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  S.B. No. 2
 
 
 
 
AN ACT
  relating to providing property tax relief through the public school
  finance system, exemptions, limitations on appraisals and taxes,
  and property tax administration; authorizing the imposition of a
  fee.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
  ARTICLE 1. SHORT TITLE
         SECTION 1.01.  This Act may be cited as the Property Tax
  Relief Act.
  ARTICLE 2. SCHOOL DISTRICT TAX RATE COMPRESSION
         SECTION 2.01.  Subchapter F, Chapter 48, Education Code, is
  amended by adding Sections 48.2555 and 48.283 to read as follows:
         Sec. 48.2555.  MAXIMUM COMPRESSED TAX RATE FOR 2023-2024
  SCHOOL YEAR.  (a)  Notwithstanding any other provision of this
  title or Chapter 26, Tax Code, for the 2023-2024 school year, the
  commissioner shall calculate the value of a school district's
  maximum compressed tax rate by determining the district's maximum
  compressed rate under Section 48.2551 or 48.2552(b), if applicable,
  and reducing the tax rate determined under the applicable section
  by $0.107.
         (b)  If a school district's maximum compressed tax rate as
  calculated under Subsection (a) would be less than 90 percent of
  another school district's maximum compressed tax rate under
  Subsection (a), the district's maximum compressed tax rate is the
  value at which the district's maximum compressed tax rate would be
  equal to 90 percent of the other district's maximum compressed tax
  rate.
         (c)  Notwithstanding any other provision of this title or
  Chapter 26, Tax Code, for purposes of determining funding for
  school districts for the 2023-2024 school year, a reference in any
  of the following provisions of law to a school district's maximum
  compressed tax rate or maximum compressed rate as determined under
  Section 48.2551 means the maximum compressed tax rate determined
  for the district under this section:
               (1)  Section 13.054(f);
               (2)  Section 45.003(d);
               (3)  Section 45.0032(a);
               (4)  Section 48.051(a);
               (5)  Sections 48.2553(a) and (e);
               (6)  Section 48.2556; and
               (7)  Section 26.08(n), Tax Code.
         (d)  For purposes of Section 30.003(f-1), a reference in that
  section to Section 48.2551 includes this section.
         (e)  Notwithstanding any other provision of this title, for
  purposes of determining a school district's maximum compressed tax
  rate under Section 48.2551 for the 2024-2025 school year, the value
  of the district's "PYMCR" is the maximum compressed tax rate
  determined for the district under this section for the preceding
  school year.
         (f)  This section expires September 1, 2025.
         Sec. 48.283.  ADDITIONAL STATE AID FOR CERTAIN DISTRICTS
  IMPACTED BY COMPRESSION. A school district that received an
  adjustment under Section 48.257(b) for the 2022-2023 school year is
  entitled to additional state aid for each school year in an amount
  equal to the amount of that adjustment for the 2022-2023 school year
  less the difference, if the difference is greater than zero,
  between:
               (1)  the amount to which the district is entitled under
  this chapter for the current school year; and
               (2)  the amount to which the district would be entitled
  under this chapter for the current school year if the district's
  maximum compressed tax rate had not been reduced under Section
  48.2555, as added by S.B. 2, Acts of the 88th Legislature, 2nd
  Called Session, 2023.
  ARTICLE 3.  SCHOOL DISTRICT RESIDENCE HOMESTEAD EXEMPTION
         SECTION 3.01.  Section 11.13, Tax Code, is amended by
  amending Subsection (b) and adding Subsection (n-1) to read as
  follows:
         (b)  An adult is entitled to exemption from taxation by a
  school district of $100,000 [$40,000] of the appraised value of the
  adult's residence homestead, except that only $5,000 of the
  exemption applies to an entity operating under former Chapter 17,
  18, 25, 26, 27, or 28, Education Code, as those chapters existed on
  May 1, 1995, as permitted by Section 11.301, Education Code.
         (n-1)  The governing body of a school district,
  municipality, or county that adopted an exemption under Subsection
  (n) for the 2022 tax year may not reduce the amount of or repeal the
  exemption. This subsection expires December 31, 2027.
         SECTION 3.02.  Section 11.26, Tax Code, is amended by
  amending Subsections (a), (a-10), and (o) and adding Subsections
  (a-11) and (a-12) to read as follows:
         (a)  The tax officials shall appraise the property to which
  this section applies and calculate taxes as on other property, but
  if the tax so calculated exceeds the limitation imposed by this
  section, the tax imposed is the amount of the tax as limited by this
  section, except as otherwise provided by this section.  A school
  district may not increase the total annual amount of ad valorem tax
  it imposes on the residence homestead of an individual 65 years of
  age or older or on the residence homestead of an individual who is
  disabled, as defined by Section 11.13, above the amount of the tax
  it imposed in the first tax year in which the individual qualified
  that residence homestead for the applicable exemption provided by
  Section 11.13(c) for an individual who is 65 years of age or older
  or is disabled.  If the individual qualified that residence
  homestead for the exemption after the beginning of that first year
  and the residence homestead remains eligible for the same exemption
  for the next year, and if the school district taxes imposed on the
  residence homestead in the next year are less than the amount of
  taxes imposed in that first year, a school district may not
  subsequently increase the total annual amount of ad valorem taxes
  it imposes on the residence homestead above the amount it imposed in
  the year immediately following the first year for which the
  individual qualified that residence homestead for the same
  exemption, except as provided by Subsection (b).  [If the first tax
  year the individual qualified the residence homestead for the
  exemption provided by Section 11.13(c) for individuals 65 years of
  age or older or disabled was a tax year before the 2015 tax year, the
  amount of the limitation provided by this section is the amount of
  tax the school district imposed for the 2014 tax year less an amount
  equal to the amount determined by multiplying $10,000 times the tax
  rate of the school district for the 2015 tax year, plus any 2015 tax
  attributable to improvements made in 2014, other than improvements
  made to comply with governmental regulations or repairs.]
         (a-10)  Notwithstanding the other provisions of this
  section, if in the 2024 or a subsequent tax year an individual
  qualifies for a limitation on tax increases provided by this
  section on the individual's residence homestead, the amount of the
  limitation provided by this section on the homestead is equal to the
  amount computed by:
               (1)  multiplying the taxable value of the homestead in
  the preceding tax year by a tax rate equal to the difference between
  the school district's maximum compressed rate for the preceding tax
  year and the district's maximum compressed rate for the current tax
  year;
               (2)  subtracting the amount computed under Subdivision
  (1) from the amount of tax the district imposed on the homestead in
  the preceding tax year; [and]
               (3)  adding any tax imposed in the current tax year
  attributable to improvements made in the preceding tax year as
  provided by Subsection (b) to the amount computed under Subdivision
  (2);
               (4)  multiplying the amount of any increase in the
  current tax year as compared to the preceding tax year in the
  aggregate amount of the exemptions to which the individual is
  entitled under Sections 11.13(b) and (c) by the school district's
  tax rate for the current tax year; and
               (5)  subtracting the amount computed under Subdivision
  (4) from the amount computed under Subdivision (3).
         (a-11)  This subsection applies only to an individual who in
  the 2023 tax year qualifies for a limitation under this section and
  for whom the 2022 tax year or an earlier tax year was the first tax
  year the individual or the individual's spouse qualified for an
  exemption under Section 11.13(c). The amount of the limitation
  provided by this section on the residence homestead of an
  individual to which this subsection applies for the 2023 tax year is
  the amount of the limitation as computed under Subsection (a-5),
  (a-6), (a-7), (a-8), or (a-9) of this section, as applicable, less
  an amount equal to the product of $60,000 and the tax rate of the
  school district for the 2023 tax year. This subsection expires
  January 1, 2025.
         (a-12)  This subsection applies only to an individual who in
  the 2023 tax year qualifies for a limitation under this section and
  for whom the 2021 tax year or an earlier tax year was the first tax
  year the individual or the individual's spouse qualified for an
  exemption under Section 11.13(c). The amount of the limitation
  provided by this section on the residence homestead of an
  individual to which this subsection applies for the 2023 tax year is
  the amount of the limitation as computed under Subsection (a-11) of
  this section less an amount equal to the product of $15,000 and the
  tax rate of the school district for the 2022 tax year. This
  subsection expires January 1, 2025.
         (o)  Notwithstanding Subsections (a)[, (a-3),] and (b), an
  improvement to property that would otherwise constitute an
  improvement under Subsection (b) is not treated as an improvement
  under that subsection if the improvement is a replacement structure
  for a structure that was rendered uninhabitable or unusable by a
  casualty or by wind or water damage.  For purposes of appraising the
  property in the tax year in which the structure would have
  constituted an improvement under Subsection (b), the replacement
  structure is considered to be an improvement under that subsection
  only if:
               (1)  the square footage of the replacement structure
  exceeds that of the replaced structure as that structure existed
  before the casualty or damage occurred; or
               (2)  the exterior of the replacement structure is of
  higher quality construction and composition than that of the
  replaced structure.
         SECTION 3.03.  Section 46.071, Education Code, is amended by
  amending Subsections (a-1) and (b-1) and adding Subsections (a-2),
  (b-2), and (c-2) to read as follows:
         (a-1)  For [Beginning with] the 2022-2023 school year, a
  school district is entitled to additional state aid under this
  subchapter to the extent that state and local revenue used to
  service debt eligible under this chapter is less than the state and
  local revenue that would have been available to the district under
  this chapter as it existed on September 1, 2021, if any increase in
  the residence homestead exemption under Section 1-b(c), Article
  VIII, Texas Constitution, as proposed by the 87th Legislature, 3rd
  Called Session, 2021, had not occurred.
