HB 9 House Committee Report

Relating to an exemption from ad valorem taxation of a portion of the appraised value of tangible personal property a person owns that is held or used for the production of income.

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A BILL TO BE ENTITLED

AN ACT

relating to an exemption from ad valorem taxation of a portion of

the appraised value of tangible personal property a person owns

that is held or used for the production of income.

       BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

ARTICLE 1.  PROVISIONS CONTINGENT ON CONSTITUTIONAL AMENDMENT

       SECTION 1.01.  The heading to Section 11.145, Tax Code, is

amended to read as follows:

       Sec. 11.145. INCOME-PRODUCING TANGIBLE PERSONAL PROPERTY

[HAVING VALUE OF LESS THAN $2,500].

       SECTION 1.02.  Section 11.145(a), Tax Code, is amended to

read as follows:

       (a)  A person is entitled to an exemption from taxation of

$250,000 of the appraised value of tangible personal property the

person owns that is held or used for the production of income [if

that property has a taxable value of less than $2,500].

       SECTION 1.03.  Section 22.01, Tax Code, is amended by adding

Subsection (j-1) to read as follows:

       (j-1)  A person is required to render tangible personal

property the person owns that is held or used for the production of

income only if, in the person’s opinion, the aggregate market value

of the property in at least one taxing unit that participates in the

appraisal district is greater than the amount exempted under

Section 11.145(a). A person required to render property for

taxation under this subsection must render all tangible personal

property the person owns that is held or used for the production of

income and has taxable situs in the appraisal district. This

subsection does not apply to property exempt from taxation under a

provision of law other than Section 11.145.

       SECTION 1.04.  The changes in law made by this article apply

only to an ad valorem tax year that begins on or after January 1,

2025.

ARTICLE 2.  PROVISIONS NOT CONTINGENT ON CONSTITUTIONAL AMENDMENT

       SECTION 2.01.  Section 26.01, Tax Code, is amended by adding

Subsections (a-2) and (a-3) to read as follows:

       (a-2)  This subsection applies only to the appraisal roll for

a taxing unit for the 2025 tax year.  When the chief appraiser

delivers the appraisal roll to the assessor for the taxing unit, the

chief appraiser shall include a provisional appraisal roll to

account for the changes in law attributable to the constitutional

amendment proposed by the 89th Legislature, Regular Session, 2025,

to authorize the legislature to exempt from ad valorem taxation a

portion of the market value of tangible personal property a person

owns that is held or used for the production of income, as if those

changes were in effect.  If the chief appraiser delivers a

supplemental appraisal roll or correction to the appraisal roll to

the assessor for the taxing unit before that constitutional

amendment takes effect, the chief appraiser shall include

provisional appraisal roll entries to account for the changes in

law attributable to that constitutional amendment.  If that

constitutional amendment takes effect:

             (1)  on the date that constitutional amendment takes

effect, the provisional appraisal roll, as supplemented and

corrected, becomes the appraisal roll for the taxing unit; and

             (2)  as soon as practicable after that date, the chief

appraiser shall correct the taxing unit’s appraisal roll as

necessary to finally account for the changes in law attributable to

that constitutional amendment.

       (a-3)  This subsection and Subsection (a-2) expire December

31, 2026.

       SECTION 2.02.  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 2025 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 attributable to the

constitutional amendment proposed by the 89th Legislature, Regular

Session, 2025, to authorize the legislature to exempt from ad

valorem taxation a portion of the market value of tangible personal

property a person owns that is held or used for the production of

income were in effect for that tax year.  This subsection expires

December 31, 2026.

       (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 2025 tax

year as if the changes in law attributable to the constitutional

amendment proposed by the 89th Legislature, Regular Session, 2025,

to authorize the legislature to exempt from ad valorem taxation a

portion of the market value of tangible personal property a person

owns that is held or used for the production of income were in

effect for that tax year.  This subsection expires December 31,

2026.

       SECTION 2.03.  Chapter 26, Tax Code, is amended by adding

Section 26.0401 to read as follows:

       Sec. 26.0401.  CALCULATION OF CERTAIN TAX RATES FOR 2025 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

2025 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 attributable to the

constitutional amendment proposed by the 89th Legislature, Regular

Session, 2025, to authorize the legislature to exempt from ad

valorem taxation a portion of the market value of tangible personal

property a person owns that is held or used for the production of

income were in effect for that tax year.

