HB5210 - Relating to an exemption from ad valorem taxation of the total appraised value of real property for which the owner of the property has prepaid those taxes.

  89R16282 CJC-F     By: Phelan H.B. No. 5210       A BILL TO BE ENTITLED   AN ACT   relating to an exemption from ad valorem taxation of the total   appraised value of real property for which the owner of the property   has prepaid those taxes.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Subchapter B, Chapter 11, Tax Code, is amended by   adding Section 11.121 to read as follows:           Sec.   11.121.     REAL PROPERTY ON WHICH TAXES ARE PREPAID. (a)   Except as otherwise provided by this section, real property for   which the taxes have been prepaid in the manner provided by this   section is exempt from taxation.           (b)     A property owner may prepay the taxes on real property   by submitting to the comptroller an enrollment form and subsequent   payment in an amount equal to the amount computed under Subsection   (d) and presented to the property owner. On receipt of an   enrollment form that is administratively complete and payment in   full of the designated amount, the comptroller shall issue to the   property owner a certificate of prepayment of taxes for the   property. The comptroller by rule shall establish an annual   deadline for enrollment for prepayment of taxes and the date by   which the designated prepayment must be made to qualify the   property for an exemption under this section in subsequent tax   years.           (c)     A property owner shall include a copy of the certificate   of prepayment of taxes received under Subsection (b) when filing an   application for the exemption provided by this section with the   chief appraiser of the appraisal district in which the property is   located. The chief appraiser shall approve an application that is   administratively complete and includes a copy of the certificate of   prepayment of taxes. If the chief appraiser approves the   application, the chief appraiser shall notify each taxing unit that   taxes the real property of the approval and enter the exemption in   the appraisal records.           (d)     The amount a property owner is required to prepay   pursuant to an approved application submitted under Subsection (b)   is equal to the product of the appraised value of the property for   the tax year in which the property owner submits the enrollment form   and the ad valorem tax prepayment rate determined by the   comptroller for that tax year under Section 403.030, Government   Code.           (e)     The exemption provided by this section does not expire   as to real property for which a certificate of prepayment is issued,   regardless of whether the property is sold or ownership of the   property otherwise changes.           (f)     The exemption provided by this section does not apply to   a new improvement to the real property made during the tax year in   which the property owner submits an enrollment form under   Subsection (b) or a subsequent tax year unless the property owner   pays a supplemental prepayment amount to the comptroller in the   manner provided by comptroller rule in the amount determined as   provided by Subsection (d) for the increase in the appraised value   of the property attributable to the improvement. For purposes of   this subsection, "new improvement" has the meaning assigned by   Section 23.23, except that the term is not limited to an improvement   to a residence homestead.           (g)     If after real property receives an exemption under this   section a taxing unit is established that imposes taxes on the real   property or the territory of a taxing unit is changed to include the   property, the exemption provided by this subsection does not apply   to the taxes imposed by that taxing unit unless the property owner   pays a supplemental prepayment amount to the comptroller in the   manner prescribed by comptroller rule in the amount determined as   provided by Subsection (d) in prepayment of the taxes due to the   taxing unit.           (h)     The comptroller shall deposit each prepayment and   supplemental prepayment received under this section to the credit   of the prepaid property tax trust fund established under Section   49-s, Article III, Texas Constitution.            SECTION 2.  Subchapter B, Chapter 403, Government Code, is   amended by adding Section 403.030 to read as follows:           Sec.   403.030.     ADOPTION OF AD VALOREM TAX PREPAYMENT RATE;   REIMBURSEMENT RATE FOR POLITICAL SUBDIVISION. (a) In this   section:                 (1)     "Eligible taxing unit" means a taxing unit that is   eligible for a distribution from the fund.                 (2)     "Fund" means the fund established under Section   49-s, Article III, Texas Constitution.                 (3)     "No-new-revenue tax rate" means the   no-new-revenue tax rate calculated under Chapter 26, Tax Code.                 (4)     "Taxing unit" has the meaning assigned by Section   1.04, Tax Code.           (b)     The comptroller shall determine and adopt an ad valorem   tax prepayment rate each year to compute tax prepayments under   Section 11.121, Tax Code, to be made to exempt property beginning in   the next tax year and shall publish the rate in the Texas Register.   The comptroller may consult with actuaries or any other persons as   necessary to determine a prepayment rate that will generate revenue   sufficient to adequately fund annual disbursements in the current   and future years to eligible taxing units from the fund.           (c)     The comptroller shall adopt a procedure by which an   eligible taxing unit may request a distribution from the fund.   Subject to Subsection (d), an eligible taxing unit is entitled to an   annual disbursement from the fund in an amount equal to the product   of:                 (1)     the total appraised value of all real property in   the taxing unit that is exempt under Section 11.121, Tax Code, in   that year; and                 (2)     the taxing unit's no-new-revenue tax rate as   calculated for that year.           (d)     If in any year the balance of the fund is not sufficient   to make a disbursement from the fund in the amount computed under   Subsection (c) to each eligible taxing unit, the comptroller may   proportionally reduce the amount of each disbursement from the fund   in that year to ensure that the fund remains solvent.          SECTION 3.  Section 403.302(d), Government Code, as   effective until January 1, 2027, is amended to read as follows:          (d)  For the purposes of this section, "taxable value" means   the market value of all taxable property less:                (1)  the total dollar amount of any residence homestead   exemptions lawfully granted under Section 11.13(b) or (c), Tax   Code, in the year that is the subject of the study for each school   district;                (2)  one-half of the total dollar amount of any   residence homestead exemptions granted under Section 11.13(n), Tax   Code, in the year that is the subject of the study for each school   district;                (3)  the total dollar amount of any exemptions granted   before May 31, 1993, within a reinvestment zone under agreements   authorized by Chapter 312, Tax Code;                (4)  subject to Subsection (e), the total dollar amount   of any captured appraised value of property that:                      (A)  is within a reinvestment zone created on or   before May 31, 1999, or is proposed to be included within the   boundaries of a reinvestment zone as the boundaries of the zone and   the proposed portion of tax increment paid into the tax increment   fund by a school district are described in a written notification   provided by the municipality or the board of directors of the zone   to the governing bodies of the other taxing units in the manner   provided by former Section 311.003(e), Tax Code, before May 31,   1999, and within the boundaries of the zone as those boundaries   existed on September 1, 1999, including subsequent improvements to   the property regardless of when made;                      (B)  generates taxes paid into a tax increment   fund created under Chapter 311, Tax Code, under a reinvestment zone   financing plan approved under Section 311.011(d), Tax Code, on or   before September 1, 1999; and                      (C)  is eligible for tax increment financing under   Chapter 311, Tax Code;                (5)  the total dollar amount of any captured appraised   value of property that:                      (A)  is within a reinvestment zone:                            (i)  created on or before December 31, 2008,   by a municipality with a population of less than 18,000; and                            (ii)  the project plan for which includes   the alteration, remodeling, repair, or reconstruction of a   structure that is included on the National Register of Historic   Places and requires that a portion of the tax increment of the zone   be used for the improvement or construction of related facilities   or for affordable housing;                      (B)  generates school district taxes that are paid   into a tax increment fund created under Chapter 311, Tax Code; and                      (C)  is eligible for tax increment financing under   Chapter 311, Tax Code;                (6)  the total dollar amount of any exemptions granted   under Section 11.251 or 11.253, Tax Code;                (7)  the difference between the comptroller's estimate   of the market value and the productivity value of land that   qualifies for appraisal on the basis of its productive capacity,   except that the productivity value estimated by the comptroller may   not exceed the fair market value of the land;                (8)  the portion of the appraised value of residence   homesteads of individuals who receive a tax limitation under   Section 11.26, Tax Code, on which school district taxes are not   imposed in the year that is the subject of the study, calculated as   if the residence homesteads were appraised at the full value   required by law;                (9)  a portion of the market value of property not   otherwise fully taxable by the district at market value because of   action required by statute or the constitution of this state, other   than Section 11.311, Tax Code, that, if the tax rate adopted by the   district is applied to it, produces an amount equal to the   difference between the tax that the district would have imposed on   the property if the property were fully taxable at market value and   the tax that the district is actually authorized to impose on the   property, less the amount of any disbursement received by the   district in the applicable tax year from the prepaid property tax   trust fund under Section 49-s, Article III, Texas Constitution, and   Section 403.030 of this code if this subsection does not otherwise   require that portion to be deducted;                (10)  the market value of all tangible personal   property, other than manufactured homes, owned by a family or   individual and not held or used for the production of income;             &#xA0 [Text truncated for display. 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