Vasut Property Tax Bill’s Elected Appraisal Boards Wait Until 2027

The text as introduced · 8,227 words

89R3607 LHC-D

By: Vasut
H.B. No. 4217

A BILL TO BE ENTITLED

AN ACT

relating to the system for appraising property for ad valorem tax

and school finance purposes.

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

ARTICLE 1. BOARDS OF DIRECTORS OF APPRAISAL DISTRICTS

SECTION 1.01. Chapter 5, Tax Code, is amended by adding

Section 5.044 to read as follows:

Sec. 5.044. TRAINING OF APPRAISAL DISTRICT DIRECTORS. (a)

In this section, "open government training" means the courses of

training required of certain public officials by Sections

551.005(b) and 552.012(d), Government Code.

(b) The comptroller, with the assistance of one or more

commissions as defined by Section 391.002, Local Government Code,

shall develop an online training course for members of the board of

directors of an appraisal district. The training must provide

information relevant to the operation of an appraisal district and

its board of directors, including an overview of the property tax

system, a discussion of the duties and responsibilities of a board

of directors, and a description of the resources available to a

board. The comptroller shall make the training available on the

comptroller's Internet website.

(c) Each member of the board of directors of an appraisal

district must complete both the open government training and the

training described by Subsection (b). The appraisal district shall

conduct the training required by this section at a time before the

first public meeting of the board during each calendar year. A

member of the board who does not complete the training on the date

the training is conducted by the appraisal district must complete

the training during regular business hours at the main office of the

appraisal district not later than the 30th day after the date the

training was conducted.

(d) A member of the board of directors who does not complete

the training in the time and manner prescribed by Subsection (c) is

ineligible to continue to serve on the board. A new board member

shall be appointed in the manner prescribed by Section 6.03(l) to

fill the vacancy. A member appointed to fill a vacancy must complete

the training required by Subsection (c) not later than the 30th day

after the date the member is appointed or the member becomes

ineligible to continue to serve on the board and shall be replaced

as provided by this subsection.

(e) This section does not apply to a nonvoting member of the

board of directors of an appraisal district.

SECTION 1.02. Section 5.12(b), Tax Code, is amended to read

as follows:

(b) At the written request of the governing bodies of a

majority of the taxing units participating in an appraisal district

[ or of a majority of the taxing units entitled to vote on the

appointment of appraisal district directors ], the comptroller

shall audit the performance of the appraisal district. The

governing bodies may request a general audit of the performance of

the appraisal district or may request an audit of only one or more

particular duties, practices, functions, departments, or other

appraisal district matters.

SECTION 1.03. Section 5.13(h), Tax Code, is amended to read

as follows:

(h) At any time after the request for an audit is made, the

comptroller may discontinue the audit in whole or in part if

requested to do so by:

(1) the governing bodies of a majority of the taxing

units participating in the district, if the audit was requested by a

majority of those units; or

(2) the taxpayers who requested the audit, [ the

governing bodies of a majority of the taxing units entitled to vote

on the appointment of appraisal district directors, if the audit

was requested by a majority of those units; or

[ (3) ] if the audit was requested under Section 5.12(c)

[ of this code, by the taxpayers who requested the audit ].

SECTION 1.04. The heading to Section 6.03, Tax Code, is

amended to read as follows:

Sec. 6.03. BOARD OF DIRECTORS [ IN LESS POPULOUS COUNTIES ].

SECTION 1.05. Section 6.03, Tax Code, is amended by

amending Subsections (a), (a-1), and (l) and adding Subsection (m)

to read as follows:

(a) [ This section applies only to an appraisal district

established in a county with a population of less than 75,000.

