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Title 1. Property Tax Code
Subtitle C. Taxable Property and Exemptions

Chapter 11. Taxable Property and Exemptions

Subchapter B. Exemptions.

Sec. 11.11. Public Property.
Sec. 11.111. Public Property Used to Provide Transitional Housing for Indigent Persons.
Sec. 11.12. Federal Exemptions.
Sec. 11.13. Residence Homestead.
Sec. 11.14. Tangible Personal Property Not Producing Income.
Sec. 11.142. Repealed in 2003.
Sec. 11.145. Income Producing Tangible Personal Property Having Value Less than $500.
Sec. 11.146. Mineral Interest Having Value of Less than $500.
Sec. 11.15. Family Supplies.
Sec. 11.16. Farm Products.
Sec. 11.161. Implements of Husbandry.
Sec. 11.17. Cemeteries.
Sec. 11.18. Charitable Organizations.
Sec. 11.1801. Charity Care and Community Benefits Requirements for Charitable Hospital.
Sec. 11.181. Charitable Organizations Improving Property for Low-Income Housing.
Sec. 11.182. Community Housing Development Organizations Improving Property for Low-Income and Moderate-Income Housing: Property Previously Exempt.
Sec. 11.1825. Organizations Constructing or Rehabilitating Low-Income Housing: Property Not Previously Exempt.
Sec. 11.1826. Monitoring of Compliance With Low-Income and Moderate-Income Housing Exemptions.
Sec. 11.183. Association Providing Assistance to Ambulatory Health Care Centers.
Sec. 11.184. Organizations Engaged Primarily in Performing Charitable Functions.
Sec. 11.185. Colonia Model Subdivision Program.
Sec. 11.19. Youth Spiritual, Mental, and Physical Development Associations.
Sec. 11.20. Religious Organizations.
Sec. 11.201. Additional Tax on Sale of Certain Religious Organization Property.
Sec. 11.21. Schools.
Sec. 11.22. Disabled Veterans.
Sec. 11.23. Miscellaneous Exemptions.
Sec. 11.24. Historic Sites.
Sec. 11.25. Marine Cargo Containers Used Exclusively in International Commerce.
Sec. 11.251. Tangible Personal Property Exempt.
Sec. 11.252. Motor Vehicles Leased for Personal Use.
Sec. 11.26. Limitation of School Tax on Homesteads of Elderly or Disabled.
Sec. 11.261. Limitation of County, Municipal, or Junior College District Tax on Homesteads of Disabled and Elderly.
Sec. 11.27. Solar and Wind-Powered Energy Devices.
Sec. 11.271. Offshore Drilling Equipment Not in Use.
Sec. 11.28. Property Exempted from City Taxation by Agreement.
Sec. 11.29. Intracoastal Waterway Dredge Disposal Site.
Sec. 11.30. Nonprofit Water Supply or Wastewater Service Corporation.
Sec. 11.31. Pollution Control Property.
Sec. 11.32. Certain Water Conservation Initiatives.
Sec. 11.33. Raw Cocoa and Green Coffee Held in Harris County.

[Sections 11.34 to 11.40 reserved for expansion]

Sec. 11.24. Historic Sites

The governing body of a taxing unit by official action of the body adopted in the manner required by law for official actions may exempt from taxation part or all of the assessed value of a structure or archeological site and the land necessary for access to and use of the structure or archeological site, if the structure or archeological site is:

(1) designated as a Recorded Texas Historic Landmark under Chapter 442, Government Code, or a state archeological landmark under Chapter 191, Natural Resources Code, by the Texas Historical Commission; or

(2) designated as a historically or archeologically significant site in need of tax relief to encourage its preservation pursuant to an ordinance or other law adopted by the governing body of the unit.

Amended by 1995 Tex. Laws, p. 917, ch. 109, Sec. 21.

Cross References:
Exemption application form, see Rule Sec. 9.415.
Annual application required, see Sec. 11.43(b).
Constitutional authorization, see art. VIII, Sec. 1-f, Tex. Const.
Historical preservation societies, charitable exemption, see Sec. 11.18.

Notes:
Where the trial record showed no evidence that a historic building was designated a landmark by the Texas Historical Commission or the city, that the city had designated it a historic site in need of tax relief, or that the city or school district had adopted an exemption, the building could not qualify under this section. City of Dallas v. Women's' Auxiliary, 620 S.W.2d 695 (Tex. App.-Dallas 1981, writ ref'd n.r.e.).

A taxing unit may exempt a specific percentage of property value or a fixed dollar amount of value from an historically significant structure. A taxing unit may not freeze the taxes paid on the historic site as of the date the exemption is granted. The taxing unit is allowed to exempt value - either a percentage of the property value or a fixed dollar amount. Tex. Att'y Gen. LO-97-039 (1997).

Sec. 11.25. Marine Cargo Containers Used Exclusively in International Commerce

(a) A person is entitled to an exemption from taxation of a marine cargo container and the equipment related to the container that the person owns if:

(1) the person is:

(A) a citizen of a foreign country; or

(B) an entity organized under the laws of a foreign country; and

(2) the container is:

(A) based, registered, and subject to taxation in a foreign country; and

(B) used exclusively in international commerce.

(b) In this section, "marine cargo container":

(1) means a container that may be:

(A) used to transport goods by ship;

(B) readily handled;

(C) transferred from one mode of transport to another without reloading; and

(D) used repeatedly; and

(2) includes a container that is fully or partially enclosed so as to serve as a compartment for goods, has an open top suitable for loading goods into the container, or consists of a flat rack suitable for securing goods onto the container.

Added by 1997 Tex. Laws, p. 2389, ch. 726, Sec. 1.

Cross References:
No application required, see Sec. 11.43(a).

Sec. 11.251. Tangible Personal Property Exempt

(a) In this section, "freeport goods" means property that under Article VIII, Section 1-j, of the Texas Constitution is not taxable.

