Loading...
2023-058 Summary of Senate Bill 2 August 25,2023 Report No. 2023-058 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: Summary of Senate Bill 2, from the Second Special Session of the 88th Session of the Texas Legislature BACKGROUND: On July 25, 2023, City staff and the City's state legislative consultant, Jackson Walker, provided an update on the 88th Session of the Texas Legislature. During that discussion, several Council members inquired regarding the provisions of S.B. 2 (from the second special session), to which staff responded that a summary would be made provided to the City Council. S.B. 2 addresses various aspects of property tax relief, including: • Over$12 billion in state funding to reduce school property tax rates; • $100,000 homestead exemption for school property taxes; • A 20% circuit breaker (essentially an appraisal cap) on appraised values for non- homesteaded properties that are valued at$5 million and under as a three-year pilot project; • Creates newly elected positions on local appraisal boards; and • Savings on franchise tax for small business DISCUSSION: Articles 2 through 6 encompass the substantive components of S.B. 2, each addressing distinct aspects of school district taxation and governance. Article 2 - School District Tax Rate Compression: This article directs the Texas Education Agency (TEA) Commissioner to calculate the maximum compressed tax rates (MCTR) for school districts for the 2023-24 and 2024-25 school years. The MCTR is then reduced by 0.107 cents as specified in the bill. Notably, an exception applies to ensure that no district's MCTR falls below 90 percent of another district's MCTR(a hold harmless provision). The article includes a Sunset Provision on September 1, 2025, and takes effect upon passage of H.J.R. 2 on the November 7, 2023 election following the official canvass. Article 3 - School District Residence Homestead Exemption: This article raises the homestead exemption to $100,000 of appraised value for school districts. It also prohibits reductions or repeal of exemptions adopted under Tax Code 11.13(n) for the 2022 tax year by school districts,municipalities,and governing bodies until December 31,2027. School districts are entitled to additional state aid if state and local revenue servicing debt under SB 2 is insufficient compared to the previous status as of September 1, 2022. Various provisions come into effect upon passage of HJR 2 on the November 7,2023,election,with specific sections having distinct effective dates, including January 1, 2025. August 25,2023 Report No. 2023-058 Article 4 - Circuit Breaker Limitation on Property Value Increases: Focused on non-homesteaded real property, this article establishes a "circuit breaker" appraisal limitation of 20% for properties with up to $5 million appraised value for the 2024 tax year. This circuit breaker applies to all taxing jurisdictions. The chief appraiser is responsible for providing notice on property eligibility. If H.J.R. 2 is passed in the November 7, 2023, election, the circuit breaker limitation will take effect on January 1, 2024. The circuit breaker functions as a pilot program that will last until December 31, 2026. Other provisions of Article 4 dealing with the appraisal process will take effect on January 1, 2027. Note: The City is currently working to secure data from the Denton Central Appraisal District that would allow our staff to approximate the impact of this"circuit breaker"appraisal cap,had it been in place in the current tax year. If staff is able to receive the data for analysis, there will be a follow-up report outlining the estimated financial impact of this portion of S.B. 2. Otherwise, the Appraisal District plans to provide these calculations to the City in preliminary values delivered to us beginning in late April 2024 (if applicable)." Article 5 - Boards of Directors of Appraisal Districts: In counties with over 75,000 population, Article 5 creates appraisal district boards of directors comprising nine members. Five members are appointed by taxing units in the district, three are elected in the general election, and the county tax assessor-collector serves as an ex officio member.The article outlines election procedures,changes to the recall process,and effective dates. The key provisions of the article become effective on July 1, 2024,provided H.J.R. 2 is approved by voters. Article 6 - Transitional Tax Year Provisions: Article 6 mandates chief appraisers to prepare supplemental appraisal records for the 2023 tax year to account for changes in the law under S.B. 2. Individuals receiving provisional tax bills are notified of potential changes. The tax assessor is required to mail a supplemental and final tax bill, and a one-month extension is granted for paying delinquent taxes until December 31,2024.Article 6 took immediate effect upon passage of S.B. 2. Note: Since the city has not changed its exemptions relating to property tax since January 1,2022, and since the changes in the exemption amounts under S.B. 2 apply to school district tax impositions, there is no significant change to the city's calculations for the current year no new and voter approval tax rates. Conclusion: Senate Bill 2 encompasses a comprehensive set of provisions aimed at refining school district taxation, appraisal limits for all jurisdictions, and appraisal district governance. ATTACHMENTS: 1. Senate Bill 2—Enrolled STAFF CONTACT: Ryan Adams August 25,2023 Report No. 2023-058 Chief of Staff Ryan.Adams@cityofdcnton.com (940) 349-8565 REQUESTOR: Staff initiated STAFF TIME TO COMPLETE REPORT: 2 hours PARTICIPATING DEPARTMENTS: City Manager's Office Legal S . B . No . 2 1 AN ACT 2 relating to providing property tax relief through the public school 3 finance system, exemptions , limitations on appraisals and taxes , 4 and property tax administration; authorizing the imposition of a 5 fee . 6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS 7 ARTICLE 1 . SHORT TITLE 8 SECTION 1 . 01 . This Act may be cited as the Property Tax 9 Relief Act . 10 ARTICLE 2 . SCHOOL DISTRICT TAX RATE COMPRESSION 11 SECTION 2 . 01 . Subchapter F, Chapter 48 , Education Code , is 12 amended by adding Sections 48 . 2555 and 48 . 283 to read as follows : 13 Sec . 48 . 2555 . MAXIMUM COMPRESSED TAX RATE FOR 2023-2024 14 SCHOOL YEAR . (a) Notwithstanding any other provision of this 15 title or Chapter 26 , Tax Code , for the 2023-2024 school year, the 16 commissioner shall calculate the value of a school district ' s 17 maximum compressed tax rate by determining the district ' s maximum 18 compressed rate under Section 48 . 2551 or 48 . 2552 (b) , if applicable , 19 and reducing the tax rate determined under the applicable section 20 by $ 0 . 107 . 21 (b ) If a school district ' s maximum compressed tax rate as 22 calculated under Subsection ( a ) would be less than 90 percent of 23 another school district ' s maximum compressed tax rate under 24 Subsection (a ) , the district ' s maximum compressed tax rate is the 1 S . B . No . 2 1 value at which the district ' s maximum compressed tax rate would be 2 equal to 90 percent of the other district ' s maximum compressed tax 3 rate . 4 ( c ) Notwithstanding any other provision of this title or 5 Chapter 26 , Tax Code , for purposes of determining funding for 6 school districts for the 2023-2024 school year , a reference in any 7 of the following provisions of law to a school district ' s maximum 8 compressed tax rate or maximum compressed rate as determined under 9 Section 48 . 2551 means the maximum compressed tax rate determined 10 for the district under this section : 11 ( 1 ) Section 13 . 054 ( f ) 12 ( 2 ) Section 45 . 003 ( d) ; 13 ( 3 ) Section 45 . 0032 ( a) ; 14 ( 4 ) Section 48 . 051 (a ) ; 15 ( 5 ) Sections 48 . 2553 ( a ) and (e ) ; 16 ( 6 ) Section 48 . 2556 ; and 17 ( 7 ) Section 26 . 08 (n) , Tax Code 18 ( d) For purposes of Section 30 . 003 ( f-1 ) , a reference in that 19 section to Section 48 . 2551 includes this section . 20 ( e ) Notwithstanding any other provision of this title , for 21 purposes of determining a school district ' s maximum compressed tax 22 rate under Section 48 . 2551 for the 2024-2025 school year, the value 23 of the district ' s " PYMCR" is the maximum compressed tax rate 24 determined for the district under this section for the preceding 25 school year . 26 ( f ) This section expires September 1 , 2025 27 Sec . 48 . 283 . ADDITIONAL STATE AID FOR CERTAIN DISTRICTS 2 S . B . No . 2 1 IMPACTED BY COMPRESSION . A school district that received an 2 adjustment under Section 48 . 257 (b ) for the 2022-2023 school year is 3 entitled to additional state aid for each school year in an amount 4 equal to the amount of that adjustment for the 2022-2023 school year 5 less the difference , if the difference is greater than zero , 6 between • 7 ( 1 ) the amount to which the district is entitled under 8 this chapter for the current school year ; and 9 ( 2 ) the amount to which the district would be entitled 10 under this chapter for the current school year if the district ' s 11 maximum compressed tax rate had not been reduced under Section 12 48 . 2555 , as added by S . B . 2 , Acts of the 88th Legislature , 2nd 13 Called Session, 2023 . 14 ARTICLE 3 . SCHOOL DISTRICT RESIDENCE HOMESTEAD EXEMPTION 15 SECTION 3 . 01 . Section 11 . 13 , Tax Code , is amended by 16 amending Subsection (b) and adding Subsection ( n-1 ) to read as 17 follows : 18 (b ) An adult is entitled to exemption from taxation by a 19 school district of $ 100 , 000 [ $ 49,9-9-91 of the appraised value of the 20 adult ' s residence homestead, except that only $ 5 , 000 of the 21 exemption applies to an entity operating under former Chapter 17 , 22 18 , 25 , 26 , 27 , or 28 , Education Code , as those chapters existed on 23 May 1 , 1995 , as permitted by Section 11 . 301 , Education Code . 24 (n-1 ) The governing body of a school district , 25 municipality, or county that adopted an exemption under Subsection 26 (n) for the 2022 tax year may not reduce the amount of or repeal the 27 exemption . This subsection expires December 31 , 2027 . 3 S . B . No . 2 1 SECTION 3 . 02 . Section 11 . 26 , Tax Code , is amended by 2 amending Subsections (a) , ( a- 10 ) , and (o ) and adding Subsections 3 ( a- 11 ) and ( a-12 ) to read as follows : 4 ( a ) The tax officials shall appraise the property to which 5 this section applies and calculate taxes as on other property, but 6 if the tax so calculated exceeds the limitation imposed by this 7 section , the tax imposed is the amount of the tax as limited by this 8 section , except as otherwise provided by this section . A school 9 district may not increase the total annual amount of ad valorem tax 10 it imposes on the residence homestead of an individual 65 years of 11 age or older or on the residence homestead of an individual who is 12 disabled, as defined by Section 11 . 13 , above the amount of the tax 13 it imposed in the first tax year in which the individual qualified 14 that residence homestead for the applicable exemption provided by 15 Section 11 . 13 ( c ) for an individual who is 65 years of age or older 16 or is disabled . If the individual qualified that residence 17 homestead for the exemption after the beginning of that first year 18 and the residence homestead remains eligible for the same exemption 19 for the next year, and if the school district taxes imposed on the 20 residence homestead in the next year are less than the amount of 21 taxes imposed in that first year, a school district may not 22 subsequently increase the total annual amount of ad valorem taxes 23 it imposes on the residence homestead above the amount it imposed in 24 the year immediately following the first year for which the 25 individual qualified that residence homestead for the same 26 exemption, except as provided by Subsection (b) [3rt�e 4�4:rst ;�7a 27 yrai45-ze 45 e L-ea4m4eiztee lzro rare s4�e , 4 F e r t-lzle 4 S . B . No . 2 1 e5-effi13t-4!e Seetie-n ! !.! 