Relating to the authority of a taxing unit other than a school district, county, municipality, or junior college district to establish a limitation on the amount of ad valorem taxes that the taxing unit may impose on the residence homesteads of certain low-income individuals who are disabled or elderly and their surviving spouses.

89(R) HB 982 - House Committee Report version - Bill Text

By: Wilson

H.B. No. 982

A BILL TO BE ENTITLED

AN ACT

relating to the authority of a taxing unit other than a school

district, county, municipality, or junior college district to

establish a limitation on the amount of ad valorem taxes that the

taxing unit may impose on the residence homesteads of certain

low-income individuals who are disabled or elderly and their

surviving spouses.

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 TAX IMPOSED BY CERTAIN TAXING

UNITS ON HOMESTEADS OF LOW-INCOME INDIVIDUALS WHO ARE DISABLED OR

ELDERLY.

(a)

In this section:

(1)

"Eligible individual" means an individual whose

household income does not exceed 200 percent of the federal poverty

level.

(2)

"Qualifying taxing unit" means a taxing unit other

than a school district, county, municipality, or junior college

district.

(3)

"Residence homestead" has the meaning assigned by

Section 11.13.

(b)

This section applies only to a qualifying taxing unit

that establishes a limitation under Section 1-b(h-1), Article VIII,

Texas Constitution, on the total amount of taxes that may be imposed

by the taxing unit on the residence homestead of an eligible

individual who is disabled or is 65 years of age or older.

(c)

The tax officials shall appraise the residence

homestead of an eligible individual who is disabled or is 65 years

of age or older and calculate taxes on that residence homestead in

the same manner as other residence homesteads, but if the tax so

calculated exceeds the limitation provided by this section, the tax

imposed is the amount of the tax as limited by this section, except

as otherwise provided by this section.

(d)

A qualifying taxing unit may not increase the total

annual amount of ad valorem taxes the taxing unit imposes on the

residence homestead of an eligible individual who is disabled or is

65 years of age or older above the amount of the taxes the taxing

unit imposed on the residence homestead in the first tax year in

which the eligible individual qualified that residence homestead

for the exemption provided by Section 11.13(c) for an individual

who is disabled or is 65 years of age or older and was an eligible

individual.

If the eligible 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 taxes imposed by the taxing unit on the

residence homestead in the next year are less than the amount of

those taxes imposed in that first year, the taxing unit 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 for which the individual qualified that residence homestead

for the exemption and was an eligible individual.

(e)

If an eligible individual who is disabled or is 65 years

of age or older makes improvements to the individual's residence

homestead, other than repairs and other than improvements required

to comply with governmental requirements, the qualifying taxing

unit 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 of the qualifying taxing unit to the difference between the

appraised value of the homestead with the improvements and the

appraised value the homestead would have had without the

improvements.

The limitation provided by this section then

applies to the increased amount of taxes on the residence homestead

until more improvements, if any, are made.

(f)

A limitation on tax increases 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

disabled or is 65 years of age or older and who owned the structure

when the limitation first took effect are using the structure as a

residence homestead;

(2)

none of the owners of the structure qualify for the

exemption provided by Section 11.13(c) for an individual who is

disabled or is 65 years of age or older; or

(3)

none of the owners of the structure are eligible

individuals.

(g)

If the appraisal roll provides for taxation of appraised

value for a prior year because a residence homestead exemption for

an eligible individual who is disabled or is 65 years of age or

older was erroneously allowed or because an individual was

erroneously considered to be an eligible individual, the tax

assessor for the applicable county 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 under the requirements of this section.

(h)

A limitation on tax increases 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.

(i)

Except as provided by Subsection (e), if an eligible

individual who receives a limitation on tax increases provided by

this section, including a surviving spouse who receives a

limitation under Subsection (k), subsequently qualifies a

different residence homestead in the same qualifying taxing unit

for an exemption under Section 11.13, the taxing unit 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 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 by this section not been in effect, multiplied

by a fraction the numerator of which is the total amount of taxes

imposed on the former homestead by the taxing unit 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 would have been imposed on the former homestead by the taxing

unit in the last year in which the individual received that

exemption for the former homestead had the limitation on tax

increases provided by this section not been in effect.