(b) A person is entitled to an exemption from taxation of the appraised value of that portion of the person's inventory or property consisting of freeport goods.

(c) The exemption provided by Subsection (b) is subtracted from the market value of the inventory or property determined under Section 23.12 to determine the taxable value of the inventory or property.

(d) Except as provided by Subsections (f) and (g), the chief appraiser shall determine the appraised value of freeport goods under this subsection. The chief appraiser shall determine the percentage of the market value of inventory or property owned by the property owner in the preceding calendar year that was contributed by freeport goods. The chief appraiser shall apply that percentage to the market value of the property owner's inventory or property for the current year to determine the appraised value of Freeport goods for the current year.

(e) In determining the market value of freeport goods that in the preceding year were assembled, manufactured, repaired, maintained, processed, or fabricated in this state or used by the person who acquired or imported the property in the repair or maintenance of aircraft operated by a certificated air carrier, the chief appraiser shall exclude the cost of equipment, machinery, or materials that entered into and became component parts of the freeport goods but were not themselves freeport goods or that were not transported outside the state before the expiration of 175 days after they were brought into this state by the property owner or acquired by the property owner in this state. For component parts held in bulk, the chief appraiser may use the average length of time a component part was held in this state by the property owner during the preceding year in determining whether the component parts were transported out of this state before the expiration of 175 days.

(f) If the property owner was not engaged in transporting freeport goods out of this state for the entire preceding year, the chief appraiser shall calculate the percentage of cost described in Subsection (d) for the portion of the year in which the property owner was engaged in transporting freeport goods out of this state.

(g) If the property owner or the chief appraiser demonstrates that the method provided by Subsection (d) significantly understates or overstates the market value of the property qualified for an exemption under Subsection (b) in the current year, the chief appraiser shall determine the market value of the freeport goods to be exempt by determining, according to the property owner's records and any other available information, the market value of those freeport goods owned by the property owner on January 1 of the current year, excluding the cost of equipment, machinery, or materials that entered into and became component parts of the freeport goods but were not themselves freeport goods or that were not transported outside the state before the expiration of 175 days after they were brought into this state by the property owner or acquired by the property owner in this state.

(h) The chief appraiser by written notice delivered to a property owner who claims an exemption under this section may require the property owner or a person designated in writing by the importer of record to provide copies of inventory or property records in order to determine the amount and value of Freeport goods. If the property owner or designated person fails to deliver the information requested in the notice before the 31st day after the date the notice is delivered to the property owner or before the date the appraisal review board approves the appraisal records under Section 41.12, whichever is later, the property owner forfeits the right to claim or receive the exemption for that year. If the property owner or designated person delivers the information requested in the notice before the date the appraisal review board approves the appraisal records but not before the 31st day after the date the notice is delivered to the property owner and the exemption is allowed, the property owner is liable to each taxing unit for a penalty in an amount equal to 10 percent of the difference between the amount of tax imposed by the taxing unit on the inventory or property and the amount that would otherwise have been imposed. The chief appraiser shall make an entry on the appraisal records for the inventory or property indicating the property owner's liability for the penalty and shall deliver a written notice of imposition of the penalty, explaining the reason for its imposition, to the property owner. The assessor for a taxing unit that taxes the inventory or property shall add the amount of the penalty to the property owner's tax bill, and the tax collector for the unit shall collect the penalty at the time and in the manner the collector collects the tax. The amount of the penalty constitutes a lien against the inventory or property against which the penalty is imposed, as if it were a tax, and accrues penalty and interest in the same manner as a delinquent tax.

(i) The exemption provided by Subsection (b) does not apply to a taxing unit that takes action to tax the property under Article VIII, Section 1 j, Subsection (b), of the Texas Constitution.

(j) Petroleum products as set forth in Article VIII, Section 1 j, of the Texas Constitution shall mean liquid and gaseous materials that are the immediate derivatives of the refining of oil or natural gas.

(k) Property that meets the requirements of Article VIII, Sections 1 j(a)(1) and (2), of the Texas Constitution and that is transported outside of this state not later than 175 days after the date the person who owns it on January 1 acquired it or imported it into this state is freeport goods regardless of whether the person who owns it on January 1 is the person who transports it outside of this state.

Added by 1989 Tex. Laws, p. 1749, ch. 534, Sec. 1; amended by 1991 Tex. Laws, p. 1770, ch. 504, Sec. 1; amended by 1993 Tex. Laws, p. 3053, ch. 779, Sec. 1; amended by 2001 Tex. Laws, p. 263, ch. 125, Sec. 1.

Cross References:
Annual application required, see Sec. 11.43(b).
Constitutional authorization, see art. VIII, Sec. 1-j, Tex. Const.
Definition of petroleum products, see Rule Sec. 9.4201.
Exemption for cotton stored in warehouse, see Sec. 11.437.
Freeport application form, see Rule Sec. 9.415.
Late application allowed, see Sec. 11.439.
Personal property held at Texas locations temporarily, see art. VIII, Sec. 1-n, Tex. Const.
Rendition of freeport property, see Sec. 22.01.

Notes:
The import-export clause of the U. S. Constitution and its related legal test of stream of export exempts goods from taxation once exportation has commenced as a part of transportation in a continuous route or journey. Seaboard states are prohibited from taxing goods merely flowing through their ports from other states. Goods are placed into the stream of export when they were shipped from the vendors to the export shipper for a pre-determined foreign destination. The inspection of the goods, approval for import, and packing the goods were necessary for the safe and efficient movement of these goods and merely facilitated their export. Taxing the goods violated the United States import-export clause. Virginia Indonesia Company v. Harris County Appraisal District, 910 S.W. 2d 905 (Tex. 1995).

