H.B. No. 168 introduces new limitations 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. It outlines the appraisal process, including provisions for new improvements and disaster recovery programs, and specifies that the limitation applies only to properties meeting certain conditions.

Additionally, the bill modifies various sections of the Tax Code to incorporate these new limitations and requirements, including provisions for notifying property owners about their eligibility for the limitation and allowing protests regarding property qualification. The amendments clarify the appraisal process and the conditions under which improvements are considered new. The bill is set to take effect on January 1, 2027, contingent upon the approval of a constitutional amendment proposed by the 89th Legislature that would permit 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)