H.B. No. 41 seeks to limit the total amount of ad valorem taxes that certain taxing units, excluding school districts, can impose on the residence homesteads of disabled or elderly individuals and their surviving spouses. The bill amends Section 11.261 of the Tax Code, updating the heading to clarify that the limitation applies specifically to taxing units other than school districts. It introduces new subsections that outline the conditions for these tax limitations, including provisions for individuals qualifying for exemptions under Section 11.13(c) and the treatment of surviving spouses. A key amendment states that a taxing unit cannot increase the total annual ad valorem taxes on a qualifying individual's homestead beyond the amount imposed in the first tax year they qualified for the exemption.

Additionally, the bill allows for tax increases based on improvements made to the homestead, while still maintaining the limitation on the increased amount. It also modifies definitions and exclusions related to taxable values for school districts and other taxing units, replacing previous terms with "taxing unit" and ensuring that the total value for these units does not include homesteads qualifying for tax limitations. The bill is set to take effect on January 1, 2026, contingent upon the approval of a constitutional amendment proposed by the 89th Legislature, which aims to limit ad valorem taxes for disabled or elderly individuals and their surviving spouses. If the amendment is not approved, the provisions of this bill will not take effect.

Statutes affected:
Introduced: Tax Code 11.261, Tax Code 11.13, Tax Code 26.012 (Tax Code 11, Tax Code 26)