Failure to submit a request to extend the filing deadline for the Freeport exemption with the appraisal review board before the approval of the appraisal records serves to prevent the exhaustion of administrative remedies and thereby precludes the ability to seek judicial review regarding the denial of the exemption. Quorum International v. Tarrant Appraisal District, 114 S.W.3d 568 (Tex. App.-Fort Worth 2003, pet. denied).

The freeport provision is not self executing, and the legislature is authorized to prescribe forfeiture provisions. The filing requirements of Section 11.251, while different from other exemption provisions, are not unreasonable or arbitrary. The request for additional information provided in Section 11.45 does apply to the freeport exemption. The 30-day deadline in Section 11.251 is not unconstitutional. Motorola, Inc. v. Tarrant County Appraisal District, 980 S.W.2d 899 (Tex. App.-Fort Worth 1998).

The application of the freeport exemption does not require the person who acquired or imported the property into this state to own the property continuously until it is transported out of the state. The Legislature repealed the continuous ownership of the goods in 1991 by adopting Section 11.251(k). Op. Tex. Att'y Gen. No. DM-463 (1997).

Sec. 11.252. Motor Vehicles Leased for Personal Use

(a) The owner of a motor vehicle that is subject to a lease is entitled to an exemption from taxation of the vehicle if:

(1) the lessee does not hold the vehicle for the production of income; and

(2) the vehicle is used primarily for activities that do not involve the production of income.

(b) For purposes of this section, a motor vehicle is presumed to be used primarily for activities that do not involve the production of income if 50 percent or more of the miles the motor vehicle is driven in a year are for non-income producing purposes.

(c) The comptroller by rule shall establish exemption application requirements and appropriate procedures to determine whether a motor vehicle subject to a lease qualifies for an exemption under Subsection (a).

(d) In connection with the requirements and procedures under Subsection (c), the comptroller by rule shall adopt a form to be completed by the lessee of a motor vehicle for which the owner of the vehicle may apply for an exemption under Subsection (a). The form shall require the lessee to provide the lessee's name, address, and driver's license or personal identification certificate number and to certify under oath that the lessee does not hold the vehicle for the production of income and that the vehicle is used primarily for activities that do not involve the production of income. The comptroller shall include on the form a notice of the penalties prescribed by Section 37.10, Penal Code, for making a false statement on the form.

(e) The owner of a motor vehicle that is subject to a lease shall maintain the form completed by the lessee of the vehicle and make the form available for inspection and copying by the chief appraiser of the applicable appraisal district at all reasonable times. If the owner does not maintain a completed form relating to the vehicle, the owner:

(1) must render the vehicle for taxation in the applicable rendition statement or property report filed by the owner under Chapter 22; and

(2) may not file an application for an exemption under Subsection (a) for the vehicle.

(f) The governing body of a municipality by ordinance adopted before January 1, 2002, may provide for the taxation of leased motor vehicles otherwise exempted under Subsection (a). If the governing body of a municipality provides for the taxation of leased motor vehicles under this subsection, the exemption provided by Subsection (a) does not apply to that municipality.

(g) Repealed by Acts 2003, 78th Leg., ch. 866, 1.

(h) In this section:

(1) "Lease" has the meaning assigned by Section 152.001(6).

(2) "Motor vehicle" means a passenger car or truck with a shipping weight of not more than 9,000 pounds.

(i) In addition to the requirements of Subsections (c) and (d), the comptroller by rule shall prescribe a property report form to be completed by the lessor describing the leased motor vehicles that the lessor owns. The property report form shall require the lessor to list each leased vehicle the lessor owns on January 1, to provide the year, make, model, and vehicle identification number of each leased vehicle, and to provide the name of the lessee, the address at which the vehicle is kept, and an indication of whether the lessee has designated the vehicle as not held for the production and not used for the production of income.

(j) The lessor shall provide the chief appraiser with the completed property report form adopted by the comptroller in the manner provided by Subchapter B, Chapter 22.

Added by Acts 2001, 77th Leg., ch. 1406, 1, eff. Jan. 1, 2002. Amended by Acts 2003, 78th Leg., ch. 866, 1, eff. June 20, 2003.

Cross References:
Constitutional authorization, see art. VIII, Sec. 1(d) & (e), Tex. Const.
Exemption application and rendition forms, see Rule Sec. 9.419.
Rendition of inventory, see Sec. 22.01.

Sec. 11.26. Limitation of School Tax on Homesteads of Elderly or Disabled

(a) The tax officials shall appraise the property to which this section applies and calculate taxes as on other property, but if the tax so calculated exceeds the limitation imposed by this section, the tax imposed is the amount of the tax as limited by this section, except as otherwise provided by this section. A school district may not increase the total annual amount of ad valorem tax it imposes on the residence homestead of an individual 65 years of age or older or on the residence homestead of an individual who is disabled, as defined by Section 11.13, above the amount of the tax it imposed in the first tax year in which the individual qualified that residence homestead for the applicable exemption provided by Section 11.13(c) for an individual who is 65 years of age or older or is disabled. If the individual qualified that residence homestead for the exemption after the beginning of that first year and the residence homestead remains eligible for the same exemption for the next year, and if the school district taxes imposed on the residence homestead in the next year are less than the amount of taxes imposed in that first year, a school district may not subsequently increase the total annual amount of ad valorem taxes it imposes on the residence homestead above the amount it imposed in the year immediately following the first year for which the individual qualified that residence homestead for the exemption, except as provided by Subsection (b). If the first tax year the individual qualified the residence homestead for the exemption provided by Section 11.13(c) for individuals 65 years of age or older was a tax year before the 1997 tax year, the amount of the limitation provided by this section is the amount of tax the school district imposed for the 1996 tax year less an amount equal to the amount determined by multiplying $10,000 times the tax rate of the school district for the 1997 tax year, plus any 1997 tax attributable to improvements made in 1996, other than improvements made to comply with governmental regulations or repairs.

