
school district of $40,000 of the appraised value of the adult's
residence homestead or 26.7 percent of the appraised value of the
adult's residence homestead, whichever is greater, except that only
$5,000 of the exemption applies 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.
SECTION 2. Section 11.26, Tax Code, is amended by amending
Subsections (a), (a-10), and (o) and adding Subsections (a-11) and
(a-12) 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 2015 tax year, the
amount of the limitation provided by this section is the amount of
tax the school district imposed for the 2014 tax year less an amount
equal to the amount determined by multiplying $10,000 times the tax
rate of the school district for the 2015 tax year, plus any 2015 tax
attributable to improvements made in 2014, other than improvements
made to comply with governmental regulations or repairs.]
(a-10) For purposes of this section, "maximum compressed
rate" means the maximum compressed rate of a school district as
calculated under Section 48.2551, Education Code. Notwithstanding
the other provisions of this section, if in the 2024 or a subsequent
tax year an individual qualifies for a limitation on tax increases
provided by this section on the individual's residence homestead,
the amount of the limitation provided by this section on the
homestead is equal to the amount computed by:
(1) multiplying the taxable value of the homestead in
the preceding tax year by a tax rate equal to the difference between
the school district's maximum compressed rate for the preceding tax
year and the district's maximum compressed rate for the current tax
year;
(2) subtracting the amount computed under Subdivision
(1) from the amount of tax the district imposed on the homestead in
the preceding tax year; and
(3) adding any tax imposed in the current tax year
attributable to improvements made in the preceding tax year as
provided by Subsection (b) to the amount computed under Subdivision
(2).
(a-11) This subsection applies only to an individual who in
the 2024 tax year qualifies for a limitation under this section and
for whom the 2021 tax year or an earlier tax year was the first tax
year the individual or the individual's spouse qualified for an
exemption under Section 11.13(c). The amount of the limitation
provided by this section on the residence homestead of an
individual to which this subsection applies for the 2024 tax year is
the amount of the limitation for the 2024 tax year as otherwise
computed under this section less an amount equal to the product of
$15,000 and the tax rate of the school district for the 2022 tax
year. This subsection expires January 1, 2025.
(a-12) This subsection applies only to an individual who in
the 2024 tax year qualifies for a limitation under this section and
whose residence homestead has an appraised value for the 2024 tax
year of more than $149,813. The amount of the limitation provided
by this section on the residence homestead of an individual to which
this subsection applies for the 2024 tax year is the amount of the
limitation for the 2024 tax year as otherwise computed under this
section less an amount equal to the amount computed by subtracting
$40,000 from an amount equal to 26.7 percent of the appraised value
of the homestead for the 2024 tax year and multiplying that amount
by the tax rate of the school district for the 2024 tax year. This
subsection expires January 1, 2025.
(o) Notwithstanding Subsections (a)[, (a-3),] and (b), an
improvement to property that would otherwise constitute an
improvement under Subsection (b) 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 (b), 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.
SECTION 3. Section 46.071, Education Code, is amended by
amending Subsections (a-1) and (b-1) and adding Subsections (a-2),
(b-2), and (c-2) to read as follows:
(a-1) For [Beginning with] the 2022-2023 and 2023-2024
school years [year], a school district is entitled to additional
state aid under this subchapter to the extent that state and local
revenue used to service debt eligible under this chapter is less
than the state and local revenue that would have been available to
the district under this chapter as it existed on September 1, 2021,
if any increase in the residence homestead exemption under Section
1-b(c), Article VIII, Texas Constitution, as proposed by the 87th
Legislature, 3rd Called Session, 2021, had not occurred.
(a-2) Beginning with the 2024-2025 school year, a school
district is entitled to additional state aid under this subchapter
to the extent that state and local revenue used to service debt
eligible under this chapter is less than the state and local revenue
that would have been available to the district under this chapter as
it existed on September 1, 2023, if any increase in the residence
homestead exemption under Section 1-b(c), Article VIII, Texas
Constitution, and any additional limitation on tax increases under
Section 1-b(d) of that article as proposed by the 88th Legislature,
Regular Session, 2023, had not occurred.