       (b)  This section expires December 31, 2026.

       SECTION 2.04.  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 2025 tax year shall be calculated

as if the changes in law attributable to the constitutional

amendment proposed by the 89th Legislature, Regular Session, 2025,

to authorize the legislature to exempt from ad valorem taxation a

portion of the market value of tangible personal property a person

owns that is held or used for the production of income were in

effect for that tax year.  This subsection expires December 31,

2026.

       SECTION 2.05.  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 the tangible personal

property a person owns that is held or used for the production of

income for the 2025 tax year as if the changes in law attributable

to the constitutional amendment proposed by the 89th Legislature,

Regular Session, 2025, to authorize the legislature to exempt from

ad valorem taxation a portion of the market value of tangible

personal property a person owns that is held or used for the

production of income were in effect for that tax year and also as if

the changes in law attributable to that constitutional amendment

were not in effect for that tax year.  This subsection expires

December 31, 2026.

       SECTION 2.06.  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 2025 tax year to reflect the

results of the election to approve the constitutional amendment

proposed by the 89th Legislature, Regular Session, 2025, to

authorize the legislature to exempt from ad valorem taxation a

portion of the market value of tangible personal property a person

owns that is held or used for the production of income.  This

subsection expires December 31, 2026.

       SECTION 2.07.  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 the tangible personal

property a person owns that is held or used for the production of

income for the 2025 tax year and only if the changes in law

attributable to the constitutional amendment proposed by the 89th

Legislature, Regular Session, 2025, to authorize the legislature to

exempt from ad valorem taxation a portion of the market value of

tangible personal property a person owns that is held or used for

the production of income 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

attributable to that constitutional amendment 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 2025 legislative session, your tax bill

would have been $____ (insert amount of tax bill if the changes in

law attributable to the constitutional amendment proposed by the

89th Legislature, Regular Session, 2025, to authorize the

legislature to exempt from ad valorem taxation a portion of the

market value of tangible personal property a person owns that is

held or used for the production of income 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 attributable to that

constitutional amendment were not in effect for that tax year and

amount of tax bill if the changes in law attributable to that

constitutional amendment were in effect for that tax year),

resulting in a lower tax bill of $____ (insert amount of tax bill if

the changes in law attributable to that constitutional amendment

were in effect for that tax year), contingent on the approval by the

voters at an election to be held November 4, 2025, of the

constitutional amendment proposed by the 89th Legislature, Regular

Session, 2025, to authorize the legislature to exempt from ad

valorem taxation a portion of the market value of tangible personal

property a person owns that is held or used for the production of

income.  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 attributable to that constitutional amendment were not in

effect for that tax year and amount of tax bill if the changes in law

attributable to that constitutional amendment 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

the 89th Legislature, Regular Session, 2025, to authorize the

legislature to exempt from ad valorem taxation a portion of the

market value of tangible personal property a person owns that is

held or used for the production of income.  If that 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

2025 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 that 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 2025 tax

year that is included in the bill;

             (2)  the amount of taxes imposed by each taxing unit on

the tangible personal property a person owns that is held or used

for the production of income for the 2025 tax year is calculated as

if the changes in law attributable to that constitutional amendment

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 attributable to that

constitutional amendment were not in effect for that tax year and

the amount of the tax bill if the changes in law attributable to

that constitutional amendment 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, 2026.

       SECTION 2.08.  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, 2026.

ARTICLE 3.  EFFECTIVE DATES

       SECTION 3.01.  Except as otherwise provided by this article:

             (1)  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;

and

             (2)  if this Act does not receive the vote necessary for

immediate effect, this Act takes effect September 1, 2025.

       SECTION 3.02.  Article 1 of this Act takes effect on the date

on which the constitutional amendment proposed by the 89th

Legislature, Regular Session, 2025, to authorize the legislature to

exempt from ad valorem taxation a portion of the market value of

tangible personal property a person owns that is held or used for

the production of income takes effect.  If that amendment is not

approved by the voters, Article 1 of this Act has no effect.

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