HB 4217

relating to the system for appraising property for ad valorem tax
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1.  BOARDS OF DIRECTORS OF APPRAISAL DISTRICTS
SECTION 1.01.  Chapter 5, Tax Code, is amended by adding
Section 5.044 to read as follows:
Sec. 5.044.  TRAINING OF APPRAISAL DISTRICT DIRECTORS.  (a)
In this section, "open government training" means the courses of
training required of certain public officials by Sections
551.005(b) and 552.012(d), Government Code.
(b)  The comptroller, with the assistance of one or more
commissions as defined by Section 391.002, Local Government Code,
shall develop an online training course for members of the board of
directors of an appraisal district. The training must provide
information relevant to the operation of an appraisal district and
its board of directors, including an overview of the property tax
system, a discussion of the duties and responsibilities of a board
of directors, and a description of the resources available to a
board. The comptroller shall make the training available on the
comptroller's Internet website.
(c)  Each member of the board of directors of an appraisal
district must complete both the open government training and the
training described by Subsection (b). The appraisal district shall
conduct the training required by this section at a time before the
first public meeting of the board during each calendar year. A
member of the board who does not complete the training on the date
the training is conducted by the appraisal district must complete
the training during regular business hours at the main office of the
appraisal district not later than the 30th day after the date the
(d)  A member of the board of directors who does not complete
the training in the time and manner prescribed by Subsection (c) is
ineligible to continue to serve on the board. A new board member
shall be appointed in the manner prescribed by Section 6.03(l) to
fill the vacancy. A member appointed to fill a vacancy must complete
the training required by Subsection (c) not later than the 30th day
after the date the member is appointed or the member becomes
ineligible to continue to serve on the board and shall be replaced
as provided by this subsection.
(e)  This section does not apply to a nonvoting member of the
board of directors of an appraisal district.
SECTION 1.02.  Section 5.12(b), Tax Code, is amended to read
(b)  At the written request of the governing bodies of a
majority of the taxing units participating in an appraisal district
[or of a majority of the taxing units entitled to vote on the
appointment of appraisal district directors], the comptroller
shall audit the performance of the appraisal district.  The
governing bodies may request a general audit of the performance of
the appraisal district or may request an audit of only one or more
particular duties, practices, functions, departments, or other
SECTION 1.03.  Section 5.13(h), Tax Code, is amended to read
(h)  At any time after the request for an audit is made, the
comptroller may discontinue the audit in whole or in part if
(1)  the governing bodies of a majority of the taxing
units participating in the district, if the audit was requested by a
(2)  the taxpayers who requested the audit, [the
governing bodies of a majority of the taxing units entitled to vote
on the appointment of appraisal district directors, if the audit
was requested by a majority of those units; or
[(3)]  if the audit was requested under Section 5.12(c)
[of this code, by the taxpayers who requested the audit].
SECTION 1.04.  The heading to Section 6.03, Tax Code, is
Sec. 6.03.  BOARD OF DIRECTORS [IN LESS POPULOUS COUNTIES].
SECTION 1.05.  Section 6.03, Tax Code, is amended by
amending Subsections (a), (a-1), and (l) and adding Subsection (m)
(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. Two directors are elected from each of the four
commissioners precincts in the county in which the appraisal
district is established and one director is elected at large from
the county. The [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).  The directors other than the county
assessor-collector are elected at an election conducted on the
November uniform election date and serve staggered two-year terms
beginning on January 1 of the year following the year in which the
(a-1)  To be eligible to serve on the board of directors, an
individual other than the [a] county assessor-collector [serving as
(A)  the commissioners precinct from which the
office is elected, in the case of a director elected from a
(B)  the county in which the appraisal district is
established, in the case of a director elected at large; [district]
(2)  [must] have resided in the appraisal 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
(l)  If a vacancy occurs on the board of directors other than
a vacancy in the position held by the [a] county assessor-collector
[serving as a nonvoting director], the [each taxing unit that is
entitled to vote by this section may nominate by resolution adopted
by its governing body a candidate to fill the vacancy.  The 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 [elect] by
majority vote of its members a person [one of the nominees] to fill
the vacancy. A person appointed to fill a vacancy under this
subsection must meet the qualifications of the vacated position.
