May 12, 2023
Written by: Eleanor Kim, DMA Tax Counsel
DuCharme, McMillen & Associates, Inc. (DMA) provides this information relating to the 88th Texas Legislature Regular Session.
The 88th Texas Legislative Session ends May 29, 2023, and critical House deadlines have passed, extinguishing many house bills that failed to satisfy the procedural steps necessary to move forward in the legislative process. Despite the state’s large surplus, property tax relief appears to be the only significant tax change remaining for consideration.
However, the form of property tax relief we will see has not been solidified. With less than a month before the end of the regular session, if the House and the Senate cannot reconcile their differences soon, we may see a special session. A special session is called by the Governor, and it cannot last more than 30 days, but there is no limit on the number of special sessions that the Governor may call.
One bill of note that recently passed the House is HB 5 (Hunter, Todd). It would create an economic development program to attract jobs and investment to Texas through school district property tax abatement agreements. The bill modifies and reinstates the appraised limitation incentive concept provided by Chapter 313, Tax Code (Texas Economic Development Act), which expired on December 31, 2022. The engrossed bill has moved to the Senate.
DMA is closely monitoring the bill and will provide a detailed analysis if or when HB 5 becomes enrolled into law.
The pace during the last two weeks of the session will be rapid, and bills may undergo changes with amendments; thus, DMA’s next update will be after the conclusion of the session. DMA will summarize all tax bills in detail that passed during the 88th Texas Legislative Session.
Bills
Following are tax-related bills that have moved since our April 27, 2023, update on the 88th Texas Legistlative Session.
Jump to bills by tax type:
SALES/USE TAX
HB 1158 (Darby, Drew) would amend Tax Code §151.334 to allow carbon capture facilities to claim an exemption on components of tangible personal property that are purchased and installed to capture carbon dioxide from the atmosphere or an anthropogenic emission source, or transport or inject carbon dioxide from the atmosphere or from an anthropogenic emission source. The bill also updates the definition of “advanced energy project” in Health & Safety Code §382.003(1-a), which would reinstate the eligibility of the exemption for certain coal-fueled electric generating facilities. The House passed the bill on April 27, 2023.
HB 3104 (Anderson, Doc) would add Tax Code §151.3596 to provide for a temporary exemption for a qualified connected data center project on certain purchases. A connected data center project undertakes the construction or refurbishment of building(s) that are primarily used to house servers and related equipment and support staff for the processing, storage, and distribution of data. To qualify, a project has to make a minimum capital investment of $500 million, create at least 40 qualifying jobs, and meet other requirements. In return, a certified project would be eligible to claim an exemption for 20 years on the purchases of: (1) electricity; (2) an electrical system; (3) a cooling system; (4) a backup electricity generation system; (5) hardware or a distributed mainframe computer or server; (6) a data storage device; (7) network connectivity equipment; (8) a rack, cabinet, and raised floor system; (9) a peripheral component or system; (10) software; and (11) a mechanical, electrical, or plumbing system that is necessary to operate any tangible personal property described in (2) through (10), including a fixture. The House passed the bill on May 6, 2023.
HB 3374 (Button, Angie Chen) would add Government Code §2303.499 to waive the requirement that employees of a qualified business of an enterprise project must perform at least 50% of the person’s service at the qualified business site during the “COVID relief period,” which means the period from March 1, 2020, through December 31, 2021. The House passed the bill on May 6, 2023.
SB 65 (Zaffirini, Judith) would amend Tax Code §151.0038 to exclude from taxable information services the furnishing of an academic transcript. The Senate passed the bill on March 28, 2023, and the House passed the bill on May 9, 2023. The enrolled bill will be sent to the Governor.
SB 1122 (Schwertner, Charles) would amend Tax Code §151.0039(b) to exclude from taxable insurance services a medical service performed to determine the appropriate level of benefits under the Texas Workers’ Compensation Act. The Senate passed the bill on April 12, 2023, and the House Ways & Means voted out the bill on May 8, 2023.
FRANCHISE TAX
SB 1243 (Huffman, Joan) would add Tax Code §171.10132 to allow a taxable entity to exclude from total revenue qualifying broadband grant proceeds for broadband deployment in Texas, to deduct the proceeds as cost of goods sold (COGS) if they are expenses that may be included in the COGS deduction, and to deduct the proceeds as compensation if they are expenses that may be included in the compensation deduction. The changes would apply retroactively to reports due on or after January 1, 2023. The Senate passed the bill on April 18, 2023, and the House passed the bill on May 9, 2023.