3 ( e ) 2ei- elms 6;-yeca�aeef 2 a tf e e L e-4m4ei� ei� ei-� s-awl ems I9e€e L-e t-ite-2 9 1 6 4rat y e a i , t 3 4 t a m t i e s e r e end}stia4met 4!ffij9 e s e ei f-eL- t it e 2 G�4 t o,ewe a t l e s-s an affieidnt- 5 6 L-at-e of €ire-s e h eeld}s ter ez-i apt re-2 9-1 ; t-aiE year- ,- lam s 7 atti=rletitab4me to m ecreme s made in 2914 , etaeat4-,ae 8 . ] 9 ( a- 10 ) Notwithstanding the other provisions of this 10 section , if in the 2024 or a subsequent tax year an individual 11 qualifies for a limitation on tax increases provided by this 12 section on the individual ' s residence homestead, the amount of the 13 limitation provided by this section on the homestead is equal to the 14 amount computed by : 15 ( 1 ) multiplying the taxable value of the homestead in 16 the preceding tax year by a tax rate equal to the difference between 17 the school district ' s maximum compressed rate for the preceding tax 18 year and the district ' s maximum compressed rate for the current tax 19 year ; 20 ( 2 ) subtracting the amount computed under Subdivision 21 ( 1 ) from the amount of tax the district imposed on the homestead in 22 the preceding tax year ; [axes] 23 ( 3 ) adding any tax imposed in the current tax year 24 attributable to improvements made in the preceding tax year as 25 provided by Subsection (b) to the amount computed under Subdivision 26 ( 2 ) ; 27 ( 4 ) multiplying the amount of any increase in the 5 S . B . No . 2 1 current tax year as compared to the preceding tax year in the 2 aggregate amount of the exemptions to which the individual is 3 entitled under Sections 11 . 13 (b) and ( c ) by the school district ' s 4 tax rate for the current tax year ; and 5 ( 5 ) subtracting the amount computed under Subdivision 6 ( 4 ) from the amount computed under Subdivision ( 3 ) . 7 ( a- 11 ) This subsection applies only to an individual who in 8 the 2023 tax year qualifies for a limitation under this section and 9 for whom the 2022 tax year or an earlier tax year was the first tax 10 year the individual or the individual ' s spouse qualified for an 11 exemption under Section 11 . 13 ( c ) . The amount of the limitation 12 provided by this section on the residence homestead of an 13 individual to which this subsection applies for the 2023 tax year is 14 the amount of the limitation as computed under Subsection ( a-5 ) , 15 ( a- 6 ) , ( a-7 ) , ( a- 8 ) , or (a- 9 ) of this section, as applicable , less 16 an amount equal to the product of $ 60 , 000 and the tax rate of the 17 school district for the 2023 tax year . This subsection expires 18 January 1 , 2025 . 19 ( a- 12 ) This subsection applies only to an individual who in 20 the 2023 tax year qualifies for a limitation under this section and 21 for whom the 2021 tax year or an earlier tax year was the first tax 22 year the individual or the individual ' s spouse qualified for an 23 exemption under Section 11 . 13 ( c ) . The amount of the limitation 24 provided by this section on the residence homestead of an 25 individual to which this subsection applies for the 2023 tax year is 26 the amount of the limitation as computed under Subsection ( a- 11 ) of 27 this section less an amount equal to the product of $ 15 , 000 and the 6 S . B . No . 2 1 tax rate of the school district for the 2022 tax year . This 2 subsection expires January 1 , 2025 . 3 ( o ) Notwithstanding Subsections ( a) [ , (a ; ) , ] and (b) , an 4 improvement to property that would otherwise constitute an 5 improvement under Subsection (b ) is not treated as an improvement 6 under that subsection if the improvement is a replacement structure 7 for a structure that was rendered uninhabitable or unusable by a 8 casualty or by wind or water damage . For purposes of appraising the 9 property in the tax year in which the structure would have 10 constituted an improvement under Subsection (b) , the replacement 11 structure is considered to be an improvement under that subsection 12 only if : 13 ( 1 ) the square footage of the replacement structure 14 exceeds that of the replaced structure as that structure existed 15 before the casualty or damage occurred; or 16 ( 2 ) the exterior of the replacement structure is of 17 higher quality construction and composition than that of the 18 replaced structure . 19 SECTION 3 . 03 . Section 46 . 071 , Education Code , is amended by 20 amending Subsections (a-1 ) and (b-1 ) and adding Subsections ( a-2 ) , 21 (b-2 ) and ( c-2 ) to read as follows : 22 ( a-1 ) For [BeEff4Tn4n- _t'-i] the 2022-2023 school year, a 23 school district is entitled to additional state aid under this 24 subchapter to the extent that state and local revenue used to 25 service debt eligible under this chapter is less than the state and 26 local revenue that would have been available to the district under 27 this chapter as it existed on September 1 , 2021 , if any increase in 7 S . B . No . 2 1 the residence homestead exemption under Section 1-b ( c ) Article 2 VIII , Texas Constitution, as proposed by the 87th Legislature , 3rd 3 Called Session, 2021 , had not occurred . 4 ( a-2 ) Beginning with the 2023-2024 school year, a school 5 district is entitled to additional state aid under this subchapter 6 to the extent that state and local revenue used to service debt 7 eligible under this chapter is less than the state and local revenue 8 that would have been available to the district under this chapter as 9 it existed on September 1 , 2022 , if any increase in a residence 10 homestead exemption under Section 1 -b ( c ) , Article VIII , Texas 11 Constitution , and any additional limitation on tax increases under 12 Section 1 -b (d) of that article as proposed by the 88th Legislature , 13 2nd Called Session , 2023 , had not occurred . 14 (b- 1 ) Subject to Subsections ( c-1 ) , ( d) , and ( e ) , 15 additional state aid under this section for [�� �_-- _- ; w4mt-iz ] the 16 2022 -2023 school year is equal to the amount by which the loss of 17 local interest and sinking revenue for debt service attributable to 18 any increase in the residence homestead exemption under Section 19 1 -b ( c ) , Article VIII , Texas Constitution, as proposed by the 87th 20 Legislature , 3rd Called Session, 2021 , is not offset by a gain in 21 state aid under this chapter . 22 (b-2 ) Subject to Subsections ( c-2 ) , ( d) , and ( e ) , 23 additional state aid under this section beginning with the 24 2023-2024 school year is equal to the amount by which the loss of 25 local interest and sinking revenue for debt service attributable to 26 any increase in a residence homestead exemption under Section 27 1 -b ( c ) Article VIII , Texas Constitution, and any additional 8 S . B . No . 2 1 limitation on tax increases under Section 1-b (d) of that article as 2 proposed by the 88th Legislature , 2nd Called Session, 2023 , is not 3 offset by a gain in state aid under this chapter . 4 ( c-2 ) For the purpose of determining state aid under 5 Subsections ( a-2 ) and (b-2 ) , local interest and sinking revenue for 6 debt service is limited to revenue required to service debt 7 eligible under this chapter as of September 1 , 2023 , or authorized 8 by the voters but not yet issued as of September 1 , 2023 , that later 9 becomes eligible under this chapter, including refunding of that 10 debt , subject to Section 46 . 061 . The limitation imposed by Section 11 46 . 034 (a) does not apply for the purpose of determining state aid 12 under this section . 13 SECTION 3 . 04 . Section 48 . 2542 , Education Code , is amended 14 to read as follows : 15 Sec . 48 . 2542 . ADDITIONAL STATE AID FOR ADJUSTMENT OF 16 LIMITATION ON TAX INCREASES ON HOMESTEAD OF ELDERLY OR DISABLED . 17 Notwithstanding any other provision of this chapter, if a school 18 district is not fully compensated through state aid or the 19 calculation of excess local revenue under this chapter based on the 20 determination of the district ' s taxable value of property under 21 Subchapter M, Chapter 403 , Government Code , the district is 22 entitled to additional state aid in the amount necessary to fully 23 compensate the district for the amount of ad valorem tax revenue 24 lost due to a reduction of the amount of the limitation on tax 25 increases provided by Sections 11 . 26 ( a-4 ) , (a-5 ) ( a- 6 ) , ( a-7 ) , 26 ( a-8 ) , (a- 9 ) [ ] ( a-10 ) ( a-11 ) and ( a-12 ) Tax Code , as 27 applicable . 9 S . B . No . 2 1 SECTION 3 . 05 . Effective January 1 , 2025 , Section 48 . 2542 , 2 Education Code , is amended to read as follows : 3 Sec . 48 . 2542 . ADDITIONAL STATE AID FOR ADJUSTMENT OF 4 LIMITATION ON TAX INCREASES ON HOMESTEAD OF ELDERLY OR DISABLED . 5 Notwithstanding any other provision of this chapter, if a school 6 district is not fully compensated through state aid or the 7 calculation of excess local revenue under this chapter based on the 8 determination of the district ' s taxable value of property under 9 Subchapter M, Chapter 403 , Government Code , the district is 10 entitled to additional state aid in the amount necessary to fully 11 compensate the district for the amount of ad valorem tax revenue 12 lost due to a reduction of the amount of the limitation on tax 13 increases provided by Section 11 . 26 (a-10 ) [ 8eet4:e re 11 . 26 ( a 4 ) , 14 ] , Tax Codes 15 -p i l4meal -= ] . 16 SECTION 3 . 06 . Section 48 . 2543 , Education Code , is amended 17 to read as follows : 18 Sec . 48 . 2543 . ADDITIONAL STATE AID FOR HOMESTEAD EXEMPTION . 19 ( a) For [ ] the 2022-2023 school year , a school 20 district is entitled to additional state aid to the extent that 21 state and local revenue under this chapter and Chapter 49 is less 22 than the state and local revenue that would have been available to 23 the district under this chapter and Chapter 49 as those chapters 24 existed on September 1 , 2021 , if any increase in the residence 25 homestead exemption under Section 1 -b ( c ) , Article VIII , Texas 26 Constitution , as proposed by the 87th Legislature , 3rd Called 27 Session , 2021 , had not occurred . 10 S . B . No . 2 1 ( a- 1 ) Beginning with the 2023-2024 school year , a school 2 district is entitled to additional state aid to the extent that 3 state and local revenue under this chapter and Chapter 49 is less 4 than the state and local revenue that would have been available to 5 the district under this chapter and Chapter 49 as those chapters 6 existed on September 1 , 2022 , if any increase in a residence 7 homestead exemption under Section 1 -b ( c ) , Article VIII , Texas 8 Constitution , and any additional limitation on tax increases under 9 Section 1 -b (d) of that article as proposed by the 88th Legislature , 10 2nd Called Session , 2023 , had not occurred . 11 (b ) The lesser of the school district ' s currently adopted 12 maintenance and operations tax rate or the adopted maintenance and 13 operations tax rate for : 14 ( 1 ) the 2021 tax year is used for the purpose of 15 determining additional state aid under Subsection (a) ; and 16 ( 2 ) the 2022 tax year is used for the purpose of 17 determining additional state aid under Subsection (a-1 ) . 18 SECTION 3 . 07 . Section 48 . 2556 (a) , Education Code , is 19 amended to read as follows : 20 ( a ) The agency shall post the following information on the 21 agency ' s Internet website for purposes of allowing the chief 22 appraiser of each appraisal district and the assessor for each 23 school district to make the calculations required by Sections 24 11 . 26 ( a-5 ) , ( a- 6 ) , (a-7 ) , (a-8 ) , ( a- 9 ) , [ anei] ( a- 10 ) (a-11 ) , and 25 ( a- 12 ) Tax Code : 26 ( 1 ) each school district ' s maximum compressed rate , as 27 determined under Section 48 . 2551 , for each tax year beginning with 11 S . B . No . 2 1 the 2019 tax year ; and 2 ( 2 ) each school district ' s tier one maintenance and 3 operations tax rate , as provided by Section 45 . 0032 ( a ) , for the 4 2018 tax year . 5 SECTION 3 . 08 . Effective January 1 , 2025 , Section 6 48 . 2556 ( a ) , Education Code , is amended to read as follows : 7 ( a ) For purposes of allowing the chief appraiser of each 8 appraisal district and the assessor for each school district to 9 make the calculations required by Section 11 . 