85R3145 SMH-D     By: Phelan H.B. No. 2081       A BILL TO BE ENTITLED   AN ACT   relating to a local option exemption from ad valorem taxation by a   school district of the total appraised value of the residence   homesteads of certain elderly or disabled persons.          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 Subsections (s) and (t) 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), (s), or (t) [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.          (s)  In addition to any other exemptions provided by this   section, an individual who is disabled or is 70 years of age or   older is entitled to an exemption from taxation by a school district   of the total appraised value of the individual's residence   homestead if the exemption is adopted by the governing body of the   school district before July 1 in the manner provided by law for   official action by the body.          (t)  The surviving spouse of an individual who qualified for   an exemption under Subsection (s) is entitled to an exemption from   taxation by the same school district of the total appraised value of   the same property to which the deceased spouse's exemption applied   if:                (1)  the deceased spouse died in a year in which the   deceased spouse qualified for the exemption;                (2)  the surviving spouse was 55 years of age or older   when the deceased spouse died; and                (3)  the property was the residence homestead of the   surviving spouse when the deceased spouse died and remains the   residence homestead of the surviving spouse.          SECTION 2.  Section 11.42(c), Tax Code, is amended to read as   follows:          (c)  An exemption authorized by Section 11.13(c), [or] (d),   or (s), 11.132, or 11.133 is effective as of January 1 of the tax   year in which the person qualifies for the exemption and applies to   the entire tax year.          SECTION 3.  Sections 11.43(k), (l), (m), (o), and (q), Tax   Code, are amended to read as follows:          (k)  A person who qualifies for an exemption authorized by   Section 11.13(c), [or] (d), or (s) or 11.132 must apply for the   exemption no later than the first anniversary of the date the person   qualified for the exemption.          (l)  The form for an application under Section 11.13 must   include a space for the applicant to state the applicant's date of   birth.  Failure to provide the date of birth does not affect the   applicant's eligibility for an exemption under that section, other   than an exemption under Section 11.13(c) or (d) for an individual 65   years of age or older or an exemption under Section 11.13(s) for an   individual 70 years of age or older.          (m)  Notwithstanding Subsections (a) and (k), a person who   receives an exemption under Section 11.13, other than an exemption   under Section 11.13(c) or (d) for an individual 65 years of age or   older or an exemption under Section 11.13(s) for an individual 70   years of age or older, in a tax year is entitled to receive an   exemption under Section 11.13(c) or (d) for an individual 65 years   of age or older or an exemption under Section 11.13(s) for an   individual 70 years of age or older in the next tax year on the same   property without applying for the exemption if the person becomes   65 or 70 years of age, as applicable, in that next year as shown by:                (1)  information in the records of the appraisal   district that was provided to the appraisal district by the   individual in an application for an exemption under Section 11.13   on the property or in correspondence relating to the property; or                (2)  the information provided by the Texas Department   of Public Safety to the appraisal district under Section 521.049,   Transportation Code.          (o)  The application form for an exemption authorized by   Section 11.13 must require an applicant for an exemption under   Subsection (c), [or] (d), or (s) of that section who is not   specifically identified on a deed or other appropriate instrument   recorded in the applicable real property records as an owner of the   residence homestead to provide an affidavit or other compelling   evidence establishing the applicant's ownership of an interest in   the homestead.          (q)  A chief appraiser may not cancel an exemption under   Section 11.13 that is received by an individual who is 65 years of   age or older without first providing written notice of the   cancellation to the individual receiving the exemption.  The notice   must include a form on which the individual may indicate whether the   individual is qualified to receive the exemption and a   self-addressed postage prepaid envelope with instructions for   returning the form to the chief appraiser.  The chief appraiser   shall consider the individual's response on the form in determining   whether to continue to allow the exemption.  If the chief appraiser   does not receive a response on or before the 60th day after the date   the notice is mailed, the chief appraiser may cancel the exemption   on or after the 30th day after the expiration of the 60-day period,   but only after making a reasonable effort to locate the individual   and determine whether the individual is qualified to receive the   exemption.  