         (a-2)  Beginning with the 2023-2024 school year, a school
  district is entitled to additional state aid under this subchapter
  to the extent that state and local revenue used to service debt
  eligible under this chapter is less than the state and local revenue
  that would have been available to the district under this chapter as
  it existed on September 1, 2022, if any increase in a residence
  homestead exemption under Section 1-b(c), Article VIII, Texas
  Constitution, and any additional limitation on tax increases under
  Section 1-b(d) of that article as proposed by the 88th Legislature,
  2nd Called Session, 2023, had not occurred.
         (b-1)  Subject to Subsections (c-1), (d), and (e),
  additional state aid under this section for [beginning with] the
  2022-2023 school year is equal to the amount by which the loss of
  local interest and sinking revenue for debt service attributable to
  any increase in the residence homestead exemption under Section
  1-b(c), Article VIII, Texas Constitution, as proposed by the 87th
  Legislature, 3rd Called Session, 2021, is not offset by a gain in
  state aid under this chapter.
         (b-2)  Subject to Subsections (c-2), (d), and (e),
  additional state aid under this section beginning with the
  2023-2024 school year is equal to the amount by which the loss of
  local interest and sinking revenue for debt service attributable to
  any increase in a residence homestead exemption under Section
  1-b(c), Article VIII, Texas Constitution, and any additional
  limitation on tax increases under Section 1-b(d) of that article as
  proposed by the 88th Legislature, 2nd Called Session, 2023, is not
  offset by a gain in state aid under this chapter.
         (c-2)  For the purpose of determining state aid under
  Subsections (a-2) and (b-2), local interest and sinking revenue for
  debt service is limited to revenue required to service debt
  eligible under this chapter as of September 1, 2023, or authorized
  by the voters but not yet issued as of September 1, 2023, that later
  becomes eligible under this chapter, including refunding of that
  debt, subject to Section 46.061.  The limitation imposed by Section
  46.034(a) does not apply for the purpose of determining state aid
  under this section.
         SECTION 3.04.  Section 48.2542, Education Code, is amended
  to read as follows:
         Sec. 48.2542.  ADDITIONAL STATE AID FOR ADJUSTMENT OF
  LIMITATION ON TAX INCREASES ON HOMESTEAD OF ELDERLY OR DISABLED.  
  Notwithstanding any other provision of this chapter, if a school
  district is not fully compensated through state aid or the
  calculation of excess local revenue under this chapter based on the
  determination of the district's taxable value of property under
  Subchapter M, Chapter 403, Government Code, the district is
  entitled to additional state aid in the amount necessary to fully
  compensate the district for the amount of ad valorem tax revenue
  lost due to a reduction of the amount of the limitation on tax
  increases provided by Sections 11.26(a-4), (a-5), (a-6), (a-7),
  (a-8), (a-9), [and] (a-10), (a-11), and (a-12), Tax Code, as
  applicable.
         SECTION 3.05.  Effective January 1, 2025, Section 48.2542,
  Education Code, is amended to read as follows:
         Sec. 48.2542.  ADDITIONAL STATE AID FOR ADJUSTMENT OF
  LIMITATION ON TAX INCREASES ON HOMESTEAD OF ELDERLY OR DISABLED.  
  Notwithstanding any other provision of this chapter, if a school
  district is not fully compensated through state aid or the
  calculation of excess local revenue under this chapter based on the
  determination of the district's taxable value of property under
  Subchapter M, Chapter 403, Government Code, the district is
  entitled to additional state aid in the amount necessary to fully
  compensate the district for the amount of ad valorem tax revenue
  lost due to a reduction of the amount of the limitation on tax
  increases provided by Section 11.26(a-10) [Sections 11.26(a-4),
  (a-5), (a-6), (a-7), (a-8), (a-9), and (a-10)], Tax Code[, as
  applicable].
         SECTION 3.06.  Section 48.2543, Education Code, is amended
  to read as follows:
         Sec. 48.2543.  ADDITIONAL STATE AID FOR HOMESTEAD EXEMPTION.
  (a) For [Beginning with] the 2022-2023 school year, a school
  district is entitled to additional state aid to the extent that
  state and local revenue under this chapter and Chapter 49 is less
  than the state and local revenue that would have been available to
  the district under this chapter and Chapter 49 as those chapters
  existed on September 1, 2021, if any increase in the residence
  homestead exemption under Section 1-b(c), Article VIII, Texas
  Constitution, as proposed by the 87th Legislature, 3rd Called
  Session, 2021, had not occurred.
         (a-1)  Beginning with the 2023-2024 school year, a school
  district is entitled to additional state aid to the extent that
  state and local revenue under this chapter and Chapter 49 is less
  than the state and local revenue that would have been available to
  the district under this chapter and Chapter 49 as those chapters
  existed on September 1, 2022, if any increase in a residence
  homestead exemption under Section 1-b(c), Article VIII, Texas
  Constitution, and any additional limitation on tax increases under
  Section 1-b(d) of that article as proposed by the 88th Legislature,
  2nd Called Session, 2023, had not occurred.
         (b)  The lesser of the school district's currently adopted
  maintenance and operations tax rate or the adopted maintenance and
  operations tax rate for:
               (1)  the 2021 tax year is used for the purpose of
  determining additional state aid under Subsection (a); and
               (2)  the 2022 tax year is used for the purpose of
  determining additional state aid under Subsection (a-1).
         SECTION 3.07.  Section 48.2556(a), Education Code, is
  amended to read as follows:
         (a)  The agency shall post the following information on the
  agency's Internet website for purposes of allowing the chief
  appraiser of each appraisal district and the assessor for each
  school district to make the calculations required by Sections
  11.26(a-5), (a-6), (a-7), (a-8), (a-9), [and] (a-10), (a-11), and
  (a-12), Tax Code:
               (1)  each school district's maximum compressed rate, as
  determined under Section 48.2551, for each tax year beginning with
  the 2019 tax year; and
               (2)  each school district's tier one maintenance and
  operations tax rate, as provided by Section 45.0032(a), for the
  2018 tax year.
         SECTION 3.08.  Effective January 1, 2025, Section
  48.2556(a), Education Code, is amended to read as follows:
         (a)  For purposes of allowing the chief appraiser of each
  appraisal district and the assessor for each school district to
  make the calculations required by Section 11.26(a-10), Tax Code,
  the [The] agency shall post [the following information] on the
  agency's Internet website [for purposes of allowing the chief
  appraiser of each appraisal district and the assessor for each
  school district to make the calculations required by Sections
  11.26(a-5), (a-6), (a-7), (a-8), (a-9), and (a-10), Tax Code:
               [(1)]  each school district's maximum compressed rate,
  as determined under Section 48.2551, for the current [each] tax
  year and the preceding [beginning with the 2019] tax year[; and
               [(2)  each school district's tier one maintenance and
  operations tax rate, as provided by Section 45.0032(a), for the
  2018 tax year].
         SECTION 3.09.  Section 49.004, Education Code, is amended by
  adding Subsections (a-1), (b-1), and (c-1) to read as follows:
         (a-1)  This subsection applies only if the constitutional
  amendment proposed by H.J.R. 2, 88th Legislature, 2nd Called
  Session, 2023, is approved by the voters in an election held for
  that purpose.  As soon as practicable after receiving revised
  property values that reflect adoption of the constitutional
  amendment, the commissioner shall review the local revenue level of
  districts in the state and revise as necessary the notifications
  provided under Subsection (a) for the 2023-2024 school year.  This
  subsection expires September 1, 2024.
         (b-1)  This subsection applies only to a district that has
  not previously held an election under this chapter. Notwithstanding
  Subsection (b), a district that enters into an agreement to
  exercise an option to reduce the district's local revenue level in
  excess of entitlement under Section 49.002(3), (4), or (5) for the
  2023-2024 school year may request and, as provided by Section
  49.0042(a), receive approval from the commissioner to delay the
  date of the election otherwise required to be ordered before
  September 1. This subsection expires September 1, 2024.
         (c-1)  Notwithstanding Subsection (c), a district that
  receives approval from the commissioner to delay an election as
  provided by Subsection (b-1) may adopt a tax rate for the 2023 tax
  year before the commissioner certifies that the district has
  reduced its local revenue level to the level established by Section
  48.257.  This subsection expires September 1, 2024.
         SECTION 3.10.  Subchapter A, Chapter 49, Education Code, is
  amended by adding Section 49.0042 to read as follows:
         Sec. 49.0042.  TRANSITIONAL PROVISIONS: INCREASED HOMESTEAD
  EXEMPTION AND LIMITATION ON TAX INCREASES.  (a) The commissioner
  shall approve a district's request under Section 49.004(b-1) to
  delay the date of an election required under this chapter if the
  commissioner determines that the district would not have a local
  revenue level in excess of entitlement if the constitutional
  amendment proposed by H.J.R. 2, 88th Legislature, 2nd Called
  Session, 2023, were approved by the voters.
         (b)  The commissioner shall set a date by which each district
  that receives approval under this section must order the election.