26 ( a- 10 ) , Tax Code , 10 the [mil-re ] agency shall post [ t- €e4!4!ew on the 11 agency ' s Internet website [ 12 - }sey—ems e-a ii, d i st-L-r e t—a n El 45 i,e fe s e c s F e,- ea 13 Bel-,eel 44:9t-i-re mlr-e—fftalee—t lie—e-a 1 e'rl-atre re i-e A:L-e 14 15 [-( i ) l each school district ' s maximum compressed rate , 16 as determined under Section 48 . 2551 , for the current [e-ae4r] tax 17 year and the preceding [1effinRm6nff w4m4E4i 4�1�ie-29191 tax year [fie 18 [ ( 2 tee e h e e4m eii st—r e t ' s t i el- one eF±,art-en_ n e- anei 19 , 20 2918 ] . 21 SECTION 3 . 09 . Section 49 . 004 , Education Code , is amended by 22 adding Subsections (a-1 ) , (b- 1 ) , and ( c- 1 ) to read as follows : 23 ( a- 1 ) This subsection applies only if the constitutional 24 amendment proposed by H . J . R . 2 , 88th Legislature , 2nd Called 25 Session , 2023 , is approved by the voters in an election held for 26 that purpose . As soon as practicable after receiving revised 27 property values that reflect adoption of the constitutional 12 S . B . No . 2 1 amendment , the commissioner shall review the local revenue level of 2 districts in the state and revise as necessary the notifications 3 provided under Subsection (a ) for the 2023-2024 school year . This 4 subsection expires September 1 , 2024 . 5 (b- 1 ) This subsection applies only to a district that has 6 not previously held an election under this chapter . Notwithstanding 7 Subsection (b) , a district that enters into an agreement to 8 exercise an option to reduce the district ' s local revenue level in 9 excess of entitlement under Section 49 . 002 ( 3 ) ( 4 ) , or ( 5 ) for the 10 2023-2024 school year may request and, as provided by Section 11 49 . 0042 ( a) , receive approval from the commissioner to delay the 12 date of the election otherwise required to be ordered before 13 September 1 . This subsection expires September 1 , 2024 14 ( c- 1 ) Notwithstanding Subsection ( c ) , a district that 15 receives approval from the commissioner to delay an election as 16 provided by Subsection (b-1 ) may adopt a tax rate for the 2023 tax 17 year before the commissioner certifies that the district has 18 reduced its local revenue level to the level established by Section 19 48 . 257 . This subsection expires September 1 , 2024 . 20 SECTION 3 . 10 . Subchapter A, Chapter 49 , Education Code , is 21 amended by adding Section 49 . 0042 to read as follows : 22 Sec . 49 . 0042 . TRANSITIONAL PROVISIONS : INCREASED HOMESTEAD 23 EXEMPTION AND LIMITATION ON TAX INCREASES . ( a ) The commissioner 24 shall approve a district ' s request under Section 49 . 004 (b- 1 ) to 25 delay the date of an election required under this chapter if the 26 commissioner determines that the district would not have a local 27 revenue level in excess of entitlement if the constitutional 13 S . B . No . 2 1 amendment proposed by H . J . R . 2 , 88th Legislature , 2nd Called 2 Session , 2023 , were approved by the voters . 3 (b ) The commissioner shall set a date by which each district 4 that receives approval under this section must order the election . 5 ( c ) Not later than the 2024-2025 school year , the 6 commissioner shall order detachment and annexation of property 7 under Subchapter G or consolidation under Subchapter H as necessary 8 to reduce the district ' s local revenue level to the level 9 established by Section 48 . 257 for a district that receives approval 10 under this section and subsequently : 11 ( 1 ) fails to hold the election ; or 12 ( 2 ) does not receive voter approval at the election . 13 (d) This section expires September 1 , 2025 . 14 SECTION 3 . 11 . Subchapter A, Chapter 49 , Education Code , is 15 amended by adding Section 49 . 0121 to read as follows : 16 Sec . 49 . 0121 . TRANSITIONAL ELECTION DATES . ( a) This 17 section applies only to an election under this chapter that occurs 18 during the 2023-2024 school year . 19 (b ) Section 49 . 012 does not apply to a district that 20 receives approval of a request under Section 49 . 0042 . The district 21 shall hold the election on a Tuesday or Saturday on or before a date 22 specified by the commissioner . Section 41 . 001 , Election Code , does 23 not apply to the election . 24 ( c ) This section expires September 1 , 2024 , 25 SECTION 3 . 12 . Section 49 . 154 , Education Code , is amended by 26 adding Subsections (a-2 ) and ( a-3 ) to read as follows : 27 ( a-2 ) Notwithstanding Subsections ( a) and ( a- 1 ) , a district 14 S . B . No . 2 1 that receives approval of a request under Section 49 . 0042 shall pay 2 for credit purchased : 3 ( 1 ) in equal monthly payments as determined by the 4 commissioner beginning March 15 , 2024 , and ending August 15 , 2024 ; 5 or 6 ( 2 ) in the manner provided by Subsection (a) ( 2 7 provided that the district notifies the commissioner of the 8 district ' s election to pay in that manner not later than March 15 , 9 2024 . 10 ( a-3 ) Subsection ( a-2 ) and this subsection expire September 11 1 , 2024 . 12 SECTION 3 . 13 . Section 49 . 308 , Education Code , is amended by 13 adding Subsection ( a- 1 ) to read as follows : 14 ( a-1 ) Notwithstanding Subsection ( a ) , for the 2023-2024 15 school year , the commissioner shall order any detachments and 16 annexations of property under this subchapter as soon as 17 practicable after the canvass of the votes on the constitutional 18 amendment proposed by H . J . R . 2 , 88th Legislature , 2nd Called 19 Session , 2023 . This subsection expires September 1 , 2024 , 20 SECTION 3 . 14 . Section 403 . 302 , Government Code , is amended 21 by amending Subsection ( j -1 ) and adding Subsection ( j -2 ) to read as 22 follows : 23 ( j - 1 ) In the final certification of the study under 24 Subsection ( j ) , the comptroller shall separately identify the final 25 taxable value for each school district as adjusted to account for 26 the reduction of the amount of the limitation on tax increases 27 provided by Section 11 . 26 ( a- 10 ) [ , 15 S . B . No . 2 1 L_ (-a 4: 9 )] , Tax Code [ , -- aj- j=14 -a 1= ] . 2 ( j -2 ) In the final certification of the study under 3 Subsection ( j ) , the comptroller shall separately identify the final 4 taxable value for each school district as adjusted to account for 5 the reduction of the amount of the limitation on tax increases 6 provided by Sections 11 . 26 ( a-5 ) , (a- 6 ) , (a-7 ) , ( a- 8 ) ( a- 9 ) , 7 ( a-10 ) , ( a-11 ) , and ( a-12 ) , Tax Code . This subsection expires 8 January 1 , 2025 , 9 SECTION 3 . 15 . (a) Sections 11 . 26 ( a- 1 ) , ( a-2 ) , and ( a-3 ) , 10 Tax Code , are repealed . 11 (b ) Effective January 1 , 2025 , Sections 11 . 26 ( a- 5 ) , ( a- 6 ) , 12 ( a-7 ) , ( a-8 ) , and (a- 9 ) , Tax Code , are repealed . 13 SECTION 3 . 16 . Sections 11 . 13 and 11 . 26 , Tax Code , as 14 amended by this article , apply only to an ad valorem tax year that 15 begins on or after January 1 , 2023 . 16 ARTICLE 4 . CIRCUIT BREAKER LIMITATION ON INCREASES IN VALUE OF REAL 17 PROPERTY OTHER THAN RESIDENCE HOMESTEAD 18 SECTION 4 . 01 . Section 1 . 12 (d) , Tax Code , is amended to read 19 as follows : 20 (d) For purposes of this section, the appraisal ratio of 21 property [a 1qeFfteetaa4] to which Section 23 . 23 or 23 . 231 applies is 22 the ratio of the property ' s market value as determined by the 23 appraisal district or appraisal review board, as applicable , to the 24 market value of the property according to law . The appraisal ratio 25 is not calculated according to the appraised value of the property 26 as limited by Section 23 . 23 or 23 . 231 . 27 SECTION 4 . 02 . Effective January 1 , 2027 , Section 1 . 12 (d) , 16 S . B . No . 2 1 Tax Code , is amended to read as follows : 2 (d) For purposes of this section, the appraisal ratio of a 3 homestead to which Section 23 . 23 applies is the ratio of the 4 property ' s market value as determined by the appraisal district or 5 appraisal review board, as applicable , to the market value of the 6 property according to law . The appraisal ratio is not calculated 7 according to the appraised value of the property as limited by 8 Section 23 . 23 . 9 SECTION 4 . 03 . Subchapter B, Chapter 23 , Tax Code , is 10 amended by adding Section 23 . 231 to read as follows : 11 Sec . 23 . 231 . CIRCUIT BREAKER LIMITATION ON APPRAISED VALUE 12 OF REAL PROPERTY OTHER THAN RESIDENCE HOMESTEAD . ( a ) In this 13 section : 14 ( 1 ) "Consumer price index" means the average over a 15 state fiscal year of the Consumer Price Index for All Urban 16 Consumers (CPI-U) , U . S . City Average , published monthly by the 17 United States Bureau of Labor Statistics , or its successor in 18 function . 19 ( 2 ) " Disaster recovery program" means a disaster 20 recovery program funded with community development block grant 21 disaster recovery money authorized by federal law . 22 ( 3 ) "New improvement" means an improvement to real 23 property made after the most recent appraisal of the property that 24 increases the market value of the property and the value of which is 25 not included in the appraised value of the property for the 26 preceding tax year . The term does not include repairs to or 27 ordinary maintenance of an existing structure or the grounds or 17 S . B . No . 2 1 another feature of the property . 2 (b ) This section applies only to real property with an 3 appraised value of not more than the amount determined under 4 Subsection ( j ) for the tax year in which the property first 5 qualifies for the circuit breaker limitation authorized by this 6 section . 7 ( c ) This section does not apply to : 8 ( 1 ) a residence homestead that qualifies for an 9 exemption under Section 11 . 13 ; or 10 ( 2 ) property appraised under Subchapter C , D, E , F, G, 11 or H . 12 ( d) Notwithstanding the requirements of Section 25 . 18 and 13 regardless of whether the appraisal office has appraised the 14 property and determined the market value of the property for the tax 15 year, an appraisal office may increase the appraised value of real 16 property to which this section applies for a tax year to an amount 17 not to exceed the lesser of : 18 ( 1 ) the market value of the property for the most 19 recent tax year that the market value was determined by the 20 appraisal office ; or 21 ( 2 ) the sum of : 22 (A) 20 percent of the appraised value of the 23 property for the preceding tax year ; 24 (B ) the appraised value of the property for the 25 preceding tax year ; and 26 (C ) the market value of all new improvements to 27 the property . 18 S . B . No . 2 1 ( e ) When appraising real property to which this section 2 applies , the chief appraiser shall : 3 ( 1 ) appraise the property at its market value ; and 4 ( 2 ) include in the appraisal records both the market 5 value of the property and the amount computed under Subsection 6 (d) ( 2 ) . 7 ( f ) The circuit breaker limitation provided by Subsection 8 (d) takes effect as to a parcel of real property on January 1 of the 9 tax year following the first tax year in which the owner owns the 10 property on January 1 . The circuit breaker limitation expires on 11 January 1 of the tax year following the tax year in which the owner 12 of the property ceases to own the property . 13 (g) For purposes of Subsection ( f) , a person who acquired 14 real property to which this section applies before the 2023 tax year 15 is considered to have acquired the property on January 1 , 2023 . 16 (h) Notwithstanding Subsections ( a ) and ( d) and except as 17 provided by Subdivision ( 2 ) of this subsection, an improvement to 18 real property that would otherwise constitute a new improvement is 19 not treated as a new improvement if the improvement is a replacement 20 structure for a structure that was rendered uninhabitable or 21 unusable by a casualty or by wind or water damage . For purposes of 22 appraising the property under Subsection ( d) in the tax year in 23 which the structure would have constituted a new improvement : 24 ( 1 ) the appraised value the property would have had in 25 the preceding tax year if the casualty or damage had not occurred is 26 considered to be the appraised value of the property for that year , 27 regardless of whether that appraised value exceeds the actual 19 S . B . No . 