81R1923 SMH-D
By: Villarreal H.B. No. 134
A BILL TO BE ENTITLED
AN ACT
relating to ad valorem taxation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. STATE ADMINISTRATION OF PROPERTY TAX SYSTEM
SECTION 1.01. Chapter 5, Tax Code, is amended by adding
Sections 5.01 and 5.02 to read as follows:
Sec. 5.01. OFFICE OF PROPERTY APPRAISAL. (a) The Office of
Property Appraisal is established as an office in the comptroller's
office.
(b) The office is under the direction and control of the
comptroller.
(c) Unless the context indicates otherwise, a reference in
another law or an administrative rule to the comptroller in
connection with state administration of the property tax system
means the Office of Property Appraisal.
Sec. 5.02. OFFICE OF PROPERTY TAX PUBLIC COUNSEL. (a) The
Office of Property Tax Public Counsel is established as an office in
the Office of Property Appraisal.
(b) The office is headed by a property tax public counsel
appointed by the comptroller.
(c) The property tax public counsel shall represent the
interests of owners of single-family residential property and small
businesses in property tax matters.
(d) The property tax public counsel may:
(1) represent a property owner in a protest under
Chapter 41 or an appeal through binding arbitration under Chapter
41A; and
(2) appear or intervene, as a party or otherwise, as a
matter of right on behalf of owners of single-family residential
property or small businesses, as a class, in an action under Section
43.01 or bring an action under that section, regardless of whether
the property tax public counsel is affected by the appraisal
district or appraisal review board's failure to comply with the
law.
SECTION 1.02. This article takes effect January 1, 2010,
but only if the constitutional amendment proposed by the 81st
Legislature, Regular Session, 2009, authorizing the legislature to
provide that ad valorem tax appraisal services in any county are
under the jurisdiction of the entity specified by the legislature,
to provide for the consolidation of ad valorem tax appraisal
services, and to provide for enforcement of ad valorem tax
standards and procedures by the specified entity is approved by the
voters. If that amendment is not approved by the voters, this
article has no effect.
ARTICLE 2. REVIEW BY OFFICE OF PROPERTY APPRAISAL OF APPRAISAL
STANDARDS, PROCEDURES, AND METHODOLOGY USED BY AN APPRAISAL
DISTRICT TO DETERMINE TAXABLE VALUE OF PROPERTY IN A SCHOOL
DISTRICT
SECTION 2.01. The heading to Subchapter M, Chapter 403,
Government Code, is amended to read as follows:
SUBCHAPTER M. DETAILED REVIEW [STUDY] OF STANDARDS,
PROCEDURES, AND METHODOLOGY USED TO DETERMINE
SCHOOL DISTRICT PROPERTY VALUES
SECTION 2.02. Sections 403.3011(1), (2), and (4),
Government Code, are amended to read as follows:
(1) "Detailed review [Annual study]" means a review
[study] conducted under Section 403.302.
(2) "Eligible school district" means a school district
for which the comptroller has determined the following:
(A) in the most recent detailed review [annual
study], the local value is invalid under Section 403.302(c) and
does not exceed the state value for the school district determined
in the detailed review [annual study];
(B) in the detailed review [annual study] for
each of the two years preceding the most recent detailed review
[annual study], the school district's local value was valid under
Section 403.302(c); and
(C) in the most recent detailed review [annual
study], the aggregate local value of all of the categories of
property sampled by the comptroller is not less than 90 percent of
the lower limit of the margin of error as determined by the
comptroller of the aggregate value as determined by the comptroller
of all of the categories of property sampled by the comptroller.
(4) "State value" means the value of property in a
school district as determined in a detailed review [the annual
study].