         (c)  Not later than the 2024-2025 school year, the
  commissioner shall order detachment and annexation of property
  under Subchapter G or consolidation under Subchapter H as necessary
  to reduce the district's local revenue level to the level
  established by Section 48.257 for a district that receives approval
  under this section and subsequently:
               (1)  fails to hold the election; or
               (2)  does not receive voter approval at the election.
         (d)  This section expires September 1, 2025.
         SECTION 3.11.  Subchapter A, Chapter 49, Education Code, is
  amended by adding Section 49.0121 to read as follows:
         Sec. 49.0121.  TRANSITIONAL ELECTION DATES. (a)  This
  section applies only to an election under this chapter that occurs
  during the 2023-2024 school year.
         (b)  Section 49.012 does not apply to a district that
  receives approval of a request under Section 49.0042. The district
  shall hold the election on a Tuesday or Saturday on or before a date
  specified by the commissioner. Section 41.001, Election Code, does
  not apply to the election.
         (c)  This section expires September 1, 2024.
         SECTION 3.12.  Section 49.154, Education Code, is amended by
  adding Subsections (a-2) and (a-3) to read as follows:
         (a-2)  Notwithstanding Subsections (a) and (a-1), a district
  that receives approval of a request under Section 49.0042 shall pay
  for credit purchased:
               (1)  in equal monthly payments as determined by the
  commissioner beginning March 15, 2024, and ending August 15, 2024;
  or
               (2)  in the manner provided by Subsection (a)(2),
  provided that the district notifies the commissioner of the
  district's election to pay in that manner not later than March 15,
  2024.
         (a-3)  Subsection (a-2) and this subsection expire September
  1, 2024.
         SECTION 3.13.  Section 49.308, Education Code, is amended by
  adding Subsection (a-1) to read as follows:
         (a-1)  Notwithstanding Subsection (a), for the 2023-2024
  school year, the commissioner shall order any detachments and
  annexations of property under this subchapter as soon as
  practicable after the canvass of the votes on the constitutional
  amendment proposed by H.J.R. 2, 88th Legislature, 2nd Called
  Session, 2023.  This subsection expires September 1, 2024.
         SECTION 3.14.  Section 403.302, Government Code, is amended
  by amending Subsection (j-1) and adding Subsection (j-2) to read as
  follows:
         (j-1)  In the final certification of the study under
  Subsection (j), the comptroller shall separately identify the final
  taxable value for each school district as adjusted to account for
  the reduction of the amount of the limitation on tax increases
  provided by Section 11.26(a-10) [Sections 11.26(a-4), (a-5),
  (a-6), (a-7), (a-8), (a-9), and (a-10)], Tax Code[, as applicable].
         (j-2)  In the final certification of the study under
  Subsection (j), the comptroller shall separately identify the final
  taxable value for each school district as adjusted to account for
  the reduction of the amount of the limitation on tax increases
  provided by Sections 11.26(a-5), (a-6), (a-7), (a-8), (a-9),
  (a-10), (a-11), and (a-12), Tax Code. This subsection expires
  January 1, 2025.
         SECTION 3.15.  (a) Sections 11.26(a-1), (a-2), and (a-3),
  Tax Code, are repealed.
         (b)  Effective January 1, 2025, Sections 11.26(a-5), (a-6),
  (a-7), (a-8), and (a-9), Tax Code, are repealed.
         SECTION 3.16.  Sections 11.13 and 11.26, Tax Code, as
  amended by this article, apply only to an ad valorem tax year that
  begins on or after January 1, 2023.
  ARTICLE 4.  CIRCUIT BREAKER LIMITATION ON INCREASES IN VALUE OF REAL
  PROPERTY OTHER THAN RESIDENCE HOMESTEAD
         SECTION 4.01.  Section 1.12(d), Tax Code, is amended to read
  as follows:
         (d)  For purposes of this section, the appraisal ratio of
  property [a homestead] to which Section 23.23 or 23.231 applies is
  the ratio of the property's market value as determined by the
  appraisal district or appraisal review board, as applicable, to the
  market value of the property according to law. The appraisal ratio
  is not calculated according to the appraised value of the property
  as limited by Section 23.23 or 23.231.
         SECTION 4.02.  Effective January 1, 2027, Section 1.12(d),
  Tax Code, is amended to read as follows:
         (d)  For purposes of this section, the appraisal ratio of a
  homestead to which Section 23.23 applies is the ratio of the
  property's market value as determined by the appraisal district or
  appraisal review board, as applicable, to the market value of the
  property according to law.  The appraisal ratio is not calculated
  according to the appraised value of the property as limited by
  Section 23.23.
         SECTION 4.03.  Subchapter B, Chapter 23, Tax Code, is
  amended by adding Section 23.231 to read as follows:
         Sec. 23.231.  CIRCUIT BREAKER LIMITATION ON APPRAISED VALUE
  OF REAL PROPERTY OTHER THAN RESIDENCE HOMESTEAD. (a)  In this
  section:
               (1)  "Consumer price index" means the average over a
  state fiscal year of the Consumer Price Index for All Urban
  Consumers (CPI-U), U.S. City Average, published monthly by the
  United States Bureau of Labor Statistics, or its successor in
  function.
               (2)  "Disaster recovery program" means a disaster
  recovery program funded with community development block grant
  disaster recovery money authorized by federal law.
               (3)  "New improvement" means an improvement to real
  property made after the most recent appraisal of the property that
  increases the market value of the property and the value of which is
  not included in the appraised value of the property for the
  preceding tax year. The term does not include repairs to or
  ordinary maintenance of an existing structure or the grounds or
  another feature of the property.
         (b)  This section applies only to real property with an
  appraised value of not more than the amount determined under
  Subsection (j) for the tax year in which the property first
  qualifies for the circuit breaker limitation authorized by this
  section.
         (c)  This section does not apply to:
               (1)  a residence homestead that qualifies for an
  exemption under Section 11.13; or
               (2)  property appraised under Subchapter C, D, E, F, G,
  or H.
         (d)  Notwithstanding the requirements of Section 25.18 and
  regardless of whether the appraisal office has appraised the
  property and determined the market value of the property for the tax
  year, an appraisal office may increase the appraised value of real
  property to which this section applies for a tax year to an amount
  not to exceed the lesser of:
               (1)  the market value of the property for the most
  recent tax year that the market value was determined by the
  appraisal office; or
               (2)  the sum of:
                     (A)  20 percent of the appraised value of the
  property for the preceding tax year;
                     (B)  the appraised value of the property for the
  preceding tax year; and
                     (C)  the market value of all new improvements to
  the property.
         (e)  When appraising real property to which this section
  applies, the chief appraiser shall:
               (1)  appraise the property at its market value; and
               (2)  include in the appraisal records both the market
  value of the property and the amount computed under Subsection
  (d)(2).
         (f)  The circuit breaker limitation provided by Subsection
  (d) takes effect as to a parcel of real property on January 1 of the
  tax year following the first tax year in which the owner owns the
  property on January 1. The circuit breaker limitation expires on
  January 1 of the tax year following the tax year in which the owner
  of the property ceases to own the property.
         (g)  For purposes of Subsection (f), a person who acquired
  real property to which this section applies before the 2023 tax year
  is considered to have acquired the property on January 1, 2023.
         (h)  Notwithstanding Subsections (a) and (d) and except as
  provided by Subdivision (2) of this subsection, an improvement to
  real property that would otherwise constitute a new improvement is
  not treated as a new improvement if the improvement is a replacement
  structure for a structure that was rendered uninhabitable or
  unusable by a casualty or by wind or water damage. For purposes of
  appraising the property under Subsection (d) in the tax year in
  which the structure would have constituted a new improvement:
               (1)  the appraised value the property would have had in
  the preceding tax year if the casualty or damage had not occurred is
  considered to be the appraised value of the property for that year,
  regardless of whether that appraised value exceeds the actual
  appraised value of the property for that year as limited by
  Subsection (d); and
               (2)  the replacement structure is considered to be a
  new improvement only if:
                     (A)  the square footage of the replacement
  structure exceeds that of the replaced structure as that structure
  existed before the casualty or damage occurred; or
                     (B)  the exterior of the replacement structure is
  of higher quality construction and composition than that of the
  replaced structure.
         (i)  Notwithstanding Subsection (h)(2), and only to the
  extent necessary to satisfy the requirements of a disaster recovery
  program, a replacement structure described by that subdivision is
  not considered to be a new improvement if to satisfy the
  requirements of the disaster recovery program it was necessary
  that:
               (1)  the square footage of the replacement structure
  exceed that of the replaced structure as that structure existed
  before the casualty or damage occurred; or
               (2)  the exterior of the replacement structure be of
  higher quality construction and composition than that of the
  replaced structure.
         (j)  For the purpose of Subsection (b), for the 2024 tax
  year, the amount is $5 million.  For the 2025 tax year, the
  comptroller shall determine the amount for purposes of Subsection
  (b) by increasing or decreasing, as applicable, the amount in
  effect for the 2024 tax year by an amount equal to $5 million
  multiplied by the percentage increase or decrease during the
  preceding state fiscal year in the consumer price index. For each
  subsequent tax year, the comptroller shall determine the amount for
  purposes of Subsection (b) by increasing or decreasing, as
  applicable, the amount in effect for the preceding tax year by an
  amount equal to that amount multiplied by the percentage increase
  or decrease during the preceding state fiscal year in the consumer
  price index, rounded to the nearest $10,000.  The comptroller shall
  publish the amount in effect for a tax year under this subsection as
  soon as practicable after January 1 of the tax year.