[ (a-1) ] The appraisal district is governed by a board of

directors. Two directors are elected from each of the four

commissioners precincts in the county in which the appraisal

district is established and one director is elected at large from

the county. The [ Five directors are appointed by the taxing units

that participate in the district as provided by this section. If

the county assessor-collector is not appointed to the board, the ]

county assessor-collector serves as a nonvoting director. The

county assessor-collector is ineligible to serve if the board

enters into a contract under Section 6.05(b) or if the

commissioners court of the county enters into a contract under

Section 6.24(b). The directors other than the county

assessor-collector are elected at an election conducted on the

November uniform election date and serve staggered two-year terms

beginning on January 1 of the year following the year in which the

director was elected.

(a-1) To be eligible to serve on the board of directors, an

individual other than the [ a ] county assessor-collector [ serving as

a nonvoting director ] must :

(1) be a resident of :

(A) the commissioners precinct from which the

office is elected, in the case of a director elected from a

commissioners precinct; or

(B) the county in which the appraisal district is

established, in the case of a director elected at large; [ district ]

and

(2) [ must ] have resided in the appraisal district for

at least two years immediately preceding the date the individual

takes office. [ An individual who is otherwise eligible to serve on

the board is not ineligible because of membership on the governing

body of a taxing unit. An employee of a taxing unit that

participates in the district is not eligible to serve on the board

unless the individual is also a member of the governing body or an

elected official of a taxing unit that participates in the

district. ]

(l) If a vacancy occurs on the board of directors other than

a vacancy in the position held by the [ a ] county assessor-collector

[ serving as a nonvoting director ], the [ each taxing unit that is

entitled to vote by this section may nominate by resolution adopted

by its governing body a candidate to fill the vacancy. The unit

shall submit the name of its nominee to the chief appraiser within

45 days after notification from the board of directors of the

existence of the vacancy, and the chief appraiser shall prepare and

deliver to the board of directors within the next five days a list

of the nominees. The ] board of directors shall appoint [ elect ] by

majority vote of its members a person [ one of the nominees ] to fill

the vacancy. A person appointed to fill a vacancy under this

subsection must meet the qualifications of the vacated position.

(m) If as a result of a change in the boundaries of a

commissioners precinct an individual serving as a director no

longer resides in the precinct from which the office is elected, the

individual is not for that reason disqualified from office during

the remainder of the term of office being served at the time the

boundary change takes effect. If as a result of a change in the

boundaries of a commissioners precinct an individual elected as a

director before the boundary change to a term that begins after the

boundary change no longer resides in the precinct from which

elected, the individual is not for that reason disqualified from

serving the term to which elected.

SECTION 1.06. The heading to Section 6.032, Tax Code, is

amended to read as follows:

Sec. 6.032. BALLOT PROCEDURES FOR [ ELECTED ] DIRECTORS[ ;

FILING FEE OR PETITION ].

SECTION 1.07. Sections 6.032(a) and (b), Tax Code, are

amended to read as follows:

(a) Except as provided by this section, Chapter 144,

Election Code, applies to a candidate for a [ an elective ] position

on an appraisal district board of directors.

(b) An application for a place on the ballot must be filed

with the county judge of the county in which the appraisal district

is established and is not required to be accompanied by a filing fee

[ prescribed by Subsection (c) of this section ] or a petition in lieu

of a [ the ] filing fee [ that satisfies the requirements prescribed

by Section 141.062, Election Code, and Subsection (d) of this

section ].

SECTION 1.08. Section 6.04(c), Tax Code, is amended to read

as follows:

(c) Except as provided by this subsection, members

[ Members ] of the board may not receive compensation for service on

the board . Members of the board [ but ] are entitled to reimbursement

for actual and necessary expenses incurred in the performance of

their duties as provided by the budget adopted by the board. Members

of the board may receive compensation in an amount not to exceed

$100 per month if the compensation is approved by the voters in the

county in which the appraisal district is established at an

election held for the purpose on a uniform election date.

