HB 273

By: Wilson
  H.B. No. 273
  A BILL TO BE ENTITLED
  AN ACT
  relating to the authority of a taxing unit other than a school
  district, county, municipality, or junior college district to
  establish a limitation on the amount of ad valorem taxes that the
  taxing unit may impose on the residence homesteads of certain
  low-income individuals who are disabled or elderly and their
  surviving spouses.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Subchapter B, Chapter 11, Tax Code, is amended by
  adding Section 11.262 to read as follows:
         Sec. 11.262.  LIMITATION OF TAX IMPOSED BY CERTAIN TAXING
  UNITS ON HOMESTEADS OF LOW-INCOME INDIVIDUALS WHO ARE DISABLED OR
  ELDERLY. (a) In this section:
               (1)  "Eligible individual" means an individual whose
  household income does not exceed 200 percent of the federal poverty
  level.
               (2)  "Qualifying taxing unit" means a taxing unit other
  than a school district, county, municipality, or junior college
  district.
               (3)  "Residence homestead" has the meaning assigned by
  Section 11.13.
         (b)  This section applies only to a qualifying taxing unit
  that establishes a limitation under Section 1-b(h-1), Article VIII,
  Texas Constitution, on the total amount of taxes that may be
  imposed by the taxing unit on the residence homestead of an
  eligible individual who is disabled or is 65 years of age or older.
         (c)  The tax officials shall appraise the residence
  homestead of an eligible individual who is disabled or is 65 years
  of age or older and calculate taxes on that residence homestead in
  the same manner as other residence homesteads, but if the tax so
  calculated exceeds the limitation provided by this section, the tax
  imposed is  the amount of the tax as limited by this section, except
  as  otherwise provided by this section.
         (d)  A qualifying taxing unit may not increase the total
  annual amount of ad valorem taxes the taxing unit imposes on the
  residence homestead of an eligible individual who is disabled or is
  65 years of age or older above the amount of the taxes the taxing
  unit imposed on the residence homestead in the first tax year in
  which the eligible individual qualified that residence homestead
  for the exemption provided by Section 11.13(c) for an individual
  who is disabled or is 65 years of age or older and was an eligible
  individual. If the eligible 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 taxes imposed by the taxing unit on the
  residence homestead in the next year are less than the amount of
  those taxes imposed in that first year, the taxing unit 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 for which the individual qualified that residence
  homestead for the exemption and was an eligible individual.
         (e)  If an eligible individual who is disabled or is 65 years
  of age or older makes improvements to the individual's residence
  homestead, other than repairs and other than improvements required
  to comply with governmental requirements, the qualifying taxing
  unit 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
  of the qualifying taxing unit to the difference between  the
  appraised value of the homestead with the improvements and the
  appraised value the homestead would have had without the
  improvements. The limitation provided by this section then applies
  to the increased amount of taxes on the residence homestead until
  more improvements, if any, are made.
         (f)  A limitation on tax increases 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 individual who is
  disabled or is 65 years of age or older and who owned the structure
  when the limitation first took effect are using the structure as a
  residence homestead;
               (2)  none of the owners of the structure qualify for the
  exemption provided by Section 11.13(c) for an individual who is
  disabled or is 65 years of age or older; or
               (3)  none of the owners of the structure are eligible
  individuals.
         (g)  If the appraisal roll provides for taxation of appraised
  value for a prior year because a residence homestead exemption for
  an eligible individual who is disabled or is 65 years of age or
  older was erroneously allowed or because an individual was
  erroneously considered to be an eligible individual, the tax
  assessor for the applicable county 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 under the requirements of this section.
         (h)  A limitation on tax increases provided by this section
  does not expire because the owner of an interest in the structure
  conveys the interest to a qualifying trust as defined by Section
  11.13(j) if the owner or the owner's spouse is a trustor of the
  trust and is entitled to occupy the structure.
         (i)  Except as provided by Subsection (e), if an eligible
  individual who receives a limitation on tax increases provided by
  this section, including a surviving spouse who receives a
  limitation under Subsection (k), subsequently qualifies a
  different residence homestead in the same qualifying taxing unit
  for an exemption under Section 11.13, the taxing unit 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 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 required by this section not been in effect, multiplied
  by a fraction the numerator of which is the total amount of taxes
  imposed on the former homestead by the taxing unit 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
  that would have been imposed on the former homestead by the taxing
  unit 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.
         (j)  An eligible individual who receives a limitation on tax
  increases under this section, including a surviving spouse who
  receives a limitation under Subsection (k), and who subsequently
  qualifies a different residence homestead 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 (i) and to calculate the amount of taxes the
  qualifying taxing unit may impose on the subsequently qualified
  homestead.
         (k)  If an eligible individual who qualifies for a limitation
  on tax increases under this section dies, the surviving spouse of
  the individual is entitled to the limitation on taxes imposed by the
  qualifying taxing unit on the residence homestead of the
  individual if:
               (1)  the surviving spouse:
                     (A)  is disabled or is 55 years of age or older
  when the individual dies; and
                     (B)  is an eligible individual; 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.