SECTION 2.03. Sections 403.302(a), (b), (c), (c-1), (d),
(f), (g), (h), (i), and (l), Government Code, are amended to read as
follows:
(a) The comptroller shall conduct a detailed review of the
appraisal standards, procedures, and methodology by which an
appraisal district determines [an annual study using comparable
sales and generally accepted auditing and sampling techniques to
determine] the [total taxable] value of all property in each school
district that participates in the appraisal district. The review
must test the standards, procedures, and methodology of an
appraisal district used to [study shall] determine the taxable
value of all property and of each category of property in the
district and the productivity value of all land that qualifies for
appraisal on the basis of its productive capacity and for which the
owner has applied for and received a productivity appraisal. The
comptroller shall make appropriate adjustments in the review
[study] to account for actions taken under Chapter 41, Education
Code.
(b) In conducting the detailed review [study], the
comptroller shall use [determine the taxable value of property in
each school district]:
(1) [using, if appropriate,] samples selected through
generally accepted auditing and sampling techniques in testing the
standards, procedures, and methodology used by the appraisal
district to determine the taxable value of property on a school
district's appraisal roll for compliance with generally accepted
appraisal standards and practices; and
(2) a margin of error that does not exceed five percent
unless the comptroller determines that the size of the sample of
properties necessary to make the determination makes the use of
such a margin of error not feasible, in which case the comptroller
may use a larger margin of error [according to generally accepted
standard valuation, statistical compilation, and analysis
techniques;
[(3) ensuring that different levels of appraisal on
sold and unsold property do not adversely affect the accuracy of the
study; and
[(4) ensuring that different levels of appraisal
resulting from protests determined under Section 41.43, Tax Code,
are appropriately adjusted in the study].
(c) If after conducting the detailed review [annual study]
the comptroller determines that the appraisal district used
appropriate information and methodology to appraise all property or
a category of property for a school district, the local value of all
property or the category of property for the [a] school district is
valid and [,] the local value is presumed to represent taxable value
for the school district. If after conducting the detailed review
the comptroller determines that the appraisal district did not use
appropriate information and methodology to appraise all property or
a category of property for a school district, [In] the [absence of
that presumption,] taxable value of all property or the category of
property for the [a] school district is the state value of that
property or category for the school district determined by the
comptroller under Subsections (a) and (b) unless the local value of
all property or of the category of property exceeds the state value
of all property or the category of property, as applicable, in which
case the taxable value of all property or the category of property
for the school district is the district's local value. [In
determining whether the local value for a school district is valid,
the comptroller shall use a margin of error that does not exceed
five percent unless the comptroller determines that the size of the
sample of properties necessary to make the determination makes the
use of such a margin of error not feasible, in which case the
comptroller may use a larger margin of error.]
(c-1) This subsection applies only to a school district
whose central administrative office is located in a county with a
population of 9,000 or less and a total area of more than 6,000
square miles. If after conducting the detailed review [annual
study] for a tax year the comptroller determines that the local
value for a school district is not valid, the comptroller shall
adjust the taxable value determined under Subsections (a) and (b)
as follows:
(1) for each category of property sampled and tested
by the comptroller in the school district, the comptroller shall
use the weighted mean appraisal ratio determined by the detailed
review [study], unless the ratio is more than four percentage
points lower than the weighted mean appraisal ratio determined by
the comptroller for that category of property in the immediately
preceding detailed review [study], in which case the comptroller
shall use the weighted mean appraisal ratio determined in the
immediately preceding detailed review [study] minus four
percentage points;
(2) the comptroller shall use the category weighted
mean appraisal ratios as adjusted under Subdivision (1) to
establish a value estimate for each category of property sampled
and tested by the comptroller in the school district; and
(3) the value estimates established under Subdivision
(2), together with the local tax roll value for any categories not
sampled and tested by the comptroller, less total deductions
determined by the comptroller, determine the taxable value for the
school district.