2 1 appraised value of the property for that year as limited by 2 Subsection (d) ; and 3 ( 2 ) the replacement structure is considered to be a 4 new improvement only if : 5 (A) the square footage of the replacement 6 structure exceeds that of the replaced structure as that structure 7 existed before the casualty or damage occurred; or 8 (B ) the exterior of the replacement structure is 9 of higher quality construction and composition than that of the 10 replaced structure . 11 ( i ) Notwithstanding Subsection (h) ( 2 ) and only to the 12 extent necessary to satisfy the requirements of a disaster recovery 13 program, a replacement structure described by that subdivision is 14 not considered to be a new improvement if to satisfy the 15 requirements of the disaster recovery program it was necessary 16 that : 17 ( 1 ) the square footage of the replacement structure 18 exceed that of the replaced structure as that structure existed 19 before the casualty or damage occurred; or 20 ( 2 ) the exterior of the replacement structure be of 21 higher quality construction and composition than that of the 22 replaced structure . 23 ( j ) For the purpose of Subsection (b ) , for the 2024 tax 24 year, the amount is $5 million . For the 2025 tax year, the 25 comptroller shall determine the amount for purposes of Subsection 26 (b) by increasing or decreasing, as applicable , the amount in 27 effect for the 2024 tax year by an amount equal to $5 million 20 S . B . No . 2 1 multiplied by the percentage increase or decrease during the 2 preceding state fiscal year in the consumer price index . For each 3 subsequent tax year , the comptroller shall determine the amount for 4 purposes of Subsection (b) by increasing or decreasing, as 5 applicable , the amount in effect for the preceding tax year by an 6 amount equal to that amount multiplied by the percentage increase 7 or decrease during the preceding state fiscal year in the consumer 8 price index, rounded to the nearest $ 10 , 000 . The comptroller shall 9 publish the amount in effect for a tax year under this subsection as 10 soon as practicable after January 1 of the tax year . 11 ( k) This section expires December 31 , 2026 . 12 SECTION 4 . 04 . Sections 25 . 19 (b) and (g) , Tax Code , are 13 amended to read as follows : 14 (b ) The chief appraiser shall separate real from personal 15 property and include in the notice for each : 16 ( 1 ) a list of the taxing units in which the property is 17 taxable ; 18 ( 2 ) the appraised value of the property in the 19 preceding year ; 20 ( 3 ) the taxable value of the property in the preceding 21 year for each taxing unit taxing the property; 22 ( 4 ) the appraised value of the property for the 23 current year , the kind and amount of each exemption and partial 24 exemption, if any, approved for the property for the current year 25 and for the preceding year, and, if an exemption or partial 26 exemption that was approved for the preceding year was canceled or 27 reduced for the current year , the amount of the exemption or partial 21 S . B . No . 2 1 exemption canceled or reduced; 2 ( 4 -a) a statement of whether the property qualifies 3 for the circuit breaker limitation on appraised value provided by 4 Section 23 . 231 ; 5 ( 5 ) in italic typeface , the following statement : The 6 Texas Legislature does not set the amount of your local taxes . Your 7 property tax burden is decided by your locally elected officials , 8 and all inquiries concerning your taxes should be directed to those 9 officials " ; 10 ( 6 ) a detailed explanation of the time and procedure 11 for protesting the value ; 12 ( 7 ) the date and place the appraisal review board will 13 begin hearing protests ; 14 ( 8 ) an explanation of the availability and purpose of 15 an informal conference with the appraisal office before a hearing 16 on a protest ; and 17 ( 9 ) a brief explanation that the governing body of 18 each taxing unit decides whether or not taxes on the property will 19 increase and the appraisal district only determines the value of 20 the property . 21 (g) By April 1 or as soon thereafter as practicable if the 22 property is a single-family residence that qualifies for an 23 exemption under Section 11 . 13 , or by May 1 or as soon thereafter as 24 practicable in connection with any other property, the chief 25 appraiser shall deliver a written notice to the owner of each 26 property not included in a notice required to be delivered under 27 Subsection ( a) , if the property was reappraised in the current tax 22 S . B . No . 2 1 year, if the ownership of the property changed during the preceding 2 year, or if the property owner or the agent of a property owner 3 authorized under Section 1 . 111 makes a written request for the 4 notice . The chief appraiser shall separate real from personal 5 property and include in the notice for each property : 6 ( 1 ) the appraised value of the property in the 7 preceding year ; 8 ( 2 ) the appraised value of the property for the 9 current year and the kind of each partial exemption , if any, 10 approved for the current year ; 11 ( 2-a) a statement of whether the property qualifies 12 for the circuit breaker limitation on appraised value provided by 13 Section 23 . 231 ; 14 ( 3 ) a detailed explanation of the time and procedure 15 for protesting the value ; and 16 ( 4 ) the date and place the appraisal review board will 17 begin hearing protests . 18 SECTION 4 . 05 . Effective January 1 , 2027 , Sections 25 . 19 (b) 19 and ( g) , Tax Code , are amended to read as follows : 20 (b ) The chief appraiser shall separate real from personal 21 property and include in the notice for each : 22 ( 1 ) a list of the taxing units in which the property is 23 taxable ; 24 ( 2 ) the appraised value of the property in the 25 preceding year ; 26 ( 3 ) the taxable value of the property in the preceding 27 year for each taxing unit taxing the property; 23 S . B . No . 2 1 ( 4 ) the appraised value of the property for the 2 current year , the kind and amount of each exemption and partial 3 exemption, if any, approved for the property for the current year 4 and for the preceding year, and, if an exemption or partial 5 exemption that was approved for the preceding year was canceled or 6 reduced for the current year , the amount of the exemption or partial 7 exemption canceled or reduced; 8 ( 5 ) in italic typeface , the following statement : "The 9 Texas Legislature does not set the amount of your local taxes . Your 10 property tax burden is decided by your locally elected officials , 11 and all inquiries concerning your taxes should be directed to those 12 officials " ; 13 ( 6 ) a detailed explanation of the time and procedure 14 for protesting the value ; 15 ( 7 ) the date and place the appraisal review board will 16 begin hearing protests ; 17 ( 8 ) an explanation of the availability and purpose of 18 an informal conference with the appraisal office before a hearing 19 on a protest ; and 20 ( 9 ) a brief explanation that the governing body of 21 each taxing unit decides whether or not taxes on the property will 22 increase and the appraisal district only determines the value of 23 the property . 24 (g) By April 1 or as soon thereafter as practicable if the 25 property is a single-family residence that qualifies for an 26 exemption under Section 11 . 13 , or by May 1 or as soon thereafter as 27 practicable in connection with any other property, the chief 24 S . B . No . 2 1 appraiser shall deliver a written notice to the owner of each 2 property not included in a notice required to be delivered under 3 Subsection ( a) , if the property was reappraised in the current tax 4 year, if the ownership of the property changed during the preceding 5 year, or if the property owner or the agent of a property owner 6 authorized under Section 1 . 111 makes a written request for the 7 notice . The chief appraiser shall separate real from personal 8 property and include in the notice for each property : 9 ( 1 ) the appraised value of the property in the 10 preceding year ; 11 ( 2 ) the appraised value of the property for the 12 current year and the kind of each partial exemption , if any, 13 approved for the current year ; 14 ( 3 ) a detailed explanation of the time and procedure 15 for protesting the value ; and 16 ( 4 ) the date and place the appraisal review board will 17 begin hearing protests . 18 SECTION 4 . 06 . Section 25 . 19 , Tax Code , is amended by adding 19 Subsection ( o ) to read as follows : 20 ( o ) A notice required under Subsection (a) or ( g) to be 21 delivered to the owner of real property other than a single-family 22 residence that qualifies for an exemption under Section 11 . 13 must 23 include the following statement : "Under Section 23 . 231 , Tax Code , 24 for the 2024 , 2025 , and 2026 tax years , the appraised value of real 25 property other than a residence homestead for ad valorem tax 26 purposes may not be increased by more than 20 percent each year, 27 with certain exceptions . The circuit breaker limitation provided 25 S . B . No . 2 1 under Section 23 . 231 , Tax Code , expires December 31 , 2026 . Unless 2 this expiration date is extended by the Texas Legislature , 3 beginning in the 2027 tax year , the circuit breaker limitation 4 provided under Section 23 . 231 , Tax Code , will no longer be in effect 5 and may result in an increase in ad valorem taxes imposed on real 6 property previously subject to the limitation . " This subsection 7 expires December 31 , 2027 . 8 SECTION 4 . 07 . Section 41 . 41 ( a) , Tax Code , is amended to 9 read as follows : 10 ( a ) A property owner is entitled to protest before the 11 appraisal review board the following actions : 12 ( 1 ) determination of the appraised value of the 13 owner ' s property or, in the case of land appraised as provided by 14 Subchapter C , D, E , or H, Chapter 23 , determination of its appraised 15 or market value ; 16 ( 2 ) unequal appraisal of the owner ' s property; 17 ( 3 ) inclusion of the owner ' s property on the appraisal 18 records ; 19 ( 4 ) denial to the property owner in whole or in part of 20 a partial exemption; 21 ( 4 -a) determination that the owner ' s property does not 22 qualify for the circuit breaker limitation on appraised value 23 provided by Section 23 . 231 ; 24 ( 5 ) determination that the owner ' s land does not 25 qualify for appraisal as provided by Subchapter C , D, E , or H, 26 Chapter 23 ; 27 ( 6 ) identification of the taxing units in which the 26 S . B . No . 2 1 owner ' s property is taxable in the case of the appraisal district ' s 2 appraisal roll ; 3 ( 7 ) determination that the property owner is the owner 4 of property; 5 ( 8 ) a determination that a change in use of land 6 appraised under Subchapter C , D, E , or H, Chapter 23 , has occurred; 7 or 8 ( 9 ) any other action of the chief appraiser , appraisal 9 district , or appraisal review board that applies to and adversely 10 affects the property owner . 11 SECTION 4 . 08 . Effective January 1 , 2027 , Section 41 . 41 ( a ) , 12 Tax Code , is amended to read as follows : 13 ( a ) A property owner is entitled to protest before the 14 appraisal review board the following actions : 15 ( 1 ) determination of the appraised value of the 16 owner ' s property or, in the case of land appraised as provided by 17 Subchapter C , D, E , or H, Chapter 23 , determination of its appraised 18 or market value ; 19 ( 2 ) unequal appraisal of the owner ' s property; 20 ( 3 ) inclusion of the owner ' s property on the appraisal 21 records ; 22 ( 4 ) denial to the property owner in whole or in part of 23 a partial exemption ; 24 ( 5 ) determination that the owner ' s land does not 25 qualify for appraisal as provided by Subchapter C , D, E , or H, 26 Chapter 23 ; 27 ( 6 ) identification of the taxing units in which the 27 S . B . No . 