H.B. No. 169 introduces a limitation on the increases in the appraised value of certain commercial real properties for ad valorem tax purposes. It amends Section 1.12(d) of the Tax Code to clarify that the appraisal ratio for properties subject to Sections 23.23 or 23.232 is based on the market value determined by the appraisal district, rather than the appraised value limited by these sections. The bill also adds Section 23.232, which defines "commercial real property" and establishes criteria for limiting the appraised value of such properties with a market value of $10 million or less. The appraisal office may increase the appraised value of these properties, but only to a certain extent, ensuring that increases do not exceed the lesser of the market value from the most recent tax year or a calculated sum based on the previous year's appraised value and any new improvements.

Additionally, the bill mandates that property owners receive notifications regarding whether their property qualifies for the new limitation on appraised value and expands the grounds for property owners to protest appraisals, including the determination that their property does not qualify for the limitation provided by Section 23.232. The bill aims to enhance clarity and fairness in the appraisal process for commercial properties, particularly in the context of disaster recovery and economic stability. It is set to take effect on January 1, 2027, contingent upon the approval of a constitutional amendment proposed by the 89th Legislature that would allow the legislature to limit the maximum appraised value of certain commercial real properties for tax purposes. If the amendment is not approved by voters, the bill will have no effect.

Statutes affected:
Introduced: Subchapter B, Chapter , Tax Code 23.23 (Subchapter B, Chapter , Tax Code 23)