bill making counties freeze taxes for elderly and disabled homeowners

The text as introduced · 4,380 words

89R6361 MLH-F

By: Button
H.B. No. 1648

A BILL TO BE ENTITLED

AN ACT

relating to the establishment of a limitation on the total amount of

ad valorem taxes that a county may impose on the residence

homesteads of individuals who are disabled or elderly and their

surviving spouses.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. The heading to Section 11.261, Tax Code, is

amended to read as follows:

Sec. 11.261. LIMITATION OF [ COUNTY, ] MUNICIPAL[ , ] OR JUNIOR

COLLEGE DISTRICT TAX ON HOMESTEADS OF INDIVIDUALS WHO ARE DISABLED

OR [ AND ] ELDERLY.

SECTION 2. Sections 11.261(a), (b), (c), (d), (e), (g),

(h), (i), (j), (k), and (l), Tax Code, are amended to read as

follows:

(a) This section applies only to a [ county, ]

municipality[ , ] or junior college district that has established a

limitation on the total amount of taxes that may be imposed by the

[ county, ] municipality[ , ] or junior college district on the

residence homestead of an individual who is [ a ] disabled

[ individual ] or is [ an individual ] 65 years of age or older under

Section 1-b(h), Article VIII, Texas Constitution.

(b) The tax officials shall appraise the property to which

this section [ the limitation ] applies and calculate taxes as on

other property, 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. The [ county, ] municipality[ , ] or junior college district

may not increase the total annual amount of ad valorem taxes the

[ county, ] municipality[ , ] or junior college district imposes on the

residence homestead of an individual who is [ a ] disabled

[ individual ] or is [ an individual ] 65 years of age or older above

the amount of the taxes the [ county, ] municipality[ , ] or junior

college district imposed on the residence homestead in the first

tax year, other than a tax year preceding the tax year in which the

[ county, ] municipality[ , ] or junior college district established

the limitation described by Subsection (a), in which the individual

qualified that residence homestead for the exemption provided by

Section 11.13(c) for an individual who is [ a ] disabled [ individual ]

or is [ an individual ] 65 years of age or older. If the 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 [ county, ]

municipal[ , ] or junior college district taxes imposed on the

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

taxes imposed in that first year, a [ county, ] municipality[ , ] or

junior college district 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, other than a tax year

preceding the tax year in which the [ county, ] municipality[ , ] or

junior college district established the limitation described by

Subsection (a), for which the individual qualified that residence

homestead for the exemption.

(c) If an individual makes improvements to the individual's

residence homestead, other than repairs and other than improvements

required to comply with governmental requirements, the [ county, ]

municipality[ , ] or junior college district 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 to the

difference between the appraised value of the homestead with the

improvements and the appraised value the homestead [ it ] would have

had without the improvements. The [ A ] limitation provided by this

section then applies to the increased amount of [ county, ]

municipal[ , ] or junior college district taxes on the residence

homestead until more improvements, if any, are made.

(d) A limitation on [ county, ] municipal[ , ] or junior

college district 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

[ a ] disabled [ individual ] or is [ an individual ] 65 years of age or

older and who owned the structure when the limitation [ provided by

this section ] first took effect is using the structure as a

residence homestead; or

(2) none of the owners of the structure qualifies for

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

[ a ] disabled [ individual ] or is [ an individual ] 65 years of age or

older.

(e) If the appraisal roll provides for taxation of appraised

value for a prior year because a residence homestead exemption for

an individual who is disabled [ individuals ] or is [ individuals ] 65

years of age or older was erroneously allowed, the tax assessor for

the applicable [ county, ] municipality[ , ] or junior college

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 year and the tax that was imposed

under [ because of ] the provisions of this section.

(g) Except as provided by Subsection (c), if an individual

who receives a limitation on [ county, ] municipal[ , ] or junior

college district tax increases provided by this section

subsequently qualifies a different residence homestead in the same

[ county, ] municipality[ , ] or junior college district for an

exemption under Section 11.13, the [ county, ] municipality[ , ] or

junior college district may not impose ad valorem taxes on the

subsequently qualified homestead in a year in an amount that

exceeds the amount of taxes the [ county, ] municipality[ , ] or junior

college district 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 provided by this section not been in

effect, multiplied by a fraction the numerator of which is the total

amount of taxes the [ county, ] municipality[ , ] or junior college

district imposed on the former homestead 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 the [ county, ]

municipality[ , ] or junior college district would have imposed on

the former homestead 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.

(h) An individual who receives a limitation on [ county, ]

municipal[ , ] or junior college district tax increases under this

section and who subsequently qualifies a different residence

homestead in the same [ county, ] municipality[ , ] or junior college

district 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 (g) and to

calculate the amount of taxes the [ county, ] municipality[ , ] or

junior college district may impose on the subsequently qualified

homestead.

(i) If an individual who qualifies for a limitation on

[ county, ] municipal[ , ] or junior college district tax increases

under this section dies, the surviving spouse of the individual is

entitled to the limitation on taxes imposed by the [ county, ]

municipality[ , ] or junior college district on the residence

homestead of the individual if:

(1) the surviving spouse is disabled or is 55 years of

age or older when the individual dies; 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.

