H.B. No. 260 introduces a limitation 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 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 how appraised values can be increased, including provisions for new improvements and exceptions for properties under certain appraisal subchapters. Additionally, property owners will receive notifications regarding whether their property qualifies for the new limitation on appraised value.

The bill also mandates that the comptroller assess the market value of properties in a school district based on the appraisal district's determinations, while considering exemptions under Section 11.35 of the Tax Code. It replaces references to "residence homesteads" with "properties" in the context of appraisals under Sections 23.23 and 23.232, broadening the scope of the appraisal process. The provisions of this bill will take effect on January 1, 2027, contingent upon the approval of a constitutional amendment proposed by the 89th Legislature, 2nd Called Session, 2025, which aims to authorize 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's provisions will not take effect.

Statutes affected:
Introduced: Subchapter B, Chapter , Tax Code 23.23 (Subchapter B, Chapter , Tax Code 23)