         (l)  If an eligible individual who is 65 years of age or older
  and qualifies for a limitation on 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 (m), the amount to which the surviving spouse's taxes
  are limited under Subsection (k) is the amount of taxes imposed by
  the qualifying taxing unit on the residence homestead in that year
  determined as if the individual qualifying for the exemption had
  lived for the entire year.
         (m)  If in the first tax year after the year in which an
  eligible individual who is 65 years of age or older dies under the
  circumstances described by Subsection (l), the amount of taxes
  imposed by the qualifying taxing unit on the residence homestead of
  the surviving spouse is less than the amount of taxes imposed by the
  taxing unit in the preceding year as limited by Subsection (l),  in
  a subsequent tax year the surviving spouse's taxes imposed by the
  taxing unit on that residence homestead are limited to the  amount
  of taxes imposed by the taxing unit in that first tax year  after the
  year in which the individual dies.
         (n)  Notwithstanding Subsection (f), a limitation on tax
  increases 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).
         (o)  Notwithstanding Subsections (c) and (e), an improvement
  to property that would otherwise constitute an improvement under
  Subsection (e) is not treated as an improvement under that
  subsection if the improvement is a replacement structure for a
  structure that was rendered uninhabitable or unusable by a casualty
  or by wind or water damage. For purposes of appraising the  property
  in the tax year in which the structure would have  constituted an
  improvement under Subsection (e), the replacement  structure is
  considered to be an improvement under that subsection only if:
               (1)  the square footage of the replacement structure
  exceeds that of the replaced structure as that structure existed
  before the casualty or damage occurred; or
               (2)  the exterior of the replacement structure is of
  higher quality construction and composition than that of the
  replaced structure.
         (p)  An heir property owner who qualifies heir property as
  the owner's residence homestead under this chapter is considered
  the  sole owner of the property for the purposes of this section.
         (q)  The chief appraiser for an appraisal district in which a
  qualifying taxing unit participates may require an individual to
  provide any information that is reasonably necessary for the chief
  appraiser to determine whether the individual is an eligible
  individual for purposes of this section.
         SECTION 2.  Sections 23.19(b) and (g), Tax Code, are amended
  to read as follows:
         (b)  If an appraisal district receives a written request for
  the appraisal of real property and improvements of a cooperative
  housing corporation according to the separate interests of the
  corporation's stockholders, the chief appraiser shall separately
  appraise the interests described by Subsection (d) if the
  conditions required by Subsections (e) and (f) have been met.
  Separate appraisal under this section is for the purposes of
  administration of tax exemptions, determination of applicable
  limitations of taxes under Section 11.26, [or] 11.261, or 11.262,
  and apportionment by a cooperative housing corporation of property
  taxes among its stockholders but is not the basis for determining
  value on which a tax is imposed under this title. A stockholder
  whose interest is separately appraised under this section may
  protest and appeal the appraised value in the manner provided by
  this title for protest and appeal of the appraised value of other
  property.
         (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 taxing unit [school district, 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, or 11.262. 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 3.  Section 26.012(6), Tax Code, as amended by H.B.
  3093, Acts of the 89th Legislature, Regular Session, 2025, is
  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;
                     (B)  the current total value for a county,
  municipality, or junior college district excludes the total value
  of homesteads that qualify for a tax limitation provided by Section
  11.261; [and]
                     (C)  the current total value for an affected
  taxing unit excludes the portion of the aggregate taxable value of
  all of the property located in the taxing unit that is included as
  part of anticipated substantial litigation that consists of
  contested taxable value; and
                     (D)  the current total value for a taxing unit
  other than a school district, county, municipality, or junior
  college  district excludes the total value of homesteads that
  qualify for a tax limitation as provided by Section 11.262.
         SECTION 4.  Sections 26.012(13) and (14), Tax Code, are
  amended to read as follows:
               (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:
                                 (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;
                                 (b)  [and] last year's taxable value
  for a 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
                                 (c)  last year's taxable value for a
  taxing unit other than a school district, county, municipality, or
  junior college district excludes the total value of homesteads that
  qualified for a tax limitation as provided by Section 11.262; 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 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
                     (C)  last year's taxable value for a taxing unit
  other than a school district, county, municipality, or junior
  college district excludes the total value of homesteads that
  qualified for a tax limitation as provided by Section 11.262.
         SECTION 5.  This Act applies only to ad valorem taxes imposed
  for a tax year beginning on or after the effective date of this Act.
         SECTION 6.  This Act takes effect January 1, 2027, but only
  if the constitutional amendment proposed by the 89th Legislature,
  2nd Called Session, 2025, to authorize a limitation on the total
  amount of ad valorem taxes that a political subdivision other than a
  school district, county, municipality, or junior college district
  may impose on the residence homesteads of certain low-income
  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.