(b) If an individual makes improvements to the individual's residence homestead, other than improvements required to comply with governmental requirements or repairs, the school district may increase the tax on the homestead in the first year the value of the homestead is increased on the appraisal roll because of the enhancement of value by the improvements. The amount of the tax increase is determined by applying the current tax rate to the difference in the assessed value of the homestead with the improvements and the assessed value it would have had without the improvements. A limitation imposed by this section then applies to the increased amount of tax until more improvements, if any, are made.

(c) The limitation on tax increases required by this section expires if on January 1:

(1) none of the owners of the structure who qualify for the exemption and who owned the structure when the limitation first took effect is using the structure as a residence homestead; or

(2) none of the owners of the structure qualifies for the exemption.

(d) If the appraisal roll provides for taxation of appraised value for a prior year because a residence homestead exemption for individuals 65 years of age or older or for disabled individuals was erroneously allowed, the tax assessor shall add, as back taxes due as provided by Section 26.09(d), the positive difference if any between the tax that should have been imposed for that year and the tax that was imposed because of the provisions of this section.

(e) For each school district in an appraisal district, the chief appraiser shall determine the portion of the appraised value of residence homesteads of individuals on which school district taxes are not imposed in a tax year because of the limitation on tax increases imposed by this section. That portion is calculated by determining the taxable value that, if multiplied by the tax rate adopted by the school district for the tax year, would produce an amount equal to the amount of tax that would have been imposed by the school district on those residence homesteads if the limitation on tax increases imposed by this section were not in effect, but that was not imposed because of that limitation. The chief appraiser shall determine that taxable value and certify it to the comptroller as soon as practicable for each tax year.

(f) The limitation on tax increases required by this section does not expire because the owner of an interest in the structure conveys the interest to a qualifying trust as defined by Section 11.13(j) if the owner or the owner's spouse is a trustor of the trust and is entitled to occupy the structure.

(g) Except as provided by Subsection (b), if an individual who receives a limitation on tax increases imposed by this section, including a surviving spouse who receives a limitation under Subsection (i), subsequently qualifies a different residence homestead for the same exemption under Section 11.13, a school district may not impose ad valorem taxes on the subsequently qualified homestead in a year in an amount that exceeds the amount of taxes the school district would have imposed on the subsequently qualified homestead in the first year in which the individual receives that exemption for the subsequently qualified homestead had the limitation on tax increases imposed by this section not been in effect, multiplied by a fraction the numerator of which is the total amount of school district taxes imposed on the former homestead in the last year in which the individual received that same exemption for the former homestead and the denominator of which is the total amount of school district taxes that would have been imposed on the former homestead in the last year in which the individual received that same exemption for the former homestead had the limitation on tax increases imposed by this section not been in effect.

(h) An individual who receives a limitation on tax increases under this section, including a surviving spouse who receives a limitation under Subsection (i), and who subsequently qualifies a different residence homestead for an exemption under Section 11.13, or an agent of the individual, is entitled to receive from the chief appraiser of the appraisal district in which the former homestead was located a written certificate providing the information necessary to determine whether the individual may qualify for that same limitation on the subsequently qualified homestead under Subsection (g) and to calculate the amount of taxes the school district may impose on the subsequently qualified homestead.

(i) If an individual who qualifies for the exemption provided by Section 11.13(c) for an individual 65 years of age or older dies, the surviving spouse of the individual is entitled to the limitation applicable to the residence homestead of the individual if:

(1) the surviving spouse is 55 years of age or older when the individual dies; and

(2) the residence homestead of the individual:

(A) is the residence homestead of the surviving spouse on the date that the individual dies; and

(B) remains the residence homestead of the surviving spouse.

(j) If an individual who qualifies for an exemption provided by Section 11.13(c) for an individual 65 years of age or older dies in the first year in which the individual qualified for the exemption and the individual first qualified for the exemption after the beginning of that year, except as provided by Subsection (k), the amount to which the surviving spouse's school district taxes are limited under Subsection (i) is the amount of school district taxes imposed on the residence homestead in that year determined as if the individual qualifying for the exemption had lived for the entire year.

(k) If in the first tax year after the year in which an individual dies in the circumstances described by Subsection (j) the amount of school district taxes imposed on the residence homestead of the surviving spouse is less than the amount of school district taxes imposed in the preceding year as limited by Subsection (j), in a subsequent tax year the surviving spouse's school district taxes on that residence homestead are limited to the amount of taxes imposed by the district in that first tax year after the year in which the individual dies.

(l) For the purpose of calculating a limitation on ad valorem tax increases by a school district under this section, an individual who qualified a residence homestead before January 1, 2003, for an exemption under Section 11.13(c) for a disabled individual is considered to have first qualified the homestead for that exemption on January 1, 2003.

(m) For the purpose of qualifying under Subsection (g) for the limitation on ad valorem taxes on a subsequently qualified homestead imposed by a school district, the residence homestead of a disabled individual may be considered to be a subsequently qualified homestead only if the disabled individual qualified the former homestead for an exemption under Section 11.13(c) for a disabled individual for a tax year beginning on or after January 1, 2003.

Acts 1979, 66th Leg., p. 2244, ch. 841, 1, eff. Jan. 1, 1980. Amended by Acts 1981, 67th Leg., 1st C.S., p. 130, ch. 13, 38, eff. Jan. 1, 1982; Acts 1984, 68th Leg., 2nd C.S., ch. 28, art. II, 16, eff. Sept. 1, 1984; Acts 1991, 72nd Leg., 2nd C.S., ch. 6, 10, eff. Sept. 1, 1991; Acts 1993, 73rd Leg., ch. 854, 2, eff. Jan. 1, 1994; Acts 1997, 75th Leg., ch. 592, 2.02; Acts 1997, 75th Leg., ch. 1039, 11, 14; Acts 1997, 75th Leg., ch. 1059, 3, eff. June 19, 1997; Acts 1999, 76th Leg., ch. 62, 16.01, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 1481, 2, eff. Jan. 1, 2000; Acts 2001, 77th Leg., ch. 193, 1, eff. Jan. 1, 2002; Acts 2001, 77th Leg., ch. 1420, 18.003, eff. Sept. 1, 2001; Acts 2003, 78th Leg., ch. 411, 1, 2, eff. Jan. 1, 2004.