(m)  If as a result of a change in the boundaries of a
commissioners precinct an individual serving as a director no
longer resides in the precinct from which the office is elected, the
individual is not for that reason disqualified from office during
the remainder of the term of office being served at the time the
boundary change takes effect.  If as a result of a change in the
boundaries of a commissioners precinct an individual elected as a
director before the boundary change to a term that begins after the
boundary change no longer resides in the precinct from which
elected, the individual is not for that reason disqualified from
serving the term to which elected.
SECTION 1.06.  The heading to Section 6.032, Tax Code, is
Sec. 6.032.  BALLOT PROCEDURES FOR [ELECTED] DIRECTORS[;
SECTION 1.07.  Sections 6.032(a) and (b), Tax Code, are
(a)  Except as provided by this section, Chapter 144,
Election Code, applies to a candidate for a [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 is not required to be accompanied by a filing fee
[prescribed by Subsection (c) of this section] or a petition in lieu
of a [the] filing fee [that satisfies the requirements prescribed
by Section 141.062, Election Code, and Subsection (d) of this
SECTION 1.08.  Section 6.04(c), Tax Code, is amended to read
(c)  Except as provided by this subsection, members
[Members] of the board may not receive compensation for service on
the board. Members of the board [but] are entitled to reimbursement
for actual and necessary expenses incurred in the performance of
their duties as provided by the budget adopted by the board. Members
of the board may receive compensation in an amount not to exceed
$100 per month if the compensation is approved by the voters in the
county in which the appraisal district is established at an
election held for the purpose on a uniform election date.
SECTION 1.09.  Section 6.051(b), Tax Code, is amended to
(b)  The acquisition or conveyance of real property or the
construction or renovation of a building or other improvement by an
appraisal district must be approved by the governing bodies of
three-fourths of the taxing units that participate in the district
[entitled to vote on the appointment of board members].  The board
of directors by resolution may propose a property transaction or
other action for which this subsection requires approval of the
taxing units.  The chief appraiser shall notify the presiding
officer of each governing body entitled to vote on the approval of
the proposal by delivering a copy of the board's resolution,
together with information showing the costs of other available
alternatives to the proposal.  On or before the 30th day after the
date the presiding officer receives notice of the proposal, the
governing body of a taxing unit by resolution may approve or
disapprove the proposal.  If a governing body fails to act on or
before that 30th day or fails to file its resolution with the chief
appraiser on or before the 10th day after that 30th day, the
proposal is treated as if it were disapproved by the governing body.
SECTION 1.10.  Section 6.052(f), Tax Code, is amended to
(f)  The taxpayer liaison officer is responsible for
providing clerical assistance to the appraisal district board of
directors [applicable appointing authority prescribed by Section
6.41(d)] 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 appraisal district board of
directors [applicable appointing authority] any applications to
serve on the board that are submitted to the officer and shall
perform other duties as requested by the appraisal district board
of directors [applicable appointing authority].  The officer may
not influence the process for selecting appraisal review board
SECTION 1.11.  Sections 6.06(a), (b), and (i), Tax Code, are
(a)  Each year the chief appraiser shall prepare a proposed
budget for the operations of the district for the following tax year
and shall submit copies to each taxing unit participating in the
district and to the district board of directors before June 15.  The
chief appraiser [He] shall include in the budget a list showing each
proposed position, the proposed salary for the position, all
benefits proposed for the position, each proposed capital
expenditure, and an estimate of the amount of the budget that will
be allocated to each taxing unit.  Each taxing unit that
participates in the district [entitled to vote on the appointment
of board members] shall maintain a copy of the proposed budget for
public inspection at its principal administrative office.