(j) If an individual who is 65 years of age or older and

qualifies for a limitation on [ county, ] municipal[ , ] or junior

college district 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

(k), the amount to which the surviving spouse's [ county, ]

municipal[ , ] or junior college district taxes are limited under

Subsection (i) is the amount of taxes imposed by the [ county, ]

municipality[ , ] or junior college district, as applicable, on the

residence homestead in that year determined as if the individual

qualifying for the exemption had lived for the entire year.

(k) If in the first tax year after the year in which an

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

circumstances described by Subsection (j) the amount of taxes

imposed by a [ county, ] municipality[ , ] or junior college district

on the residence homestead of the surviving spouse is less than the

amount of taxes imposed by the [ county, ] municipality[ , ] or junior

college district in the preceding year as limited by Subsection

(j), in a subsequent tax year the surviving spouse's taxes imposed

by the [ county, ] municipality[ , ] or junior college district on that

residence homestead are limited to the amount of taxes imposed by

the [ county, ] municipality[ , ] or junior college district in that

first tax year after the year in which the individual dies.

(l) Notwithstanding Subsection (d), a limitation on

[ county, ] municipal[ , ] or junior college district 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).

SECTION 3. Subchapter B, Chapter 11, Tax Code, is amended by

adding Section 11.262 to read as follows:

Sec. 11.262. LIMITATION OF COUNTY TAX ON HOMESTEADS OF

INDIVIDUALS WHO ARE DISABLED OR ELDERLY. (a) The tax officials

shall appraise the property to which this section applies and

calculate taxes as on other property, but if the tax so calculated

exceeds the limitation required by this section, the tax imposed is

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

otherwise provided by this section.

(b) A county may not increase the total annual amount of ad

valorem taxes the county imposes on the residence homestead of an

individual who is disabled or is 65 years of age or older above the

amount of the taxes the county imposed on the residence homestead in

the first tax year in which the 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. If the

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 county on the residence homestead in the next

year are less than the amount of those taxes imposed in that first

year, the county 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.

(c) If the first tax year the individual qualified the

residence homestead for the exemption provided by Section 11.13(c)

for individuals who are disabled or are 65 years of age or older was

a tax year before the 2026 tax year and the homestead qualified for

a limitation on county taxes under Section 11.261, as that section

existed on January 1, 2025, for the 2026 tax year, the amount of the

limitation on county taxes required by this section is the amount of

the tax imposed by the county for the 2025 tax year, plus any 2026

tax attributable to improvements made in 2025, other than

improvements made to comply with governmental regulations or

repairs.

(d) Except as provided by Subsection (c), for the purpose of

calculating a limitation on tax increases by a county under this

section, an individual who qualified a residence homestead before

January 1, 2026, for an exemption under Section 11.13(c) for

individuals who are disabled or are 65 years of age or older is

considered to have qualified the homestead for that exemption on

January 1, 2026.

(e) If an individual makes improvements to the individual's

residence homestead, other than repairs and other than improvements

required to comply with governmental requirements, the county 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

county 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

county taxes on the residence homestead until more improvements, if

any, are made.

(f) A limitation on county tax increases required 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 is using the structure as a

residence homestead; or

(2) none of the owners of the structure qualifies for

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

disabled or is 65 years of age or older.

(g) If the appraisal roll provides for taxation of appraised

value for a prior year because a residence homestead exemption for

an individual who is disabled or is 65 years of age or older was

erroneously allowed, 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 county tax increases required 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 individual

who receives a limitation on county tax increases required by this

section, including a surviving spouse who receives a limitation

under Subsection (k), subsequently qualifies a different residence

homestead for an exemption under Section 11.13, a county may not

impose ad valorem taxes on the subsequently qualified homestead in

a year in an amount that exceeds the amount of taxes the county

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 county

taxes imposed on the former homestead 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 county taxes that would

have been imposed on the former homestead in the last year in which

the individual received that exemption for the former homestead had

the limitation on tax increases required by this section not been in

effect.

(j) An individual who receives a limitation on county 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 county

may impose on the subsequently qualified homestead.

(k) If an individual who qualifies for a limitation on

county tax increases under this section dies, the surviving spouse

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

the county on the residence homestead of the individual if:

(1) the surviving spouse is disabled or is 55 years of

age or older when the individual dies; 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 individual who is 65 years of age or older and

qualifies for a limitation on county 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

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

imposed by the county 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

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

circumstances described by Subsection (l) the amount of taxes

imposed by a county on the residence homestead of the surviving

spouse is less than the amount of taxes imposed by the county in the

preceding year as limited by Subsection (l), in a subsequent tax

year the surviving spouse's taxes imposed by the county on that

residence homestead are limited to the amount of taxes imposed by

the county in that first tax year after the year in which the

individual dies.

(n) Notwithstanding Subsection (f), a limitation on county

tax increases required 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 (a) 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.

SECTION 4. 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 , or county 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 5. 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;

(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 as provided by

Section 11.261 ; and

(C) the current total value for a county 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

county 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

(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 county

excludes the total value of homesteads that qualified for a tax

limitation as provided by Section 11.262 .

SECTION 6. This Act applies only to ad valorem taxes imposed

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

SECTION 7. This Act takes effect January 1, 2026, but only

if the constitutional amendment proposed by the 89th Legislature,

Regular Session, 2025, establishing a limitation on the total

amount of ad valorem taxes that a county may impose on the residence

homesteads of 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.