The bill amends the Texas Tax Code to redefine how replacement structures are treated for ad valorem tax purposes when the original structures have been rendered uninhabitable or unusable due to casualties, natural disasters declared by the president or governor, or wind or water damage. Specifically, it introduces new provisions that clarify that a replacement structure will not be considered an improvement for tax purposes unless it exceeds the square footage of the original structure or has a higher quality of construction. Additionally, if the materials used for the replacement structure are no longer available, it can still be considered an improvement if the materials used are the most comparable in quality to those of the original structure.

The bill also includes similar amendments to other sections of the Tax Code, ensuring consistency in how replacement structures are assessed across different contexts. It specifies that the appraised value of the property for tax purposes will be based on what it would have been in the previous year had the damage not occurred. The changes will take effect on January 1, 2026, and will apply to ad valorem taxes imposed for tax years beginning on or after that date.

Statutes affected:
Introduced: Tax Code 11.26, Tax Code 11.261, Tax Code 23.23 (Tax Code 23, Tax Code 11)