         (k)  This section expires December 31, 2026.
         SECTION 4.04.  Sections 25.19(b) and (g), Tax Code, are
  amended to read as follows:
         (b)  The chief appraiser shall separate real from personal
  property and include in the notice for each:
               (1)  a list of the taxing units in which the property is
  taxable;
               (2)  the appraised value of the property in the
  preceding year;
               (3)  the taxable value of the property in the preceding
  year for each taxing unit taxing the property;
               (4)  the appraised value of the property for the
  current year, the kind and amount of each exemption and partial
  exemption, if any, approved for the property for the current year
  and for the preceding year, and, if an exemption or partial
  exemption that was approved for the preceding year was canceled or
  reduced for the current year, the amount of the exemption or partial
  exemption canceled or reduced;
               (4-a)  a statement of whether the property qualifies
  for the circuit breaker limitation on appraised value provided by
  Section 23.231;
               (5)  in italic typeface, the following statement:  "The
  Texas Legislature does not set the amount of your local taxes. Your
  property tax burden is decided by your locally elected officials,
  and all inquiries concerning your taxes should be directed to those
  officials";
               (6)  a detailed explanation of the time and procedure
  for protesting the value;
               (7)  the date and place the appraisal review board will
  begin hearing protests;
               (8)  an explanation of the availability and purpose of
  an informal conference with the appraisal office before a hearing
  on a protest; and
               (9)  a brief explanation that the governing body of
  each taxing unit decides whether or not taxes on the property will
  increase and the appraisal district only determines the value of
  the property.
         (g)  By April 1 or as soon thereafter as practicable if the
  property is a single-family residence that qualifies for an
  exemption under Section 11.13, or by May 1 or as soon thereafter as
  practicable in connection with any other property, the chief
  appraiser shall deliver a written notice to the owner of each
  property not included in a notice required to be delivered under
  Subsection (a), if the property was reappraised in the current tax
  year, if the ownership of the property changed during the preceding
  year, or if the property owner or the agent of a property owner
  authorized under Section 1.111 makes a written request for the
  notice.  The chief appraiser shall separate real from personal
  property and include in the notice for each property:
               (1)  the appraised value of the property in the
  preceding year;
               (2)  the appraised value of the property for the
  current year and the kind of each partial exemption, if any,
  approved for the current year;
               (2-a)  a statement of whether the property qualifies
  for the circuit breaker limitation on appraised value provided by
  Section 23.231;
               (3)  a detailed explanation of the time and procedure
  for protesting the value; and
               (4)  the date and place the appraisal review board will
  begin hearing protests.
         SECTION 4.05.  Effective January 1, 2027, Sections 25.19(b)
  and (g), Tax Code, are amended to read as follows:
         (b)  The chief appraiser shall separate real from personal
  property and include in the notice for each:
               (1)  a list of the taxing units in which the property is
  taxable;
               (2)  the appraised value of the property in the
  preceding year;
               (3)  the taxable value of the property in the preceding
  year for each taxing unit taxing the property;
               (4)  the appraised value of the property for the
  current year, the kind and amount of each exemption and partial
  exemption, if any, approved for the property for the current year
  and for the preceding year, and, if an exemption or partial
  exemption that was approved for the preceding year was canceled or
  reduced for the current year, the amount of the exemption or partial
  exemption canceled or reduced;
               (5)  in italic typeface, the following statement: "The
  Texas Legislature does not set the amount of your local taxes. Your
  property tax burden is decided by your locally elected officials,
  and all inquiries concerning your taxes should be directed to those
  officials";
               (6)  a detailed explanation of the time and procedure
  for protesting the value;
               (7)  the date and place the appraisal review board will
  begin hearing protests;
               (8)  an explanation of the availability and purpose of
  an informal conference with the appraisal office before a hearing
  on a protest; and
               (9)  a brief explanation that the governing body of
  each taxing unit decides whether or not taxes on the property will
  increase and the appraisal district only determines the value of
  the property.
         (g)  By April 1 or as soon thereafter as practicable if the
  property is a single-family residence that qualifies for an
  exemption under Section 11.13, or by May 1 or as soon thereafter as
  practicable in connection with any other property, the chief
  appraiser shall deliver a written notice to the owner of each
  property not included in a notice required to be delivered under
  Subsection (a), if the property was reappraised in the current tax
  year, if the ownership of the property changed during the preceding
  year, or if the property owner or the agent of a property owner
  authorized under Section 1.111 makes a written request for the
  notice.  The chief appraiser shall separate real from personal
  property and include in the notice for each property:
               (1)  the appraised value of the property in the
  preceding year;
               (2)  the appraised value of the property for the
  current year and the kind of each partial exemption, if any,
  approved for the current year;
               (3)  a detailed explanation of the time and procedure
  for protesting the value; and
               (4)  the date and place the appraisal review board will
  begin hearing protests.
         SECTION 4.06.  Section 25.19, Tax Code, is amended by adding
  Subsection (o) to read as follows:
         (o)  A notice required under Subsection (a) or (g) to be
  delivered to the owner of real property other than a single-family
  residence that qualifies for an exemption under Section 11.13 must
  include the following statement: "Under Section 23.231, Tax Code,
  for the 2024, 2025, and 2026 tax years, the appraised value of real
  property other than a residence homestead for ad valorem tax
  purposes may not be increased by more than 20 percent each year,
  with certain exceptions.  The circuit breaker limitation provided
  under Section 23.231, Tax Code, expires December 31, 2026.  Unless
  this expiration date is extended by the Texas Legislature,
  beginning in the 2027 tax year, the circuit breaker limitation
  provided under Section 23.231, Tax Code, will no longer be in effect
  and may result in an increase in ad valorem taxes imposed on real
  property previously subject to the limitation." This subsection
  expires December 31, 2027.
         SECTION 4.07.  Section 41.41(a), Tax Code, is amended to
  read as follows:
         (a)  A property owner is entitled to protest before the
  appraisal review board the following actions:
               (1)  determination of the appraised value of the
  owner's property or, in the case of land appraised as provided by
  Subchapter C, D, E, or H, Chapter 23, determination of its appraised
  or market value;
               (2)  unequal appraisal of the owner's property;
               (3)  inclusion of the owner's property on the appraisal
  records;
               (4)  denial to the property owner in whole or in part of
  a partial exemption;
               (4-a)  determination that the owner's property does not
  qualify for the circuit breaker limitation on appraised value
  provided by Section 23.231;
               (5)  determination that the owner's land does not
  qualify for appraisal as provided by Subchapter C, D, E, or H,
  Chapter 23;
               (6)  identification of the taxing units in which the
  owner's property is taxable in the case of the appraisal district's
  appraisal roll;
               (7)  determination that the property owner is the owner
  of property;
               (8)  a determination that a change in use of land
  appraised under Subchapter C, D, E, or H, Chapter 23, has occurred;
  or
               (9)  any other action of the chief appraiser, appraisal
  district, or appraisal review board that applies to and adversely
  affects the property owner.
         SECTION 4.08.  Effective January 1, 2027, Section 41.41(a),
  Tax Code, is amended to read as follows:
         (a)  A property owner is entitled to protest before the
  appraisal review board the following actions:
               (1)  determination of the appraised value of the
  owner's property or, in the case of land appraised as provided by
  Subchapter C, D, E, or H, Chapter 23, determination of its appraised
  or market value;
               (2)  unequal appraisal of the owner's property;
               (3)  inclusion of the owner's property on the appraisal
  records;
               (4)  denial to the property owner in whole or in part of
  a partial exemption;
               (5)  determination that the owner's land does not
  qualify for appraisal as provided by Subchapter C, D, E, or H,
  Chapter 23;
               (6)  identification of the taxing units in which the
  owner's property is taxable in the case of the appraisal district's
  appraisal roll;
               (7)  determination that the property owner is the owner
  of property;
               (8)  a determination that a change in use of land
  appraised under Subchapter C, D, E, or H, Chapter 23, has occurred;
  or
               (9)  any other action of the chief appraiser, appraisal
  district, or appraisal review board that applies to and adversely
  affects the property owner.
         SECTION 4.09.  Section 42.26(d), Tax Code, is amended to
  read as follows:
         (d)  For purposes of this section, the value of the property
  subject to the suit and the value of a comparable property or sample
  property that is used for comparison must be the market value
  determined by the appraisal district when the property is [a
  residence homestead] subject to the limitation on appraised value
  imposed by Section 23.23 or 23.231.
         SECTION 4.10.  Effective January 1, 2027, Section 42.26(d),
  Tax Code, is amended to read as follows:
         (d)  For purposes of this section, the value of the property
  subject to the suit and the value of a comparable property or sample
  property that is used for comparison must be the market value
  determined by the appraisal district when the property is a
  residence homestead subject to the limitation on appraised value
  imposed by Section 23.23.