(j)

An eligible individual who receives a limitation on tax

increases under this section, including a surviving spouse who

receives a limitation under Subsection (k), and who subsequently

qualifies a different residence homestead 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 (i) and to calculate the amount of taxes the

qualifying taxing unit may impose on the subsequently qualified

homestead.

(k)

If an eligible individual who qualifies for a limitation

on tax increases under this section dies, the surviving spouse of

the individual is entitled to the limitation on taxes imposed by the

qualifying taxing unit on the residence homestead of the individual

if:

(1) the surviving spouse:

(A)

is disabled or is 55 years of age or older

when the individual dies; and

(B) is an eligible individual; 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.

(l)

If an eligible individual who is 65 years of age or older

and qualifies for a limitation on 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 (m), the amount to which the surviving spouse's taxes

are limited under Subsection (k) is the amount of taxes imposed by

the qualifying taxing unit on the residence homestead in that year

determined as if the individual qualifying for the exemption had

lived for the entire year.

(m)

If in the first tax year after the year in which an

eligible individual who is 65 years of age or older dies under the

circumstances described by Subsection (l), the amount of taxes

imposed by the qualifying taxing unit on the residence homestead of

the surviving spouse is less than the amount of taxes imposed by the

taxing unit in the preceding year as limited by Subsection (l), in a

subsequent tax year the surviving spouse's taxes imposed by the

taxing unit on that residence homestead are limited to the amount of

taxes imposed by the taxing unit in that first tax year after the

year in which the individual dies.

(n)

Notwithstanding Subsection (f), a limitation on tax

increases provided by this section does not expire if the owner of

the structure qualifies for an exemption under Section 11.13 under

the circumstances described by Section 11.135(a).

(o)

Notwithstanding Subsections (c) and (e), an improvement

to property that would otherwise constitute an improvement under

Subsection (e) is not treated as an improvement under that

subsection if the improvement is a replacement structure for a

structure that was rendered uninhabitable or unusable by a casualty

or by wind or water damage.

For purposes of appraising the

property in the tax year in which the structure would have

constituted an improvement under Subsection (e), the replacement

structure is considered to be an improvement under that subsection

only if:

(1)

the square footage of the replacement structure

exceeds that of the replaced structure as that 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.

(p)

An heir property owner who qualifies heir property as

the owner's residence homestead under this chapter is considered

the sole owner of the property for the purposes of this section.

(q)

The chief appraiser for an appraisal district in which a

qualifying taxing unit participates may require an individual to

provide any information that is reasonably necessary for the chief

appraiser to determine whether the individual is an eligible

individual for purposes of this section.

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
taxing unit
[
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 Section 11.26; and

(ii) new property value of property that is

subject to an agreement entered into under Chapter 313; [
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
as
provided by

Section 11.261
; and

(C)

the current total value for a taxing unit

other than a school district, county, municipality, or junior

college district excludes the total value of homesteads that

qualify for a tax limitation as provided by Section 11.262
.

(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
:

(a)
last year's taxable value for a

school district excludes the total value of homesteads that

qualified for a tax limitation as provided by Section 11.26
;

(b)
[
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

(c)

last year's taxable value for a

taxing unit other than a school district, county, municipality, or

junior college district excludes the total value of homesteads that

qualified for a tax limitation as provided by Section 11.262; 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

(B) the amount of taxes refunded by the taxing

unit in the preceding year for tax years before that year.

(14) "Last year's total value" means the total taxable

value of property listed on the appraisal roll for the preceding

year, including 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:

(A) last year's taxable value for a school

district excludes the total value of homesteads that qualified for

a tax limitation as provided by Section 11.26; [
and
]

(B) 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

(C)

last year's taxable value for a taxing unit

other than a school district, county, municipality, or junior

college district excludes the total value of homesteads that

qualified for a tax limitation as provided by Section 11.262
.

SECTION 4. This Act applies only to ad valorem taxes imposed

for a tax year beginning on or after the effective date of this Act.

SECTION 5. This Act takes effect January 1, 2026, but only

if the constitutional amendment proposed by the 89th Legislature,

Regular Session, 2025, to authorize a limitation on the total

amount of ad valorem taxes that a political subdivision other than a

school district, county, municipality, or junior college district

may impose on the residence homesteads of certain low-income

persons who are disabled or elderly and their surviving spouses is

approved by the voters. If that amendment is not approved by the

voters, this Act has no effect.