SB 1614 (Perry, Charles) would amend Tax Code §171.1012(o) to expand the current COGS deduction that is allowed for a taxable entity whose principal business activity is film or television production broadcasting to include a taxable entity whose principal business activity is television or radio broadcasting. The bill defines “television or radio broadcasting” to mean television or radio broadcasting under a television or radio broadcast license issued by the Federal Communications Commission and regulated under 47 C.F.R. Part 73 or 74. The Senate passed the bill on April 12, 2023, and the House Ways & Means Committee voted out the bill on May 8, 2023.
GENERAL
(Applies to all taxes)
HB 2691 (Button, Angie Chen) would amend Government Code §403.055 to authorize the Comptroller to release any held payments of a debtor that is in excess of the amount of outstanding debt that another state agency has reported to the Comptroller and would require the reporting state agency to notify a debtor that the debts are being reported to the Comptroller and that payments from the state will be held due to the debt owed. The House passed the bill on April 21, 2023, and the Senate passed the engrossed bill on May 9, 2023. The enrolled bill will be sent to the Governor.
HJR 132 (Hefner, Cole) proposes a constitutional amendment that would prohibit the legislature from imposing a tax based on the wealth or net worth of an individual or family, including a tax based on the difference between the assets and liabilities of an individual or family. Upon passage, this resolution is contingent on the voters’ approval of the constitutional amendment. The House passed the resolution on May 2, 2023.
SB 61 (Zaffirini, Judith) would amend Tax Code §111.0047 (Suspension or Revocation of Permit or License) to allow a permit holder to elect the receipt of notices by electronic means. Service by electronic means is complete when the Comptroller transmits the notice using the contact information provided by the permit holder, and service by mail is complete when the notice is deposited by the Comptroller in a United States Postal Service post office. The bill would add a similar provision to Tax Code §151.203 (Suspension or Revocation of Sales/Use Tax Permit) and to Tax Code §171.256 (Forfeiture of Corporate Privileges). The Senate passed the bill on March 21, 2023, and the House Ways & Means Committee voted out the bill on April 27, 2023.
HOTEL OCCUPANCY TAX
(Excludes bills relating to revenue use or revenue sharing)
HB 1034 (Stucky, Lynn) would amend Tax Code §352.002 by adding a new subsection that authorizes Wise County to impose a county hotel occupancy tax and would amend Tax Code §352.003 to impose a ceiling of 2% on such tax imposition. The House passed the bill on April 28, 2023, and the Senate Natural Resource/Economic Development Committee heard the bill on May 10, 2023.
HB 1410 (Rogers, Glenn) would amend Tax Code §352.002(a)to allow Palo Pinto County to continue to impose county hotel occupancy tax. The House passed the bill on April 28, 2023.
HB 3235 (Troxclair, Ellen) would authorize Blanco to impose a seven percent county hotel occupancy tax for use in promoting tourism in the county. The House passed the bill on May 2, 2023.
HB 3453 (Jetton, Jacey) would authorize Fort Bend County to impose a hotel occupancy tax. The House passed the bill on May 2, 2023.
HB 4565 (Longoria, Oscar) would authorize the City of Harlingen to increase its municipal hotel occupancy tax rate by two percent and to use the additional revenue to pay costs associated with the construction, expansion, maintenance, financing, operation, or debt service of its convention center. The House passed the bill on May 2, 2023.
HB 5178 (Ashby, Trent) would authorize a certain county containing a portion of the Angelina National Forest to impose a hotel occupancy tax to generate revenue for funding initiatives such as tourism development, historic preservation programs, and promotion of the arts. The House passed the bill on May 2, 2023.
