bill freezing local property taxes for elderly and disabled homeowners

The text as introduced · 2,869 words

89R1118 CJC-D

By: Shaheen
H.B. No. 1829

A BILL TO BE ENTITLED

AN ACT

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

ad valorem taxes that certain taxing units 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 TAX IMPOSED BY TAXING UNIT OTHER

THAN SCHOOL DISTRICT [ COUNTY, MUNICIPAL, OR JUNIOR COLLEGE DISTRICT

TAX ] ON HOMESTEADS OF INDIVIDUALS WHO ARE DISABLED OR [ AND ]

ELDERLY.

SECTION 2. Section 11.261, Tax Code, is amended by amending

Subsections (a), (b), (c), (d), (e), (f), (g), (h), (i), (j), (k),

and (l) and adding Subsections (b-1) and (b-2) to read as follows:

(a) This section applies only to a taxing unit other than a

school district [ 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 a disabled individual or 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

required [ provided ] by this section, the tax imposed by a taxing

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

otherwise provided by this section. A taxing unit [ The county,

municipality, or junior college district ] may not increase the

total annual amount of ad valorem taxes the taxing unit [ 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 taxing unit [ 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 by the taxing

unit on the residence homestead in the next year are less than the

amount of taxes imposed in that first year, the taxing unit [ 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.

(b-1) 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, municipal, or junior college district taxes

under this section for that tax year, the amount of the limitation

on county, municipal, or junior college district taxes, as

applicable, required by this section is the amount of the tax

imposed by the applicable taxing unit 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.

(b-2) Except as provided by Subsection (b-1), for the

purpose of calculating a limitation on tax increases by a taxing

unit 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.

(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 taxing unit

[ 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 required

[ 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 by a taxing unit required [ 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 taxing unit [ 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

because of the provisions of this section.

(f) A limitation on tax increases by a taxing unit required

[ 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.

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

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

district ] tax increases by a taxing unit required [ 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, a taxing unit [ 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 taxing unit [ 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 required [ 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 by a taxing unit

of the same type 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 that [ the

county, municipality, or junior college district ] would have been

imposed by the taxing unit of the same type 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

[ provided ] by this section not been in effect. A limitation under

this subsection does not apply to a taxing unit if the former

homestead was not subject to taxation by a taxing unit of the same

type in the last year in which the individual received the exemption

for the former homestead.

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

municipal, or junior college district ] tax increases by a taxing

unit 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 a taxing unit of the same type [ the

county, municipality, or junior college district ] may impose on the

subsequently qualified homestead.

(i) If an individual who receives [ qualifies for ] a

limitation on [ county, municipal, or junior college district ] tax

increases by a taxing unit under this section dies, the surviving

spouse of the individual is entitled to the limitation on taxes

imposed by the taxing unit [ 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 taxing unit to which the

limitation applies [ 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 taxing unit [ county, municipality, or junior college

district ] on the residence homestead of the surviving spouse is

less than the amount of taxes imposed by the taxing unit [ 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 taxing unit [ county, municipality, or

junior college district ] on that residence homestead are limited to

the amount of taxes imposed by the taxing unit [ 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 by a

taxing unit required [ 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. Section 23.19(g), Tax Code, is amended to read as

follows:

(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 or other taxing unit [ , 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. 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 4. 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 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 11.261.

(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 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 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 11.261; 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 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 11.261.

SECTION 5. This Act applies only to ad valorem taxes imposed

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

SECTION 6. 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 certain political subdivisions 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.