HB642 - Relating to a limitation on the total amount of ad valorem taxes that a school district may impose on certain residence homesteads following a substantial school tax increase.

  89R3419 TJB-F     By: Bernal H.B. No. 642       A BILL TO BE ENTITLED   AN ACT   relating to a limitation on the total amount of ad valorem taxes   that a school district may impose on certain residence homesteads   following a substantial school tax increase.          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 SCHOOL TAXES ON CERTAIN   HOMESTEADS FOLLOWING SUBSTANTIAL TAX INCREASE. (a) In this   section, "residence homestead" has the meaning assigned by Section   11.13.           (b)     The chief appraiser shall appraise, and the tax assessor   for each school district shall calculate the taxes on, each   residence homestead in the manner provided by law for other   property.           (c)     Except as provided by Subsection (g), if an individual   qualifies property as the individual's residence homestead for at   least 15 consecutive tax years and the total amount of school   district taxes imposed on the property in that 15th tax year is at   least 120 percent greater than the total amount of those taxes   imposed in the first of those tax years, not including taxes imposed   on the appraised value of all improvements made to the property   during that period, a school district may not impose taxes on that   residence homestead in a subsequent tax year in an amount that   exceeds the least of the following amounts:                 (1)     the amount of school taxes calculated for the   current tax year under Subsection (b);                 (2)     the amount of school taxes imposed for that 15th   tax year; or                 (3)     the amount of school taxes as limited under   Section 11.26, if applicable.           (c-1)     An individual may not receive a limitation on taxes   under Subsection (c) based on an increase in taxes for any period   that began before the 2012 tax year.           (d)     If an individual who qualifies for a limitation under   this section dies, the surviving spouse of the individual is   entitled to continue receiving the limitation on school taxes   imposed by a school district on the residence homestead of the   individual if the property:                 (1)     is the residence homestead of the surviving spouse   on the date that the individual dies; and                 (2)     remains the residence homestead of the surviving   spouse.           (e)     Except as provided by Subsection (d) or (f), a   limitation under this section expires on January 1 if the property   is not the residence homestead of the individual entitled to the   limitation for the preceding tax year.           (f)  A limitation under this section does not expire if:                 (1)     an owner of an interest in the residence homestead   conveys the interest to a qualifying trust as defined by Section   11.13(j) and the owner or the owner's spouse is:                       (A)  a trustor of the trust; and                       (B)  entitled to occupy the property; or                 (2)     the owner of the structure qualifies for an   exemption under Section 11.13 under the circumstances described by   Section 11.135(a).           (g)     Except as provided by Subsection (h), a school district   may increase the tax on a residence homestead subject to a   limitation under this section in the first year the appraised value   of the property is increased as the result of an improvement made to   the property in the preceding tax year. The amount of the tax   increase is determined by applying the current tax rate of the   school district to the difference in the taxable value of the   property with the improvement and the taxable value the property   would have had without the improvement. A limitation imposed by   this section then applies to the increased amount of tax until   another improvement is made to the property.           (h)     An improvement to a residence homestead is not treated   as an improvement under Subsection (g) if the improvement is:                 (1)  a repair;                 (2)     required to be made to comply with a governmental   requirement; or                 (3)     subject to Subsection (i), a replacement structure   for a structure that was rendered uninhabitable or unusable by a   casualty or by wind or water damage.           (i)     A replacement structure described by Subsection (h)(3)   is considered to be an improvement under Subsection (g) only if:                 (1)     the square footage of the replacement structure   exceeds the square footage of the replaced structure as the   replaced 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.           (j)     If the appraisal roll provides for taxation of appraised   value for a prior year because a limitation under this section was   erroneously allowed, the tax assessor for the school 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 tax year and the tax that was imposed because of the   provisions of this section.           (k)     For each school district in an appraisal district, the   chief appraiser shall determine the portion of the appraised value   of residence homesteads of individuals on which school district   taxes are not imposed in a tax year because of the limitation under   this section. That portion is calculated by determining the   taxable value that, if multiplied by the tax rate adopted by the   school district for the tax year, would produce an amount equal to   the amount of tax that would have been imposed by the school   district on those properties if the limitation under this section   were not in effect, but that was not imposed because of that   limitation. The chief appraiser shall determine that taxable value   and certify it to the comptroller as soon as practicable for each   tax year.          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 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 Sections [ Section ]   11.26 and 11.262 ;                            (ii)  new property value of property that is   subject to an agreement entered into under former Subchapter B or C,   Chapter 313; and                            (iii)  new property value of property that   is subject to an agreement entered into under Subchapter T, Chapter   403, Government Code; 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 provided by Section   11.261.                (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 last year's   taxable value for a school district excludes the total value of   homesteads that qualified for a tax limitation as provided by   Sections [ Section ] 11.26 and 11.262 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                            (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               &#xA [Text truncated for display. Full text available on Congress.gov.]