HB 84

By: Tepper
  H.B. No. 84
  A BILL TO BE ENTITLED
  AN ACT
  relating to the limitations on increases in the appraised value of
  certain property for ad valorem tax purposes.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 23.23(a), Tax Code, is amended to read as
  follows:
         (a)  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)  2.5 [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.
         SECTION 2.  Sections 23.231(a), (d), and (g), Tax Code, are
  amended to read as follows:
         (a)  In this section:
               (1)   ["Consumer price index" means the average over a
  state fiscal year of the Consumer Price Index for All Urban
  Consumers (CPI-U), U.S. City Average, published monthly by the
  United States Bureau of Labor Statistics, or its successor in
  function.
               [(2)]  "Disaster recovery program" means a disaster
  recovery program funded with community development block grant
  disaster recovery money authorized by federal law.
               (2) [(3)]  "New improvement" means an improvement to
  real property 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.
         (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)  eight [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.
         (g)  For purposes of Subsection (f):
               (1) [,] a person who, before the 2023 tax year, acquired
  real property to which this section applied as this section existed
  on January 1, 2024, [applies before the 2023 tax year] is considered
  to have acquired the property on January 1, 2023; and
               (2)  a person who, before the 2026 tax year, acquired
  real property, other than property described by Subdivision (1),
  to which this section applies is considered to have acquired the
  property on January 1, 2026.
         SECTION 3.  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 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 eight [20] percent each
  year, with certain exceptions." [The circuit breaker limitation
  provided under Section 23.231, Tax Code, expires December 31, 2026.
  Unless this expiration date is extended by the Texas Legislature,
  beginning in the 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, 2027.]
         SECTION 4.  The following provisions are repealed:
               (1)  Sections 23.231(b), (j), and (k), Tax Code;
               (2)  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, as effective January 1, 2027;
               (3)  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, as effective January 1, 2027;
               (4)  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, as effective January 1, 2027;
               (5)  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, as effective January 1, 2027;
               (6)  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, as effective January 1, 2027;
  and
               (7)  Section 3, Chapter 467 (H.B. 4809), Acts of the
  89th Legislature, Regular Session, 2025, which amended Section
  41.41(a), Tax Code, as effective January 1, 2027.
         SECTION 5.  This Act applies only to the appraisal of
  property for ad valorem tax purposes for a tax year that begins on
  or after January 1, 2027.
         SECTION 6.  (a)  Except as otherwise provided by Subsections
  (b) and (c) of this section, this Act takes effect January 1, 2027.
         (b)  Section 4 of this Act takes effect on the date on which
  the constitutional amendment described by Subsection (c) of this
  section takes effect.
         (c)  This Act takes effect only if the constitutional
  amendment proposed by the 89th Legislature, 1st Called Session,
  2025, to authorize the legislature to set lower limits on the
  maximum appraised value of residence homesteads and of real
  property other than a residence homestead for ad valorem tax
  purposes and to make permanent the limit on the maximum appraised
  value of real property other than a residence homestead is approved
  by the voters.  If that amendment is not approved by the voters,
  this Act has no effect.