Cross References:
Constitutional authorization, see art. VIII, Sec. 1-b(d), Tex. Const.
Residential homestead exemption, see Sec. 11.13.
Prorating over-65 or disabled homeowner's taxes, see Secs. 26.10 and 26.112.
Abatement of delinquent tax suit, see Sec. 33.06.

Notes:
Where a residence homestead was the separate property of the under-65 husband, the over-65 wife could not qualify it for the over-65 exemption, even though the property was her homestead for other constitutional purposes. Under the statute, the qualified person must be an owner of the residence. Ripley v. Stephens, 686 S.W.2d 757 (Tex. App.-Austin 1985, writ ref'd n.r.e.).

An appraiser must determine whether a homestead damaged by a natural disaster has been repaired or improved before the school district may increase the school tax ceiling provided by Section 11.26(b) for qualified homeowners age 65 or older. Enhancements that increase a homestead's market value are new improvements for Section 23.23 purposes and must be included in calculating that homestead's capped appraised value. In reviewing Section 23.23 as it existed for homes repaired or reconstructed in 2001 and/or 2002, 'ordinary maintenance' does not include substantial repairs or reconstruction necessitated by an extraordinary event like a tropical storm or hurricane. Op. Tex. Att'y Gen. No. GA-0091 (2003).

The constitutional amendment authorizing extension of the tax ceiling to over-65 surviving spouses applies only to spouses whose husband or wife died after the constitutional amendment took effect. Op. Tex. Att'y Gen. No. JM-991 (1988).

The constitution authorizes a tax ceiling for school district taxes only. Op. Tex. Att'y Gen. No. MW-265 (1980).

Sec. 11.261. Limitation of County, Municipal, or Junior College District Tax on Homesteads of Disabled nd Elderly

(a) This section applies only to a county, municipality, or junior college district that has established a limitation on the total amount of taxes that may be imposed by the county, municipality, or junior college district on the residence homestead of a disabled individual or an individual 65 years of age or older under Section 1-b(h), Article VIII, Texas Constitution.

(b) The tax officials shall appraise the property to which the limitation applies and calculate taxes as on other property, but if the tax so calculated exceeds the limitation provided by this section, the tax imposed is the amount of the tax as limited by this section, except as otherwise provided by this section. The county, municipality, or junior college district may not increase the total annual amount of ad valorem taxes the county, municipality, or junior college district imposes on the residence homestead of a disabled individual or an individual 65 years of age or older above the amount of the taxes the county, municipality, or junior college district imposed on the residence homestead in the first tax year, other than a tax year preceding the tax year in which the county, municipality, or junior college district established the limitation described by Subsection (a), in which the individual qualified that residence homestead for the exemption provided by Section 11.13(c) for a disabled individual or an individual 65 years of age or older. If the individual qualified that residence homestead for the exemption after the beginning of that first year and the residence homestead remains eligible for the exemption for the next year, and if the county, municipal, or junior college district taxes imposed on the residence homestead in the next year are less than the amount of taxes imposed in that first year, a county, municipality, or junior college district may not subsequently increase the total annual amount of ad valorem taxes it imposes on the residence homestead above the amount it imposed on the residence homestead in the year immediately following the first year, other than a tax year preceding the tax year in which the county, municipality, or junior college district established the limitation described by Subsection (a), for which the individual qualified that residence homestead for the exemption.

(c) If an individual makes improvements to the individual's residence homestead, other than repairs and other than improvements required to comply with governmental requirements, the county, municipality, or junior college district may increase the amount of taxes on the homestead in the first year the value of the homestead is increased on the appraisal roll because of the enhancement of value by the improvements. The amount of the tax increase is determined by applying the current tax rate to the difference between the appraised value of the homestead with the improvements and the appraised value it would have had without the improvements. A limitation provided by this section then applies to the increased amount of county, municipal, or junior college district taxes on the residence homestead until more improvements, if any, are made.

(d) A limitation on county, municipal, or junior college district tax increases provided by this section expires if on January 1:

(1) none of the owners of the structure who qualify for the exemption provided by Section 11.13(c) for a disabled individual or an individual 65 years of age or older and who owned the structure when the limitation provided by this section first took effect is using the structure as a residence homestead; or

(2) none of the owners of the structure qualifies for the exemption provided by Section 11.13(c) for a disabled individual or an individual 65 years of age or older.

(e) If the appraisal roll provides for taxation of appraised value for a prior year because a residence homestead exemption for disabled individuals or individuals 65 years of age or older was erroneously allowed, the tax assessor for the applicable county, municipality, or junior college district shall add, as back taxes due as provided by Section 26.09(d), the positive difference, if any, between the tax that should have been imposed for that year and the tax that was imposed because of the provisions of this section.

(f) A limitation on tax increases provided by this section does not expire because the owner of an interest in the structure conveys the interest to a qualifying trust as defined by Section 11.13(j) if the owner or the owner's spouse is a trustor of the trust and is entitled to occupy the structure.