For purposes of this subsection, sending an additional   notice of cancellation that includes, in bold font equal to or   greater in size than the surrounding text, the date on which the   chief appraiser is authorized to cancel the exemption to the   individual receiving the exemption immediately after the   expiration of the 60-day period by first class mail in an envelope   on which is written, in all capital letters, "RETURN SERVICE   REQUESTED," or another appropriate statement directing the United   States Postal Service to return the notice if it is not deliverable   as addressed, or providing the additional notice in another manner   that the chief appraiser determines is appropriate, constitutes a   reasonable effort on the part of the chief appraiser.  This   subsection does not apply to an exemption under Section 11.13(c) or   (d) for an individual 65 years of age or older or an exemption under   Section 11.13(s) for an individual 70 years of age or older that is   canceled because the chief appraiser determines that the individual   receiving the exemption no longer owns the property subject to the   exemption.          SECTION 4.  Section 26.10(b), Tax Code, is amended to read as   follows:          (b)  If the appraisal roll shows that a residence homestead   exemption under Section 11.13(c), [or] (d), or (s), 11.132, or   11.133 applicable to a property on January 1 of a year terminated   during the year and if the owner of the property qualifies a   different property for one of those residence homestead exemptions   during the same year, the tax due against the former residence   homestead is calculated by:                (1)  subtracting:                      (A)  the amount of the taxes that otherwise would   be imposed on the former residence homestead for the entire year had   the owner qualified for the residence homestead exemption for the   entire year; from                      (B)  the amount of the taxes that otherwise would   be imposed on the former residence homestead for the entire year had   the owner not qualified for the residence homestead exemption   during the year;                (2)  multiplying the remainder determined under   Subdivision (1) by a fraction, the denominator of which is 365 and   the numerator of which is the number of days that elapsed after the   date the exemption terminated; and                (3)  adding the product determined under Subdivision   (2) and the amount described by Subdivision (1)(A).          SECTION 5.  Section 26.112, Tax Code, is amended to read as   follows:          Sec. 26.112.  CALCULATION OF TAXES ON RESIDENCE HOMESTEAD OF   CERTAIN PERSONS. (a)  Except as provided by Section 26.10(b), if at   any time during a tax year property is owned by an individual who   qualifies for an exemption under Section 11.13(c), [or] (d), or (s)   or 11.133, the amount of the tax due on the property for the tax year   is calculated as if the individual qualified for the exemption on   January 1 and continued to qualify for the exemption for the   remainder of the tax year.          (b)  If an individual qualifies for an exemption under   Section 11.13(c), [or] (d), or (s) or 11.133 with respect to the   property after the amount of the tax due on the property is   calculated and the effect of the qualification is to reduce the   amount of the tax due on the property, the assessor for each taxing   unit shall recalculate the amount of the tax due on the property and   correct the tax roll.  If the tax bill has been mailed and the tax on   the property has not been paid, the assessor shall mail a corrected   tax bill to the person in whose name the property is listed on the   tax roll or to the person's authorized agent.  If the tax on the   property has been paid, the tax collector for the taxing unit shall   refund to the person who paid the tax the amount by which the   payment exceeded the tax due.          SECTION 6.  Section 33.01(d), Tax Code, is amended to read as   follows:          (d)  In lieu of the penalty imposed under Subsection (a), a   delinquent tax incurs a penalty of 50 percent of the amount of the   tax without regard to the number of months the tax has been   delinquent if the tax is delinquent because the property owner   received an exemption under:                (1)  Section 11.13 and the chief appraiser subsequently   cancels the exemption because the residence was not the principal   residence of the property owner and the property owner received an   exemption for two or more additional residence homesteads for the   tax year in which the tax was imposed;                (2)  Section 11.13(c) or (d) for a person who is 65   years of age or older and the chief appraiser subsequently cancels   the exemption because the property owner was younger than 65 years   of age; [or]                (3)  Section 11.13(s) for a person who is 70 years of   age or older and the chief appraiser subsequently cancels the   exemption because the property owner was younger than 70 years of   age; or                (4)  Section 11.13(q) or (t) and the chief appraiser   subsequently cancels the exemption because the property owner was   younger than 55 years of age when the property owner's spouse died.          