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, changing the heading to specify that the limitation applies 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 addressing tax increases due to property improvements. A key amendment states that a taxing unit cannot increase the total annual ad valorem taxes on a qualifying individual's residence homestead beyond the amount imposed in the first tax year they qualified for the exemption.

Additionally, the bill modifies the calculation of total taxable value for taxing units, replacing previous references to "county, municipality, or junior college district" with the term "taxing unit." It specifies that the current total value for a taxing unit, excluding school districts, will not include the total value of homesteads qualifying for tax limitations under Section 11.261. 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 on the homesteads of disabled or elderly individuals and their surviving spouses. If the amendment is not approved by voters, 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 26, Tax Code 11)