         SECTION 4.11.  Sections 403.302(d) and (i), Government Code,
  are amended to read as follows:
         (d)  For the purposes of this section, "taxable value" means
  the market value of all taxable property less:
               (1)  the total dollar amount of any residence homestead
  exemptions lawfully granted under Section 11.13(b) or (c), Tax
  Code, in the year that is the subject of the study for each school
  district;
               (2)  one-half of the total dollar amount of any
  residence homestead exemptions granted under Section 11.13(n), Tax
  Code, in the year that is the subject of the study for each school
  district;
               (3)  the total dollar amount of any exemptions granted
  before May 31, 1993, within a reinvestment zone under agreements
  authorized by Chapter 312, Tax Code;
               (4)  subject to Subsection (e), the total dollar amount
  of any captured appraised value of property that:
                     (A)  is within a reinvestment zone created on or
  before May 31, 1999, or is proposed to be included within the
  boundaries of a reinvestment zone as the boundaries of the zone and
  the proposed portion of tax increment paid into the tax increment
  fund by a school district are described in a written notification
  provided by the municipality or the board of directors of the zone
  to the governing bodies of the other taxing units in the manner
  provided by former Section 311.003(e), Tax Code, before May 31,
  1999, and within the boundaries of the zone as those boundaries
  existed on September 1, 1999, including subsequent improvements to
  the property regardless of when made;
                     (B)  generates taxes paid into a tax increment
  fund created under Chapter 311, Tax Code, under a reinvestment zone
  financing plan approved under Section 311.011(d), Tax Code, on or
  before September 1, 1999; and
                     (C)  is eligible for tax increment financing under
  Chapter 311, Tax Code;
               (5)  the total dollar amount of any captured appraised
  value of property that:
                     (A)  is within a reinvestment zone:
                           (i)  created on or before December 31, 2008,
  by a municipality with a population of less than 18,000; and
                           (ii)  the project plan for which includes
  the alteration, remodeling, repair, or reconstruction of a
  structure that is included on the National Register of Historic
  Places and requires that a portion of the tax increment of the zone
  be used for the improvement or construction of related facilities
  or for affordable housing;
                     (B)  generates school district taxes that are paid
  into a tax increment fund created under Chapter 311, Tax Code; and
                     (C)  is eligible for tax increment financing under
  Chapter 311, Tax Code;
               (6)  the total dollar amount of any exemptions granted
  under Section 11.251 or 11.253, Tax Code;
               (7)  the difference between the comptroller's estimate
  of the market value and the productivity value of land that
  qualifies for appraisal on the basis of its productive capacity,
  except that the productivity value estimated by the comptroller may
  not exceed the fair market value of the land;
               (8)  the portion of the appraised value of residence
  homesteads of individuals who receive a tax limitation under
  Section 11.26, Tax Code, on which school district taxes are not
  imposed in the year that is the subject of the study, calculated as
  if the residence homesteads were appraised at the full value
  required by law;
               (9)  a portion of the market value of property not
  otherwise fully taxable by the district at market value because of
  action required by statute or the constitution of this state, other
  than Section 11.311, Tax Code, that, if the tax rate adopted by the
  district is applied to it, produces an amount equal to the
  difference between the tax that the district would have imposed on
  the property if the property were fully taxable at market value and
  the tax that the district is actually authorized to impose on the
  property, if this subsection does not otherwise require that
  portion to be deducted;
               (10)  the market value of all tangible personal
  property, other than manufactured homes, owned by a family or
  individual and not held or used for the production of income;
               (11)  the appraised value of property the collection of
  delinquent taxes on which is deferred under Section 33.06, Tax
  Code;
               (12)  the portion of the appraised value of property
  the collection of delinquent taxes on which is deferred under
  Section 33.065, Tax Code;
               (13)  the amount by which the market value of property
  [a residence homestead] to which Section 23.23 or 23.231, Tax Code,
  applies exceeds the appraised value of that property as calculated
  under Section 23.23 or 23.231, Tax Code, as applicable [that
  section]; and
               (14)  the total dollar amount of any exemptions granted
  under Section 11.35, Tax Code.
         (i)  If the comptroller determines in the study that the
  market value of property in a school district as determined by the
  appraisal district that appraises property for the school district,
  less the total of the amounts and values listed in Subsection (d) as
  determined by that appraisal district, is valid, the comptroller,
  in determining the taxable value of property in the school district
  under Subsection (d), shall for purposes of Subsection (d)(13)
  subtract from the market value as determined by the appraisal
  district of properties [residence homesteads] to which Section
  23.23 or 23.231, Tax Code, applies the amount by which that amount
  exceeds the appraised value of those properties as calculated by
  the appraisal district under Section 23.23 or 23.231, Tax Code, as
  applicable.  If the comptroller determines in the study that the
  market value of property in a school district as determined by the
  appraisal district that appraises property for the school district,
  less the total of the amounts and values listed in Subsection (d) as
  determined by that appraisal district, is not valid, the
  comptroller, in determining the taxable value of property in the
  school district under Subsection (d), shall for purposes of
  Subsection (d)(13) subtract from the market value as estimated by
  the comptroller of properties [residence homesteads] to which
  Section 23.23 or 23.231, Tax Code, applies the amount by which that
  amount exceeds the appraised value of those properties as
  calculated by the appraisal district under Section 23.23 or 23.231,
  Tax Code, as applicable.
         SECTION 4.12.  Effective January 1, 2027, Sections
  403.302(d) and (i), Government Code, are amended to read as
  follows:
         (d)  For the purposes of this section, "taxable value" means
  the market value of all taxable property less:
               (1)  the total dollar amount of any residence homestead
  exemptions lawfully granted under Section 11.13(b) or (c), Tax
  Code, in the year that is the subject of the study for each school
  district;
               (2)  one-half of the total dollar amount of any
  residence homestead exemptions granted under Section 11.13(n), Tax
  Code, in the year that is the subject of the study for each school
  district;
               (3)  the total dollar amount of any exemptions granted
  before May 31, 1993, within a reinvestment zone under agreements
  authorized by Chapter 312, Tax Code;
               (4)  subject to Subsection (e), the total dollar amount
  of any captured appraised value of property that:
                     (A)  is within a reinvestment zone created on or
  before May 31, 1999, or is proposed to be included within the
  boundaries of a reinvestment zone as the boundaries of the zone and
  the proposed portion of tax increment paid into the tax increment
  fund by a school district are described in a written notification
  provided by the municipality or the board of directors of the zone
  to the governing bodies of the other taxing units in the manner
  provided by former Section 311.003(e), Tax Code, before May 31,
  1999, and within the boundaries of the zone as those boundaries
  existed on September 1, 1999, including subsequent improvements to
  the property regardless of when made;
                     (B)  generates taxes paid into a tax increment
  fund created under Chapter 311, Tax Code, under a reinvestment zone
  financing plan approved under Section 311.011(d), Tax Code, on or
  before September 1, 1999; and
                     (C)  is eligible for tax increment financing under
  Chapter 311, Tax Code;
               (5)  the total dollar amount of any captured appraised
  value of property that:
                     (A)  is within a reinvestment zone:
                           (i)  created on or before December 31, 2008,
  by a municipality with a population of less than 18,000; and
                           (ii)  the project plan for which includes
  the alteration, remodeling, repair, or reconstruction of a
  structure that is included on the National Register of Historic
  Places and requires that a portion of the tax increment of the zone
  be used for the improvement or construction of related facilities
  or for affordable housing;
                     (B)  generates school district taxes that are paid
  into a tax increment fund created under Chapter 311, Tax Code; and
                     (C)  is eligible for tax increment financing under
  Chapter 311, Tax Code;
               (6)  the total dollar amount of any exemptions granted
  under Section 11.251 or 11.253, Tax Code;
               (7)  the difference between the comptroller's estimate
  of the market value and the productivity value of land that
  qualifies for appraisal on the basis of its productive capacity,
  except that the productivity value estimated by the comptroller may
  not exceed the fair market value of the land;
               (8)  the portion of the appraised value of residence
  homesteads of individuals who receive a tax limitation under
  Section 11.26, Tax Code, on which school district taxes are not
  imposed in the year that is the subject of the study, calculated as
  if the residence homesteads were appraised at the full value
  required by law;
               (9)  a portion of the market value of property not
  otherwise fully taxable by the district at market value because of
  action required by statute or the constitution of this state, other
  than Section 11.311, Tax Code, that, if the tax rate adopted by the
  district is applied to it, produces an amount equal to the
  difference between the tax that the district would have imposed on
  the property if the property were fully taxable at market value and
  the tax that the district is actually authorized to impose on the
  property, if this subsection does not otherwise require that
  portion to be deducted;
               (10)  the market value of all tangible personal
  property, other than manufactured homes, owned by a family or
  individual and not held or used for the production of income;
               (11)  the appraised value of property the collection of
  delinquent taxes on which is deferred under Section 33.06, Tax
  Code;
               (12)  the portion of the appraised value of property
  the collection of delinquent taxes on which is deferred under
  Section 33.065, Tax Code;
               (13)  the amount by which the market value of a
  residence homestead to which Section 23.23, Tax Code, applies
  exceeds the appraised value of that property as calculated under
  that section; and
               (14)  the total dollar amount of any exemptions granted
  under Section 11.35, Tax Code.
         (i)  If the comptroller determines in the study that the
  market value of property in a school district as determined by the
  appraisal district that appraises property for the school district,
  less the total of the amounts and values listed in Subsection (d) as
  determined by that appraisal district, is valid, the comptroller,
  in determining the taxable value of property in the school district
  under Subsection (d), shall for purposes of Subsection (d)(13)
  subtract from the market value as determined by the appraisal
  district of residence homesteads to which Section 23.23, Tax Code,
  applies the amount by which that amount exceeds the appraised value
  of those properties as calculated by the appraisal district under
  Section 23.23, Tax Code.  If the comptroller determines in the
  study that the market value of property in a school district as
  determined by the appraisal district that appraises property for
  the school district, less the total of the amounts and values listed
  in Subsection (d) as determined by that appraisal district, is not
  valid, the comptroller, in determining the taxable value of
  property in the school district under Subsection (d), shall for
  purposes of Subsection (d)(13) subtract from the market value as
  estimated by the comptroller of residence homesteads to which
  Section 23.23, Tax Code, applies the amount by which that amount
  exceeds the appraised value of those properties as calculated by
  the appraisal district under Section 23.23, Tax Code.