(b)  The board of directors shall hold a public hearing to
consider the budget.  The secretary of the board shall deliver to
the presiding officer of the governing body of each taxing unit
participating in the district not later than the 10th day before the
date of the hearing a written notice of the date, time, and place
fixed for the hearing.  The board shall complete its hearings, make
any amendments to the proposed budget it desires, and finally
approve a budget before September 15.  If governing bodies of a
majority of the taxing units participating in the district
[entitled to vote on the appointment of board members] adopt
resolutions disapproving a budget and file them with the secretary
of the board within 30 days after its adoption, the budget does not
take effect, and the board shall adopt a new budget within 30 days
(i)  The fiscal year of an appraisal district is the calendar
year unless the governing bodies of three-fourths of the taxing
units participating in the district [entitled to vote on the
appointment of board members] adopt resolutions proposing a
different fiscal year and file them with the secretary of the board
not more than 12 and not less than eight months before the first day
of the fiscal year proposed by the resolutions.  If the fiscal year
of an appraisal district is changed under this subsection, the
chief appraiser shall prepare a proposed budget for the fiscal year
as provided by Subsection (a) [of this section] before the 15th day
of the seventh month preceding the first day of the fiscal year
established by the change, and the board of directors shall adopt a
budget for the fiscal year as provided by Subsection (b) [of this
section] before the 15th day of the fourth month preceding the first
day of the fiscal year established by the change.  Unless the
appraisal district adopts a different method of allocation under
Section 6.061 [of this code], the allocation of the budget to each
taxing unit shall be calculated as provided by Subsection (d) of
this section using the amount of property taxes imposed by each
participating taxing unit in the most recent tax year preceding the
fiscal year established by the change for which the necessary
information is available.  Each taxing unit shall pay its
allocation as provided by Subsection (e) [of this section], except
that the first payment shall be made before the first day of the
fiscal year established by the change and subsequent payments shall
be made quarterly.  In the year in which a change in the fiscal year
occurs, the budget that takes effect on January 1 of that year may
be amended as necessary as provided by Subsection (c) [of this
section] in order to accomplish the change in fiscal years.
SECTION 1.12.  Sections 6.061(b) and (e), Tax Code, are
(b)  The taxing units participating in an appraisal district
may adopt a different method of allocating the costs of operating
the district if the governing bodies of three-fourths of the taxing
units that participate in the district [are entitled to vote on the
appointment of board members] adopt resolutions providing for the
other method.  However, a change under this subsection is not valid
if it requires any taxing unit to pay a greater proportion of the
appraisal district's costs than the unit would pay under Section
6.06 [of this code] without the consent of the governing body of
(e)  A change in allocation of district costs made as
provided by this section remains in effect until changed in a manner
provided by this section or rescinded by resolution of a majority of
the governing bodies of the taxing units that participate in the
district [that are entitled to vote on appointment of board members
under Section 6.03 of this code].
SECTION 1.13.  Section 6.063(b), Tax Code, is amended to
(b)  The report of the audit is a public record.  A copy of
the report shall be delivered to the presiding officer of the
governing body of each taxing unit that participates in the
district [eligible to vote on the appointment of district
directors], and a reasonable number of copies shall be available
for inspection at the appraisal office.
SECTION 1.14.  Section 6.15(c), Tax Code, is amended to read
(c)  Subsections (a) and (b) do not apply to a routine
communication between the chief appraiser and the county
assessor-collector that relates to the administration of an
appraisal roll, including a communication made in connection with
the certification, correction, or collection of an account,
regardless of whether the county assessor-collector serves on [was
appointed to] the board of directors of the appraisal district [or
serves as a nonvoting director].
SECTION 1.15.  Sections 6.41(d), (d-1), (d-2-1), (d-3),
(d-5), (d-10), (e), (f), (g), (i), and (j), Tax Code, are amended to
(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 appraisal district. A
vacancy on the board is filled in the same manner for the unexpired
(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
board of directors of the appraisal district [applicable appointing
authority].  The appraisal district may provide the board of
directors [appointing authority] 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
(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 board of directors of the appraisal district
[applicable appointing authority] shall cause the proper officer to
notify appointees to the board of their appointment, and when and
(d-5)  The appraisal district of the county shall provide to
the board of directors of the appraisal district [applicable
appointing authority, 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 board of directors
[applicable appointing authority or the commissioners].
