HB3130 - Relating to a limitation on increases in the appraised value for ad valorem tax purposes of residential real property leased to an elderly person.

  89R6210 LHC-D     By: Bhojani H.B. No. 3130       A BILL TO BE ENTITLED   AN ACT   relating to a limitation on increases in the appraised value for ad   valorem tax purposes of residential real property leased to an   elderly person.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Section 1.12(d), Tax Code, as effective until   January 1, 2027, is amended to read as follows:          (d)  For purposes of this section, the appraisal ratio of   property to which Section 23.23 , [ or ] 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 , [ or ] 23.231 , or 23.232 .          SECTION 2.  Section 1.12(d), Tax Code, as effective January   1, 2027, is amended to read as follows:          (d)  For purposes of this section, the appraisal ratio of   property [ a homestead ] to which Section 23.23 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 or 23.232 .          SECTION 3.  Subchapter B, Chapter 23, Tax Code, is amended by   adding Section 23.232 to read as follows:           Sec.   23.232.     LIMITATION ON APPRAISED VALUE OF RESIDENTIAL   REAL PROPERTY LEASED TO ELDERLY PERSON. (a) In this section:                 (1)     "Fair market rent" means the most recent   applicable fair market rent established by the United States   Department of Housing and Urban Development for the zip code in   which the property is located.                 (2)     "New improvement" means an improvement to real   property described by Subsection (b) 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.           (b)  This section applies only to real property that:                 (1)     is a single-family residential property leased to   a lessee who is 65 years of age or older and used by the lessee as a   primary residence; and                 (2)     is leased to a lessee for a rent that does not   exceed the fair market rent.           (c)     This section does not apply to property appraised under   Subchapter C, D, E, F, G, or H.           (d)     Notwithstanding the requirements of Section 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 real   property described by Subsection (b) 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)     10 percent of the appraised value of the   property for the preceding tax year;                       (B)     the appraised value of the property for the   preceding tax year; and                       (C)     the market value of all new improvements to   the property.           (e)     If only part of a parcel of real property qualifies for   the limitation provided by Subsection (d), the limitation applies   only to that part of the parcel.           (f)     When appraising real property described by Subsection   (b), the chief appraiser shall:                 (1)  appraise the property at its market value; and                 (2)     include in the appraisal records both the market   value of the property and the amount computed under Subsection   (d)(2).           (g)     The limitation provided by Subsection (d) takes effect   as to a parcel or part of a parcel of real property described by   Subsection (b) on January 1 of the tax year following the first tax   year in which the owner of the property leases the property to a   lessee and for an amount described by Subsection (b). Except as   provided by Subsection (h), the limitation expires on January 1 of   the tax year following the first tax year in which the owner of the   property ceases to lease the property to a lessee or for an amount   described by Subsection (b).           (h)     Notwithstanding Subsections (a)(2) and (d) and except   as provided by Subdivision (2) of this subsection, 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 unusable by a casualty   or by wind or water damage. For purposes of appraising the property   under Subsection (d) 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 (d); 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.           (i)     In this subsection, "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. Notwithstanding Subsection (h)(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.           (j)     To receive a limitation under Subsection (d), a person   claiming the limitation must annually apply for the limitation by   filing an application with the chief appraiser of the appraisal   district. The chief appraiser shall accept and approve or deny an   application. For property appraised by more than one appraisal   district, a separate application must be filed in each appraisal   district to receive the limitation in that district.           (k)     The comptroller, in prescribing the contents of the   application form for a limitation under Subsection (d), shall   ensure that the form requires an applicant to provide the   information necessary to determine the validity of the limitation   claim. The form must require an applicant to provide the   applicant's name and driver's license number, personal   identification certificate number, social security number, or   taxpayer identification number. The comptroller shall include on   the form a notice of the penalties prescribed by Section 37.10,   Penal Code, for making or filing an application containing a false   statement and shall include on the form a statement explaining that   the application must be made annually. In this subsection,   "driver's license" and "personal identification certificate" have   the meanings assigned by Section 11.43(f).           (l)     To receive a limitation under Subsection (d) for a tax   year, a person must apply for the limitation not later than May 1 of   that year. Except as provided by Subsection (m), if the person   fails to timely file a completed application, the person may not   receive the limitation for that year.           (m)     The chief appraiser shall accept and approve or deny an   application for a limitation under Subsection (d) for a tax year   after the deadline for filing the application has passed if the   application is filed not later than one year after the delinquency   date for the taxes on the property for that tax year. If a late   application is approved after approval of the appraisal records by   the appraisal review board, the chief appraiser shall notify the   collector for each taxing unit in which the property is located. If   the tax has not been paid, the collector shall deduct from the   person's tax bill the difference between the taxes that would have   been due had the property not qualified for the limitation and the   taxes due after taking the limitation into account. If the tax has   been paid, the collector shall refund the difference.           (n)     This subsection expires January 1, 2030. For purposes   of applying the limitation provided by Subsection (d) in the first   tax year after the 2025 tax year in which the property is appraised   for taxation:                 (1)     the property is considered to have been appraised   for taxation in the 2025 tax year at a market value equal to the   appraised value of the property for that tax year; and                 (2)     a person who acquired real property described by   Subsection (b) in a tax year before the 2025 tax year is considered   to have acquired the property on January 1, 2025.          SECTION 4.  Section 41.41(a), Tax Code, as effective until   January 1, 2027, 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 the circuit breaker limitation on appraised value   provided b [Text truncated for display. 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