(d) For the purposes of this section, "taxable value" means
the market value of all taxable property less:
(1) the total dollar amount of any residence homestead
exemptions lawfully granted under Section 11.13(b) or (c), Tax
Code, in the year that is the subject of the detailed review [study]
for each school district;
(2) one-half of the total dollar amount of any
residence homestead exemptions granted under Section 11.13(n), Tax
Code, in the year that is the subject of the detailed review [study]
for each school district;
(3) the total dollar amount of any exemptions granted
before May 31, 1993, within a reinvestment zone under agreements
authorized by Chapter 312, Tax Code;
(4) subject to Subsection (e), the total dollar amount
of any captured appraised value of property that:
(A) is within a reinvestment zone created on or
before May 31, 1999, or is proposed to be included within the
boundaries of a reinvestment zone as the boundaries of the zone and
the proposed portion of tax increment paid into the tax increment
fund by a school district are described in a written notification
provided by the municipality or the board of directors of the zone
to the governing bodies of the other taxing units in the manner
provided by Section 311.003(e), Tax Code, before May 31, 1999, and
within the boundaries of the zone as those boundaries existed on
September 1, 1999, including subsequent improvements to the
property regardless of when made;
(B) generates taxes paid into a tax increment
fund created under Chapter 311, Tax Code, under a reinvestment zone
financing plan approved under Section 311.011(d), Tax Code, on or
before September 1, 1999; and
(C) is eligible for tax increment financing under
Chapter 311, Tax Code;
(5) for a school district for which a deduction from
taxable value is made under Subdivision (4), an amount equal to the
taxable value required to generate revenue when taxed at the school
district's current tax rate in an amount that, when added to the
taxes of the district paid into a tax increment fund as described by
Subdivision (4)(B), is equal to the total amount of taxes the
district would have paid into the tax increment fund if the district
levied taxes at the rate the district levied in 2005;
(6) the total dollar amount of any captured appraised
value of property that:
(A) is within a reinvestment zone:
(i) created on or before December 31, 2008,
by a municipality with a population of less than 18,000; and
(ii) the project plan for which includes
the alteration, remodeling, repair, or reconstruction of a
structure that is included on the National Register of Historic
Places and requires that a portion of the tax increment of the zone
be used for the improvement or construction of related facilities
or for affordable housing;
(B) generates school district taxes that are paid
into a tax increment fund created under Chapter 311, Tax Code; and
(C) is eligible for tax increment financing under
Chapter 311, Tax Code;
(7) the total dollar amount of any exemptions granted
under Section 11.251 or 11.253, Tax Code;
(8) the difference between the comptroller's estimate
of the market value and the productivity value of land that
qualifies for appraisal on the basis of its productive capacity,
except that the productivity value estimated by the comptroller may
not exceed the fair market value of the land;
(9) the portion of the appraised value of residence
homesteads of individuals who receive a tax limitation under
Section 11.26, Tax Code, on which school district taxes are not
imposed in the year that is the subject of the detailed review
[study], calculated as if the residence homesteads were appraised
at the full value required by law;
(10) a portion of the market value of property not
otherwise fully taxable by the district at market value because of:
(A) action required by statute or the
constitution of this state that, if the tax rate adopted by the
district is applied to it, produces an amount equal to the
difference between the tax that the district would have imposed on
the property if the property were fully taxable at market value and
the tax that the district is actually authorized to impose on the
property, if this subsection does not otherwise require that
portion to be deducted; or
(B) action taken by the district under Subchapter
B or C, Chapter 313, Tax Code;
(11) the market value of all tangible personal
property, other than manufactured homes, owned by a family or
individual and not held or used for the production of income;
(12) the appraised value of property the collection of
delinquent taxes on which is deferred under Section 33.06, Tax
Code;
(13) the portion of the appraised value of property
the collection of delinquent taxes on which is deferred under
Section 33.065, Tax Code; and
(14) the amount by which the market value of a
residence homestead to which Section 23.23, Tax Code, applies
exceeds the appraised value of that property as calculated under
that section.
(f) The detailed review [study] shall determine the values
as of January 1 of each year.
(g) The comptroller shall publish preliminary findings,
listing values by district, before February 1 of the year following
the year of the detailed review [study]. Preliminary findings
shall be delivered to each school district and shall be certified to
the commissioner of education.