SECTION 1.09. Section 6.051(b), Tax Code, is amended to

read as follows:

(b) The acquisition or conveyance of real property or the

construction or renovation of a building or other improvement by an

appraisal district must be approved by the governing bodies of

three-fourths of the taxing units that participate in the district

[ entitled to vote on the appointment of board members ]. The board

of directors by resolution may propose a property transaction or

other action for which this subsection requires approval of the

taxing units. The chief appraiser shall notify the presiding

officer of each governing body entitled to vote on the approval of

the proposal by delivering a copy of the board's resolution,

together with information showing the costs of other available

alternatives to the proposal. On or before the 30th day after the

date the presiding officer receives notice of the proposal, the

governing body of a taxing unit by resolution may approve or

disapprove the proposal. If a governing body fails to act on or

before that 30th day or fails to file its resolution with the chief

appraiser on or before the 10th day after that 30th day, the

proposal is treated as if it were disapproved by the governing body.

SECTION 1.10. Section 6.052(f), Tax Code, is amended to

read as follows:

(f) The taxpayer liaison officer is responsible for

providing clerical assistance to the appraisal district board of

directors [ applicable appointing authority prescribed by Section

6.41(d) ] in the selection of appraisal review board members and for

publicizing the availability of positions on the appraisal review

board. The officer shall deliver to the appraisal district board of

directors [ applicable appointing authority ] any applications to

serve on the board that are submitted to the officer and shall

perform other duties as requested by the appraisal district board

of directors [ applicable appointing authority ]. The officer may

not influence the process for selecting appraisal review board

members.

SECTION 1.11. Sections 6.06(a), (b), and (i), Tax Code, are

amended to read as follows:

(a) Each year the chief appraiser shall prepare a proposed

budget for the operations of the district for the following tax year

and shall submit copies to each taxing unit participating in the

district and to the district board of directors before June 15. The

chief appraiser [ He ] shall include in the budget a list showing each

proposed position, the proposed salary for the position, all

benefits proposed for the position, each proposed capital

expenditure, and an estimate of the amount of the budget that will

be allocated to each taxing unit. Each taxing unit that

participates in the district [ entitled to vote on the appointment

of board members ] shall maintain a copy of the proposed budget for

public inspection at its principal administrative office.

(b) The board of directors shall hold a public hearing to

consider the budget. The secretary of the board shall deliver to

the presiding officer of the governing body of each taxing unit

participating in the district not later than the 10th day before the

date of the hearing a written notice of the date, time, and place

fixed for the hearing. The board shall complete its hearings, make

any amendments to the proposed budget it desires, and finally

approve a budget before September 15. If governing bodies of a

majority of the taxing units participating in the district

[ entitled to vote on the appointment of board members ] adopt

resolutions disapproving a budget and file them with the secretary

of the board within 30 days after its adoption, the budget does not

take effect, and the board shall adopt a new budget within 30 days

of the disapproval.

(i) The fiscal year of an appraisal district is the calendar

year unless the governing bodies of three-fourths of the taxing

units participating in the district [ entitled to vote on the

appointment of board members ] adopt resolutions proposing a

different fiscal year and file them with the secretary of the board

not more than 12 and not less than eight months before the first day

of the fiscal year proposed by the resolutions. If the fiscal year

of an appraisal district is changed under this subsection, the

chief appraiser shall prepare a proposed budget for the fiscal year

as provided by Subsection (a) [ of this section ] before the 15th day

of the seventh month preceding the first day of the fiscal year

established by the change, and the board of directors shall adopt a

budget for the fiscal year as provided by Subsection (b) [ of this

section ] before the 15th day of the fourth month preceding the first

day of the fiscal year established by the change. Unless the

appraisal district adopts a different method of allocation under

Section 6.061 [ of this code ], the allocation of the budget to each

taxing unit shall be calculated as provided by Subsection (d) of

this section using the amount of property taxes imposed by each

participating taxing unit in the most recent tax year preceding the

fiscal year established by the change for which the necessary

information is available. Each taxing unit shall pay its

allocation as provided by Subsection (e) [ of this section ], except

that the first payment shall be made before the first day of the

fiscal year established by the change and subsequent payments shall

be made quarterly. In the year in which a change in the fiscal year

occurs, the budget that takes effect on January 1 of that year may

be amended as necessary as provided by Subsection (c) [ of this

section ] in order to accomplish the change in fiscal years.