SECTION 7.  Section 44.004(c), Education Code, is amended to   read as follows:          (c)  The notice of public meeting to discuss and adopt the   budget and the proposed tax rate may not be smaller than one-quarter   page of a standard-size or a tabloid-size newspaper, and the   headline on the notice must be in 18-point or larger type.  Subject   to Subsection (d), the notice must:                (1)  contain a statement in the following form:   "NOTICE OF PUBLIC MEETING TO DISCUSS BUDGET AND PROPOSED TAX RATE          "The (name of school district) will hold a public meeting at   (time, date, year) in (name of room, building, physical location,   city, state).  The purpose of this meeting is to discuss the school   district's budget that will determine the tax rate that will be   adopted.  Public participation in the discussion is invited."  The   statement of the purpose of the meeting must be in bold type.  In   reduced type, the notice must state:  "The tax rate that is   ultimately adopted at this meeting or at a separate meeting at a   later date may not exceed the proposed rate shown below unless the   district publishes a revised notice containing the same information   and comparisons set out below and holds another public meeting to   discuss the revised notice.";                (2)  contain a section entitled "Comparison of Proposed   Budget with Last Year's Budget," which must show the difference,   expressed as a percent increase or decrease, as applicable, in the   amounts budgeted for the preceding fiscal year and the amount   budgeted for the fiscal year that begins in the current tax year for   each of the following:                      (A)  maintenance and operations;                      (B)  debt service; and                      (C)  total expenditures;                (3)  contain a section entitled "Total Appraised Value   and Total Taxable Value," which must show the total appraised value   and the total taxable value of all property and the total appraised   value and the total taxable value of new property taxable by the   district in the preceding tax year and the current tax year as   calculated under Section 26.04, Tax Code;                (4)  contain a statement of the total amount of the   outstanding and unpaid bonded indebtedness of the school district;                (5)  contain a section entitled "Comparison of Proposed   Rates with Last Year's Rates," which must:                      (A)  show in rows the tax rates described by   Subparagraphs (i)-(iii), expressed as amounts per $100 valuation of   property, for columns entitled "Maintenance & Operations,"   "Interest & Sinking Fund," and "Total," which is the sum of   "Maintenance & Operations" and "Interest & Sinking Fund":                            (i)  the school district's "Last Year's   Rate";                            (ii)  the "Rate to Maintain Same Level of   Maintenance & Operations Revenue & Pay Debt Service," which:                                  (a)  in the case of "Maintenance &   Operations," is the tax rate that, when applied to the current   taxable value for the district, as certified by the chief appraiser   under Section 26.01, Tax Code, and as adjusted to reflect changes   made by the chief appraiser as of the time the notice is prepared,   would impose taxes in an amount that, when added to state funds to   be distributed to the district under Chapter 42, would provide the   same amount of maintenance and operations taxes and state funds   distributed under Chapter 42 per student in average daily   attendance for the applicable school year that was available to the   district in the preceding school year; and                                  (b)  in the case of "Interest & Sinking   Fund," is the tax rate that, when applied to the current taxable   value for the district, as certified by the chief appraiser under   Section 26.01, Tax Code, and as adjusted to reflect changes made by   the chief appraiser as of the time the notice is prepared, and when   multiplied by the district's anticipated collection rate, would   impose taxes in an amount that, when added to state funds to be   distributed to the district under Chapter 46 and any excess taxes   collected to service the district's debt during the preceding tax   year but not used for that purpose during that year, would provide   the amount required to service the district's debt; and                            (iii)  the "Proposed Rate";                      (B)  contain fourth and fifth columns aligned with   the columns required by Paragraph (A) that show, for each row   required by Paragraph (A):                            (i)  the "Local Revenue per Student," which   is computed by multiplying the district's total taxable value of   property, as certified by the chief appraiser for the applicable   school year under Section 