2 1 owner ' s property is taxable in the case of the appraisal district ' s 2 appraisal roll ; 3 ( 7 ) determination that the property owner is the owner 4 of property; 5 ( 8 ) a determination that a change in use of land 6 appraised under Subchapter C , D, E , or H, Chapter 23 , has occurred; 7 or 8 ( 9 ) any other action of the chief appraiser , appraisal 9 district , or appraisal review board that applies to and adversely 10 affects the property owner . 11 SECTION 4 . 09 . Section 42 . 26 (d) Tax Code , is amended to 12 read as follows : 13 (d) For purposes of this section , the value of the property 14 subject to the suit and the value of a comparable property or sample 15 property that is used for comparison must be the market value 16 determined by the appraisal district when the property is [ft- 17 res-ielenee—hie-s-teaE] subject to the limitation on appraised value 18 imposed by Section 23 . 23 or 23 . 231 . 19 SECTION 4 . 10 . Effective January 1 , 2027 , Section 42 . 26 (d) , 20 Tax Code , is amended to read as follows : 21 (d) For purposes of this section , the value of the property 22 subject to the suit and the value of a comparable property or sample 23 property that is used for comparison must be the market value 24 determined by the appraisal district when the property is a 25 residence homestead subject to the limitation on appraised value 26 imposed by Section 23 . 23 . 27 SECTION 4 . 11 . Sections 403 . 302 (d) and ( i ) , Government Code , 28 S . B . No . 2 1 are amended to read as follows : 2 (d) For the purposes of this section, " taxable value " means 3 the market value of all taxable property less : 4 ( 1 ) the total dollar amount of any residence homestead 5 exemptions lawfully granted under Section 11 . 13 (b) or ( c) , Tax 6 Code , in the year that is the subject of the study for each school 7 district ; 8 ( 2 ) one-half of the total dollar amount of any 9 residence homestead exemptions granted under Section 11 . 13 (n ) , Tax 10 Code , in the year that is the subject of the study for each school 11 district ; 12 ( 3 ) the total dollar amount of any exemptions granted 13 before May 31 , 1993 , within a reinvestment zone under agreements 14 authorized by Chapter 312 , Tax Code ; 15 ( 4 ) subject to Subsection (e ) , the total dollar amount 16 of any captured appraised value of property that : 17 (A) is within a reinvestment zone created on or 18 before May 31 , 1999 , or is proposed to be included within the 19 boundaries of a reinvestment zone as the boundaries of the zone and 20 the proposed portion of tax increment paid into the tax increment 21 fund by a school district are described in a written notification 22 provided by the municipality or the board of directors of the zone 23 to the governing bodies of the other taxing units in the manner 24 provided by former Section 311 . 003 (e ) , Tax Code , before May 31 , 25 1999 , and within the boundaries of the zone as those boundaries 26 existed on September 1 , 1999 , including subsequent improvements to 27 the property regardless of when made ; 29 S . B . No . 2 1 (B ) generates taxes paid into a tax increment 2 fund created under Chapter 311 , Tax Code , under a reinvestment zone 3 financing plan approved under Section 311 . 011 (d) , Tax Code , on or 4 before September 1 , 1999 ; and 5 (C ) is eligible for tax increment financing under 6 Chapter 311 , Tax Code ; 7 ( 5 ) the total dollar amount of any captured appraised 8 value of property that : 9 (A) is within a reinvestment zone : 10 ( i ) created on or before December 31 , 2008 , 11 by a municipality with a population of less than 18 , 000 ; and 12 ( ii ) the project plan for which includes 13 the alteration, remodeling, repair , or reconstruction of a 14 structure that is included on the National Register of Historic 15 Places and requires that a portion of the tax increment of the zone 16 be used for the improvement or construction of related facilities 17 or for affordable housing; 18 (B ) generates school district taxes that are paid 19 into a tax increment fund created under Chapter 311 , Tax Code ; and 20 (C ) is eligible for tax increment financing under 21 Chapter 311 , Tax Code ; 22 ( 6 ) the total dollar amount of any exemptions granted 23 under Section 11 . 251 or 11 . 253 , Tax Code ; 24 ( 7 ) the difference between the comptroller ' s estimate 25 of the market value and the productivity value of land that 26 qualifies for appraisal on the basis of its productive capacity, 27 except that the productivity value estimated by the comptroller may 30 S . B . No . 2 1 not exceed the fair market value of the land; 2 ( 8 ) the portion of the appraised value of residence 3 homesteads of individuals who receive a tax limitation under 4 Section 11 . 26 , Tax Code , on which school district taxes are not 5 imposed in the year that is the subject of the study, calculated as 6 if the residence homesteads were appraised at the full value 7 required by law; 8 ( 9 ) a portion of the market value of property not 9 otherwise fully taxable by the district at market value because of 10 action required by statute or the constitution of this state , other 11 than Section 11 . 311 , Tax Code , that , if the tax rate adopted by the 12 district is applied to it , produces an amount equal to the 13 difference between the tax that the district would have imposed on 14 the property if the property were fully taxable at market value and 15 the tax that the district is actually authorized to impose on the 16 property, if this subsection does not otherwise require that 17 portion to be deducted; 18 ( 10 ) the market value of all tangible personal 19 property, other than manufactured homes , owned by a family or 20 individual and not held or used for the production of income ; 21 ( 11 ) the appraised value of property the collection of 22 delinquent taxes on which is deferred under Section 33 . 06 , Tax 23 Code ; 24 ( 12 ) the portion of the appraised value of property 25 the collection of delinquent taxes on which is deferred under 26 Section 33 . 065 , Tax Code ; 27 ( 13 ) the amount by which the market value of property 31 S . B . No . 2 1 [ a " elen " 1:taf .. ,.tea ] to which Section 23 . 23 or 23 . 231 , Tax Code , 2 applies exceeds the appraised value of that property as calculated 3 under Section 23 . 23 or 23 . 231 , Tax Code , as applicable [ 4 e��] ; and 5 ( 14 ) the total dollar amount of any exemptions granted 6 under Section 11 . 35 , Tax Code . 7 ( i ) If the comptroller determines in the study that the 8 market value of property in a school district as determined by the 9 appraisal district that appraises property for the school district , 10 less the total of the amounts and values listed in Subsection (d) as 11 determined by that appraisal district , is valid, the comptroller, 12 in determining the taxable value of property in the school district 13 under Subsection (d) , shall for purposes of Subsection (d) ( 13 ) 14 subtract from the market value as determined by the appraisal 15 district of properties [ i—es4mEie1qeFftes-�9] to which Section 16 23 . 23 or 23 . 231 , Tax Code , applies the amount by which that amount 17 exceeds the appraised value of those properties as calculated by 18 the appraisal district under Section 23 . 23 or 23 . 231 , Tax Code , as 19 applicable . If the comptroller determines in the study that the 20 market value of property in a school district as determined by the 21 appraisal district that appraises property for the school district , 22 less the total of the amounts and values listed in Subsection (d) as 23 determined by that appraisal district , is not valid, the 24 comptroller, in determining the taxable value of property in the 25 school district under Subsection (d) , shall for purposes of 26 Subsection (d) ( 13 ) subtract from the market value as estimated by 27 the comptroller of properties [ L-ea4meienee lqeffte-a-to-aeia ] to which 32 S . B . No . 2 1 Section 23 . 23 or 23 . 231 , Tax Code , applies the amount by which that 2 amount exceeds the appraised value of those properties as 3 calculated by the appraisal district under Section 23 . 23 or 23 . 231 , 4 Tax Code , as applicable . 5 SECTION 4 . 12 . Effective January 1 , 2027 , Sections 6 403 . 302 (d) and ( i ) Government Code , are amended to read as 7 follows : 8 ( d) For the purposes of this section, "taxable value" means 9 the market value of all taxable property less : 10 ( 1 ) the total dollar amount of any residence homestead 11 exemptions lawfully granted under Section 11 . 13 (b) or ( c) , Tax 12 Code , in the year that is the subject of the study for each school 13 district ; 14 ( 2 ) one-half of the total dollar amount of any 15 residence homestead exemptions granted under Section 11 . 13 (n) , Tax 16 Code , in the year that is the subject of the study for each school 17 district ; 18 ( 3 ) the total dollar amount of any exemptions granted 19 before May 31 , 1993 , within a reinvestment zone under agreements 20 authorized by Chapter 312 , Tax Code ; 21 ( 4 ) subject to Subsection (e ) , the total dollar amount 22 of any captured appraised value of property that : 23 (A) is within a reinvestment zone created on or 24 before May 31 , 1999 , or is proposed to be included within the 25 boundaries of a reinvestment zone as the boundaries of the zone and 26 the proposed portion of tax increment paid into the tax increment 27 fund by a school district are described in a written notification 33 S . B . No . 2 1 provided by the municipality or the board of directors of the zone 2 to the governing bodies of the other taxing units in the manner 3 provided by former Section 311 . 003 (e ) , Tax Code , before May 31 , 4 1999 , and within the boundaries of the zone as those boundaries 5 existed on September 1 , 1999 , including subsequent improvements to 6 the property regardless of when made ; 7 (B ) generates taxes paid into a tax increment 8 fund created under Chapter 311 , Tax Code , under a reinvestment zone 9 financing plan approved under Section 311 . 011 (d) , Tax Code , on or 10 before September 1 , 1999 ; and 11 (C ) is eligible for tax increment financing under 12 Chapter 311 , Tax Code ; 13 ( 5 ) the total dollar amount of any captured appraised 14 value of property that : 15 (A) is within a reinvestment zone : 16 ( i ) created on or before December 31 , 2008 , 17 by a municipality with a population of less than 18 , 000 ; and 18 ( ii ) the project plan for which includes 19 the alteration, remodeling, repair , or reconstruction of a 20 structure that is included on the National Register of Historic 21 Places and requires that a portion of the tax increment of the zone 22 be used for the improvement or construction of related facilities 23 or for affordable housing; 24 (B ) generates school district taxes that are paid 25 into a tax increment fund created under Chapter 311 , Tax Code ; and 26 (C ) is eligible for tax increment financing under 27 Chapter 311 , Tax Code ; 34 S . B . No . 2 1 ( 6 ) the total dollar amount of any exemptions granted 2 under Section 11 . 251 or 11 . 253 , Tax Code ; 3 ( 7 ) the difference between the comptroller ' s estimate 4 of the market value and the productivity value of land that 5 qualifies for appraisal on the basis of its productive capacity, 6 except that the productivity value estimated by the comptroller may 7 not exceed the fair market value of the land; 8 ( 8 ) the portion of the appraised value of residence 9 homesteads of individuals who receive a tax limitation under 10 Section 11 . 26 , Tax Code , on which school district taxes are not 11 imposed in the year that is the subject of the study, calculated as 12 if the residence homesteads were appraised at the full value 13 required by law; 14 ( 9 ) a portion of the market value of property not 15 otherwise fully taxable by the district at market value because of 16 action required by statute or the constitution of this state , other 17 than Section 11 . 