SB 1420 (Birdwell, Brian) would: (1) amend Tax Code §351.009 and §352.009 to change the due date that a municipality or a county must file a report pertaining to its city hotel occupancy tax with the Comptroller from February 20 of each year to March 1 of each year; (2) add the requirement that the municipality must include in the report the total revenue amount of city hotel occupancy tax that has been collected and unspent that is in the municipality’s budget for the fiscal year in which the report is due; (3) authorize a municipality or a county to use a portion of its hotel occupancy tax to recoup cost in reporting; (4) amend Tax Code §351.101 to prohibit the use of city hotel occupancy tax to acquire a site for, construct, improve, enlarge, equip, repair, staff, operate or maintain any part of a building or facility for a visitor information center unless the building or facility is exclusively used to distribute or disseminate tourism-related information to tourists; (5) amend the definition of “tourist” provided by Tax Code §351.001 to an individual who travels at least 50 miles to either attend a meeting or event at a hotel or spend the night at a hotel; (6) add Tax Code §351.162 to require the Comptroller to recapture an amount of tax based on tax collection data between the hotel’s 10 year-year anniversary and 20 year-anniversary of being designated a qualified hotel under certain circumstances; and (7) add Tax Code §351.163 to require the Comptroller to prepare a report on the status of each qualified project by December 1 of each even-number year. The Senate passed the bill, and the House Ways & Committee voted out the bill on May 4, 2023.
SB 1809 (Sparks, Kevin) would authorize Armstrong County to impose a county hotel occupancy tax with a maximum county tax rate of seven percent for those areas of the county that are not subject to a municipal hotel occupancy tax. The Senate passed the bill on April 19, 2023, and the House Ways & Means Committee voted out the bill on May 4, 2023.
MOTOR FUEL TAX
HB 654 (Bailes, Ernest) would amend Tax Code §162.204 to exempt diesel fuel sold to a hospital licensed under Chapter 241, Health & Safety Code (Texas Hospital Licensing Law) for the hospital’s exclusive use and would amend Tax Code §162.227 to authorize the hospital to obtain a refund if it paid tax on diesel fuel that is used in an exempt manner. The House Ways & Means Committee voted out the bill on May 4, 2023, and the bill on the House local calendar for May 12, 2023.
HB 3599 (Thierry, Shawn) would amend Tax Code §162.104(a) and Tax Code §162.204(a) to add an exemption for gasoline or diesel fuel sold to a nonprofit food bank and delivered into (A) the fuel supply tank of a motor vehicle with a gross vehicle weight rating of at least 25,000 pounds that is owned by the nonprofit food bank and used to deliver food; or (B) a storage facility from which gasoline will be delivered solely into the fuel supply tanks of motor vehicles described in (A). The bill adds refund provisions for tax paid by a nonprofit food bank when it purchased gasoline and diesel fuel and used in an exempt manner. The House passed the bill on May 8, 2023.
HB 3651 (Bailes, Ernest) would amend Chapter 162, Tax Code, as follows: (1) define container to mean any receptables used to store motor fuel; (2) define “delivery” to mean any transfer of motor fuel: (a) into a fuel supply tank, cargo tank, or container; or (b) to a location or into a receptable, as specified by this chapter in connection with the term; (3) amend the definition of “motor fuel” to provide that fuel used for “a motor vehicle licensed for use on a public highway”; (4) amend the definition of “motor fuel transporter” to exclude a person who is licensed under Chapter 162 as a supplier, permissive supplier, or distributor and who lawfully acquires motor fuel and retains ownership of the fuel while the fuel is being transported; (5) amend the definition of “transport vehicle” to provide that it includes a motor vehicle or a motor vehicle/trailer combination that carries motor fuel over a public highway; (6) amend Tax Code §162.101 and Tax Code §162.201 to clarify that tax shall be added to the selling price of gasoline or diesel fuel so that the tax is “paid by each person receiving” the fuel until it is paid by the person ultimately using or consuming it; and (7) amend Tax Code §162.103(a)(4) and Tax Code §162.203(a) to clarify that a backup tax is imposed on gasoline or diesel fuel on which tax has not been paid “in an original or subsequent sale” and adds subsection (5) that the backup tax is imposed on a person who acquires gasoline or diesel fuel by any unlawful means, including purchase through unauthorized use of a credit card, debit card, or other money, regardless of whether tax was previously paid on the fuel or was added to the selling price of the fuel. The House passed the bill on April 27, 2023, and the Senate Finance Committee voted out the bill on May 8, 2023.
MOTOR VEHICLE REGISTRATION
HB 78 (Ortega, Lina) would amend Transportation Code §502.4021 to allow certain counties to impose an additional vehicle registration fee in an amount up to $10 if the voters of the county approve the fee imposition. The bill applies only to a county that borders Mexico and contains a municipality that unilaterally created a regional mobile authority. The House passed the bill on May 2, 2023.