(d-10)  Upon selection of the individuals who are to serve as
members of the appraisal review board, the board of directors of the
appraisal district [applicable appointing authority] shall enter
an appropriate order designating such members and setting each
member's respective term of office, as provided elsewhere in this
(e)  Members of the appraisal review 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 board of directors of the appraisal district
[applicable appointing authority, or the local administrative
district 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.
(f)  A member of the appraisal review board may be removed
from the board by the board of directors of the appraisal district
[applicable appointing authority, or the local administrative
district 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.
(1)  a violation of Section 6.412, 6.413, 41.66(f), or
(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;
(3)  evidence of repeated bias or misconduct.
(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 boards of directors of the appraisal
districts [applicable appointing authorities in the counties in
which the appraisal districts] that are parties to the contract
(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 board of directors of the appraisal district [applicable
appointing authority] 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 board of directors of the appraisal district
[applicable appointing authority] regarding the member's
(2)  a communication between the taxpayer liaison
officer for the appraisal district and the board of directors of the
appraisal district [applicable appointing authority] 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[,] or 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 board of directors of the appraisal district [applicable
appointing authority] 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 board of directors of the appraisal district
[applicable appointing authority]; or
(5)  a communication between a property tax consultant
or a property owner or an agent of the property owner and the board
of directors of the appraisal district [applicable appointing
authority] regarding information relating to or described by
(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[,] or 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
SECTION 1.16.  Section 6.42(a), Tax Code, is amended to read
(a)  A majority of the appraisal review board constitutes a
quorum.  The board of directors of the appraisal district
[applicable appointing authority prescribed by Section 6.41(d) 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 board of directors of the appraisal
district [applicable appointing authority] 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 1.17.  The following provisions of the Tax Code are
(1)  Sections 6.03(b), (c), (d), (e), (f), (g), (h),
(4)  Sections 6.032(c), (d), and (e);
(9)  Sections 6.41(d-2), (d-4), (d-6), (d-7), and
SECTION 1.18.  The comptroller of public accounts shall make
available the training course required by Section 5.044, Tax Code,
as added by this article, not later than January 1, 2027.
SECTION 1.19.  Section 5.044, Tax Code, as added by this
article, applies only to a member of the board of directors of an
appraisal district elected for a term that begins on or after
SECTION 1.20.  (a)  Appraisal district directors shall be
elected as provided by Section 6.03, Tax Code, as amended by this
article, beginning with the election conducted on the uniform
election date in November 2026.  The directors then elected take
(b)  At the first meeting of the board of directors of an
appraisal district described by Section 6.03, Tax Code, as amended
by this article, that follows the November 2026 election of
directors under that section, the directors shall draw lots to
determine which four directors, including one director elected from
each commissioners precinct, shall serve a term of one year and
which five directors, including one director elected from each
commissioners precinct and the director elected at large, shall
serve a term of two years.  Thereafter, all elected directors serve
(c)  The change in the manner of selection of appraisal
district directors made by this article does not affect the
selection of directors who serve on the board before January 1,
(d)  The term of an appraisal district director serving on
December 31, 2026, expires on January 1, 2027.
ARTICLE 2.  LIMITATION ON INCREASES IN APPRAISED VALUE OF CERTAIN
SECTION 2.01.  Section 1.12(d), Tax Code, as effective
January 1, 2027, is amended to read as follows:
(d)  For purposes of this section, the appraisal ratio of a
parcel of single-family residential real property [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 2.02.  The heading to Section 23.23, Tax Code, is
Sec. 23.23.  LIMITATION ON APPRAISED VALUE OF SINGLE-FAMILY
RESIDENTIAL REAL PROPERTY [RESIDENCE HOMESTEAD].