SECTION 1.12. Sections 6.061(b) and (e), Tax Code, are

amended to read as follows:

(b) The taxing units participating in an appraisal district

may adopt a different method of allocating the costs of operating

the district if the governing bodies of three-fourths of the taxing

units that participate in the district [ are entitled to vote on the

appointment of board members ] adopt resolutions providing for the

other method. However, a change under this subsection is not valid

if it requires any taxing unit to pay a greater proportion of the

appraisal district's costs than the unit would pay under Section

6.06 [ of this code ] without the consent of the governing body of

that unit.

(e) A change in allocation of district costs made as

provided by this section remains in effect until changed in a manner

provided by this section or rescinded by resolution of a majority of

the governing bodies of the taxing units that participate in the

district [ that are entitled to vote on appointment of board members

under Section 6.03 of this code ].

SECTION 1.13. Section 6.063(b), Tax Code, is amended to

read as follows:

(b) The report of the audit is a public record. A copy of

the report shall be delivered to the presiding officer of the

governing body of each taxing unit that participates in the

district [ eligible to vote on the appointment of district

directors ], and a reasonable number of copies shall be available

for inspection at the appraisal office.

SECTION 1.14. Section 6.15(c), Tax Code, is amended to read

as follows:

(c) Subsections (a) and (b) do not apply to a routine

communication between the chief appraiser and the county

assessor-collector that relates to the administration of an

appraisal roll, including a communication made in connection with

the certification, correction, or collection of an account,

regardless of whether the county assessor-collector serves on [ was

appointed to ] the board of directors of the appraisal district [ or

serves as a nonvoting director ].

SECTION 1.15. Sections 6.41(d), (d-1), (d-2-1), (d-3),

(d-5), (d-10), (e), (f), (g), (i), and (j), Tax Code, are amended to

read as follows:

(d) Members of the board are appointed by the [ applicable

appointing authority. For an appraisal district to which Section

6.03 applies, the appointing authority is the local administrative

district judge under Subchapter D, Chapter 74, Government Code, in

the county in which the appraisal district is established. For an

appraisal district to which Section 6.0301 applies, the appointing

authority is the ] board of directors of the appraisal district. A

vacancy on the board is filled in the same manner for the unexpired

portion of the term.

(d-1) All applications submitted to the appraisal district

or to the appraisal review board from persons seeking appointment

as a member of the appraisal review board shall be delivered to the

board of directors of the appraisal district [ applicable appointing

authority ]. The appraisal district may provide the board of

directors [ appointing authority ] with information regarding

whether an applicant for appointment to or a member of the board

owes any delinquent ad valorem taxes to a taxing unit participating

in the appraisal district.

(d-2-1) A board of directors [ acting as an appointing

authority ] must make appointments to the appraisal review board by

majority vote[ , with at least two members of the majority being

elected members of the board of directors ].

(d-3) The board of directors of the appraisal district

[ applicable appointing authority ] shall cause the proper officer to

notify appointees to the board of their appointment, and when and

where they are to appear.

(d-5) The appraisal district of the county shall provide to

the board of directors of the appraisal district [ applicable

appointing authority, or to the appraisal review board

commissioners, as the case may be, ] the number of appraisal review

board positions that require appointment and shall provide whatever

reasonable assistance is requested by the board of directors

[ applicable appointing authority or the commissioners ].

(d-10) Upon selection of the individuals who are to serve as

members of the appraisal review board, the board of directors of the

appraisal district [ applicable appointing authority ] shall enter

an appropriate order designating such members and setting each

member's respective term of office, as provided elsewhere in this

section.