HB 3860 (Goldman, Craig) would amend Chapter 520, Transportation Code, to exempt a county tax assessor-collector from liability for an offense or damages arising from the misuse of license plates or other fraudulent activity related to vehicle registration and titling by an individual or business entity deputized by the county tax assessor-collector to perform titling services in accordance with adopted Texas Department of Motor Vehicles rules. The House passed the bill on May 5, 2023.
SB 505 (Nichols, Robert) would add Transportation Code §502.360 to impose an additional registration fee on electric vehicles. The term “electric vehicle” means a motor vehicle that has a gross weight of 10,000 pounds or less and uses electricity as its only source of motor power. The additional fee is $400 for the registration of a new vehicle and $200 for the registration or renewal of registration of a vehicle. The bill has passed both houses and was sent to the Governor on May 2, 2023.
NEW TAX
HB 4772 (Thierry, Shawn) would add Chapter 164, Tax Code, to impose a tax on a person who receives an e-cigarette or alternative nicotine product for the purpose of making a first sale in Texas. The tax rate is: (1) five cents for each milliliter or fractional part of a milliliter of vapor product sold for use in an open-system e-cigarette; (2) five cents for each e-cigarette pod sold for use in a closed-system e-cigarette; (3) five percent of the wholesale cost price, exclusive of any discount, promotion, or allowance, on each closed-system e-cigarette that does not use an e-cigarette pod; and (4) $1.23 per ounce of net volume of the alternative nicotine product, as listed by the manufacturer, on each alternative nicotine product sold. The person who makes the first sale in Texas pays the tax but adds the tax to the price charged to the customer such that the ultimate consumer pays the tax. The House passed the bill on May 9, 2023.
SEVERANCE TAX
HB 591 (Capriglione, Giovanni) would add Tax Code §201.061 to exempt from natural gas production tax gas that is produced from a qualifying well that is consumed within 1,000 feet of the qualifying well and that would otherwise have been lawfully vented or flared. The term “qualifying well” means a well that: (A) is connected to a pipeline on which pipeline takeaway capacity is not expected to meet the demand for gas produced by the well; (B) is not connected to a pipeline and for which connection to a pipeline is technically or commercially unfeasible but is operated by a well operator who has contractually dedicated the well, the gas produced from the well, or the land or lease on which the well is located to a pipeline operator; or (C) is not connected to a pipeline and is operated by a well operator who has not contractually dedicated the well the gas produced from the well, or the land or lease on which the well is located to a pipeline operator. A well operator and a pipeline operator, as applicable, would apply to the Texas Railroad Commission for certification of a well as a qualifying well and would submit the certification to the Texas Comptroller with an application for the tax exemption. The House passed the bill on April 14, 2023, and the Senate passed the bill on May 10, 2023. The enrolled bill will be sent to the Governor.
PROPERTY TAX
HB 5 (Hunter, Todd) would create an economic development program to attract jobs and investment to Texas through school district property tax abatement agreements. Chapter 403, Government Code, would be amended to set out provisions for property tax abatement agreements between a public school district and a person proposing to construct an eligible project within the district under which the district agrees to limit the taxable value for school district maintenance and operation (M&O) property tax purposes of the eligible property used as part of the proposed project in exchange for the investment and job creation associated with the project. An eligible project would be a project that: (A) is a national or state security project or supply chain infrastructure project; (B) is a manufacturing project; or (C) requires an investment in a school district in this state of more than $1 billion. The provisions regarding the agreements would expire on December 31, 2036. The House passed the bill on May 5, 2023.
HB 35 (Bernal, Diego), as substituted, would amend Tax Code §31.031(a) to permit an individual who has residence homestead exemption for property located in a county with a population greater than 1.5 million and where more than 70% residence in a single municipality, to pay property taxes on that homestead in four equal installments. The House passed the bill on May 9, 2023.
HB 40 (Zwiener, Erin) would provide a property tax exemption for the appraisal value of a property that is attributable to a graywater or rainwater harvesting system. The House Ways & Means voted out the bill on May 4, 2023, and the bill is on the House Calendar.
