Reduced Valuation - Senate Bill 812

Senate Bill 812, by Sen. Eddie Lucio and Rep Senfronia Thompson, amends current law relating to the application of the limit on appraised value of a residence homestead for ad valorem tax purposes to an improvement that is a replacement structure for a structure that was rendered uninhabitable or unusable by a casualty or by wind or water damage.

Texans who receive help after a natural disaster, like Hurricane Harvey, should not worry about accepting assistance due to a higher tax bill. Mayor Turner worked with Sen. Lucio, Sen. Alvarado, Sen. Bettencourt, and Rep. Thompson to get this important piece of legislation drafted, filed, and passed. This important bill extends existing appraisal protections for homeowners by applying them to any applicable federal funding, rather than limiting the appraisal exemptions to named federal appropriations acts.

The Legislature has already applied appraisal limits for homeowners assisted by recovery programs for past disasters. This change will allow the exemption to apply to any disaster funding administered with Community Development Block Grant -Disaster Recovery (CDBG-DR) funds now and in the future.

The City of Houston and Harris County are currently administering over $2 billion of CDBG-DR funds via a contract with the General Land Office to aid in Houston's recovery, post-Hurricane Harvey. A portion of these funds are used to rebuild homes owned by low-to moderate-income residents which are deemed irreparable by the City's program guidelines.

If rebuilds were treated as new improvements, the low- to moderate-income residents who lost their homes in Hurricane Harvey would face the possibility of additional strain in the form of higher taxes. The Legislature has rightly recognized that homes which are rebuilt via these programs ought not to be treated as new improvements by appraisal districts.

The City of Houston Government Relations team worked with the Legislature to make this exemption applicable to current recovery funds and any funds which may be made available in the future. This legislation passed the Legislature, was signed by the Governor and will take effect immediately.