Kolkhorst Bill Cuts The Non-Homestead Appraisal Cap To 10 Percent

The text as introduced · 729 words

89R2999 DRS-D

By: Kolkhorst
S.B. No. 322

A BILL TO BE ENTITLED

AN ACT

relating to the limitation on increases in the appraised value of

certain real property for ad valorem tax purposes.

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

SECTION 1. Sections 23.231(c), (d), and (k), Tax Code, are

amended to read as follows:

(c) This section does not apply to:

(1) a residence homestead that qualifies for an

exemption under Section 11.13; [ or ]

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

or H ; or

(3) a mineral interest .

(d) 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 real

property to which this section applies 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 [ 20 ] 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.

(k) This section expires December 31, 2031 [ 2026 ].

SECTION 2. Section 25.19(o), Tax Code, is amended to read as

follows:

(o) A notice required under Subsection (a) or (g) to be

delivered to the owner of real property other than a single-family

residence that qualifies for an exemption under Section 11.13 must

include the following statement: "Under Section 23.231, Tax Code,

for the [ 2024, 2025, and ] 2026 , 2027, 2028, 2029, 2030, and 2031 tax

years, the appraised value of real property other than a residence

homestead for ad valorem tax purposes may not be increased by more

than 10 [ 20 ] percent each year, with certain exceptions. The

circuit breaker limitation provided under Section 23.231, Tax Code,

expires December 31, 2031 [ 2026 ]. Unless this expiration date is

extended by the Texas Legislature, beginning in the 2032 [ 2027 ] tax

year, the circuit breaker limitation provided under Section 23.231,

Tax Code, will no longer be in effect and may result in an increase

in ad valorem taxes imposed on real property previously subject to

the limitation." This subsection expires December 31, 2032 [ 2027 ].

SECTION 3. Notwithstanding Chapter 1 (S.B. 2), Acts of the

88th Legislature, 2nd Called Session, 2023, the following

provisions are effective January 1, 2032:

(1) Section 4.02, Chapter 1 (S.B. 2), Acts of the 88th

Legislature, 2nd Called Session, 2023, which amended Section

1.12(d), Tax Code;

(2) Section 4.05, Chapter 1 (S.B. 2), Acts of the 88th

Legislature, 2nd Called Session, 2023, which amended Sections

25.19(b) and (g), Tax Code;

(3) Section 4.08, Chapter 1 (S.B. 2), Acts of the 88th

Legislature, 2nd Called Session, 2023, which amended Section

41.41(a), Tax Code;

(4) Section 4.10, Chapter 1 (S.B. 2), Acts of the 88th

Legislature, 2nd Called Session, 2023, which amended Section

42.26(d), Tax Code; and

(5) Section 4.12, Chapter 1 (S.B. 2), Acts of the 88th

Legislature, 2nd Called Session, 2023, which amended Sections

403.302(d) and (i), Government Code.

SECTION 4. Sections 23.231(c) and (d), Tax Code, as amended

by this Act, apply only to the appraisal of real property for ad

valorem tax purposes for a tax year that begins on or after the

effective date of this Act.

SECTION 5. (a) Except as otherwise provided by this

section, this Act takes effect January 1, 2026.

(b) Sections 23.231(d) and (k) and 25.19(o), Tax Code, as

amended by this Act, and Section 3 of this Act take effect January

1, 2026, but only if the constitutional amendment proposed by the

89th Legislature, Regular Session, 2025, to authorize the

legislature to set a lower limit on the maximum appraised value of

real property other than a residence homestead for ad valorem tax

purposes and to postpone the expiration of the limit is approved by

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

Sections 23.231(d) and (k) and 25.19(o), Tax Code, as amended by

this Act, and Section 3 of this Act have no effect.