SECTION 2.03.  Section 23.23, Tax Code, is amended by
amending Subsections (a), (b), (c), and (e) and adding Subsections
(a-1), (a-2), (a-3), (a-4), (a-5), (a-6), (a-7), (a-8), (a-9),
(a-10), (a-11), (c-2), (c-3), and (h) to read as follows:
(a)  The appraised value of a parcel of single-family
residential real property for the first tax year in which the owner
owns the property on January 1 is equal to the market value of the
property.  Notwithstanding Section 23.01, the appraised value of
the property for each subsequent tax year until the tax year in
which the limitation provided by this subsection expires is equal
(1)  the appraised value of the property for the
preceding tax year as increased by the chief appraiser for the
current tax year using the percentage by which the appraised value
may be increased as determined by the comptroller under Subsection
(2)  the value of all new improvements to the property,
as determined under Subsection (a-11) [Notwithstanding the
requirements of Section 25.18 and regardless of whether the
appraisal office has appraised the property and determined the
market value of the property for the tax year, an appraisal office
may increase the appraised value of a residence homestead for a tax
year to an amount not to exceed the lesser of:
[(1)  the market value of the property for the most
recent tax year that the market value was determined by the
[(A)  10 percent of the appraised value of the
property for the preceding tax year;
[(B)  the appraised value of the property for the
[(C)  the market value of all new improvements to
(a-1)  Notwithstanding Subsection (a), if the owner of
single-family residential real property acquired the property as a
bona fide purchaser for value, the purchase price of the property
paid by the property owner is considered to be the market value of
the property for the first tax year in which the owner owns the
(a-2)  If the first tax year the property owner owned the
property on January 1 was a tax year before the 2026 tax year:
(1)  the property owner is considered to have acquired
the property on January 1, 2025; and
(2)  the appraised value of the property as shown on the
2025 appraisal roll is considered to be the market value of the
property for that tax year for purposes of Subsection (a).
(a-3)  Subsection (a-1) does not apply to real property if:
(A)  pursuant to a court order;
(B)  from a trustee in bankruptcy;
(C)  by one co-owner from one or more other
(D)  from a spouse or a person or persons within
the first or second degree of lineal consanguinity of one or more of
(E)  from a governmental entity; or
(2)  the chief appraiser determines that the applicant
was not a bona fide purchaser for value under criteria established
by rules adopted by the comptroller for that purpose.
(a-4)  To receive a limitation on appraised value under
Subsection (a) computed in accordance with Subsection (a-1), an
owner of the property must apply for the limitation.  To apply for
the limitation, the owner must file an application with the chief
appraiser for each appraisal district in which the property subject
to the claimed limitation is located.  The application must be filed
not later than April 30.  The comptroller by rule shall prescribe
the form for the application to ensure that the applicant provides
the information necessary to determine the applicant's eligibility
for the limitation, including the purchase price of the property
(a-5)  An application filed with a chief appraiser under
Subsection (a-4) is confidential and not open to public inspection.
The application and the information it contains may not be
disclosed to another person other than an employee of the appraisal
district who appraises property, except as provided by Subsection
(a-6)  Information that is confidential under Subsection
(1)  in a judicial or administrative proceeding under a
(2)  to a purchaser, grantee, seller, or grantor named
in the application or in the deed to which the application applies
or to a representative of the purchaser, grantee, seller, or
grantor under a written authorization signed by the purchaser,
(3)  to the comptroller or to an assessor for a taxing
unit in which the property described in the application is located;
(4)  in a judicial or administrative proceeding related
(A)  to which the purchaser, grantee, seller, or
(B)  to which an owner of the property described
in the application is a party; or
(C)  by the appraisal district for the purpose of
establishing a value of the property or of providing evidence of
comparable sales to appraise another property;
(5)  for statistical purposes if the information is
provided in a form that does not identify a specific property or
specific purchaser, grantee, seller, or grantor;
(6)  if and to the extent that the information is
required to be included in a public document or record that the
appraisal office is required to prepare or maintain; or
(7)  to a taxing unit or its legal representative that
is engaged in the collection of delinquent taxes on the property
(a-7)  Information that is disclosed under Subsection (a-6)
does not lose its confidential character.