(e) Members of the appraisal review board hold office for

terms of two years beginning January 1. The appraisal district

board of directors by resolution shall provide for staggered terms,

so that the terms of as close to one-half of the members as possible

expire each year. In making the initial or subsequent

appointments, the board of directors of the appraisal district

[ applicable appointing authority, or the local administrative

district judge's designee if the appointing authority is the

judge, ] shall designate those members who serve terms of one year as

needed to comply with this subsection.

(f) A member of the appraisal review board may be removed

from the board by the board of directors of the appraisal district

[ applicable appointing authority, or the local administrative

district judge's designee if the appointing authority is the

judge ]. Not later than the 90th day after the date the board of

directors[ , local administrative district judge, or judge's

designee that appointed a member of the appraisal review board ]

learns of a potential ground for removal of the member, the board of

directors[ , local administrative district judge, or judge's

designee, as applicable, ] shall remove the member or find by

official action that the member's removal is not warranted.

Grounds for removal are:

(1) a violation of Section 6.412, 6.413, 41.66(f), or

41.69;

(2) good cause relating to the attendance of members

at called meetings of the board as established by written policy

adopted by a majority of the appraisal district board of directors;

or

(3) evidence of repeated bias or misconduct.

(g) Subsection (a) does not preclude the boards of directors

of two or more adjoining appraisal districts from providing for the

operation of a consolidated appraisal review board by interlocal

contract. Members of a consolidated appraisal review board are

appointed jointly by the boards of directors of the appraisal

districts [ applicable appointing authorities in the counties in

which the appraisal districts ] that are parties to the contract

[ are established ].

(i) A chief appraiser or another employee or agent of the

appraisal district, a member of the appraisal review board for the

appraisal district, [ a member of the board of directors of the

appraisal district if the board is established for a district to

which Section 6.03 applies, ] a property tax consultant, or an agent

of a property owner commits an offense if the person communicates

with the board of directors of the appraisal district [ applicable

appointing authority ] regarding the appointment of appraisal

review board members. This subsection does not apply to:

(1) a communication between a member of the appraisal

review board and the board of directors of the appraisal district

[ applicable appointing authority ] regarding the member's

reappointment to the board;

(2) a communication between the taxpayer liaison

officer for the appraisal district and the board of directors of the

appraisal district [ applicable appointing authority ] in the course

of the performance of the officer's clerical duties so long as the

officer does not offer an opinion or comment regarding the

appointment of appraisal review board members;

(3) a communication between a chief appraiser or

another employee or agent of the appraisal district[ , ] or a member

of the appraisal review board for the appraisal district[ , or a

member of the board of directors of the appraisal district if the

board is established for a district to which Section 6.03 applies ]

and the board of directors of the appraisal district [ applicable

appointing authority ] regarding information relating to or

described by Subsection (d-1), (d-5), or (f) of this section or

Section 411.1296, Government Code;

(4) a communication between a property tax consultant

or a property owner or an agent of the property owner and the

taxpayer liaison officer for the appraisal district regarding

information relating to or described by Subsection (f). The

taxpayer liaison officer for the appraisal district shall report

the contents of the communication relating to or described by

Subsection (f) to the board of directors of the appraisal district

[ applicable appointing authority ]; or

(5) a communication between a property tax consultant

or a property owner or an agent of the property owner and the board

of directors of the appraisal district [ applicable appointing

authority ] regarding information relating to or described by

Subsection (f).

(j) A chief appraiser or another employee or agent of an

appraisal district commits an offense if the person communicates

with a member of the appraisal review board for the appraisal

district[ , ] or a member of the board of directors of the appraisal

district[ , or the local administrative district judge, if the judge

is the appointing authority for the district, ] regarding a ranking,

scoring, or reporting of the percentage by which the appraisal

review board or a panel of the board reduces the appraised value of

property.

