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 clarifies that such replacement structures will not be considered improvements unless they exceed the square footage of the original structure or are of higher quality construction. Additionally, it introduces new criteria under which a replacement structure may not be considered an improvement if the materials used for the replacement are no longer available and the materials used are the most comparable in quality to those of the original structure.

The bill also includes similar provisions for different sections of the Tax Code, ensuring consistency in how replacement structures are assessed across various contexts. It specifies that these changes will apply to ad valorem taxes imposed for tax years beginning on or after January 1, 2026. Overall, the bill aims to provide clarity and fairness in the taxation of properties affected by disasters, ensuring that property owners are not unfairly penalized for rebuilding after such events.

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