311 , Tax Code , that , if the tax rate adopted by the 18 district is applied to it , produces an amount equal to the 19 difference between the tax that the district would have imposed on 20 the property if the property were fully taxable at market value and 21 the tax that the district is actually authorized to impose on the 22 property, if this subsection does not otherwise require that 23 portion to be deducted; 24 ( 10 ) the market value of all tangible personal 25 property, other than manufactured homes , owned by a family or 26 individual and not held or used for the production of income ; 27 ( 11 ) the appraised value of property the collection of 35 S . B . No . 2 1 delinquent taxes on which is deferred under Section 33 . 06 , Tax 2 Code ; 3 ( 12 ) the portion of the appraised value of property 4 the collection of delinquent taxes on which is deferred under 5 Section 33 . 065 , Tax Code ; 6 ( 13 ) the amount by which the market value of a 7 residence homestead to which Section 23 . 23 , Tax Code , applies 8 exceeds the appraised value of that property as calculated under 9 that section ; and 10 ( 14 ) the total dollar amount of any exemptions granted 11 under Section 11 . 35 , Tax Code . 12 ( i ) If the comptroller determines in the study that the 13 market value of property in a school district as determined by the 14 appraisal district that appraises property for the school district , 15 less the total of the amounts and values listed in Subsection (d) as 16 determined by that appraisal district , is valid, the comptroller, 17 in determining the taxable value of property in the school district 18 under Subsection (d) , shall for purposes of Subsection (d) ( 13 ) 19 subtract from the market value as determined by the appraisal 20 district of residence homesteads to which Section 23 . 23 , Tax Code , 21 applies the amount by which that amount exceeds the appraised value 22 of those properties as calculated by the appraisal district under 23 Section 23 . 23 , Tax Code . If the comptroller determines in the 24 study that the market value of property in a school district as 25 determined by the appraisal district that appraises property for 26 the school district , less the total of the amounts and values listed 27 in Subsection (d) as determined by that appraisal district , is not 36 S . B . No . 2 1 valid, the comptroller , in determining the taxable value of 2 property in the school district under Subsection (d) , shall for 3 purposes of Subsection ( d) ( 13 ) subtract from the market value as 4 estimated by the comptroller of residence homesteads to which 5 Section 23 . 23 , Tax Code , applies the amount by which that amount 6 exceeds the appraised value of those properties as calculated by 7 the appraisal district under Section 23 . 23 , Tax Code . 8 SECTION 4 . 13 . Section 23 . 231 , Tax Code , as added by this 9 article , applies only to the appraisal of real property other than a 10 residence homestead for ad valorem tax purposes for a tax year that 11 begins on or after the effective date of this article . 12 ARTICLE 5 . BOARDS OF DIRECTORS OF APPRAISAL DISTRICTS 13 SECTION 5 . 01 . The heading to Section 6 . 03 , Tax Code , is 14 amended to read as follows : 15 Sec . 6 . 03 . BOARD OF DIRECTORS IN LESS POPULOUS COUNTIES . 16 SECTION 5 . 02 . Section 6 . 03 , Tax Code , is amended by 17 amending Subsection ( a ) and adding Subsection (a-1 ) to read as 18 follows : 19 ( a ) This section applies only to an appraisal district 20 established in a county with a population of less than 75 , 000 . 21 ( a- 1 ) The appraisal district is governed by a board of 22 directors . Five directors are appointed by the taxing units that 23 participate in the district as provided by this section . If the 24 county assessor-collector is not appointed to the board, the county 25 assessor-collector serves as a nonvoting director . The county 26 assessor-collector is ineligible to serve if the board enters into 27 a contract under Section 6 . 05 (b ) or if the commissioners court of 37 S . B . No . 2 1 the county enters into a contract under Section 6 . 24 (b ) . To be 2 eligible to serve on the board of directors , an individual other 3 than a county assessor-collector serving as a nonvoting director 4 must be a resident of the district and must have resided in the 5 district for at least two years immediately preceding the date the 6 individual takes office . An individual who is otherwise eligible 7 to serve on the board is not ineligible because of membership on the 8 governing body of a taxing unit . An employee of a taxing unit that 9 participates in the district is not eligible to serve on the board 10 unless the individual is also a member of the governing body or an 11 elected official of a taxing unit that participates in the 12 district . 13 SECTION 5 . 03 . Subchapter A, Chapter 6 , Tax Code , is amended 14 by adding Section 6 . 0301 to read as follows : 15 Sec . 6 . 0301 . BOARD OF DIRECTORS IN POPULOUS COUNTIES . 16 ( a ) This section applies only to an appraisal district established 17 in a county with a population of 75 , 000 or more . 18 (b ) Sections 6 . 031 , 6 . 034 , and 6 . 10 do not apply to an 19 appraisal district to which this section applies . 20 ( c ) The appraisal district is governed by a board of nine 21 directors . Five directors are appointed by the taxing units that 22 participate in the district in the manner prescribed by Section 23 6 . 03 . Three directors are elected by majority vote at the general 24 election for state and county officers by the voters of the county 25 in which the district is established . The county 26 assessor-collector serves as an ex officio director . 27 (d) To be eligible to serve on the board of directors , an 38 S . B . No . 2 1 individual other than the county assessor-collector must be a 2 resident of the district and must have resided in the district for 3 at least two years immediately preceding the date the individual 4 takes office . An individual who is otherwise eligible to serve on 5 the board is not ineligible because of membership on the governing 6 body of a taxing unit . An employee of a taxing unit that 7 participates in the district is not eligible to serve on the board 8 unless the individual is also a member of the governing body or an 9 elected official of a taxing unit that participates in the 10 district . 11 ( e ) Members of the board of directors appointed by the 12 taxing units participating in the district serve staggered 13 four-year terms beginning on January 1 of every other even-numbered 14 year . Elected members of the board of directors serve staggered 15 four-year terms beginning on January 1 of every other odd-numbered 16 year . 17 ( f ) If a vacancy occurs in an appointive position on the 18 board of directors , each taxing unit that is entitled to vote under 19 Section 6 . 03 may nominate by resolution adopted by its governing 20 body a candidate to fill the vacancy . The taxing unit shall submit 21 the name of its nominee to the chief appraiser within 45 days after 22 notification from the board of directors of the existence of the 23 vacancy, and the chief appraiser shall prepare and deliver to the 24 board of directors within the next five days a list of the nominees . 25 The board of directors shall appoint by majority vote of its members 26 one of the nominees to fill the vacancy . 27 (g) If a vacancy occurs in an elective position on the board 39 S . B . No . 2 1 of directors , the board of directors shall appoint by majority vote 2 of its members a person to fill the vacancy . A person appointed to 3 fill a vacancy in an elective position must have the qualifications 4 required of a director elected at a general election . 5 SECTION 5 . 04 . Subchapter A, Chapter 6 , Tax Code , is amended 6 by adding Section 6 . 032 to read as follows : 7 Sec . 6 . 032 . BALLOT PROCEDURES FOR ELECTED DIRECTORS ; FILING 8 FEE OR PETITION . ( a ) Except as provided by this section , Chapter 9 144 , Election Code , applies to a candidate for an elective position 10 on an appraisal district board of directors . 11 (b ) An application for a place on the ballot must be filed 12 with the county judge of the county in which the appraisal district 13 is established and be accompanied by a filing fee prescribed by 14 Subsection ( c) of this section or a petition in lieu of the filing 15 fee that satisfies the requirements prescribed by Section 141 . 062 , 16 Election Code , and Subsection (d) of this section . 17 ( c ) The filing fee for a place on the ballot is : 18 ( 1 ) $ 400 for a county with a population of 200 , 000 or 19 more ; or 20 ( 2 ) $200 for a county with a population of less than 21 200 , 000 . 22 ( d) The minimum number of signatures that must appear on the 23 petition authorized by Subsection (b ) is the lesser of : 24 ( 1 ) 500 ; or 25 ( 2 ) two percent of the total vote received in the 26 county by all the candidates for governor in the most recent 27 gubernatorial general election , unless that number is less than 50 , 40 S . B . No . 2 1 in which case the required number of signatures is the lesser of : 2 (A) 50 ; or 3 (B ) 20 percent of that total vote 4 ( e ) A filing fee received under this section shall be 5 deposited in the county treasury to the credit of the county general 6 fund . 7 ( f ) The secretary of state shall adopt rules as necessary to 8 implement this section . 9 SECTION 5 . 05 . The heading to Section 6 . 033 , Tax Code , is 10 amended to read as follows : 11 Sec . 6 . 033 . RECALL OF APPOINTED DIRECTOR . 12 SECTION 5 . 06 . Section 6 . 033 ( a) , Tax Code , is amended to 13 read as follows : 14 ( a ) The governing body of a taxing unit may call for the 15 recall of an appointed [e-] member of the board of directors of an 16 appraisal district [ apjeOrr-eel tineie;L- Seetien 6 . 93 ti.,4me eaeie-] for 17 whom the taxing unit cast any of its votes in the appointment of the 18 board . The call must be in the form of a resolution, be filed with 19 the chief appraiser of the appraisal district , and state that the 20 taxing unit is calling for the recall of the member . If a 21 resolution calling for the recall of a board member is filed under 22 this subsection, the chief appraiser, not later than the loth day 23 after the date of filing, shall deliver a written notice of the 24 filing of the resolution and the date of its filing to the presiding 25 officer of the governing body of each taxing unit entitled to vote 26 in the appointment of board members . 27 SECTION 5 . 07 . Section 6 . 036 ( a ) , Tax Code , is amended to 41 S . B . No . 2 1 read as follows : 2 ( a ) An individual is not eligible to be a candidate for , to 3 be appointed to , or to serve on the board of directors of an 4 appraisal district if the individual or a business entity in which 5 the individual has a substantial interest is a party to a contract 6 with : 7 ( 1 ) the appraisal district ; or 8 ( 2 ) a taxing unit that participates in the appraisal 9 district , if the contract relates to the performance of an activity 10 governed by this title . 11 SECTION 5 . 08 . Section 6 . 052 ( f) , Tax Code , as effective 12 January 1 , 2024 , is amended to read as follows : 13 ( f ) The taxpayer liaison officer is responsible for 14 providing clerical assistance to the applicable appointing 15 authority prescribed by Section 6 . 41 ( d) [ lam - _ , aelfft n 6- e 16 elm6s —iet- � tt4je ] in the selection of appraisal review board members 17 and for publicizing the availability of positions on the appraisal 18 review board . The officer shall deliver to the applicable 19 appointing authority [ lie-al 4i9t-i-ret j idelEff e I any 20 applications to serve on the board that are submitted to the officer 21 and shall perform other duties as requested by the applicable 22 appointing authority [ lee-a, sir-a �e4!s��iet jtt4'g-e-1 The 23 officer may not influence the process for selecting appraisal 24 review board members . 25 SECTION 5 . 09 . Section 6 . 41 , Tax Code , is amended by 26 amending Subsections (d) , (d-1 ) , (d-2 ) , (d-3 ) , (d-5 ) , ( d- 9 ) , 27 (d-10 ) , ( e ) , (g) , ( i ) , and ( j ) and adding Subsection (d-2 -1 ) to read 42 S . B . No . 2 1 as follows : 2 (d) Members of the board are appointed by the applicable 3 appointing authority . For an appraisal district to which Section 4 6 . 