SECTION 1.16. Section 6.42(a), Tax Code, is amended to read

as follows:

(a) A majority of the appraisal review board constitutes a

quorum. The board of directors of the appraisal district

[ applicable appointing authority prescribed by Section 6.41(d) in

the county in which the appraisal district is established ] shall

select a chairman and a secretary from among the members of the

appraisal review board. The board of directors of the appraisal

district [ applicable appointing authority ] is encouraged to select

as chairman a member of the appraisal review board, if any, who has

a background in law and property appraisal.

SECTION 1.17. The following provisions of the Tax Code are

repealed:

(1) Sections 6.03(b), (c), (d), (e), (f), (g), (h),

(i), (j), (k), and (k-1);

(2) Section 6.0301;

(3) Section 6.031;

(4) Sections 6.032(c), (d), and (e);

(5) Section 6.033;

(6) Section 6.034;

(7) Section 6.037;

(8) Section 6.10; and

(9) Sections 6.41(d-2), (d-4), (d-6), (d-7), and

(d-8).

SECTION 1.18. The comptroller of public accounts shall make

available the training course required by Section 5.044, Tax Code,

as added by this article, not later than January 1, 2027.

SECTION 1.19. Section 5.044, Tax Code, as added by this

article, applies only to a member of the board of directors of an

appraisal district elected for a term that begins on or after

January 1, 2027.

SECTION 1.20. (a) Appraisal district directors shall be

elected as provided by Section 6.03, Tax Code, as amended by this

article, beginning with the election conducted on the uniform

election date in November 2026. The directors then elected take

office on January 1, 2027.

(b) At the first meeting of the board of directors of an

appraisal district described by Section 6.03, Tax Code, as amended

by this article, that follows the November 2026 election of

directors under that section, the directors shall draw lots to

determine which four directors, including one director elected from

each commissioners precinct, shall serve a term of one year and

which five directors, including one director elected from each

commissioners precinct and the director elected at large, shall

serve a term of two years. Thereafter, all elected directors serve

two-year terms.

(c) The change in the manner of selection of appraisal

district directors made by this article does not affect the

selection of directors who serve on the board before January 1,

2027.

(d) The term of an appraisal district director serving on

December 31, 2026, expires on January 1, 2027.

ARTICLE 2. LIMITATION ON INCREASES IN APPRAISED VALUE OF CERTAIN

REAL PROPERTY

SECTION 2.01. Section 1.12(d), Tax Code, as effective

January 1, 2027, is amended to read as follows:

(d) For purposes of this section, the appraisal ratio of a

parcel of single-family residential real property [ homestead ] to

which Section 23.23 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.

SECTION 2.02. The heading to Section 23.23, Tax Code, is

amended to read as follows:

Sec. 23.23. LIMITATION ON APPRAISED VALUE OF SINGLE-FAMILY

RESIDENTIAL REAL PROPERTY [ RESIDENCE HOMESTEAD ].

SECTION 2.03. Section 23.23, Tax Code, is amended by

amending Subsections (a), (b), (c), and (e) and adding Subsections

(a-1), (a-2), (a-3), (a-4), (a-5), (a-6), (a-7), (a-8), (a-9),

(a-10), (a-11), (c-2), (c-3), and (h) to read as follows:

(a) The appraised value of a parcel of single-family

residential 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 sum of:

(1) 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); and

(2) the value of all new improvements to the property,

as determined under Subsection (a-11) [ 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

single-family residential 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, the comptroller shall determine and

publicize the percentage by which the appraised value of

single-family residential real property may be increased under

Subsection (a). The comptroller shall determine the percentage by

which the appraised value may be increased by calculating the sum

of:

(1) the inflation rate, expressed as a percentage; and

(2) the growth rate of the population of this state for

the preceding year, expressed as a percentage.