HB 159 (Landgraf, Brooks) would amend Tax Code §26.04 to provide that a taxing unit that is required to post-tax rate information on the taxing unit’s Internet website is required to publish a summary of that information and the uniform resource locator (URL) address of the location where the information is posted in a newspaper of general circulation in each county in which the taxing unit is located. The requirement would not apply to a taxing unit located wholly or partly in a county with a population of one million or more; or where no part of the taxing unit is located in a county in which a newspaper of general circulation is published. The House passed the bill on April 26, 2023.
HB 796 (Button, Angie Chen) would add Tax Code §41.13 to require each appraisal district to create and maintain a publicly available and searchable Internet database that contains certain information regarding protest hearings conducted by the appraisal district’s appraisal review board. The bill provides that beginning on January 1, 2025, the database must include information for protests relating to the most recent tax year and each tax year thereafter until the database includes protest information for the most recent five years and that beginning January 1, 2030, the database is to provide protest information for the previous five tax years. The House passed the bill on April 5, 2023, and the Senate Local Government Committee voted out the bill on May 1, 2023.
HB 1285 (Shine, Hugh) would authorize the board of directors of an appraisal district to appoint one or more deputy taxpayer liaison officers to assist the taxpayer liaison officer and establishes that the taxpayer liaison officer is the taxpayer assistance officer for the district. The House passed the bill on April 21, 2023, and the Senate Local Government Committee voted out the bill on May 9, 2023.
HB 1301 (Geren, Charlie) would amend Tax Code §25.25 (relating to Correction of Appraisal Roll) and Tax Code §41.01 to require an appraisal review board to consider and issue a written order if a property owner timely files a motion for correction or timely files a protest, and would preclude an ARB from ruling that the property owner has forfeited the right to file if the filing was timely. The House passed the bill on May 6, 2023.
HB 1634 (Walle, Armando) would amend Local Government Code §303.042(f) to specify that the current property tax exemption for leaseholds or other possessory interest in a public facility applies to a public facility used to provide multifamily housing only if the public facility user meets specified low-income housing requirements. The House passed the bill on May 2, 2023.
HB 1956 (Geren, Charlie) would amend Tax Code §42.29 to increase the attorney’s fee limit that a prevailing property owner can be awarded from the greater of $15,000 or 20% of the total tax liability to the greater of $25,000 or 50% of the total tax liability. The limitation would not apply to an appeal of an appraised value of a residence homestead if the property owner prevailed in an appeal under Tax Code §42.25 (Excessive Appraisal) or §42.26 (Unequal Appraisal). The House passed the bill on May 6, 2023.
HB 2121 (Paul, Dennis) would amend Tax Code §22.24(e) to add that a rendition or report can be filed on behalf of a property owner who is rendering tangible personal property used to produce income that has an estimated market value of not more than $500,000 without requiring a sworn statement. The House passed the bill on April 25, 2023, and the Senate Local Government Committee voted out the bill on May 9, 2023.
HB 2354 (Hefner, Cole) would amend Tax Code §23.54 to provide the ownership of agricultural land is not considered to have changed if the ownership is transferred from the former owner to the surviving spouse or a surviving child of the former owner. The House passed the bill on April 14, 2023, and the Senate Local Government Committee voted out the bill on May 9, 2023.
HB 2397 (Guillen, Ryan) would amend Tax Code §11.43 to provide that the ownership of the property is not considered to have changed if ownership of the property is transferred from the former owner to the surviving spouse or a surviving child of the former owner and would amend §23.54 to provide that the ownership of land is not deemed to have changed if the new owner uses the land in materially the same way as the former owner used the land during the preceding tax year. The House passed the bill on May 6, 2023.
HB 2747 (Darby, Drew) would amend Tax Code §11.43 to require an appraisal district to develop a program for the periodic review of each residence homestead exemption granted by the district to confirm the exemption qualification. The program would require the review of each residence homestead exemption at least once every five tax years. The House Ways & Means Committee voted out the bill on April 17, 2023.
HB 3127 (Ashby, Trent) would: (1) amend Government Code §403.3011(2) to delete from the definition of an “eligible school district” a school district for which the Comptroller has determined the appraisal district that appraises the property for the school district was in compliance with the scoring requirement of the Comptroller’s most recent review of the appraisal district conducted under Tax Code §5.102; and (2) amend Government Code §403.303(a) to extend the deadline to file a petition protesting the property value study from 40 days to 50 days of the date on which the Comptroller’s findings are certified to the Education Commissioner. The House passed the bill on May 9, 2023.