(b-1) Subject to Subsections (c-1), (d), and (e),
additional state aid under this section for [beginning with] the
2022-2023 and 2023-2024 school years [year] is equal to the amount
by which the loss of local interest and sinking revenue for debt
service attributable to any increase in the residence homestead
exemption under Section 1-b(c), Article VIII, Texas Constitution,
as proposed by the 87th Legislature, 3rd Called Session, 2021, is
not offset by a gain in state aid under this chapter.
(b-2) Subject to Subsections (c-2), (d), and (e),
additional state aid under this section beginning with the
2024-2025 school year is equal to the amount by which the loss of
local interest and sinking revenue for debt service attributable to
any increase in the residence homestead exemption under Section
1-b(c), Article VIII, Texas Constitution, and any additional
limitation on tax increases under Section 1-b(d) of that article as
proposed by the 88th Legislature, Regular Session, 2023, is not
offset by a gain in state aid under this chapter.
(c-2) For the purpose of determining state aid under
Subsections (a-2) and (b-2), local interest and sinking revenue for
debt service is limited to revenue required to service debt
eligible under this chapter as of September 1, 2024, including
refunding of that debt, subject to Section 46.061. The limitation
imposed by Section 46.034(a) does not apply for the purpose of
determining state aid under this section.
SECTION 4. Section 48.2542, Education Code, is amended to
read as follows:
Sec. 48.2542. ADDITIONAL STATE AID FOR ADJUSTMENT OF
LIMITATION ON TAX INCREASES ON HOMESTEAD OF ELDERLY OR DISABLED.
Notwithstanding any other provision of this chapter, if a school
district is not fully compensated through state aid or the
calculation of excess local revenue under this chapter based on the
determination of the district's taxable value of property under
Subchapter M, Chapter 403, Government Code, the district is
entitled to additional state aid in the amount necessary to fully
compensate the district for the amount of ad valorem tax revenue
lost due to a reduction of the amount of the limitation on tax
increases provided by Sections 11.26(a-10), (a-11), and (a-12)
[11.26(a-4), (a-5), (a-6), (a-7), (a-8), (a-9), and (a-10)], Tax
Code, as applicable.
SECTION 5. Effective January 1, 2025, Section 48.2542,
Education Code, is amended to read as follows:
Sec. 48.2542. ADDITIONAL STATE AID FOR ADJUSTMENT OF
LIMITATION ON TAX INCREASES ON HOMESTEAD OF ELDERLY OR DISABLED.
Notwithstanding any other provision of this chapter, if a school
district is not fully compensated through state aid or the
calculation of excess local revenue under this chapter based on the
determination of the district's taxable value of property under
Subchapter M, Chapter 403, Government Code, the district is
entitled to additional state aid in the amount necessary to fully
compensate the district for the amount of ad valorem tax revenue
lost due to a reduction of the amount of the limitation on tax
increases provided by Section 11.26(a-10) [Sections 11.26(a-4),
(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10)], Tax Code[, as
applicable].
SECTION 6. Section 48.2543, Education Code, is amended to
read as follows:
Sec. 48.2543. ADDITIONAL STATE AID FOR HOMESTEAD
EXEMPTION. (a) For [Beginning with] the 2022-2023 and 2023-2024
school years [year], a school district is entitled to additional
state aid to the extent that state and local revenue under this
chapter and Chapter 49 is less than the state and local revenue that
would have been available to the district under this chapter and
Chapter 49 as those chapters existed on September 1, 2021, if any
increase in the residence homestead exemption under Section 1-b(c),
Article VIII, Texas Constitution, as proposed by the 87th
Legislature, 3rd Called Session, 2021, had not occurred.