03 applies , the appointing authority is the local administrative 5 district judge under Subchapter D, Chapter 74 , Government Code , in 6 the county in which the appraisal district is established . For an 7 appraisal district to which Section 6 . 0301 applies , the appointing 8 authority is the board of directors of the district . A vacancy on 9 the board is filled in the same manner for the unexpired portion of 10 the term . 11 (d- 1 ) All applications submitted to the appraisal district 12 or to the appraisal review board from persons seeking appointment 13 as a member of the appraisal review board shall be delivered to the 14 applicable appointing authority [ leeal r�t�azt��di9tLQrez 15 ] The appraisal district may provide the appointing 16 authority [ 4!eea4! with information 17 regarding whether an applicant for appointment to or a member of the 18 board owes any delinquent ad valorem taxes to a taxing unit 19 participating in the appraisal district . 20 (d-2 ) A local administrative district judge acting as an 21 appointing authority may make appointments to the board directly or 22 may, by written order , appoint from three to five persons to perform 23 the duties of appraisal review board commissioner . If the local 24 administrative district judge chooses to appoint appraisal review 25 board commissioners , each commissioner shall possess the same 26 qualifications as those required of an appraisal review board 27 member . 43 S . B . No . 2 1 (d-2 -1 ) A board of directors acting as an appointing 2 authority must make appointments to the appraisal review board by 3 majority vote , with at least two members of the majority being 4 elected members of the board of directors . 5 (d-3 ) The applicable appointing authority [ter 6 � ,a4je ] shall cause the proper officer to notify 7 appointees to the board of their appointment , and when and where 8 they are to appear . 9 (d-5 ) The appraisal district of the county shall provide to 10 the applicable appointing authority [ 4!eea4: 44!stTiet 11 ] , or to the appraisal review board commissioners , as the case 12 may be , the number of appraisal review board positions that require 13 appointment and shall provide whatever reasonable assistance is 14 requested by the applicable appointing authority [ter 15 e] or the commissioners . 16 ( d- 9 ) In selecting individuals who are to serve as members 17 of the appraisal review board for an appraisal district described 18 by Subsection (b-2 ) , the board of directors of the district [4meear 19 44:9t-i-re shall select an adequate number of 20 qualified individuals to permit the chairman of the appraisal 21 review board to fill the positions on each special panel 22 established under Section 6 . 425 . 23 (d- 10 ) Upon selection of the individuals who are to serve as 24 members of the appraisal review board, the applicable appointing 25 authority [ lee-al eiet-L-ret � ,aEiEje ] shall enter an 26 appropriate order designating such members and setting each 27 member ' s respective term of office , as provided elsewhere in this 44 S . B . No . 2 1 section 2 ( e ) Members of the board hold office for terms of two years 3 beginning January 1 . The appraisal district board of directors by 4 resolution shall provide for staggered terms , so that the terms of 5 as close to one-half of the members as possible expire each 6 year . In making the initial or subsequent appointments , the 7 applicable appointing authority, or the local administrative 8 district [ ] judge ' s designee if the appointing 9 authority is the judge , shall designate those members who serve 10 terms of one year as needed to comply with this subsection . 11 (g) Subsection ( a ) does not preclude the boards of directors 12 of two or more adjoining appraisal districts from providing for the 13 operation of a consolidated appraisal review board by interlocal 14 contract . Members of a consolidated appraisal review board are 15 appointed jointly by the applicable appointing authorities [ter 16 m�rst ;L-a 4!-tp,e—dist L-4!e t j ,���e = ] in the counties in which the 17 appraisal districts that are parties to the contract are 18 established . 19 ( i ) A chief appraiser or another employee or agent of the 20 appraisal district , a member of the appraisal review board for the 21 appraisal district , a member of the board of directors of the 22 appraisal district if the board is established for a district to 23 which Section 6 . 03 applies , a property tax consultant , or an agent 24 of a property owner commits an offense if the person communicates 25 with the applicable appointing authority [ le el—aa r istiazt e 26 44:9-t-L-iet- jidEitfe ] regarding the appointment of appraisal review board 27 members . This subsection does not apply to : 45 S . B . No . 2 1 ( 1 ) a communication between a member of the appraisal 2 review board and the applicable appointing authority [ter 3 rs-tLa t-4!-,�edia-t ie ] regarding the member ' s 4 reappointment to the board; 5 ( 2 ) a communication between the taxpayer liaison 6 officer for the appraisal district and the applicable appointing 7 authority [ lee- ' e4istL-iet] in the course of 8 the performance of the officer ' s clerical duties so long as the 9 officer does not offer an opinion or comment regarding the 10 appointment of appraisal review board members ; 11 ( 3 ) a communication between a chief appraiser or 12 another employee or agent of the appraisal district , a member of the 13 appraisal review board for the appraisal district , or a member of 14 the board of directors of the appraisal district if the board is 15 established for a district to which Section 6 . 03 applies and the 16 applicable appointing authority [ 4!eea4! 44!stTret 17 l regarding information relating to or described by Subsection 18 (d-1 ) , (d-5 ) , or ( f) of this section or Section 411 . 1296 , 19 Government Code ; 20 ( 4 ) a communication between a property tax consultant 21 or a property owner or an agent of the property owner and the 22 taxpayer liaison officer for the appraisal district regarding 23 information relating to or described by Subsection ( f ) . The 24 taxpayer liaison officer for the appraisal district shall report 25 the contents of the communication relating to or described by 26 Subsection ( f) to the applicable appointing authority [ 27 eii stir et- � ,d4EIe l ; or 46 S . B . No . 2 1 ( 5 ) a communication between a property tax consultant 2 or a property owner or an agent of the property owner and the 3 applicable appointing authority [ 4!ee&4! eiislcL-w6et- 4 ] regarding information relating to or described by Subsection 5 ( f ) . 6 ( j ) A chief appraiser or another employee or agent of an 7 appraisal district commits an offense if the person communicates 8 with a member of the appraisal review board for the appraisal 9 district , a member of the board of directors of the appraisal 10 district , or the local administrative district judge , if the judge 11 is the appointing authority for the district , regarding a ranking, 12 scoring, or reporting of the percentage by which the appraisal 13 review board or a panel of the board reduces the appraised value of 14 property . 15 SECTION 5 . 10 . Section 6 . 41 ( f) , Tax Code , as amended by 16 Chapters 354 (H . B . 2941 ) and 533 ( S . B . 63 ) , Acts of the 8 7 t h 17 Legislature , Regular Session , 2021 , is reenacted and amended to 18 read as follows : 19 ( f ) A member of the appraisal review board may be removed 20 from the board by the applicable appointing authority, or the local 21 administrative district [ ] judge ' s designee if the 22 appointing authority is the judge . Not later than the 90th day 23 after the date the board of directors , local administrative 24 district judge , or judge ' s designee that appointed a member of the 25 appraisal review board learns of a potential ground for removal of 26 the member, the board of directors , local administrative district 27 judge , or judge ' s designee , as applicable , shall remove the member 47 S . B . No . 2 1 or find by official action that the member ' s removal is not 2 warranted . Grounds for removal are : 3 ( 1 ) a violation of Section 6 . 412 , 6 . 413 , 41 . 66 ( f) , or 4 41 . 69 ; 5 ( 2 ) good cause relating to the attendance of members 6 at called meetings of the board as established by written policy 7 adopted by a majority of the appraisal district board of directors ; 8 or 9 ( 3 ) evidence of repeated bias or misconduct . 10 SECTION 5 . 11 . Section 6 . 42 (a) , Tax Code , is amended to read 11 as follows : 12 ( a ) A majority of the appraisal review board constitutes a 13 quorum . The applicable appointing authority prescribed by Section 14 6 . 41 (d) [ 1eeal aelfftinistL-ative 4is idelg _ uncle- , 15 , ] in the county in which the appraisal 16 district is established shall select a chairman and a secretary 17 from among the members of the appraisal review board . The 18 applicable appointing authority [ ] is encouraged to select as 19 chairman a member of the appraisal review board, if any, who has a 20 background in law and property appraisal . 21 SECTION 5 . 12 . Section 6 . 425 (e ) , Tax Code , is amended to 22 read as follows : 23 ( e ) Notwithstanding Subsection (d) the chairman of the 24 appraisal review board may appoint to a special panel described by 25 this section a member of the appraisal review board who does not 26 meet the qualifications prescribed by that subsection if : 27 ( 1 ) the number of persons appointed to the board [�- 48 S . B . No . 2 1 nTeleea aa- n atI-at- edis t-1-4! _t idela;= ] who meet those 2 qualifications is not sufficient to fill the positions on each 3 special panel ; and 4 ( 2 ) the board member being appointed to the panel 5 holds a bachelor ' s degree in any field . 6 SECTION 5 . 13 . (a) Appraisal district directors shall be 7 elected to the elective positions as provided by Section 6 . 0301 , 8 Tax Code , as added by this article , beginning with the election 9 conducted on the uniform election date in May 2024 . The directors 10 then elected take office on July 1 , 2024 , and serve a term that 11 expires on December 31 , 2026 . 12 (b ) Following the election of the initial elected directors 13 of an appraisal district as provided by Subsection ( a) of this 14 section , directors shall be elected as provided by Section 6 . 0301 , 15 Tax Code , as added by this article , beginning with the general 16 election conducted in November 2026 . Directors then elected take 17 office January 1 , 2027 . 18 ( c ) At the first meeting of the board of directors of an 19 appraisal district described by Section 6 . 0301 , Tax Code , as added 20 by this article , that follows the November 2026 general election of 21 directors under that section, the three elected directors shall 22 draw lots to determine which director shall serve a term of two 23 years and which two directors shall serve a term of four years 24 Thereafter, all elected directors serve four-year terms . 25 (d) The term of an appraisal district director serving on 26 December 31 , 2024 , on the board of directors of an appraisal 27 district described by Section 6 . 0301 , Tax Code , as added by this 49 S . B . No . 2 1 article , expires on January 1 , 2025 . Not later than December 31 , 2 2024 , the taxing units participating in the appraisal district that 3 are entitled to appoint directors shall appoint five directors to 4 serve terms that begin on January 1 , 2025 . Two directors shall be 5 appointed to serve a term of one year, and three directors shall be 6 appointed to serve a term of three years . Thereafter, all appointed 7 directors serve four-year terms . 8 ARTICLE 6 . TRANSITIONAL TAX YEAR PROVISIONS 9 SECTION 6 . 01 . Section 25 . 23 , Tax Code , is amended by adding 10 Subsection (a-1 ) to read as follows : 11 ( a-1 ) This subsection applies only to the appraisal records 12 for the 2023 tax year . The chief appraiser shall prepare 13 supplemental appraisal records to account for the changes in law 14 made by S . B . 2 , Acts of the 88th Legislature , 2nd Called Session, 15 2023 . This subsection expires December 31 , 2024 , 16 SECTION 6 . 02 . Section 26 . 