         SECTION 4.13.  Section 23.231, Tax Code, as added by this
  article, applies only to the appraisal of real property other than a
  residence homestead for ad valorem tax purposes for a tax year that
  begins on or after the effective date of this article.
  ARTICLE 5.  BOARDS OF DIRECTORS OF APPRAISAL DISTRICTS
         SECTION 5.01.  The heading to Section 6.03, Tax Code, is
  amended to read as follows:
         Sec. 6.03.  BOARD OF DIRECTORS IN LESS POPULOUS COUNTIES.
         SECTION 5.02.  Section 6.03, Tax Code, is amended by
  amending Subsection (a) and adding Subsection (a-1) to read as
  follows:
         (a)  This section applies only to an appraisal district
  established in a county with a population of less than 75,000.
         (a-1)  The appraisal district is governed by a board of
  directors. Five directors are appointed by the taxing units that
  participate in the district as provided by this section. If the
  county assessor-collector is not appointed to the board, the county
  assessor-collector serves as a nonvoting director. The county
  assessor-collector is ineligible to serve if the board enters into
  a contract under Section 6.05(b) or if the commissioners court of
  the county enters into a contract under Section 6.24(b). To be
  eligible to serve on the board of directors, an individual other
  than a county assessor-collector serving as a nonvoting director
  must be a resident of the district and must have resided in the
  district for at least two years immediately preceding the date the
  individual takes office. An individual who is otherwise eligible
  to serve on the board is not ineligible because of membership on the
  governing body of a taxing unit. An employee of a taxing unit that
  participates in the district is not eligible to serve on the board
  unless the individual is also a member of the governing body or an
  elected official of a taxing unit that participates in the
  district.
         SECTION 5.03.  Subchapter A, Chapter 6, Tax Code, is amended
  by adding Section 6.0301 to read as follows:
         Sec. 6.0301.  BOARD OF DIRECTORS IN POPULOUS COUNTIES.
  (a)  This section applies only to an appraisal district established
  in a county with a population of 75,000 or more.
         (b)  Sections 6.031, 6.034, and 6.10 do not apply to an
  appraisal district to which this section applies.
         (c)  The appraisal district is governed by a board of nine
  directors. Five directors are appointed by the taxing units that
  participate in the district in the manner prescribed by Section
  6.03. Three directors are elected by majority vote at the general
  election for state and county officers by the voters of the county
  in which the district is established. The county
  assessor-collector serves as an ex officio director.
         (d)  To be eligible to serve on the board of directors, an
  individual other than the county assessor-collector must be a
  resident of the district and must have resided in the district for
  at least two years immediately preceding the date the individual
  takes office. An individual who is otherwise eligible to serve on
  the board is not ineligible because of membership on the governing
  body of a taxing unit. An employee of a taxing unit that
  participates in the district is not eligible to serve on the board
  unless the individual is also a member of the governing body or an
  elected official of a taxing unit that participates in the
  district.
         (e)  Members of the board of directors appointed by the
  taxing units participating in the district serve staggered
  four-year terms beginning on January 1 of every other even-numbered
  year. Elected members of the board of directors serve staggered
  four-year terms beginning on January 1 of every other odd-numbered
  year.
         (f)  If a vacancy occurs in an appointive position on the
  board of directors, each taxing unit that is entitled to vote under
  Section 6.03 may nominate by resolution adopted by its governing
  body a candidate to fill the vacancy. The taxing unit shall submit
  the name of its nominee to the chief appraiser within 45 days after
  notification from the board of directors of the existence of the
  vacancy, and the chief appraiser shall prepare and deliver to the
  board of directors within the next five days a list of the nominees.
  The board of directors shall appoint by majority vote of its members
  one of the nominees to fill the vacancy.
         (g)  If a vacancy occurs in an elective position on the board
  of directors, the board of directors shall appoint by majority vote
  of its members a person to fill the vacancy. A person appointed to
  fill a vacancy in an elective position must have the qualifications
  required of a director elected at a general election.
         SECTION 5.04.  Subchapter A, Chapter 6, Tax Code, is amended
  by adding Section 6.032 to read as follows:
         Sec. 6.032.  BALLOT PROCEDURES FOR ELECTED DIRECTORS; FILING
  FEE OR PETITION. (a) Except as provided by this section, Chapter
  144, Election Code, applies to a candidate for an elective position
  on an appraisal district board of directors.
         (b)  An application for a place on the ballot must be filed
  with the county judge of the county in which the appraisal district
  is established and be accompanied by a filing fee prescribed by
  Subsection (c) of this section or a petition in lieu of the filing
  fee that satisfies the requirements prescribed by Section 141.062,
  Election Code, and Subsection (d) of this section.
         (c)  The filing fee for a place on the ballot is:
               (1)  $400 for a county with a population of 200,000 or
  more; or
               (2)  $200 for a county with a population of less than
  200,000.
         (d)  The minimum number of signatures that must appear on the
  petition authorized by Subsection (b) is the lesser of:
               (1)  500; or
               (2)  two percent of the total vote received in the
  county by all the candidates for governor in the most recent
  gubernatorial general election, unless that number is less than 50,
  in which case the required number of signatures is the lesser of:
                     (A)  50; or
                     (B)  20 percent of that total vote.
         (e)  A filing fee received under this section shall be
  deposited in the county treasury to the credit of the county general
  fund.
         (f)  The secretary of state shall adopt rules as necessary to
  implement this section.
         SECTION 5.05.  The heading to Section 6.033, Tax Code, is
  amended to read as follows:
         Sec. 6.033.  RECALL OF APPOINTED DIRECTOR.
         SECTION 5.06.  Section 6.033(a), Tax Code, is amended to
  read as follows:
         (a)  The governing body of a taxing unit may call for the
  recall of an appointed [a] member of the board of directors of an
  appraisal district [appointed under Section 6.03 of this code] for
  whom the taxing unit cast any of its votes in the appointment of the
  board. The call must be in the form of a resolution, be filed with
  the chief appraiser of the appraisal district, and state that the
  taxing unit is calling for the recall of the member. If a
  resolution calling for the recall of a board member is filed under
  this subsection, the chief appraiser, not later than the 10th day
  after the date of filing, shall deliver a written notice of the
  filing of the resolution and the date of its filing to the presiding
  officer of the governing body of each taxing unit entitled to vote
  in the appointment of board members.
         SECTION 5.07.  Section 6.036(a), Tax Code, is amended to
  read as follows:
         (a)  An individual is not eligible to be a candidate for, to
  be appointed to, or to serve on the board of directors of an
  appraisal district if the individual or a business entity in which
  the individual has a substantial interest is a party to a contract
  with:
               (1)  the appraisal district; or
               (2)  a taxing unit that participates in the appraisal
  district, if the contract relates to the performance of an activity
  governed by this title.
         SECTION 5.08.  Section 6.052(f), Tax Code, as effective
  January 1, 2024, is amended to read as follows:
         (f)  The taxpayer liaison officer is responsible for
  providing clerical assistance to the applicable appointing
  authority prescribed by Section 6.41(d) [local administrative
  district judge] in the selection of appraisal review board members
  and for publicizing the availability of positions on the appraisal
  review board. The officer shall deliver to the applicable
  appointing authority [local administrative district judge] any
  applications to serve on the board that are submitted to the officer
  and shall perform other duties as requested by the applicable
  appointing authority [local administrative district judge]. The
  officer may not influence the process for selecting appraisal
  review board members.
         SECTION 5.09.  Section 6.41, Tax Code, is amended by
  amending Subsections (d), (d-1), (d-2), (d-3), (d-5), (d-9),
  (d-10), (e), (g), (i), and (j) and adding Subsection (d-2-1) to read
  as follows:
         (d)  Members of the board are appointed by the applicable
  appointing authority. For an appraisal district to which Section
  6.03 applies, the appointing authority is the local administrative
  district judge under Subchapter D, Chapter 74, Government Code, in
  the county in which the appraisal district is established. For an
  appraisal district to which Section 6.0301 applies, the appointing
  authority is the board of directors of the district. A vacancy on
  the board is filled in the same manner for the unexpired portion of
  the term.
         (d-1)  All applications submitted to the appraisal district
  or to the appraisal review board from persons seeking appointment
  as a member of the appraisal review board shall be delivered to the
  applicable appointing authority [local administrative district
  judge]. The appraisal district may provide the appointing
  authority [local administrative district judge] with information
  regarding whether an applicant for appointment to or a member of the
  board owes any delinquent ad valorem taxes to a taxing unit
  participating in the appraisal district.
         (d-2)  A local administrative district judge acting as an
  appointing authority may make appointments to the board directly or
  may, by written order, appoint from three to five persons to perform
  the duties of appraisal review board commissioner. If the local
  administrative district judge chooses to appoint appraisal review
  board commissioners, each commissioner shall possess the same
  qualifications as those required of an appraisal review board
  member.
         (d-2-1)  A board of directors acting as an appointing
  authority must make appointments to the appraisal review board by
  majority vote, with at least two members of the majority being
  elected members of the board of directors.