HB 3241 (Guillen, Ryan) would amend Tax Code §11.162 to exempt farm production inputs in the hands of the producer. The bill defines “Farm production inputs” to include seeds, weaned animals, fertilizer, pesticides, feed, and any other resources that are necessary to produce crops, fruit, flowers, and other products of the soil, or farm products defined in Tax Code §11.16. The House passed the bill on May 9. 2023. The bill is contingent on the passage of HJR 141, which the House passed on May 8, 2023.
HB 3273 (Thierry, Shawn) would amend Tax Code §26.04 to provide that beginning January 1, 2024, the chief appraiser is required to inform each property owner that the estimated amount of taxes imposed on the property can be found in the property tax database (if website is maintained) and to publish the notice in a county-wide newspaper. The House passed the bill on April 20, 2023, and the Senate Local Government Committee voted out the bill on May 1, 2023.
HB 3364 (Button, Angie Chen) would: (1) amend Tax Code §1.07 to require notices be sent by certified mail pertaining to a property that was not on the appraisal roll in the preceding year because it was omitted property; (2) amend Tax Code §6.035 to reduce the length of term for a member of the board of directors from five to three terms for counties of 120,000 or more in population; (3) amend Chapter 6, Tax Code, to require an appraisal district with a population of 120,000 to maintain a website and to post on the appraisal district’s website the appraisal records, other than records that are confidential under law, and to continuously update the posted records to include any change in the appraised value of property; (4) amend Tax Code §41.45 to change the written notice deadline requirement for a telephonic hearing from 10 days to five days; (5) amend Tax Code §41.45 to require the appraisal review board to deliver written notice of a protest hearing dismissal for failure to appear within 30 days of the scheduled hearing date; (6) amend Tax Code §41.61 to change the deadline to deliver a subpoena for good cause hearing from 5th to the 15th day; (7) amend Chapter 41A, Tax Code, to allow a person leasing the property to file an appeal through binding arbitration if the person is contractually obligated to reimburse the property owner for taxes, the owner does not appeal the order and the appraised value of the property is $5 million or less; and (8) amend Tax Code §41A.015(a) to allow a property owner to request limited binding arbitration to compel the appraisal review board or chief appraiser to either comply with the model hearing procedures prepared by the Comptroller including by rescinding procedural rules that are not in compliance with the model, or use of correct appraised values for protests on the ground of unequal appraisal of property. The House passed the bill on May 9, 2023.
HB 3745 (Goldman, Craig) would amend Tax Code §23.521 to prohibit a chief appraiser from requesting a land owner to submit a report on the implementation of a written management plan more than once during each five-year period. The House passed the bill on May 10, 2023.
HB 3857 (Thimesch, Kronda) would: (1) amend Tax Code §23.51 to provide that in appraising qualified open-space land, the chief appraiser shall distinguish between the degree of intensity required for various agricultural production methods; and (2) add Tax Code §23.5215 to require the Comptroller, in consultation with the Texas A&M AgriLife Extension Service, to develop guidelines for determining the degree of intensity generally accepted in the area. The House passed the bill on May 9, 2023.
HB 4077 (Noble, Candy) would amend Tax Code §11.43 to clarify that an individual who is 64 and is receiving a residence homestead exemption is eligible to claim certain additional tax exemption that is available to individuals 65 or older in the following tax year without the need to apply if the individual’s information on file supports granting the exemption. The House passed the bill on May 6, 2023.
HB 4101 (Shine, Hugh) would amend Tax Code §41A.015 to authorize a property owner who has filed a notice of protest to request for a limited binding arbitration to compel the appraisal review board or the chief appraiser to comply with the model hearing procedures adopted by the appraisal review board. The House passed the bill on April 25, 2023, and the Senate Local Government Committee voted out the bill on May 9, 2023.
HB 4181 (Munoz, Sergio) would amend Tax Code §11.133 to provide that the surviving spouse of a military service member (rather than a member of the armed services) of the United States killed or fatally injured in the line of duty is entitled to an exemption from taxation of the total appraised value of the surviving spouse’s residence homestead if the surviving spouse has not remarried. The bill is contingent on the passage of a constitutional amendment (HJR 165) and on the voters’ approval of the constitutional amendment. The House passed the bill on May 8, 2023. The bill is contingent on the passage of HJR 165, which the House also passed on May 3, 2023.
