The bill amends the Texas Tax Code to redefine how replacement structures are treated for ad valorem tax purposes when the original structures have been rendered uninhabitable or unusable due to casualties, natural disasters declared by the president or governor, or wind or water damage. Specifically, it clarifies that such replacement structures will not be considered improvements unless they exceed the square footage of the original structure or are of higher quality construction. Additionally, it introduces new criteria under which a replacement structure may not be considered an improvement if the materials used for the replacement are not available and are instead replaced with comparable materials.

The bill also includes similar amendments to other sections of the Tax Code, ensuring consistency in the treatment of replacement structures across various tax provisions. It establishes that these changes will apply to ad valorem taxes imposed for tax years beginning on or after January 1, 2026. The new legal language emphasizes the conditions under which replacement structures are assessed, aiming to provide clarity and fairness in property taxation following disasters.

Statutes affected:
Introduced: Tax Code 11.26, Tax Code 11.261, Tax Code 23.23 (Tax Code 11, Tax Code 23)