(g) Except as provided by Subsection (c), if an individual who receives a limitation on county, municipal, or junior college district tax increases provided by this section subsequently qualifies a different residence homestead in the same county, municipality, or junior college district for an exemption under Section 11.13, the county, municipality, or junior college district may not impose ad valorem taxes on the subsequently qualified homestead in a year in an amount that exceeds the amount of taxes the county, municipality, or junior college district would have imposed on the subsequently qualified homestead in the first year in which the individual receives that exemption for the subsequently qualified homestead had the limitation on tax increases provided by this section not been in effect, multiplied by a fraction the numerator of which is the total amount of taxes the county, municipality, or junior college district imposed on the former homestead in the last year in which the individual received that exemption for the former homestead and the denominator of which is the total amount of taxes the county, municipality, or junior college district would have imposed on the former homestead in the last year in which the individual received that exemption for the former homestead had the limitation on tax increases provided by this section not been in effect.

(h) An individual who receives a limitation on county, municipal, or junior college district tax increases under this section and who subsequently qualifies a different residence homestead in the same county, municipality, or junior college district for an exemption under Section 11.13, or an agent of the individual, is entitled to receive from the chief appraiser of the appraisal district in which the former homestead was located a written certificate providing the information necessary to determine whether the individual may qualify for a limitation on the subsequently qualified homestead under Subsection (g) and to calculate the amount of taxes the county, municipality, or junior college district may impose on the subsequently qualified homestead.

(i) If an individual who qualifies for a limitation on county, municipal, or junior college district tax increases under this section dies, the surviving spouse of the individual is entitled to the limitation on taxes imposed by the county, municipality, or junior college district on the residence homestead of the individual if:

(1) the surviving spouse is disabled or is 55 years of age or older when the individual dies; and

(2) the residence homestead of the individual:

(A) is the residence homestead of the surviving spouse on the date that the individual dies; and

(B) remains the residence homestead of the surviving spouse.

(j) If an individual who is 65 years of age or older and qualifies for a limitation on county, municipal, or junior college district tax increases for the elderly under this section dies in the first year in which the individual qualified for the limitation and the individual first qualified for the limitation after the beginning of that year, except as provided by Subsection (k), the amount to which the surviving spouse's county, municipal, or junior college district taxes are limited under Subsection (i) is the amount of taxes imposed by the county, municipality, or junior college district, as applicable, on the residence homestead in that year determined as if the individual qualifying for the exemption had lived for the entire year.

(k) If in the first tax year after the year in which an individual who is 65 years of age or older dies under the circumstances described by Subsection (j) the amount of taxes imposed by a county, municipality, or junior college district on the residence homestead of the surviving spouse is less than the amount of taxes imposed by the county, municipality, or junior college district in the preceding year as limited by Subsection (j), in a subsequent tax year the surviving spouse's taxes imposed by the county, municipality, or junior college district on that residence homestead are limited to the amount of taxes imposed by the county, municipality, or junior college district in that first tax year after the year in which the individual dies.

Added by Acts 2003, 78th Leg., ch. 396, 1, eff. Jan. 1, 2004.

Cross References:
Constitutional authorization, see art. VIII, Sec. 1-b(h), Tex. Const.
Residential homestead exemption, see Sec. 11.13.
Prorating over-65 or disabled homeowner's taxes, see Secs. 26.10 and 26.112.
Abatement of delinquent tax suit, see Sec. 33.06.

Notes:
Where a residence homestead was the separate property of the under-65 husband, the over-65 wife could not qualify it for the over-65 exemption, even though the property was her homestead for other constitutional purposes. Under the statute, the qualified person must be an owner of the residence. Ripley v. Stephens, 686 S.W.2d 757 (Tex. App.-Austin 1985, writ ref'd n.r.e.).

Sec. 11.27. Solar and Wind-Powered Energy Devices

(a) A person is entitled to an exemption from taxation of the amount of appraised value of his property that arises from the installation or construction of a solar or wind-powered energy device that is primarily for production and distribution of energy for on-site use.

(b) The comptroller, with the assistance of the Texas Energy and Natural Resources Advisory Council, or its successor, shall develop guidelines to assist local officials in the administration of this section.

(c) In this section:

(1) "Solar energy device" means an apparatus designed or adapted to convert the radiant energy from the sun, including energy imparted to plants through photosynthesis employing the bioconversion processes of anaerobic digestion, gasification, pyrolysis, or fermentation, but not including direct combustion, into thermal, mechanical, or electrical energy; to store the converted energy, either in the form to which originally converted or another form; or to distribute radiant solar energy or the energy to which the radiant solar energy is converted.

(2) "Wind-powered energy device" means an apparatus designed or adapted to convert the energy available in the wind into thermal, mechanical, or electrical energy; to store the converted energy, either in the form to which originally converted or another form; or to distribute the converted energy.

Added by 1981 Tex. Laws (1st C.S.), p. 130, ch. 13, Sec. 39; amended by 1991 Tex. Laws (2nd C.S.), p. 29, ch. 6, Sec. 11.

Cross References:
Exemption application form, see Rule Sec. 9.415.
Annual application required, see Sec. 11.43(b).
Constitutional authorization, see art. VIII, Sec. 2(a), Tex. Const.

Sec. 11.271. Offshore Drilling Equipment not in Use

An owner or lessee of a marine or mobile drilling unit designed for offshore drilling of oil or gas wells is entitled to an exemption from taxation of the drilling unit if the drilling unit:

(1) is being stored in a county bordering on the Gulf of Mexico or on a bay or other body of water immediately adjacent to the Gulf of Mexico;

(2) is not being stored for the sole purpose of repair or maintenance; and

(3) is not being used to drill a well at the location at which it is being stored.

Added by 1987 Tex. Laws, ch. 805, Sec. 1.

Cross References:
Constitutional authorization, see art. VIII, Sec. I-i, Tex. Const.
Annual application required, see Sec. 11.43(b).
Model application form for offshore drilling equipment not in use, see Rule Sec. 9.415.

Sec. 11.28. Property Exempted From City Taxation by Agreement

The owner of property to which an agreement made under the Property Redevelopment and Tax Abatement Act (Chapter 312 of this code) applies is entitled to exemption from taxation by an incorporated city or town or other taxing unit of all or part of the value of the property as provided by the agreement.