HB 4980 (Noble, Candy) would amend Tax Code §41A.03 to replace the appraisal district with the Comptroller to whom the property owner must submit a request for a binding arbitration to appeal an appraisal review board’s order. The bill would require the Comptroller to receive the request through an online electronic system and would allow a property owner to designate an agent to represent the owner in an arbitration proceeding on a signed form prescribed by the Comptroller. The House passed the bill on May 2, 2023.
HB 5012 (Clardy, Travis) would add municipalities to the list of eligible municipalities that may receive a rebate for a period of 10 years of the state hotel occupancy taxes and state sales taxes collected at qualified hotel projects. The bill would provide for a “clawback” provision to ensure the state’s revenues are recouped over time in certain newly authorized projects. The House passed the bill on May 9, 2023.
HB 5321 (Bell, Cecil) would authorize the East Montgomery County Improvement District’s board of directors by order to authorize proceeds from the district’s hotel occupancy tax to be used for certain qualified projects. The House passed the bill on May 9, 2023.
HJR 153 (Wilson, Terry) would propose a constitutional amendment to expand the tax limitation on residence homesteads for the disabled and over 65 to include all taxing units/political subdivisions other than a school from just a county, a city or town, or a junior college. The House passed the resolution on May 9, 2023.
SB 348 (Springer, Drew) would amend Tax Code §25.027(b), which currently allows the posting of an aerial photograph that depicts five or more separately owned buildings, to permit the posting of: (1) an aerial photograph that depicts more than one separately owned buildings; (2) a street-level photograph of only the exterior of a building; or (3) a field record or overhead sketch of the property that depicts only the outline of the buildings, the general landscape of the property, and the dimensions of or distances between the buildings and features depicted. The Senate passed the bill on April 12, 2023, and the House Ways & Means Committee voted out the bill on May 8, 2023.
SB 361 (Eckhardt, Sarah) would amend Tax Code §6.412 to allow a person employed by a school district as a teacher to serve on the appraisal review board of an appraisal district. The Senate passed the bill on April 4, 2023, and the House Ways & Means Committee voted out the bill on May 8, 2023.
SB 539 (Campbell, Donna) would amend Tax Code §33.03 to require each taxing unit to indicate on each delinquent roll whether a tax delinquency is deferred or abated for residence homestead under Tax Code §33.06 (Elderly, Disabled, Disabled Veteran) or §33.065 (Appreciating homestead). The Senate passed the bill on April 20, 2023, and the House Ways & Means Committee voted out the bill on May 9, 2023.
SB 938 (Blanco, Cesar) would include El Paso County among the counties in which conservation and reclamation districts may issue bonds supported by property taxes to fund the development and maintenance of parks and recreational facilities. Both houses passed the bill, and the enrolled bill was sent to the Governor on May 2, 2023. SJR 32 (Blanco, Cesar), which proposes a constitutional amendment for SB 938, passed both houses and has been filed with the Texas Secretary of State for submission to the voters for approval on an election to be held on November 7, 2023.
SB 1145 (West, Royce) would add Tax Code § 11.36 to provide an exemption for a person who owns and operates a qualifying childcare facility or the portion of the real property that the person owns and leases to a person who uses the property to operate a qualifying childcare facility. The bill sets forth requirements and definitions for eligibility of the exemption. The Senate passed the bill on May 1, 2023. The bill is contingent on the passage of SJR 64 (West, Royce), which the Senate passed on May 3, 2023. The House Ways & Means Committee voted out both SB 1145 and SJR 64 on May 4 and May 8, 2023, respectively.
SB 1191 (Zaffirini, Judith) would amend Tax Code §23.541 to require a chief appraiser to accept and approve or deny an application after the deadline for filing if the land had been appraised as open space land in the preceding year, the former owner died during the preceding year, and the application is filed prior to the taxes becoming delinquent by the surviving spouse or a surviving child of the former owner; the executor or administrator of the estate or the trustee of the trust created by the former owner. The bill would exempt such a late application from penalty imposed for a late-filed application. The Senate passed the bill on April 4, 2023, and the House passed the bill on May 9, 2023.