(a-9) Each chief appraiser shall use the percentage

determined by the comptroller under Subsection (a-8) to determine

the appraised value under Subsection (a) of single-family

residential real property appraised by that chief appraiser.

(a-10) In this section, "inflation rate" means the positive

amount, if any, computed by determining the percentage change in

the Consumer Price Index for all Urban Consumers (CPI-U), U.S. City

Average, published by the Bureau of Labor Statistics of the United

States Department of Labor for the preceding calendar year as

compared to the calendar year preceding that calendar year.

(a-11) Except as otherwise provided by this subsection, for

purposes of Subsection (a), the value of a new improvement to a

property is the market value of the improvement. The value of a new

improvement to a property is the amount paid by the property owner

for the improvement if:

(1) the property owner provides to the chief appraiser

documentation sufficient to establish the price paid by the

property owner for the improvement; and

(2) the chief appraiser determines that the price paid

for the improvement was bona fide under criteria established by

rules adopted by the comptroller for that purpose.

(b) When appraising single-family residential 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), 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) 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.

(e) In this section, "new improvement" means an improvement

to a parcel of single-family residential real property [ residence

homestead ] made after the most recent appraisal of the property

that increases the market value of the property and the value of

which is not included in the appraised value of the property for the

preceding tax year. The term does not include repairs to or

ordinary maintenance of an existing structure or the grounds or

another feature of the property.

(h) In this section, "single-family residential 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 2.04. Section 23.231(c), Tax Code, is amended to

read as follows:

(c) This section does not apply to:

(1) a parcel of single-family residential real

property to which Section 23.23 applies [ residence homestead that

qualifies for an exemption under Section 11.13 ]; or

(2) property appraised under Subchapter C, D, E, F, G,

or H.

SECTION 2.05. Section 42.26(d), Tax Code, as effective

January 1, 2027, is amended to read as follows:

(d) For purposes of this section, the value of the property

subject to the suit and the value of a comparable property or sample

property that is used for comparison must be the market value

determined by the appraisal district when the property is a

property [ residence homestead ] subject to the limitation on

appraised value imposed by Section 23.23.

SECTION 2.06. Sections 403.302(d) and (i), Government Code,

as effective January 1, 2027, are 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, 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;

(11) the appraised value of property the collection of

delinquent taxes on which is deferred under Section 33.06, Tax

Code;

(12) the portion of the appraised value of property

the collection of delinquent taxes on which is deferred under

Section 33.065, Tax Code;

(13) the amount by which the market value of a parcel

of single-family residential real property [ residence homestead ]

to which Section 23.23, Tax Code, applies exceeds the appraised

value of that property as calculated under that section; and

(14) the total dollar amount of any exemptions granted

under Section 11.35, Tax Code.

(i) If the comptroller determines in the study that the

market value of property in a school district as determined by the

appraisal district that appraises property for the school district,

less the total of the amounts and values listed in Subsection (d) as

determined by that appraisal district, is valid, the comptroller,

in determining the taxable value of property in the school district

under Subsection (d), shall for purposes of Subsection (d)(13)

subtract from the market value as determined by the appraisal

district of single-family residential real property [ residence

homesteads ] to which Section 23.23, Tax Code, applies the amount by

which that amount exceeds the appraised value of that property

[ those properties ] as calculated by the appraisal district under

Section 23.23, Tax Code. If the comptroller determines in the study

that the market value of property in a school district as determined

by the appraisal district that appraises property for the school

district, less the total of the amounts and values listed in

Subsection (d) as determined by that appraisal district, is not

valid, the comptroller, in determining the taxable value of

property in the school district under Subsection (d), shall for

purposes of Subsection (d)(13) subtract from the market value as

estimated by the comptroller of single-family residential real

property [ residence homesteads ] to which Section 23.23, Tax Code,

applies the amount by which that amount exceeds the appraised value

of that property [ those properties ] as calculated by the appraisal

district under Section 23.23, Tax Code.