(a-8)  For each tax year, the comptroller shall determine and
publicize the percentage by which the appraised value of
single-family residential real property may be increased under
Subsection (a).  The comptroller shall determine the percentage by
which the appraised value may be increased by calculating the sum
(1)  the inflation rate, expressed as a percentage; and
(2)  the growth rate of the population of this state for
the preceding year, expressed as a percentage.
(a-9)  Each chief appraiser shall use the percentage
determined by the comptroller under Subsection (a-8) to determine
the appraised value under Subsection (a) of single-family
residential real property appraised by that chief appraiser.
(a-10)  In this section, "inflation rate" means the positive
amount, if any, computed by determining the percentage change in
the Consumer Price Index for all Urban Consumers (CPI-U), U.S. City
Average, published by the Bureau of Labor Statistics of the United
States Department of Labor for the preceding calendar year as
compared to the calendar year preceding that calendar year.
(a-11)  Except as otherwise provided by this subsection, for
purposes of Subsection (a), the value of a new improvement to a
property is the market value of the improvement.  The value of a new
improvement to a property is the amount paid by the property owner
(1)  the property owner provides to the chief appraiser
documentation sufficient to establish the price paid by the
property owner for the improvement; and
(2)  the chief appraiser determines that the price paid
for the improvement was bona fide under criteria established by
rules adopted by the comptroller for that purpose.
(b)  When appraising single-family residential real property
[a residence homestead], 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 (a)
(c)  The limitation provided by Subsection (a) takes effect
on January 1 of the first tax year in which the owner owns the
property on January 1 [as to a residence homestead on January 1 of
the tax year following the first tax year the owner qualifies the
property for an exemption under Section 11.13].  Except as provided
by Subsection (c-2), the [The] limitation expires on January 1 of
the first tax year following the year in which [that neither] the
owner of the property ceases to own the property.
(c-2)  If property subject to a limitation under this section
qualifies for an exemption under Section 11.13 when the ownership
of the property is transferred to the owner's spouse or surviving
spouse, the limitation expires on January 1 of the first tax year
following the year in which [when the limitation took effect nor]
the owner's spouse or surviving spouse ceases to own the property,
unless the limitation is further continued under this subsection on
the subsequent transfer to a spouse or surviving spouse [qualifies
for an exemption under Section 11.13].
(c-3)  Notwithstanding Subsection (c), a limitation
established under Subsection (a) does not expire if a change in
ownership of the property occurs by inheritance or under a will as
long as the person who acquires the property qualifies for an
(e)  In this section, "new improvement" means an improvement
to a parcel of single-family residential real property [residence
homestead] 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.
(h)  In this section, "single-family residential real
property" includes a manufactured home as that term is defined by
Section 1201.003, Occupations Code, that qualifies as a residence
homestead under Section 11.13 of this code, regardless of whether
the owner of the manufactured home elects to treat the manufactured
home as real property under Section 1201.2055, Occupations Code.
SECTION 2.04.  Section 23.231(c), Tax Code, is amended to
(c)  This section does not apply to:
(1)  a parcel of single-family residential real
property to which Section 23.23 applies [residence homestead that
qualifies for an exemption under Section 11.13]; or
(2)  property appraised under Subchapter C, D, E, F, G,
SECTION 2.05.  Section 42.26(d), Tax Code, as effective
January 1, 2027, 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
property [residence homestead] subject to the limitation on
appraised value imposed by Section 23.23.
SECTION 2.06.  Sections 403.302(d) and (i), Government Code,
as effective January 1, 2027, 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
(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
(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
(C)  is eligible for tax increment financing under
(5)  the total dollar amount of any captured appraised
(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
(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
(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
(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
(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
(12)  the portion of the appraised value of property
the collection of delinquent taxes on which is deferred under
(13)  the amount by which the market value of a parcel
of single-family residential real property [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
(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 single-family residential real property [residence
homesteads] to which Section 23.23, Tax Code, applies the amount by
which that amount exceeds the appraised value of that property
[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 single-family residential real
property [residence homesteads] to which Section 23.23, Tax Code,
applies the amount by which that amount exceeds the appraised value
of that property [those properties] as calculated by the appraisal
district under Section 23.23, Tax Code.