SB 1340 (Zaffirini, Judith) would: (1) amend Government Code §403.0246 to include agreements under Chapter 312 or 313, Tax Code, in the definition of “local development agreement” for inclusion of such information in the Comptroller’s database that the agency is required to create and maintain; (2) require the Comptroller to maintain additional data, including impacts on sales/use tax, ad valorem tax or hotel occupancy tax, on its website; (3) require the submission of agreements (new, amendments or renewals) to the Comptroller. The Senate passed the bill on April 20, 2023, and the House Ways & Means Committee voted out the bill on May 9, 2023.
SB 1381 (Eckhardt, Sarah) would amend Tax Code §11.43 relating to the eligibility of the surviving spouse of an elderly person who qualified for a local option exemption by a taxing unit of a portion of the appraised value of the deceased person’s residence homestead to continue to receive an exemption for the same property. The Senate passed the bill on April 4, 2023, and the House Ways & Means Committee voted out the bill on May 4, 2023.
SB 1439 (Springer, Drew) would: (1) amend Tax Code §11.145 to insert the aggregation of tangible personal property held or used for the production of income with the taxable value of less than $2,500 owned by a person and aggregation of such property with other related entities that are members of the same unified business enterprise; (2) define “Related business entity” to mean a business entity that: (A) engages in a common business enterprise with at least one other business entity; and (B) owns tangible personal property that:(i) is held or used for the production of income as part of the common business enterprise; and (ii) is located at the same physical address that tangible personal property owned by at least one other business entity engaged in the common business enterprise is located; (3) define “Unified business enterprise” to mean a common business enterprise composed of more than one related business entity; (4) allow a chief appraiser to investigate whether a business entity is a related entity and authorized to aggregated tangible personal property; and (5) amend Chapter 27, Tax Code, to require the physical address of a property on a rendition statement and require a rendition statement of a related business entity to contain the information for each related business entity that is included in the unified business enterprise. The Senate passed the bill on April 12, 2023, and the House Ways & Means Committee voted out the bill on May 8, 2023.
SB 1801 (Springer, Drew) would amend Tax Code §11.43 to require an appraisal district to develop a program for the periodic review of each residence homestead exemption granted by the district to confirm the exemption qualification. The program would require the review of each residence homestead exemption at least once every five tax years. The Senate Local Government Committee voted out the bill on March 28, 2023. The Senate passed the bill on April 12, 2023. Referred to Ways and Means voted out the bill on May 4, 2023.
SB 1814 (Bettencourt, Paul) would amend Tax Code§ 26.012(3) to modify the definition of “current debt” for purposes of calculating an interest and sinking tax rate, to include only the minimum amount required by a bond issuance’s schedule. The Senate passed the bill on May 3, 2023, and the House Ways & Means Committee is scheduled to hear the bill on May 15, 2023.
SB 2091 (West, Royce) would amend provisions in Chapters 33 and 34, Tax Code, to allow a taxing unit to sell seized or foreclosed property to an abutting property owner without the need for a public sale. The Senate passed the bill on April 4, 2023, and the House Ways & Means Committee voted out the bill on May 8, 2023.
SB 2289 (Huffman, Joan) would add Tax Code §11.36 to provide an exemption for certain tangible personal property held by a manufacturer of medical or biomedical products as a finished good or used in the manufacturing or processing of medical or biomedical products. The Senate passed the bill on April 13, 2023, and the House Ways & Means Committee voted out the bill on May 8, 2023. The bill is contingent on the passage of SJR 87, which the House Ways & Means Committee has also voted out.
SB 2355 (Bettencourt, Paul) would amend Tax Code §41A.03 to replace the appraisal district with the Comptroller to whom the property owner must submit a request for a binding arbitration to appeal an appraisal review board’s order. The bill would require the Comptroller to receive the request through an online electronic system and would allow a property owner to designate an agent to represent the owner in an arbitration proceeding on a signed form prescribed by the Comptroller. The Senate passed the bill on April 4, 2023, and the House Ways & Means Committee voted out the bill on May 4, 2023.
SB 2361 (Parker, Tan) would amend Tax Code §11.184 to exempt from tax property owned by an organization engaged primarily in performing charitable functions. The Senate passed the bill on May 10, 2023.
If you have questions about the impact these bills may have on your business, contact our team today to consult with a DMA tax expert.
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