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.