bill allowing flat-dollar homestead exemptions

The text as introduced · 2,246 words

89R4377 CS-D

By: Eckhardt, Gutierrez
S.B. No. 634

A BILL TO BE ENTITLED

AN ACT

relating to the authority of the governing body of a taxing unit to

adopt an exemption from ad valorem taxation of a portion, expressed

as a dollar amount, of the appraised value of an individual's

residence homestead.

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

SECTION 1. Section 11.13, Tax Code, is amended by amending

Subsection (i) and adding Subsection (n-2) to read as follows:

(i) The assessor and collector for a taxing unit may

disregard the exemptions authorized by Subsection (b), (c), (d),

[ or ] (n) , or (n-2) [ of this section ] and assess and collect a tax

pledged for payment of debt without deducting the amount of the

exemption if:

(1) prior to adoption of the exemption, the unit

pledged the taxes for the payment of a debt; and

(2) granting the exemption would impair the obligation

of the contract creating the debt.

(n-2) The governing body of a taxing unit, in the manner

provided by law for official action by the body, may adopt an

exemption from taxation by the taxing unit of a portion, expressed

as a dollar amount, of the appraised value of an individual's

residence homestead. The exemption must be adopted by the

governing body before July 1 of the tax year in which the exemption

applies. If the governing body adopts an exemption under this

subsection, the amount of the exemption in a tax year may not be

less than $5,000. An individual is entitled to an exemption adopted

under this subsection in addition to any other exemptions provided

by this section.

SECTION 2. Section 45.006(f), Education Code, is amended to

read as follows:

(f) The governing body of a school district that adopts a

tax rate that exceeds $1.50 per $100 valuation of taxable property

may set the amount of the exemption from taxation authorized by

Section 11.13(n) or (n-2) , Tax Code, at any time before the date the

governing body adopts the district's tax rate for the tax year in

which the election approving the additional taxes is held.

SECTION 3. Section 48.259(a), Education Code, is amended to

read as follows:

(a) In any school year, the commissioner may not provide

funding under this chapter or Chapter 46 based on a school

district's taxable value of property computed in accordance with

Section 403.302(d)(2), Government Code, unless:

(1) funds are specifically appropriated for purposes

of this section; or

(2) the commissioner determines that the total amount

of state funds appropriated for purposes of the Foundation School

Program for the school year exceeds the amount of state funds

distributed to school districts in accordance with Section 48.266

based on the taxable values of property in school districts

computed in accordance with Section 403.302(d), Government Code,

without any deduction for residence homestead exemptions granted

under Section 11.13(n) or (n-2) , Tax Code.

SECTION 4. Section 403.302(d), Government Code, effective

until January 1, 2027, is 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) or

(n-2) , 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 property

to which Section 23.23 or 23.231, Tax Code, applies exceeds the

appraised value of that property as calculated under Section 23.23

or 23.231, Tax Code, as applicable; and

(14) the total dollar amount of any exemptions granted

under Section 11.35, Tax Code.

SECTION 5. Section 403.302(d), Government Code, as

effective January 1, 2027, is 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) or

(n-2) , 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

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.

SECTION 6. Section 25.23(a), Tax Code, is amended to read as

follows:

(a) After submission of appraisal records, the chief

appraiser shall prepare supplemental appraisal records listing:

(1) each taxable property the chief appraiser

discovers that is not included in the records already submitted,

including property that was omitted from an appraisal roll in a

prior tax year;

(2) property on which the appraisal review board has

not determined a protest at the time of its approval of the

appraisal records; and

(3) property that qualifies for an exemption under

Section 11.13(n) or (n-2) that was adopted by the governing body of

a taxing unit after the date the appraisal records were submitted.

SECTION 7. 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 8. This Act takes effect January 1, 2026, but only

if the constitutional amendment proposed by the 89th Legislature,

Regular Session, 2025, authorizing the governing body of a

political subdivision to adopt an exemption from ad valorem

taxation of a portion, expressed as a dollar amount, of the market

value of an individual's residence homestead is approved by the

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

has no effect.