26.01, Tax Code, and as adjusted to   reflect changes made by the chief appraiser as of the time the   notice is prepared, by the total tax rate, and dividing the product   by the number of students in average daily attendance in the   district for the applicable school year; and                            (ii)  the "State Revenue per Student," which   is computed by determining the amount of state aid received or to be   received by the district under Chapters 42, 43, and 46 and dividing   that amount by the number of students in average daily attendance in   the district for the applicable school year; and                      (C)  contain an asterisk after each calculation   for "Interest & Sinking Fund" and a footnote to the section that, in   reduced type, states "The Interest & Sinking Fund tax revenue is   used to pay for bonded indebtedness on construction, equipment, or   both.  The bonds, and the tax rate necessary to pay those bonds,   were approved by the voters of this district.";                (6)  contain a section entitled "Comparison of Proposed   Levy with Last Year's Levy on Average Residence," which must:                      (A)  show in rows the information described by   Subparagraphs (i)-(iv), rounded to the nearest dollar, for columns   entitled "Last Year" and "This Year":                            (i)  "Average Market Value of Residences,"   determined using the same group of residences for each year;                            (ii)  "Average Taxable Value of Residences,"   determined after taking into account the limitation on the   appraised value of residences under Section 23.23, Tax Code, and   after subtracting all homestead exemptions applicable in each year,   other than exemptions available only to disabled persons, [or]   persons 65 years of age or older, or, if applicable, persons 70   years of age or older or their surviving spouses, and using the same   group of residences for each year;                            (iii)  "Last Year's Rate Versus Proposed   Rate per $100 Value"; and                            (iv)  "Taxes Due on Average Residence,"   determined using the same group of residences for each year; and                      (B)  contain the following information:     "Increase (Decrease) in Taxes" expressed in dollars and cents,   which is computed by subtracting the "Taxes Due on Average   Residence" for the preceding tax year from the "Taxes Due on Average   Residence" for the current tax year;                (7)  contain the following statement in bold print:     "Under state law, the dollar amount of school taxes imposed on the   residence of a person 65 years of age or older or of the surviving   spouse of such a person, if the surviving spouse was 55 years of age   or older when the person died, may not be increased above the amount   paid in the first year after the person turned 65, regardless of   changes in tax rate or property value.";                (8)  contain the following statement in bold print:     "Notice of Rollback Rate:  The highest tax rate the district can   adopt before requiring voter approval at an election is (the school   district rollback rate determined under Section 26.08, Tax Code).     This election will be automatically held if the district adopts a   rate in excess of the rollback rate of (the school district rollback   rate)."; [and]                (9)  contain a section entitled "Fund Balances," which   must include the estimated amount of interest and sinking fund   balances and the estimated amount of maintenance and operation or   general fund balances remaining at the end of the current fiscal   year that are not encumbered with or by corresponding debt   obligation, less estimated funds necessary for the operation of the   district before the receipt of the first payment under Chapter 42 in   the succeeding school year; and                (10)  if applicable, contain the following statement in   bold print:  "The residence of a person who is disabled or is 70   years of age or older or of the surviving spouse of such a person, if   the surviving spouse was 55 years of age or older when the person   died, is exempt from taxation by the district."          SECTION 8.  Section 403.302, Government Code, is amended by   adding Subsection (d-2) to read as follows:          (d-2)  For purposes of Subsection (d), a residence homestead   that receives an exemption under Section 11.13(s) or (t), Tax Code,   in the year that is the subject of the study is considered to be   taxable property.          SECTION 9.  This Act applies only to ad valorem taxes imposed   for a tax year beginning on or after the effective date of this Act.          SECTION 10.  This Act takes effect January 1, 2018, but only   if the constitutional amendment proposed by the 85th Legislature,   Regular Session, 2017, to authorize a local option exemption from   ad valorem taxation by a school district of the total market value   of the residence homesteads of certain elderly or disabled persons   is approved by the voters. If that constitutional amendment is not   approved by the voters, this Act has no effect.