(a-1) Beginning with the 2024-2025 school year, a school
district is entitled to additional state aid to the extent that
state and local revenue under this chapter and Chapter 49 is less
than the state and local revenue that would have been available to
the district under this chapter and Chapter 49 as those chapters
existed on September 1, 2023, if any increase in the residence
homestead exemption under Section 1-b(c), Article VIII, Texas
Constitution, and any additional limitation on tax increases under
Section 1-b(d) of that article as proposed by the 88th Legislature,
Regular Session, 2023, had not occurred.
(b) The lesser of the school district's currently adopted
maintenance and operations tax rate or the adopted maintenance and
operations tax rate for:
(1) the 2021 tax year is used for the purpose of
determining additional state aid under Subsection (a); and
(2) the 2023 tax year is used for the purpose of
determining additional state aid under Subsection (a-1).
SECTION 7. Section 48.2556(a), Education Code, is amended
to read as follows:
(a) For purposes of allowing the chief appraiser of each
appraisal district and the assessor for each school district to
make the calculations required by Sections 11.26(a-10), (a-11), and
(a-12), Tax Code, the [The] agency shall post [the following
information] on the agency's Internet website [for purposes of
allowing the chief appraiser of each appraisal district and the
assessor for each school district to make the calculations required
by Sections 11.26(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10), Tax
Code:
[(1)] each school district's maximum compressed rate,
as determined under Section 48.2551, for each tax year beginning
with the 2022 [2019] tax year[; and
[(2) each school district's tier one maintenance and
operations tax rate, as provided by Section 45.0032(a), for the
2018 tax year].
SECTION 8. Effective January 1, 2025, Section 48.2556(a),
Education Code, is amended to read as follows:
(a) For purposes of allowing the chief appraiser of each
appraisal district and the assessor for each school district to
make the calculations required by Section 11.26(a-10), Tax Code,
the [The] agency shall post [the following information] on the
agency's Internet website [for purposes of allowing the chief
appraiser of each appraisal district and the assessor for each
school district to make the calculations required by Sections
11.26(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10), Tax Code:
[(1)] each school district's maximum compressed rate,
as determined under Section 48.2551, for the current [each] tax
year and the preceding [beginning with the 2019] tax year[; and
[(2) each school district's tier one maintenance and
operations tax rate, as provided by Section 45.0032(a), for the
2018 tax year].
SECTION 9. Section 403.302, Government Code, is amended by
amending Subsection (j-1) and adding Subsection (j-2) to read as
follows:
(j-1) In the final certification of the study under
Subsection (j), the comptroller shall separately identify the final
taxable value for each school district as adjusted to account for
the reduction of the amount of the limitation on tax increases
provided by Section 11.26(a-10) [Sections 11.26(a-4), (a-5),
(a-6), (a-7), (a-8), (a-9), and (a-10)], Tax Code[, as applicable].
(j-2) In the final certification of the study under
Subsection (j), the comptroller shall separately identify the final
taxable value for each school district as adjusted to account for
the reduction of the amount of the limitation on tax increases
provided by Sections 11.26(a-11) and (a-12), Tax Code. This
subsection expires January 1, 2025.
SECTION 10. Sections 11.26(a-1), (a-2), (a-3), (a-4),
(a-5), (a-6), (a-7), (a-8), and (a-9), Tax Code, are repealed.
SECTION 11. 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, 2024.
SECTION 12. Except as otherwise provided by this Act, this
Act takes effect January 1, 2024, but only if the constitutional
amendment proposed by the 88th Legislature, Regular Session, 2023,
providing for an exemption from ad valorem taxation for public
school purposes of a dollar amount or a percentage, whichever is
greater, of the market value of a residence homestead and providing
for an adjustment of the limitation on the total amount of ad
valorem taxes that may be imposed for those purposes on the
homestead of a person who is elderly or disabled to reflect
increases in the exemption amount is approved by the voters. If
that amendment is not approved by the voters, this Act has no
effect.