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, defining "commercial real property" and establishing that the limitation applies only to parcels with a market value of $10 million or less. It outlines conditions for increasing appraised values, capping them at 10% from the previous year, plus the market value of any new improvements. Additionally, property owners must be notified about their property's qualification for this limitation, and improvements made to replace disaster-damaged structures may not be treated as new improvements under certain conditions.

The bill also mandates that the comptroller assess the market value of properties in a school district based on the appraisal district's determinations, ensuring that the taxable value reflects accurate appraisals. It specifies that the appraised value of properties under Sections 23.23 or 23.232 should be subtracted from the market value. The bill is set to take effect on January 1, 2027, contingent upon the approval of a constitutional amendment proposed by the 89th Legislature, which would allow 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 will have no effect.

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