special districts can freeze taxes for elderly and disabled homeowners

The text as introduced · 2,547 words

89R1568 CJC-D

By: Bucy
H.B. No. 670

A BILL TO BE ENTITLED

AN ACT

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

district to establish a limitation on the amount of ad valorem taxes

that the taxing unit 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. 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 taxing unit that:

(1) is not a school [ a county, municipality, or junior

college ] district ; and

(2) [ that ] has established a limitation on the total

amount of taxes that may be imposed by the taxing unit [ county,

municipality, or junior college district ] on the residence

homestead of an [ a disabled ] individual who is disabled 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

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 by a taxing unit is the amount of the tax as

limited by this section, except as otherwise provided by this

section. The taxing unit [ 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 [ a disabled ]

individual who is disabled 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 taxing unit [ 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 [ a

disabled ] individual who is disabled 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 taxing unit [ 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 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. 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 by a taxing unit 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 [ a disabled ]

individual who is disabled 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 [ a disabled ]

individual who is disabled 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

[ disabled ] individuals who are disabled or are [ 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.

(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 provided by this section

subsequently qualifies a different residence homestead in the same

taxing unit [ county, municipality, or junior college district ] for

an exemption under Section 11.13, the taxing unit [ 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 provided by this

section not been in effect, multiplied by a fraction the numerator

of which is the total amount of taxes the taxing unit [ 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 taxing unit [ 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 by a taxing

unit under this section and who subsequently qualifies a different

residence homestead in the same taxing unit [ 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 taxing unit

[ 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 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 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 [ 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 [ 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 [ 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 that begins 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, to authorize a political subdivision other

than a school district to establish a limitation on the amount of ad

valorem taxes that the political subdivision 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.