H.B. No. 168 introduces significant changes to the appraisal process for commercial real property concerning ad valorem tax purposes. It amends Section 1.12(d) of the Tax Code to clarify that the appraisal ratio for properties under 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 sets criteria for limiting the appraised value of properties with a market value of $10 million or less. It outlines conditions for increasing appraised values, including provisions for new improvements and exceptions for properties appraised under specific subchapters.

Moreover, the bill mandates that property owners receive notifications regarding their eligibility for the new limitation on appraised value and amends various sections of the Tax Code to reflect these changes. It includes provisions for properties affected by disaster recovery programs and specifies how replacement structures are treated in terms of appraised value. The bill will only apply to tax years beginning on or after January 1, 2027, contingent upon the approval of a constitutional amendment proposed by the 89th Legislature. If the amendment is not approved by voters, the provisions of this bill will not take effect, aiming to ensure accurate calculations of taxable values for commercial properties.

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