(h) On request of the commissioner of education or a school
district, the comptroller may audit the total taxable value of
property in a school district and may revise the detailed review
[annual study] findings. The request for audit is limited to
corrections and changes in a school district's appraisal roll that
occurred after preliminary certification of the detailed review
[annual study] findings by the comptroller. Except as otherwise
provided by this subsection, the request for audit must be filed
with the comptroller not later than the third anniversary of the
date of the final certification of the detailed review [annual
study] findings. The request for audit may be filed not later than
the first anniversary of the date the chief appraiser certifies a
change to the appraisal roll if the chief appraiser corrects the
appraisal roll under Section 25.25 or 42.41, Tax Code, and the
change results in a material reduction in the total taxable value of
property in the school district. The comptroller shall certify the
findings of the audit to the commissioner of education.
(i) If the comptroller determines in the detailed review
[annual study] that the market value of property in a school
district as determined by the appraisal district that appraises
property for the school district, less the total of the amounts and
values listed in Subsection (d) as determined by that appraisal
district, is valid, the comptroller, in determining the taxable
value of property in the school district under Subsection (d),
shall for purposes of Subsection (d)(14) subtract from the market
value as determined by the appraisal district of residence
homesteads to which Section 23.23, Tax Code, applies the amount by
which that amount exceeds the appraised value of those properties
as calculated by the appraisal district under Section 23.23, Tax
Code. If the comptroller determines in the detailed review [annual
study] that the market value of property in a school district as
determined by the appraisal district that appraises property for
the school district, less the total of the amounts and values listed
in Subsection (d) as determined by that appraisal district, is not
valid, the comptroller, in determining the taxable value of
property in the school district under Subsection (d), shall for
purposes of Subsection (d)(14) subtract from the market value as
estimated by the comptroller of residence homesteads to which
Section 23.23, Tax Code, applies the amount by which that amount
exceeds the appraised value of those properties as calculated by
the appraisal district under Section 23.23, Tax Code.
(l) If after conducting the detailed review [annual study]
for the year 2009 [2003] or a subsequent year the comptroller
determines that a school district is an eligible school district,
for that year and the following year the taxable value for the
school district is the district's local value. [Not later than the
first anniversary of the date of the determination that a school
district is an eligible school district, the comptroller shall
complete an appraisal standards review as provided by Section
5.102, Tax Code, of each appraisal district that appraises property
for the school district.]
SECTION 2.04. Sections 403.303(a) and (b), Government Code,
are amended to read as follows:
(a) A school district or a property owner whose property is
included in the detailed review [study] under Section 403.302 and
whose tax liability on the property is $100,000 or more may protest
the comptroller's findings under Section 403.302(g) or (h) by
filing a petition with the comptroller. The petition must be filed
not later than the 40th day after the date on which the
comptroller's findings are certified to the commissioner of
education and must specify the grounds for objection and the value
claimed to be correct by the school district or property owner.
(b) After receipt of a petition, the comptroller shall hold
a hearing. The comptroller has the burden to prove the accuracy of
the findings. Until a final decision is made by the comptroller,
the taxable value of property in the district is determined, with
respect to property subject to the protest, according to the value
claimed by the school district or property owner, except that the
value to be used while a final decision is pending may not be less
than the appraisal roll value for the year of the detailed review
[study]. If after a hearing the comptroller concludes that the
findings should be changed, the comptroller shall order the
appropriate changes and shall certify to the commissioner of
education the changes in the values of the school district that
brought the protest, the values of the school district named by the
property owner who brought the protest, or, if the comptroller by
rule allows an appraisal district to bring a protest, the values of
the school district named by the appraisal district that brought
the protest. The comptroller may not order a change in the values
of a school district as a result of a protest brought by another
school district, a property owner in the other school district, or
an appraisal district that appraises property for the other school
district. The comptroller shall complete all protest hearings and
certify all changes as necessary to comply with Chapter 42,
Education Code. A hearing conducted under this subsection is not a
contested case for purposes of Section 2001.003.
