By: Tepper H.B. No. 204       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 2025 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, 2025.          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; and                (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.          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 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,   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.