SECTION 2.07. Section 23.23(c-1), Tax Code, is repealed.

SECTION 2.08. As soon as practicable after the effective

date of this article, the comptroller of public accounts shall

adopt the rules required by Section 23.23, Tax Code, as amended by

this article.

SECTION 2.09. This article applies only to ad valorem taxes

imposed for a tax year beginning on or after the effective date of

this article.

ARTICLE 3. APPRAISAL REVIEW BOARD MEMBERS

SECTION 3.01. Section 6.41(c), Tax Code, is amended to read

as follows:

(c) To be eligible to serve on the board, an individual

must :

(1) be a resident of the district ;

(2) [ and must ] have resided in the district for at

least two years ;

(3) own real property located in the district; and

(4) have at least five years of experience in finance,

real estate, or business .

SECTION 3.02. Section 6.412(d), Tax Code, is amended to

read as follows:

(d) A person is ineligible to serve on the appraisal review

board of an appraisal district established for a county with a

population of 120,000 or more if the person:

(1) is a former member of the board of directors,

former officer, or former employee of the appraisal district;

(2) served as a member of the governing body or officer

of a taxing unit for which the appraisal district appraises

property, until the fourth anniversary of the date the person

ceased to be a member or officer; or

(3) appeared before the appraisal review board for

compensation during the two-year period preceding the date the

person is appointed[ ; or

[ (4) served for all or part of three previous terms as

a board member or auxiliary board member on the appraisal review

board ].

SECTION 3.03. The changes made to Section 6.41, Tax Code, by

this article apply only to the appointment of appraisal review

board members to terms beginning on or after January 1, 2026. This

article does not affect the term of an appraisal review board member

serving on December 31, 2025, if the member was appointed before

January 1, 2026, to a term that began before December 31, 2025, and

expires December 31, 2026.

ARTICLE 4. PROPERTY VALUE STUDY MARGIN OF ERROR

SECTION 4.01. Section 403.302(c), Government Code, is

amended to read as follows:

(c) If after conducting the study the comptroller

determines that the local value for a school district is valid, the

local value is presumed to represent taxable value for the school

district. In the absence of that presumption, taxable value for a

school district is the state value for the school district

determined by the comptroller under Subsections (a) and (b) unless

the local value exceeds the state value, in which case the taxable

value for the school district is the district's local value. In

determining whether the local value for a school district is valid,

the comptroller shall use a margin of error that does not exceed 10

[ five ] percent unless the comptroller determines that the size of

the sample of properties necessary to make the determination makes

the use of such a margin of error not feasible, in which case the

comptroller may use a larger margin of error.

SECTION 4.02. The change in law made by this article applies

only to the study conducted under Section 403.302, Government Code,

for a tax year that begins on or after January 1, 2026. The study

for a tax year that begins before that date is covered by the law in

effect immediately before the effective date of this article, and

the prior law is continued in effect for that purpose.

ARTICLE 5. EFFECTIVE DATES

SECTION 5.01. Except as otherwise provided by this article,

this Act takes effect January 1, 2026.

SECTION 5.02. (a) Except as otherwise provided by this

section, Article 1 of this Act takes effect January 1, 2027.

(b) This section and Sections 1.06, 1.07, and 1.20 of this

Act take effect January 1, 2026.

SECTION 5.03. Article 2 of this Act takes effect January 1,

2026, but only if the constitutional amendment proposed by the 89th

Legislature, Regular Session, 2025, authorizing the legislature to

provide that the appraised value of a parcel of single-family

residential real property for ad valorem tax purposes for the first

tax year in which the owner owns the property on January 1 is the

market value of the property and that, if the owner purchased the

property, the purchase price of the property is considered to be the

market value of the property for that tax year and to limit

increases in the appraised value of the property for subsequent tax

years based on the inflation and population growth rates is

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

voters, Article 2 of this Act has no effect.