SECTION 2.05. Section 403.304(a), Government Code, is
amended to read as follows:
(a) All information the comptroller obtains from a person,
other than a government or governmental subdivision or agency,
under an assurance that the information will be kept confidential,
in the course of conducting a detailed review [study of school
district values] is confidential and may not be disclosed except as
provided in Subsection (b).
SECTION 2.06. Section 825.405(i), Government Code, is
amended to read as follows:
(i) Not later than the seventh day after the final date the
comptroller certifies to the commissioner of education changes to
the detailed review [property value study] conducted under
Subchapter M, Chapter 403, the comptroller shall certify to the
Teacher Retirement System of Texas:
(1) the effective tax rate for school district
maintenance and operation revenues for each school district in the
state for the immediately preceding tax year; and
(2) the statewide average effective tax rate for
school district maintenance and operation revenues for the
immediately preceding tax year.
SECTION 2.07. Section 5.07(c), Tax Code, is amended to read
as follows:
(c) The comptroller shall also prescribe a uniform record
system to be used by all appraisal districts for the purpose of
submitting data to be used in the detailed review [annual studies]
required by [Section 5.10 of this code and by] Section 403.302,
Government Code. The record system shall include a compilation of
information concerning sales of real property within the boundaries
of the appraisal district. The sales information maintained in the
uniform record system shall be submitted annually in a form
prescribed by the comptroller.
SECTION 2.08. Sections 5.101(a), (b), (c), and (d), Tax
Code, are amended to read as follows:
(a) The comptroller shall appoint a technical advisory
committee for the purpose of providing professional and practical
expertise to the comptroller and to review and comment on the
methodology used by the comptroller to conduct the detailed review
[annual studies] required by [Section 5.10 of this code and by]
Section 403.302, Government Code. A member of the committee serves
at the will of the comptroller.
(b) The committee shall:
(1) review the methodology used by the comptroller to
conduct the detailed review [studies] described in Subsection (a);
(2) make an annual report to the comptroller that
includes the committee's findings and recommendations relating to
the methodology used to conduct the detailed review [studies]; and
(3) meet as often as necessary to perform its duties.
(c) The comptroller shall appoint the committee to provide
for a balanced representation of the general public and of
professionals affiliated with the entities affected by the detailed
review [studies].
(d) Each member of the committee must have expertise
sufficient to determine the accuracy of the detailed review [annual
studies] and the appropriateness of the methods used to develop the
findings of the detailed review [studies].
SECTION 2.09. Sections 5.102(a) and (b), Tax Code, are
amended to read as follows:
(a) [The comptroller shall review the appraisal standards,
procedures, and methodology used by each appraisal district that
appraises property for an eligible school district as defined by
Section 403.3011, Government Code, to determine compliance with
generally accepted appraisal standards and practices. The
comptroller by rule may establish procedures and standards for
conducting the review.
[(b)] In conducting the detailed review required by Section
403.302, Government Code, the comptroller is entitled to access to
all records and reports of the appraisal district and to the
assistance of the appraisal district's officers and employees.
SECTION 2.10. Section 5.12, Tax Code, is amended to read as
follows:
Sec. 5.12. PERFORMANCE AUDIT OF APPRAISAL DISTRICT. (a)
[The comptroller shall audit the performance of an appraisal
district if one or more of the following conditions exist according
to each of two consecutive annual studies conducted by the
comptroller under Section 5.10 of this code, regardless of whether
the prescribed condition or conditions that exist are the same for
each of those studies:
[(1) the overall median level of appraisal for all
property in the district for which the comptroller determines a
median level of appraisal is less than 0.75;
[(2) the coefficient of dispersion around the overall
median level of appraisal of the properties used to determine the
overall median level of appraisal for all property in the district
for which the comptroller determines a median level of appraisal
exceeds 0.30; or
[(3) the difference between the median levels of
appraisal for any two classes of property in the district for which
the comptroller determines a median level of appraisal is more than
0.45.