Added by 1981 Tex. Laws (1st C.S.), p. 56, ch. 5, Sec. 7; amended by 1987 Tex. Laws, ch. 191, Sec. 2.

Cross References:
Constitutional authorization, see art. VIII, Sec. 1-g, Tex. Const.
Exemption application required, see Sec. 11.43(a).
Property Redevelopment and Tax Abatement Act, see ch. 312, Tax Code.
Model application form, see Rule Sec. 9.415.

Sec. 11.29. Intracoastal Waterway Dredge Disposal Site

(a) A person is entitled to an exemption from taxation of land that the person owns and that has been dedicated by recorded donated easement dedicating said land as a disposal site for depositing and discharging materials dredged from the main channel of the Gulf Intracoastal Waterway by or under the direction of the state or federal government.

(b) An exemption granted under this section terminates when the land ceases to be used as an active dredge material disposal site described by Subsection (a) of this section and is no longer dedicated for that purpose.

Added by 1987 Tex. Laws, ch. 428, Sec. 1.

Cross References:
Exemption application required, see Sec. 11.43(c).
Exemption application form, see Rule Sec. 9.415.

Notes:
The state statute that authorizes a property tax exemption for easements used solely as disposal sites for material dredged from the Gulf Intracoastal Waterway is unconstitutional. Op. Tex. Att'y. No. DM-301 (1994).

Sec. 11.30. Nonprofit Water Supply or Wastewater Service Corporation

(a) A corporation organized under Chapter 67, Water Code, that provides in the bylaws of the corporation that on dissolution of the corporation the assets of the corporation remaining after discharge of the corporation's indebtedness shall be transferred to an entity that provides a water supply or wastewater service, or both, that is exempt from ad valorem taxation is entitled to an exemption from taxation of:

(1) property that the corporation owns and that is reasonably necessary for and used in the operation of the corporation:

(A) to acquire, treat, store, transport, sell, or distribute water; or

(B) to provide wastewater service; and

(2) the real property owned by the corporation consisting of:

(A) an incomplete improvement that:

(i) is under active construction or other physical preparation; and

(ii) is designed and intended to be used in the operation of the corporation for a purpose described by Subdivision (1) when complete; and

(B) the land on which the incomplete improvement is located that will be reasonably necessary for the use of the improvement in the operation of the corporation for a purpose described by Subdivision (1).

(b) A property may not be exempted under Subsection (a)(2) for more than three years.

(c) For purposes of Subsection (a)(2), an incomplete improvement is under physical preparation if the corporation has:

(1) engaged in architectural or engineering work, soil testing, land clearing activities, or site improvement work necessary for the construction of the improvement; or

(2) conducted an environmental or land use study relating to the construction of the improvement.

Added by Acts 1991, 72nd Leg., ch. 306, 1, eff. Jan. 1, 1992. Amended by Acts 1999, 76th Leg., ch. 62, 18.46, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 138, 6, eff. May 18, 1999; Acts 2003, 78th Leg., ch. 288, 1.07, eff. June 18, 2003; Acts 2003, 78th Leg., ch. 288, 2.07, eff. Jan. 1, 2006.

Cross References:
Annual application not required, see Sec. 11.43(c).
Effect on rates, see Sec. 13.0435, Water Code.
Exemption application required, see Sec. 11.43(c).
Exemption application form, see Rule Sec. 9.415.
Filing deadline for property acquired after January 1, see Sec. 11.43(d).
Immediate qualification for property acquired after January 1, see Sec. 11.42(d).
Prorating taxes for exemption for part of tax year, see Secs. 26.112 and 26.113.
Constitutional authorization, see art. VIII, Sec. 1-k, Tex. Const.

Notes:
Amendments to the statute effective June 18, 2003 under Acts 2003, 78th Leg., ch. 288 applies for the 2003 tax year regardless of whether the property owner applied for the exemption, provided the owner qualified for the exemption for the three years preceding the 2003 tax year. For the 2006 tax year, the statute modifies the five years exemption period for incomplete improvements back to being three years.

Sec. 11.31. Pollution Control Property

(a) A person is entitled to an exemption from taxation of all or part of real and personal property that the person owns and that is used wholly or partly as a facility, device, or method for the control of air, water, or land pollution. A person is not entitled to an exemption from taxation under this section solely on the basis that the person manufactures or produces a product or provides a service that prevents, monitors, controls, or reduces air, water, or land pollution. Property used for residential purposes, or for recreational, park, or scenic uses as defined by Section 23.81, is ineligible for an exemption under this section.

(b) In this section, "facility, device, or method for the control of air, water, or land pollution" means land that is acquired after January 1, 1994, or any structure, building, installation, excavation, machinery, equipment, or device, and any attachment or addition to or reconstruction, replacement, or improvement of that property, that is used, constructed, acquired, or installed wholly or partly to meet or exceed rules or regulations adopted by any environmental protection agency of the United States, this state, or a political subdivision of this state for the prevention, monitoring, control, or reduction of air, water, or land pollution. This section does not apply to a motor vehicle.

(c) In applying for an exemption under this section, a person seeking the exemption shall present in a permit application or permit exemption request to the executive director of the Texas Natural Resource Conservation Commission information detailing:

(1) the anticipated environmental benefits from the installation of the facility, device, or method for the control of air, water, or land pollution;

(2) the estimated cost of the pollution control facility, device, or method; and

(3) the purpose of the installation of such facility, device, or method, and the proportion of the installation that is pollution control property. If the installation includes property that is not used wholly for the control of air, water, or land pollution, the person seeking the exemption shall also present such financial or other data as the executive director requires by rule for the determination of the proportion of the installation that is pollution control property.