04 , Tax Code , is amended by adding 17 Subsections ( a-1 ) and ( c-1 ) to read as follows : 18 ( a- 1 ) On receipt of the appraisal roll for the 2023 tax 19 year, the assessor for a taxing unit shall determine the total 20 taxable value of property taxable by the taxing unit and the taxable 21 value of new property as if the changes in law made by S . B . 2 , Acts 22 of the 88th Legislature , 2nd Called Session, 2023 , were in effect 23 for that tax year . This subsection expires December 31 , 2024 . 24 ( c- 1 ) An officer or employee designated by the governing 25 body of a taxing unit shall calculate the no-new-revenue tax rate 26 and the voter-approval tax rate of the taxing unit for the 2023 tax 27 year as if the changes in law made by S . B . 2 , Acts of the 88th 50 S . B . No . 2 1 Legislature , 2nd Called Session, 2023 , were in effect for that tax 2 year . This subsection expires December 31 , 2024 . 3 SECTION 6 . 03 . Chapter 26 , Tax Code , is amended by adding 4 Section 26 . 0401 to read as follows : 5 Sec . 26 . 0401 . CALCULATION OF CERTAIN TAX RATES FOR 2023 TAX 6 YEAR . ( a) For the purposes of calculating the no-new-revenue tax 7 rate , the voter-approval tax rate , and any related tax rate for the 8 2023 tax year , a taxing unit that calculates those rates under a 9 provision of law other than Section 26 . 04 or 26 . 08 shall calculate 10 those rates as if the changes in law made by S . B . 2 , Acts of the 88th 11 Legislature , 2nd Called Session, 2023 , were in effect for that tax 12 year . 13 (b ) This section expires December 31 , 2 02 4 14 SECTION 6 . 04 . Section 26 . 08 , Tax Code , is amended by adding 15 Subsection (q) to read as follows : 16 ( q) For purposes of this section, the voter-approval tax 17 rate of a school district for the 2023 tax year shall be calculated 18 as if the changes in law made by S . B . 2 , Acts of the 88th 19 Legislature , 2nd Called Session, 2023 , were in effect for that tax 20 year . This subsection expires December 31 , 2024 . 21 SECTION 6 . 05 . Section 26 . 09 , Tax Code , is amended by adding 22 Subsection ( c-1 ) to read as follows : 23 ( c- 1 ) The assessor for a taxing unit shall calculate the 24 amount of tax imposed by the taxing unit on property for the 2023 25 tax year as if the changes in law made by S . B . 2 , Acts of the 88th 26 Legislature , 2nd Called Session, 2023 , were in effect for that tax 27 year and also as if the changes in law made by that Act were not in 51 S . B . No . 2 1 effect for that tax year . This subsection expires December 31 , 2 2024 . 3 SECTION 6 . 06 . Section 26 . 15 , Tax Code , is amended by adding 4 Subsection (h) to read as follows : 5 (h) The assessor for a taxing unit shall correct the tax 6 roll for the taxing unit for the 2023 tax year to reflect the 7 results of the election to approve the constitutional amendment 8 proposed by H . J . R . 2 , 88th Legislature , 2nd Called Session , 2023 . 9 This subsection expires December 31 , 2024 , 10 SECTION 6 . 07 . Section 31 . 01 , Tax Code , is amended by adding 11 Subsections (d-2 ) , (d-3 ) , (d-4 ) , and ( d-5 ) to read as follows : 12 ( d-2 ) This subsection and Subsections (d-3 ) and ( d-4 ) apply 13 only to taxes imposed by a taxing unit on property for the 2023 tax 14 year and only if the changes in law made by S . B . 2 , Acts of the 88th 15 Legislature , 2nd Called Session, 2023 , would lower the taxes 16 imposed by the taxing unit on the property for that tax year . The 17 assessor for the taxing unit shall compute the amount of taxes 18 imposed and the other information required by this section as if the 19 changes in law made by S . B . 2 , Acts of the 88th Legislature , 2nd 20 Called Session , 2023 , were in effect for that tax year . The tax 21 bill or the separate statement must indicate that the bill is a 22 provisional tax bill and include a statement in substantially the 23 following form : 24 " If the Texas Legislature had not enacted property tax relief 25 legislation during the 2023 legislative session, your tax bill 26 would have been $ ( insert amount of tax bill if the changes in 27 law made by S . B . 2 , Acts of the 88th Legislature , 2nd Called 52 S . B . No . 2 1 Session, 2023 , were not in effect for that tax year ) . Because of 2 action by the Texas Legislature , your tax bill has been lowered by 3 $ ( insert difference between amount of tax bill if the changes 4 in law made by S . B . 2 , Acts of the 88th Legislature , 2nd Called 5 Session , 2023 , were not in effect for that tax year and amount of 6 tax bill if that Act were in effect for that tax year) , resulting in 7 a lower tax bill of $ ( insert amount of tax bill if the changes 8 in law made by S . B . 2 , Acts of the 88th Legislature , 2nd Called 9 Session , 2023 , were in effect for that tax year ) , contingent on the 10 approval by the voters at an election to be held November 7 , 2023 , 11 of the constitutional amendment proposed by H . J . R . 2 , 88th 12 Legislature , 2nd Called Session, 2023 . If that constitutional 13 amendment is not approved by the voters at the election, a 14 supplemental tax bill in the amount of $ ( insert difference 15 between amount of tax bill if the changes in law made by S . B . 2 , 16 Acts of the 88th Legislature , 2nd Called Session , 2023 , were not in 17 effect for that tax year and amount of tax bill if that Act were in 18 effect for that tax year) will be mailed to you . " 19 (d-3 ) A tax bill prepared by the assessor for a taxing unit 20 as provided by Subsection (d-2 ) and mailed as provided by 21 Subsection (a ) is considered to be a provisional tax bill until the 22 canvass of the votes on the constitutional amendment proposed by 23 H . J . R . 2 , 88th Legislature , 2nd Called Session, 2023 . If the 24 constitutional amendment is approved by the voters , the tax bill is 25 considered to be a final tax bill for the taxes imposed on the 26 property for the 2023 tax year, and no additional tax bill is 27 required to be mailed unless another provision of this title 53 S . B . No . 2 1 requires the mailing of a corrected tax bill . If the constitutional 2 amendment is not approved by the voters : 3 ( 1 ) a tax bill prepared by the assessor as provided by 4 Subsection ( d-2 ) is considered to be a final tax bill but only as to 5 the portion of the taxes imposed on the property for the 2023 tax 6 year that are included in the bill ; 7 ( 2 ) the amount of taxes imposed by each taxing unit on 8 property for the 2023 tax year is calculated as if the changes in 9 law made by S . B . 2 , Acts of the 88th Legislature , 2nd Called 10 Session , 2023 , were not in effect for that tax year; and 11 ( 3 ) except as provided by Subsections ( f ) , ( i-1 ) , and 12 ( k) , the assessor for each taxing unit shall prepare and mail a 13 supplemental tax bill , by December 1 or as soon thereafter as 14 practicable , in an amount equal to the difference between the 15 amount of the tax bill if the changes in law made by S . B . 2 , Acts of 16 the 88th Legislature , 2nd Called Session, 2023 , were not in effect 17 for that tax year and the amount of the tax bill if that Act were in 18 effect for that tax year . 19 (d-4 ) Except as otherwise provided by Subsection (d-3 ) , the 20 provisions of this section other than Subsection (d-2 ) apply to a 21 supplemental tax bill mailed under Subsection (d-3 ) . 22 (d-5 ) This subsection and Subsections (d-2 ) (d-3 ) and 23 (d-4 ) expire December 31 , 2024 . 24 SECTION 6 . 08 . Section 31 . 02 , Tax Code , is amended by adding 25 Subsection ( a-1 ) to read as follows : 26 ( a- 1 ) Except as provided by Subsection (b) of this section 27 and Sections 31 . 03 and 31 . 04 , taxes for which a supplemental tax 54 S . B . No . 2 1 bill is mailed under Section 31 . 01 (d-3 ) are due on receipt of the 2 tax bill and are delinquent if not paid before March 1 of the year 3 following the year in which imposed . This subsection expires 4 December 31 , 2024 . 5 ARTICLE 7 . CONTINGENT ON PASSAGE OF FRANCHISE TAX REFORM 6 LEGISLATION 7 SECTION 7 . 01 . This Act takes effect only if S . B . 3 or 8 similar legislation of the 88th Legislature , 2nd Called Session , 9 2023 , relating to the amount of the total revenue exemption for the 10 franchise tax and the exclusion of certain taxable entities from 11 the requirement to file a franchise tax report becomes law in a 12 manner described by Section 2001 . 006 (a ) ( 2 ) , Government Code . If 13 legislation described by this section does not become law in a 14 manner described by Section 2001 . 006 ( a ) ( 2 ) , Government Code , this 15 Act has no effect . 16 ARTICLE 8 . EFFECTIVE DATES 17 SECTION 8 . 01 . Except as provided by Article 7 of this Act , 18 this Act takes effect as provided by this article . 19 SECTION 8 . 02 . Except as otherwise provided by this article , 20 this Act takes effect on the 91st day after the last day of the 21 legislative session . 22 SECTION 8 . 03 . Article 2 of this Act takes effect on the date 23 on which the constitutional amendment proposed by H . J . R . 2 , 88th 24 Legislature , 2nd Called Session, 2023 , is approved by the voters . 25 If that amendment is not approved by the voters , Article 2 of this 26 Act has no effect . 27 SECTION 8 . 04 . (a) Except as provided by Subsection (b) of 55 S . B . No . 2 1 this section or as otherwise provided by Article 3 of this Act : 2 ( 1 ) Article 3 of this Act takes effect on the date on 3 which the constitutional amendment proposed by H . J . R . 2 , 88th 4 Legislature , 2nd Called Session, 2023 , takes effect ; and 5 ( 2 ) if that amendment is not approved by the voters , 6 Article 3 of this Act has no effect . 7 (b ) Sections 49 . 004 ( a-1 ) , (b-1 ) , and ( c- 1 ) , 49 . 0042 , 8 49 . 0121 , 49 . 154 (a-2 ) and (a-3 ) , and 49 . 308 (a-1 ) , Education Code , as 9 added by Article 3 of this Act , take effect immediately if this Act 10 receives a vote of two-thirds of all the members elected to each 11 house , as provided by Section 39 , Article III , Texas Constitution . 12 If this Act does not receive the vote necessary for those sections 13 to have immediate effect , those sections take effect on the 91st day 14 after the last day of the legislative session . 15 SECTION 8 . 05 . Article 4 of this Act takes effect January 1 , 16 2024 , but only if the constitutional amendment proposed by 17 H . J . R . 2 , 88th Legislature , 2nd Called Session, 2023 , is approved 18 by the voters . If that amendment is not approved by the voters , 19 Article 4 of this Act has no effect . 20 SECTION 8 . 06 . (a) Article 5 of this Act takes effect as 21 provided by Subsections (b ) and ( c ) of this section, but only if the 22 constitutional amendment proposed by H . J . R . 2 , 88th Legislature , 23 2nd Called Session, 2023 , is approved by the voters . If that 24 amendment is not approved by the voters , Article 5 of this Act has 25 no effect . 26 (b ) Except as provided by Subsection ( c ) of this section , 27 Article 5 of this Act takes effect July 1 , 2024 . 56 S . B . No . 2 1 ( c ) Sections 5 . 04 and 5 . 13 of this Act take effect on the 2 91st day after the last day of the legislative session . 3 SECTION 8 . 07 . Article 6 of this Act takes effect 4 immediately if this Act receives a vote of two-thirds of all the 5 members elected to each house , as provided by Section 39 , Article 6 III , Texas Constitution . If this Act does not receive the vote 7 necessary for that article to have immediate effect , Article 6 of 8 this Act takes effect on the 91st day after the last day of the 9 legislative session . 57 S . B . No . 2 ------------------------------ ------p----------------- President of the Senate Speaker of the House I hereby certify that S . B . No . 2 passed the Senate on July 12 , 2023 , by the following vote : Yeas 31 , Nays 0 . ------------------------------ Secretary of the Senate I hereby certify that S . B . No . 2 passed the House on July 13 , 2023 , by the following vote : Yeas 133 , Nays 4 , zero present not voting . ------------------------------ Chief Clerk of the House Approved : ------------------------------ Date ------------------------------ Governor 58