         (d-3)  The applicable appointing authority [local
  administrative judge] shall cause the proper officer to notify
  appointees to the board of their appointment, and when and where
  they are to appear.
         (d-5)  The appraisal district of the county shall provide to
  the applicable appointing authority [local administrative district
  judge], or to the appraisal review board commissioners, as the case
  may be, the number of appraisal review board positions that require
  appointment and shall provide whatever reasonable assistance is
  requested by the applicable appointing authority [local
  administrative district judge] or the commissioners.
         (d-9)  In selecting individuals who are to serve as members
  of the appraisal review board for an appraisal district described
  by Subsection (b-2), the board of directors of the district [local
  administrative district judge] shall select an adequate number of
  qualified individuals to permit the chairman of the appraisal
  review board to fill the positions on each special panel
  established under Section 6.425.
         (d-10)  Upon selection of the individuals who are to serve as
  members of the appraisal review board, the applicable appointing
  authority [local administrative district judge] shall enter an
  appropriate order designating such members and setting each
  member's respective term of office, as provided elsewhere in this
  section.
         (e)  Members of the board hold office for terms of two years
  beginning January 1.  The appraisal district board of directors by
  resolution shall provide for staggered terms, so that the terms of
  as close to one-half of the members as possible expire each
  year.  In making the initial or subsequent appointments, the
  applicable appointing authority, or the local administrative
  district [judge or the] judge's designee if the appointing
  authority is the judge, shall designate those members who serve
  terms of one year as needed to comply with this subsection.
         (g)  Subsection (a) does not preclude the boards of directors
  of two or more adjoining appraisal districts from providing for the
  operation of a consolidated appraisal review board by interlocal
  contract.  Members of a consolidated appraisal review board are
  appointed jointly by the applicable appointing authorities [local
  administrative district judges] in the counties in which the
  appraisal districts that are parties to the contract are
  established.
         (i)  A chief appraiser or another employee or agent of the
  appraisal district, a member of the appraisal review board for the
  appraisal district, a member of the board of directors of the
  appraisal district if the board is established for a district to
  which Section 6.03 applies, a property tax consultant, or an agent
  of a property owner commits an offense if the person communicates
  with the applicable appointing authority [local administrative
  district judge] regarding the appointment of appraisal review board
  members.  This subsection does not apply to:
               (1)  a communication between a member of the appraisal
  review board and the applicable appointing authority [local
  administrative district judge] regarding the member's
  reappointment to the board;
               (2)  a communication between the taxpayer liaison
  officer for the appraisal district and the applicable appointing
  authority [local administrative district judge] in the course of
  the performance of the officer's clerical duties so long as the
  officer does not offer an opinion or comment regarding the
  appointment of appraisal review board members;
               (3)  a communication between a chief appraiser or
  another employee or agent of the appraisal district, a member of the
  appraisal review board for the appraisal district, or a member of
  the board of directors of the appraisal district if the board is
  established for a district to which Section 6.03 applies and the
  applicable appointing authority [local administrative district
  judge] regarding information relating to or described by Subsection
  (d-1), (d-5), or (f) of this section or Section 411.1296,
  Government Code;
               (4)  a communication between a property tax consultant
  or a property owner or an agent of the property owner and the
  taxpayer liaison officer for the appraisal district regarding
  information relating to or described by Subsection (f).  The
  taxpayer liaison officer for the appraisal district shall report
  the contents of the communication relating to or described by
  Subsection (f) to the applicable appointing authority [local
  administrative district judge]; or
               (5)  a communication between a property tax consultant
  or a property owner or an agent of the property owner and the
  applicable appointing authority [local administrative district
  judge] regarding information relating to or described by Subsection
  (f).
         (j)  A chief appraiser or another employee or agent of an
  appraisal district commits an offense if the person communicates
  with a member of the appraisal review board for the appraisal
  district, a member of the board of directors of the appraisal
  district, or the local administrative district judge, if the judge
  is the appointing authority for the district, regarding a ranking,
  scoring, or reporting of the percentage by which the appraisal
  review board or a panel of the board reduces the appraised value of
  property.
         SECTION 5.10.  Section 6.41(f), Tax Code, as amended by
  Chapters 354 (H.B. 2941) and 533 (S.B. 63), Acts of the 87th
  Legislature, Regular Session, 2021, is reenacted and amended to
  read as follows:
         (f)  A member of the appraisal review board may be removed
  from the board by the applicable appointing authority, or the local
  administrative district [judge or the] judge's designee if the
  appointing authority is the judge. Not later than the 90th day
  after the date the board of directors, local administrative
  district judge, or judge's designee that appointed a member of the
  appraisal review board learns of a potential ground for removal of
  the member, the board of directors, local administrative district
  judge, or judge's designee, as applicable, shall remove the member
  or find by official action that the member's removal is not
  warranted. Grounds for removal are:
               (1)  a violation of Section 6.412, 6.413, 41.66(f), or
  41.69;
               (2)  good cause relating to the attendance of members
  at called meetings of the board as established by written policy
  adopted by a majority of the appraisal district board of directors;
  or
               (3)  evidence of repeated bias or misconduct.
         SECTION 5.11.  Section 6.42(a), Tax Code, is amended to read
  as follows:
         (a)  A majority of the appraisal review board constitutes a
  quorum. The applicable appointing authority prescribed by Section
  6.41(d) [local administrative district judge under Subchapter D,
  Chapter 74, Government Code,] in the county in which the appraisal
  district is established shall select a chairman and a secretary
  from among the members of the appraisal review board. The
  applicable appointing authority [judge] is encouraged to select as
  chairman a member of the appraisal review board, if any, who has a
  background in law and property appraisal.
         SECTION 5.12.  Section 6.425(e), Tax Code, is amended to
  read as follows:
         (e)  Notwithstanding Subsection (d), the chairman of the
  appraisal review board may appoint to a special panel described by
  this section a member of the appraisal review board who does not
  meet the qualifications prescribed by that subsection if:
               (1)  the number of persons appointed to the board [by
  the local administrative district judge] who meet those
  qualifications is not sufficient to fill the positions on each
  special panel; and
               (2)  the board member being appointed to the panel
  holds a bachelor's degree in any field.
         SECTION 5.13.  (a)  Appraisal district directors shall be
  elected to the elective positions as provided by Section 6.0301,
  Tax Code, as added by this article, beginning with the election
  conducted on the uniform election date in May 2024.  The directors
  then elected take office on July 1, 2024, and serve a term that
  expires on December 31, 2026.
         (b)  Following the election of the initial elected directors
  of an appraisal district as provided by Subsection (a) of this
  section, directors shall be elected as provided by Section 6.0301,
  Tax Code, as added by this article, beginning with the general
  election conducted in November 2026.  Directors then elected take
  office January 1, 2027.
         (c)  At the first meeting of the board of directors of an
  appraisal district described by Section 6.0301, Tax Code, as added
  by this article, that follows the November 2026 general election of
  directors under that section, the three elected directors shall
  draw lots to determine which director shall serve a term of two
  years and which two directors shall serve a term of four years.
  Thereafter, all elected directors serve four-year terms.
         (d)  The term of an appraisal district director serving on
  December 31, 2024, on the board of directors of an appraisal
  district described by Section 6.0301, Tax Code, as added by this
  article, expires on January 1, 2025. Not later than December 31,
  2024, the taxing units participating in the appraisal district that
  are entitled to appoint directors shall appoint five directors to
  serve terms that begin on January 1, 2025. Two directors shall be
  appointed to serve a term of one year, and three directors shall be
  appointed to serve a term of three years. Thereafter, all appointed
  directors serve four-year terms.
  ARTICLE 6. TRANSITIONAL TAX YEAR PROVISIONS
         SECTION 6.01.  Section 25.23, Tax Code, is amended by adding
  Subsection (a-1) to read as follows:
         (a-1)  This subsection applies only to the appraisal records
  for the 2023 tax year. The chief appraiser shall prepare
  supplemental appraisal records to account for the changes in law
  made by S.B. 2, Acts of the 88th Legislature, 2nd Called Session,
  2023.  This subsection expires December 31, 2024.
         SECTION 6.02.  Section 26.04, Tax Code, is amended by adding
  Subsections (a-1) and (c-1) to read as follows:
         (a-1)  On receipt of the appraisal roll for the 2023 tax
  year, the assessor for a taxing unit shall determine the total
  taxable value of property taxable by the taxing unit and the taxable
  value of new property as if the changes in law made by S.B. 2, Acts
  of the 88th Legislature, 2nd Called Session, 2023, were in effect
  for that tax year. This subsection expires December 31, 2024.
         (c-1)  An officer or employee designated by the governing
  body of a taxing unit shall calculate the no-new-revenue tax rate
  and the voter-approval tax rate of the taxing unit for the 2023 tax
  year as if the changes in law made by S.B. 2, Acts of the 88th
  Legislature, 2nd Called Session, 2023, were in effect for that tax
  year. This subsection expires December 31, 2024.
         SECTION 6.03.  Chapter 26, Tax Code, is amended by adding
  Section 26.0401 to read as follows:
         Sec. 26.0401.  CALCULATION OF CERTAIN TAX RATES FOR 2023 TAX
  YEAR. (a)  For the purposes of calculating the no-new-revenue tax
  rate, the voter-approval tax rate, and any related tax rate for the
  2023 tax year, a taxing unit that calculates those rates under a
  provision of law other than Section 26.04 or 26.08 shall calculate
  those rates as if the changes in law made by S.B. 2, Acts of the 88th
  Legislature, 2nd Called Session, 2023, were in effect for that tax
  year.