SECTION 2.07.  Section 23.23(c-1), Tax Code, is repealed.
SECTION 2.08.  As soon as practicable after the effective
date of this article, the comptroller of public accounts shall
adopt the rules required by Section 23.23, Tax Code, as amended by
SECTION 2.09.  This article applies only to ad valorem taxes
imposed for a tax year beginning on or after the effective date of
ARTICLE 3. APPRAISAL REVIEW BOARD MEMBERS
SECTION 3.01.  Section 6.41(c), Tax Code, is amended to read
(c)  To be eligible to serve on the board, an individual
(1)  be a resident of the district;
(2)  [and must] have resided in the district for at
(3)  own real property located in the district; and
(4)  have at least five years of experience in finance,
SECTION 3.02.  Section 6.412(d), Tax Code, is amended to
(d)  A person is ineligible to serve on the appraisal review
board of an appraisal district established for a county with a
population of 120,000 or more if the person:
(1)  is a former member of the board of directors,
former officer, or former employee of the appraisal district;
(2)  served as a member of the governing body or officer
of a taxing unit for which the appraisal district appraises
property, until the fourth anniversary of the date the person
ceased to be a member or officer; or
(3)  appeared before the appraisal review board for
compensation during the two-year period preceding the date the
[(4)  served for all or part of three previous terms as
a board member or auxiliary board member on the appraisal review
SECTION 3.03.  The changes made to Section 6.41, Tax Code, by
this article apply only to the appointment of appraisal review
board members to terms beginning on or after January 1, 2026.  This
article does not affect the term of an appraisal review board member
serving on December 31, 2025, if the member was appointed before
January 1, 2026, to a term that began before December 31, 2025, and
ARTICLE 4.  PROPERTY VALUE STUDY MARGIN OF ERROR
SECTION 4.01.  Section 403.302(c), Government Code, is
(c)  If after conducting the study the comptroller
determines that the local value for a school district is valid, the
local value is presumed to represent taxable value for the school
district.  In the absence of that presumption, taxable value for a
school district is the state value for the school district
determined by the comptroller under Subsections (a) and (b) unless
the local value exceeds the state value, in which case the taxable
value for the school district is the district's local value.  In
determining whether the local value for a school district is valid,
the comptroller shall use a margin of error that does not exceed 10
[five] percent unless the comptroller determines that the size of
the sample of properties necessary to make the determination makes
the use of such a margin of error not feasible, in which case the
comptroller may use a larger margin of error.
SECTION 4.02.  The change in law made by this article applies
only to the study conducted under Section 403.302, Government Code,
for a tax year that begins on or after January 1, 2026.  The study
for a tax year that begins before that date is covered by the law in
effect immediately before the effective date of this article, and
the prior law is continued in effect for that purpose.
SECTION 5.01.  Except as otherwise provided by this article,
this Act takes effect January 1, 2026.
SECTION 5.02.  (a)  Except as otherwise provided by this
section, Article 1 of this Act takes effect January 1, 2027.
(b)  This section and Sections 1.06, 1.07, and 1.20 of this
Act take effect January 1, 2026.
SECTION 5.03.  Article 2 of this Act takes effect January 1,
2026, but only if the constitutional amendment proposed by the 89th
Legislature, Regular Session, 2025, authorizing the legislature to
provide that the appraised value of a parcel of single-family
residential real property for ad valorem tax purposes for the first
tax year in which the owner owns the property on January 1 is the
market value of the property and that, if the owner purchased the
property, the purchase price of the property is considered to be the
market value of the property for that tax year and to limit
increases in the appraised value of the property for subsequent tax
years based on the inflation and population growth rates is
approved by the voters.  If that amendment is not approved by the
voters, Article 2 of this Act has no effect.