(d) Following submission of the information required by Subsection (c), the executive director of the Texas Natural Resource Conservation Commission shall determine if the facility, device, or method is used wholly or partly as a facility, device, or method for the control of air, water, or land pollution. As soon as practicable, the executive director shall send notice by regular mail to the chief appraiser of the appraisal district for the county in which the property is located that the person has applied for a determination under this subsection. The executive director shall issue a letter to the person stating the executive director's determination of whether the facility, device, or method is used wholly or partly to control pollution and, if applicable, the proportion of the property that is pollution control property. The executive director shall send a copy of the letter by regular mail to the chief appraiser of the appraisal district for the county in which the property is located.

(e) Not later than the 20th day after the date of receipt of the letter issued by the executive director, the person seeking the exemption or the chief appraiser may appeal the executive director's determination to the Texas Natural Resource Conservation Commission. The commission shall consider the appeal at the next regularly scheduled meeting of the commission for which adequate notice may be given. The person seeking the determination and the chief appraiser may testify at the meeting. The commission may remand the matter to the executive director for a new determination or deny the appeal and affirm the executive director's determination. On issuance of a new determination, the executive director shall issue a letter to the person seeking the determination and provide a copy to the chief appraiser as provided by Subsection (d). A new determination of the executive director may be appealed to the commission in the manner provided by this subsection. A proceeding under this subsection is not a contested case for purposes of Chapter 2001, Government Code.

(f) The commission may charge a person seeking a determination that property is pollution control property an additional fee not to exceed its administrative costs for processing the information, making the determination, and issuing the letter required by this section.

(g) The commission shall adopt rules to implement this section. Rules adopted under this section must:

(1) establish specific standards for considering applications for determinations;

(2) be sufficiently specific to ensure that determinations are equal and uniform; and

(3) allow for determinations that distinguish the proportion of property that is used to control, monitor, prevent, or reduce pollution from the proportion of property that is used to produce goods or services.

(h) The executive director may not make a determination that property is pollution control property unless the property meets the standards established under rules adopted under this section.

(i) A person seeking an exemption under this section shall provide to the chief appraiser a copy of the letter issued by the executive director of the Texas Natural Resource Conservation Commission under Subsection (d) determining that the facility, device, or method is used wholly or partly as pollution control property. The chief appraiser shall accept a final determination by the executive director as conclusive evidence that the facility, device, or method is used wholly or partly as pollution control property.

(j) This section does not apply to a facility, device, or method for the control of air, water, or land pollution that was subject to a tax abatement agreement executed before January 1, 1994.

Added by 1993 Tex. Laws, p. 1324, ch. 285, Sec. 1; amended by 2001 Tex. Laws, p. 1673, ch. 881, Sec. 1.

Cross References:
Annual application not required, see Sec. 11.43(c).
Constitutional authorization, see art. VIII, Sec. 1-l, Tex. Const.
Environmental response appraisal adjustment, see Sec. 23.14.
Exemption application required, see Sec. 11.43(c).
Rollback tax rate additional protection, see Sec. 26.045.
Tax rate calculation process, see Sec. 26.012.
Model application form, see Rule Sec. 9.415.

Notes:
Add-on pollution-control devices and methods of production that limit pollution at new facilities are entitled to exemption under Tax Code Section 11.31. The Texas Natural Resource Conservation Commission must administer the tax exemption to grant exemptions to only that portion of property that actually controls pollution. Pollution-reducing production equipment may receive only a partial tax exemption. Section 11.31 makes no distinction between property controlling pollution generated by an existing facility or by a new facility. The statute contains only one limitation: to be exempt, property must be acquired after January 1, 1994, the statute's effective date. Op. Tex. Att'y Gen. No. JC-372 (2001).

A commercial business performing pollution control or abatement services is not entitled to a property tax exemption for its pollution control property. The pollution control exemption was not intended to give tax relief to those who are primarily engaged in the commercial business of pollution control but to give relief to businesses compelled by law to install or acquire pollution control equipment which generates no revenue for such businesses. Tex. Att'y Gen. LO-96-128 (1996).

Sec. 11.32. Certain Water Conservation Initiatives

The governing body of a taxing unit by official action of the governing body adopted in the manner required by law for official actions may exempt from taxation part or all of the assessed value of property on which approved water conservation initiatives, desalination projects, or brush control initiatives have been implemented. For purposes of this section, approved water conservation, desalination, and brush control initiatives shall be designated pursuant to an ordinance or other law adopted by the governing unit.

Added by 1997 Tex. Laws, p. 3663, ch 1010, Sec. 5.11; amended by 2001 Tex. Laws, p. 1959, ch. 966, Sec. 4.24 and p. 2745, ch. 1234, Sec. 38.

Cross References:
Annual application required, see Sec. 11.43(a).
Constitutional authorization, see art. VIII, Sec. 1-m, Tex. Const.
Model application form, see Rule Sec. 9.415.

Sec. 11.33. Raw Cocoa and Green Coffee Held in Harris County

(a) A person is entitled to an exemption from taxation of raw cocoa and green coffee that the person holds in Harris County.

(b) An exemption granted under this section, once allowed, need not be claimed in subsequent years, and the exemption applies to all raw cocoa and green coffee the person holds until the cocoa's or the coffee's qualification for the exemption changes. The chief appraiser may, however, require a person who holds raw cocoa or green coffee for which an exemption in a prior year has been granted to file a new application to confirm the cocoa's or the coffee's current qualification for the exemption by delivering a written notice that a new application is required, accompanied by an appropriate application form, to the person.

Added by 2001 Tex. Laws, p. 1820, ch. 961, Sec. 1.

Cross References:
Application required, see Sec. 11.43.
Constitutional authorization, see art. VIII, Sec. 1-n, Tex. Const.
Model application form, see Rule Sec. 9.415.

[Sections 11.34 to 11.40 reserved for expansion]