         (b)  This section expires December 31, 2024.
         SECTION 6.04.  Section 26.08, Tax Code, is amended by adding
  Subsection (q) to read as follows:
         (q)  For purposes of this section, the voter-approval tax
  rate of a school district for the 2023 tax year shall be calculated
  as if the changes in law made by S.B. 2, Acts of the 88th
  Legislature, 2nd Called Session, 2023, were in effect for that tax
  year. This subsection expires December 31, 2024.
         SECTION 6.05.  Section 26.09, Tax Code, is amended by adding
  Subsection (c-1) to read as follows:
         (c-1)  The assessor for a taxing unit shall calculate the
  amount of tax imposed by the taxing unit on property for the 2023
  tax year as if the changes in law made by S.B. 2, Acts of the 88th
  Legislature, 2nd Called Session, 2023, were in effect for that tax
  year and also as if the changes in law made by that Act were not in
  effect for that tax year. This subsection expires December 31,
  2024.
         SECTION 6.06.  Section 26.15, Tax Code, is amended by adding
  Subsection (h) to read as follows:
         (h)  The assessor for a taxing unit shall correct the tax
  roll for the taxing unit for the 2023 tax year to reflect the
  results of the election to approve the constitutional amendment
  proposed by H.J.R. 2, 88th Legislature, 2nd Called Session, 2023.
  This subsection expires December 31, 2024.
         SECTION 6.07.  Section 31.01, Tax Code, is amended by adding
  Subsections (d-2), (d-3), (d-4), and (d-5) to read as follows:
         (d-2)  This subsection and Subsections (d-3) and (d-4) apply
  only to taxes imposed by a taxing unit on property for the 2023 tax
  year and only if the changes in law made by S.B. 2, Acts of the 88th
  Legislature, 2nd Called Session, 2023, would lower the taxes
  imposed by the taxing unit on the property for that tax year. The
  assessor for the taxing unit shall compute the amount of taxes
  imposed and the other information required by this section as if the
  changes in law made by S.B. 2, Acts of the 88th Legislature, 2nd
  Called Session, 2023, were in effect for that tax year. The tax
  bill or the separate statement must indicate that the bill is a
  provisional tax bill and include a statement in substantially the
  following form:
         "If the Texas Legislature had not enacted property tax relief
  legislation during the 2023 legislative session, your tax bill
  would have been $____ (insert amount of tax bill if the changes in
  law made by S.B. 2, Acts of the 88th Legislature, 2nd Called
  Session, 2023, were not in effect for that tax year). Because of
  action by the Texas Legislature, your tax bill has been lowered by
  $____ (insert difference between amount of tax bill if the changes
  in law made by S.B. 2, Acts of the 88th Legislature, 2nd Called
  Session, 2023, were not in effect for that tax year and amount of
  tax bill if that Act were in effect for that tax year), resulting in
  a lower tax bill of $____ (insert amount of tax bill if the changes
  in law made by S.B. 2, Acts of the 88th Legislature, 2nd Called
  Session, 2023, were in effect for that tax year), contingent on the
  approval by the voters at an election to be held November 7, 2023,
  of the constitutional amendment proposed by H.J.R. 2, 88th
  Legislature, 2nd Called Session, 2023. If that constitutional
  amendment is not approved by the voters at the election, a
  supplemental tax bill in the amount of $____ (insert difference
  between amount of tax bill if the changes in law made by S.B. 2,
  Acts of the 88th Legislature, 2nd Called Session, 2023, were not in
  effect for that tax year and amount of tax bill if that Act were in
  effect for that tax year) will be mailed to you."
         (d-3)  A tax bill prepared by the assessor for a taxing unit
  as provided by Subsection (d-2) and mailed as provided by
  Subsection (a) is considered to be a provisional tax bill until the
  canvass of the votes on the constitutional amendment proposed by
  H.J.R. 2, 88th Legislature, 2nd Called Session, 2023. If the
  constitutional amendment is approved by the voters, the tax bill is
  considered to be a final tax bill for the taxes imposed on the
  property for the 2023 tax year, and no additional tax bill is
  required to be mailed unless another provision of this title
  requires the mailing of a corrected tax bill. If the constitutional
  amendment is not approved by the voters:
               (1)  a tax bill prepared by the assessor as provided by
  Subsection (d-2) is considered to be a final tax bill but only as to
  the portion of the taxes imposed on the property for the 2023 tax
  year that are included in the bill;
               (2)  the amount of taxes imposed by each taxing unit on
  property for the 2023 tax year is calculated as if the changes in
  law made by S.B. 2, Acts of the 88th Legislature, 2nd Called
  Session, 2023, were not in effect for that tax year; and
               (3)  except as provided by Subsections (f), (i-1), and
  (k), the assessor for each taxing unit shall prepare and mail a
  supplemental tax bill, by December 1 or as soon thereafter as
  practicable, in an amount equal to the difference between the
  amount of the tax bill if the changes in law made by S.B. 2, Acts of
  the 88th Legislature, 2nd Called Session, 2023, were not in effect
  for that tax year and the amount of the tax bill if that Act were in
  effect for that tax year.
         (d-4)  Except as otherwise provided by Subsection (d-3), the
  provisions of this section other than Subsection (d-2) apply to a
  supplemental tax bill mailed under Subsection (d-3).
         (d-5)  This subsection and Subsections (d-2), (d-3), and
  (d-4) expire December 31, 2024.
         SECTION 6.08.  Section 31.02, Tax Code, is amended by adding
  Subsection (a-1) to read as follows:
         (a-1)  Except as provided by Subsection (b) of this section
  and Sections 31.03 and 31.04, taxes for which a supplemental tax
  bill is mailed under Section 31.01(d-3) are due on receipt of the
  tax bill and are delinquent if not paid before March 1 of the year
  following the year in which imposed. This subsection expires
  December 31, 2024.
  ARTICLE 7. CONTINGENT ON PASSAGE OF FRANCHISE TAX REFORM
  LEGISLATION
         SECTION 7.01.  This Act takes effect only if S.B. 3 or
  similar legislation of the 88th Legislature, 2nd Called Session,
  2023, relating to the amount of the total revenue exemption for the
  franchise tax and the exclusion of certain taxable entities from
  the requirement to file a franchise tax report becomes law in a
  manner described by Section 2001.006(a)(2), Government Code. If
  legislation described by this section does not become law in a
  manner described by Section 2001.006(a)(2), Government Code, this
  Act has no effect.
  ARTICLE 8. EFFECTIVE DATES
         SECTION 8.01.  Except as provided by Article 7 of this Act,
  this Act takes effect as provided by this article.
         SECTION 8.02.  Except as otherwise provided by this article,
  this Act takes effect on the 91st day after the last day of the
  legislative session.
         SECTION 8.03.  Article 2 of this Act takes effect on the date
  on which the constitutional amendment proposed by H.J.R. 2, 88th
  Legislature, 2nd Called Session, 2023, is approved by the voters.
  If that amendment is not approved by the voters, Article 2 of this
  Act has no effect.
         SECTION 8.04.  (a) Except as provided by Subsection (b) of
  this section or as otherwise provided by Article 3 of this Act:
               (1)  Article 3 of this Act takes effect on the date on
  which the constitutional amendment proposed by H.J.R. 2, 88th
  Legislature, 2nd Called Session, 2023, takes effect; and
               (2)  if that amendment is not approved by the voters,
  Article 3 of this Act has no effect.
         (b)  Sections 49.004(a-1), (b-1), and (c-1), 49.0042,
  49.0121, 49.154(a-2) and (a-3), and 49.308(a-1), Education Code, as
  added by Article 3 of this Act, take effect immediately if this Act
  receives a vote of two-thirds of all the members elected to each
  house, as provided by Section 39, Article III, Texas Constitution.
  If this Act does not receive the vote necessary for those sections
  to have immediate effect, those sections take effect on the 91st day
  after the last day of the legislative session.
         SECTION 8.05.  Article 4 of this Act takes effect January 1,
  2024, but only if the constitutional amendment proposed by
  H.J.R. 2, 88th Legislature, 2nd Called Session, 2023, is approved
  by the voters. If that amendment is not approved by the voters,
  Article 4 of this Act has no effect.
         SECTION 8.06.  (a) Article 5 of this Act takes effect as
  provided by Subsections (b) and (c) of this section, but only if the
  constitutional amendment proposed by H.J.R. 2, 88th Legislature,
  2nd Called Session, 2023, is approved by the voters. If that
  amendment is not approved by the voters, Article 5 of this Act has
  no effect.
         (b)  Except as provided by Subsection (c) of this section,
  Article 5 of this Act takes effect July 1, 2024.
         (c)  Sections 5.04 and 5.13 of this Act take effect on the
  91st day after the last day of the legislative session.
         SECTION 8.07.  Article 6 of this Act takes effect
  immediately if this Act receives a vote of two-thirds of all the
  members elected to each house, as provided by Section 39, Article
  III, Texas Constitution. If this Act does not receive the vote
  necessary for that article to have immediate effect, Article 6 of
  this Act takes effect on the 91st day after the last day of the
  legislative session.
 
 
 
 
 
  ______________________________ ______________________________
     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