HB455 - Relating to the establishment of a limitation on the total amount of ad valorem taxes that certain taxing units may impose on the residence homesteads of individuals who are disabled or elderly and their surviving spouses.

  89R1118 CJC-D     By: Schofield H.B. No. 455       A BILL TO BE ENTITLED   AN ACT   relating to the establishment of a limitation on the total amount of   ad valorem taxes that certain taxing units may impose on the   residence homesteads of individuals who are disabled or elderly and   their surviving spouses.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  The heading to Section 11.261, Tax Code, is   amended to read as follows:          Sec. 11.261.  LIMITATION OF TAX IMPOSED BY TAXING UNIT OTHER   THAN SCHOOL DISTRICT [ COUNTY, MUNICIPAL, OR JUNIOR COLLEGE DISTRICT   TAX ] ON HOMESTEADS OF INDIVIDUALS WHO ARE DISABLED OR [ AND ]   ELDERLY.          SECTION 2.  Section 11.261, Tax Code, is amended by amending   Subsections (a), (b), (c), (d), (e), (f), (g), (h), (i), (j), (k),   and (l) and adding Subsections (b-1) and (b-2) to read as follows:          (a)  This section applies only to a taxing unit other than a   school district [ county, municipality, or junior college district   that has established a limitation on the total amount of taxes that   may be imposed by the county, municipality, or junior college   district on the residence homestead of a disabled individual or an   individual 65 years of age or older under Section 1-b(h), Article   VIII, Texas Constitution ].          (b)  The tax officials shall appraise the property to which   this section [ the limitation ] applies and calculate taxes as on   other property, but if the tax so calculated exceeds the limitation   required [ provided ] by this section, the tax imposed by a taxing   unit is the amount of the tax as limited by this section, except as   otherwise provided by this section. A taxing unit [ The county,   municipality, or junior college district ] may not increase the   total annual amount of ad valorem taxes the taxing unit [ county,   municipality, or junior college district ] imposes on the residence   homestead of an individual who is [ a ] disabled [ individual ] or is   [ an individual ] 65 years of age or older above the amount of the   taxes the taxing unit [ county, municipality, or junior college   district ] imposed on the residence homestead in the first tax   year[ , other than a tax year preceding the tax year in which the   county, municipality, or junior college district established the   limitation described by Subsection (a), ] in which the individual   qualified that residence homestead for the exemption provided by   Section 11.13(c) for an individual who is [ a ] disabled [ individual ]   or is [ an individual ] 65 years of age or older. 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 exemption for the next year, and if the [ county,   municipal, or junior college district ] taxes imposed by the taxing   unit on the residence homestead in the next year are less than the   amount of taxes imposed in that first year, the taxing unit [ a   county, municipality, or junior college district ] 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[ , other than a tax year preceding the tax year in which the   county, municipality, or junior college district established the   limitation described by Subsection (a), ] for which the individual   qualified that residence homestead for the exemption.           (b-1)     If the first tax year the individual qualified the   residence homestead for the exemption provided by Section 11.13(c)   for individuals who are disabled or are 65 years of age or older was   a tax year before the 2026 tax year and the homestead qualified for   a limitation on county, municipal, or junior college district taxes   under this section for that tax year, the amount of the limitation   on county, municipal, or junior college district taxes, as   applicable, required by this section is the amount of the tax   imposed by the applicable taxing unit for the 2025 tax year, plus   any 2026 tax attributable to improvements made in 2025, other than   improvements made to comply with governmental regulations or   repairs.           (b-2)     Except as provided by Subsection (b-1), for the   purpose of calculating a limitation on tax increases by a taxing   unit under this section, an individual who qualified a residence   homestead before January 1, 2026, for an exemption under Section   11.13(c) for individuals who are disabled or are 65 years of age or   older is considered to have qualified the homestead for that   exemption on January 1, 2026.          (c)  If an individual makes improvements to the individual's   residence homestead, other than repairs and other than improvements   required to comply with governmental requirements, the taxing unit   [ county, municipality, or junior college district ] 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 to the   difference between the appraised value of the homestead with the   improvements and the appraised value the homestead [ it ] would have   had without the improvements. The [ A ] limitation required   [ provided ] by this section then applies to the increased amount of   [ county, municipal, or junior college district ] taxes on the   residence homestead until more improvements, if any, are made.          (d)  A limitation on [ county, municipal, or junior college   district ] tax increases by a taxing unit required [ 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   [ a ] disabled [ individual ] or is [ an individual ] 65 years of age or   older and who owned the structure when the limitation [ provided by   this section ] first took effect is using the structure as a   residence homestead; or                (2)  none of the owners of the structure qualifies for   the exemption provided by Section 11.13(c) for an individual who is   [ a ] disabled [ individual ] or is [ an individual ] 65 years of age or   older.          (e)  If the appraisal roll provides for taxation of appraised   value for a prior year because a residence homestead exemption for   an individual who is disabled [ individuals ] or is [ individuals ] 65   years of age or older was erroneously allowed, the tax assessor for   the applicable taxing unit [ county, municipality, or junior college   district ] 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   because of the provisions of this section.          (f)  A limitation on tax increases by a taxing unit required   [ 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.          (g)  Except as provided by Subsection (c), if an individual   who receives a limitation on [ county, municipal, or junior college   district ] tax increases by a taxing unit required [ provided ] by   this section subsequently qualifies a different residence   homestead [ in the same county, municipality, or junior college   district ] for an exemption under Section 11.13, a taxing unit [ the   county, municipality, or junior college district ] 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 [ county,   municipality, or junior college district ] 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 [ provided ]   by this section not been in effect, multiplied by a fraction the   numerator of which is the total amount of taxes [ the county,   municipality, or junior college district ] imposed by a taxing unit   of the same type on the former homestead 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 [ the   county, municipality, or junior college district ] would have been   imposed by the taxing unit of the same type on the former homestead   in the last year in which the individual received that exemption for   the former homestead had the limitation on tax increases required   [ provided ] by this section not been in effect. A limitation under   this subsection does not apply to a taxing unit if the former   homestead was not subject to taxation by a taxing unit of the same   type in the last year in which the individual received the exemption   for the former homestead.          (h)  An individual who receives a limitation on [ county,   municipal, or junior college district ] tax increases by a taxing   unit under this section and who subsequently qualifies a different   residence homestead [ in the same county, municipality, or junior   college district ] 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 (g) and to   calculate the amount of taxes a taxing unit of the same type  [ the   county, municipality, or junior college district ] may impose on the   subsequently qualified homestead.          (i)  If an individual who receives [ qualifies for ] a   limitation on [ county, municipal, or junior college district ] tax   increases by a taxing unit under this section dies, the surviving   spouse of the individual is entitled to the limitation on taxes   imposed by the taxing unit [ county, municipality, or junior college   district ] on the residence homestead of the individual if:                (1)  the surviving spouse is disabled or is 55 years of   age or older when the individual dies; 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.          (j)  If an individual who is 65 years of age or older and   qualifies for a limitation on [ county, municipal, or junior college   district ] 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 (k), the   amount to which the surviving spouse's [ county, municipal, or   junior college district ] taxes are limited under Subsection (i) is   the amount of taxes imposed by the taxing unit to which the   limitation applies [ county, municipality, or junior college   district, as applicable, ] on the residence homestead in that year   determined as if the individual qualifying for the exemption had   lived for the entire year.          (k)  If in the first tax year after the year in which an   individual who is 65 years of age or older dies under the   circumstances described by Subsection (j) the amount of taxes   imposed by a taxing unit [ county, municipality, or junior college   district ] on the residence homestead of the surviving spouse is   less than the amount of taxes imposed by the taxing unit [ county,   municipality, or junior college district ] in the preceding year as   limited by Subsection (j), in a subsequent tax year the surviving   spouse's taxes imposed by the taxing unit [ county, municipality, or   junior college district ] on that residence homestead are limited to   the amount of taxes imposed by the taxing unit [ county,   municipality, or junior college district ] in that first tax year   after the year in which the individual dies.        &#xA0 [Text truncated for display. 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