H.B. No. 260 seeks to limit the increases in the appraised value of certain commercial real properties for ad valorem tax purposes by amending Section 1.12(d) of the Tax Code. The bill clarifies that the appraisal ratio for properties under 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. It introduces a new Section 23.232, defining "commercial real property" and establishing criteria for limiting the appraised value of properties with a market value of $10 million or less. The bill outlines conditions under which appraisal offices can increase the appraised value, including a cap based on the previous year's appraised value and any new improvements made to the property.

Additionally, the bill mandates that appraisal offices notify property owners about their eligibility for the new limitation on appraised value and provide statements regarding this limitation in their notices. It allows property owners to protest determinations related to the limitation on appraised value. The bill also specifies that the comptroller must subtract from the market value of properties to which Sections 23.23 or 23.232 apply the amount by which the market value exceeds the appraised value as determined by the appraisal district. The provisions of this bill will only apply to tax years beginning on or after January 1, 2027, contingent upon the approval of a related constitutional amendment by voters. If the amendment is not approved, the bill's provisions will have no effect.

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