HB4082 - Relating to a limitation on increases in the appraised value of real property for ad valorem tax purposes.

  89R3283 DRS-D     By: Vasut H.B. No. 4082       A BILL TO BE ENTITLED   AN ACT   relating to a limitation on increases in the appraised value of real   property for ad valorem tax purposes.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  (a)  Section 1.12(d), Tax Code, as amended by   Section 4.01, Chapter 1 (S.B. 2), Acts of the 88th Legislature, 2nd   Called Session, 2023, and 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 ] 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 ].          (b)  Section 4.02, Chapter 1 (S.B. 2), Acts of the 88th   Legislature, 2nd Called Session, 2023, which amended Section   1.12(d), Tax Code, effective January 1, 2027, is repealed.          SECTION 2.  The heading to Section 23.23, Tax Code, is   amended to read as follows:          Sec. 23.23.  LIMITATION ON APPRAISED VALUE OF REAL PROPERTY   [ RESIDENCE HOMESTEAD ].          SECTION 3.  Section 23.23, Tax Code, is amended by amending   Subsections (a), (b), and (c) and adding Subsections (a-1), (a-2),   (a-3), (a-4), (a-5), (a-6), (a-7), (a-8), (c-2), (c-3), (c-4), and   (h) to read as follows:          (a)   The appraised value of a parcel of real property for the   first tax year in which the owner owns the property on January 1 is   equal to the market value of the property. Notwithstanding Section   23.01, the appraised value of the property for each subsequent tax   year until the tax year in which the limitation provided by this   subsection expires is equal to the appraised value of the property   for the preceding tax year as increased by the chief appraiser for   the current tax year using the percentage by which the appraised   value may be increased as determined by the comptroller under   Subsection (a-8) [ 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 a   residence homestead 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 ].           (a-1)     Notwithstanding Subsection (a), if the owner of real   property acquired the property as a bona fide purchaser for value,   the purchase price of the property paid by the property owner is   considered to be the market value of the property for the first tax   year in which the owner owns the property on January 1.           (a-2)     If the first tax year the property owner owned the   property on January 1 was a tax year before the 2026 tax year:                 (1)     the property owner is considered to have acquired   the property on January 1, 2025; and                 (2)     the appraised value of the property as shown on the   2025 appraisal roll is considered to be the market value of the   property for that tax year for purposes of Subsection (a).           (a-3)  Subsection (a-1) does not apply to real property if:                 (1)  the purchase was made:                       (A)  pursuant to a court order;                       (B)  from a trustee in bankruptcy;                       (C)     by one co-owner from one or more other   co-owners;                       (D)     from a spouse or a person or persons within   the first or second degree of lineal consanguinity of one or more of   the purchasers; or                       (E)  from a governmental entity; or                 (2)     the chief appraiser determines that the applicant   was not a bona fide purchaser for value under criteria established   by rules adopted by the comptroller for that purpose.           (a-4)     To receive a limitation on appraised value under   Subsection (a) computed in accordance with Subsection (a-1), an   owner of the property must apply for the limitation. To apply for   the limitation, the owner must file an application with the chief   appraiser for each appraisal district in which the property subject   to the claimed limitation is located. The application must be filed   not later than April 30. The comptroller by rule shall prescribe   the form for the application to ensure that the applicant provides   the information necessary to determine the applicant's eligibility   for the limitation, including the purchase price of the property   paid by the applicant.           (a-5)     An application filed with a chief appraiser under   Subsection (a-4) is confidential and not open to public inspection.   The application and the information it contains may not be   disclosed to another person other than an employee of the appraisal   district who appraises property, except as provided by Subsection   (a-6).           (a-6)     Information that is confidential under Subsection   (a-5) may be disclosed:                 (1)     in a judicial or administrative proceeding under a   lawful subpoena;                 (2)     to a purchaser, grantee, seller, or grantor named   in the application or in the deed to which the application applies   or to a representative of the purchaser, grantee, seller, or   grantor under a written authorization signed by the purchaser,   grantee, seller, or grantor;                 (3)     to the comptroller or to an assessor for a taxing   unit in which the property described in the application is located;                 (4)     in a judicial or administrative proceeding related   to real property taxation:                       (A)     to which the purchaser, grantee, seller, or   grantor is a party;                       (B)     to which an owner of the property described   in the application is a party; or                       (C)     by the appraisal district for the purpose of   establishing a value of the property or of providing evidence of   comparable sales to appraise another property;                 (5)     for statistical purposes if the information is   provided in a form that does not identify a specific property or   specific purchaser, grantee, seller, or grantor;                 (6)     if and to the extent that the information is   required to be included in a public document or record that the   appraisal office is required to prepare or maintain; or                 (7)     to a taxing unit or its legal representative that   is engaged in the collection of delinquent taxes on the property   described in the application.           (a-7)     Information that is disclosed under Subsection (a-6)   does not lose its confidential character.           (a-8)     For each tax year, using the index that the   comptroller considers to most accurately report changes in the   purchasing power of the dollar for consumers in this state, the   comptroller shall determine and publicize the percentage by which   the appraised value of real property may be increased under   Subsection (a). Each chief appraiser shall use the percentage   determined by the comptroller under this subsection to determine   the appraised value under Subsection (a) of real property appraised   by that chief appraiser.          (b)  When appraising real property [ a residence homestead ],   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 (a)   [ (a)(2) ].          (c)  The limitation provided by Subsection (a) takes effect   on January 1 of the first tax year in which the owner owns the   property on January 1 [ as to a residence homestead on January 1 of   the tax year following the first tax year the owner qualifies the   property for an exemption under Section 11.13 ]. Except as provided   by Subsection (c-2) or (c-3), the [ The ] limitation expires on   January 1 of the first tax year following the year in which [ that   neither ] the owner of the property ceases to own the property.           (c-2)     If property subject to a limitation under this section   qualifies for an exemption under Section 11.13 when the ownership   of the property is transferred to the owner's spouse or surviving   spouse, the limitation expires on January 1 of the first tax year   following the year in which [ when the limitation took effect nor ]   the owner's spouse or surviving spouse ceases to own the property,   unless the limitation is further continued under this subsection on   the subsequent transfer to a spouse or surviving spouse [ qualifies   for an exemption under Section 11.13 ].           (c-3)     If property subject to a limitation under Subsection   (a), other than a residence homestead, is owned by two or more   persons, the limitation expires on January 1 of the first tax year   following the year in which the ownership of at least a 50 percent   interest in the property is sold or otherwise transferred.           (c-4)     Notwithstanding Subsection (c), a limitation   established under Subsection (a) does not expire if a change in   ownership of the property occurs by inheritance or under a will as   long as the person who acquires the property qualifies for an   exemption under Section 11.13.           (h)     In this section, "real property" includes a   manufactured home as that term is defined by Section 1201.003,   Occupations Code, that qualifies as a residence homestead under   Section 11.13 of this code, regardless of whether the owner of the   manufactured home elects to treat the manufactured home as real   property under Section 1201.2055, Occupations Code.          SECTION 4.  (a)  Sections 25.19(b) and (g), Tax Code, as   amended by Section 4.04, Chapter 1 (S.B. 2), Acts of the 88th   Legislature, 2nd Called Session, 2023, and effective until January   1, 2027, are amended to read as follows:          (b)&#xA0 [Text truncated for display. 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