[(b)] At the written request of the governing bodies of a
majority of the taxing units participating in an appraisal district
or of a majority of the taxing units entitled to vote on the
appointment of appraisal district directors, the comptroller shall
audit the performance of the appraisal district. The governing
bodies may request a general audit of the performance of the
appraisal district or may request an audit of only one or more
particular duties, practices, functions, departments, or other
appraisal district matters.
(b) [(c)] At the written request of the owners of not less
than 10 percent of the number of accounts or parcels of property in
an appraisal district belonging to a single class of property, if
the class constitutes at least five percent of the appraised value
of taxable property within the district in the preceding year, or at
the written request of the owners of property representing not less
than 10 percent of the appraised value of all property in the
district belonging to a single class of property, if the class
constitutes at least five percent of the appraised value of taxable
property in the district in the preceding year, the comptroller
shall audit the performance of the appraisal district. The
property owners may request a general audit of the performance of
the appraisal district or may request an audit of only one or more
particular duties, practices, functions, departments, or other
appraisal district matters. A property owner may authorize an
agent to sign a request for an audit under this subsection on the
property owner's behalf. The comptroller may require a person
signing a request for an audit to provide proof that the person is
entitled to sign the request as a property owner or as the agent of a
property owner.
(c) [(d) A request for a performance audit of an appraisal
district may not be made under Subsection (b) or (c) of this section
if according to each of the two most recently published annual
studies conducted by the comptroller under Section 5.10 of this
code:
[(1) the overall median level of appraisal for all
property in the district for which the comptroller determines a
median level of appraisal is more than 0.90 and less than 1.10;
[(2) the coefficient of dispersion around the overall
median level of appraisal of the properties used to determine the
overall median level of appraisal for all property in the district
for which the comptroller determines a median level of appraisal is
less than 0.15; and
[(3) the difference between the highest and lowest
median levels of appraisal in the district for the classes of
property for which the comptroller determines a median level of
appraisal is less than 0.20.
[(e) A request for a performance audit of an appraisal
district may not be made under Subsection (b) or (c) of this
section:
[(1) during the two years immediately following the
publication of the second of two consecutive annual studies
according to which the comptroller is required to conduct an audit
of the district under Subsection (a) of this section; or
[(2) during the year immediately following the date
the results of an audit of the district conducted by the comptroller
under Subsection (a) of this section are reported to the chief
appraiser of the district.
[(f) For purposes of this section, "class of property" means
a major kind of property for which the comptroller determines a
median level of appraisal under Section 5.10 of this code.
[(g) The results of an annual study conducted by the
comptroller for a tax year before 1989 may not be considered for
purposes of determining whether an audit is required under
Subsection (a) of this section.
[(h)] In addition to the performance audits required by
Subsections (a) and [,] (b)[, and (c) and the review of appraisal
standards required by Section 5.102], the comptroller may audit an
appraisal district to analyze the effectiveness and efficiency of
the policies, management, and operations of the appraisal district.
The results of the audit shall be delivered in a report that details
the comptroller's findings and recommendations for improvement to
the appraisal district's chief appraiser and board of directors and
the governing body of each taxing unit participating in the
appraisal district. The comptroller may require reimbursement by
the appraisal district for some or all of the costs of the audit,
not to exceed the actual costs associated with conducting the
audit.
SECTION 2.11. Sections 5.13(a), (f), (g), and (h), Tax
Code, are amended to read as follows:
(a) [The comptroller shall complete an audit required by
Section 5.12(a) of this code within two years after the date of the
publication of the second of the two annual studies the results of
which required the audit to be conducted.] The comptroller shall
complete an audit requested under Section 5.12(a) or (b) [5.12(b)
or (c) of this code] as soon as practicable after the request is
made.
(f) The comptroller shall report the results of its audit in
writing to the governing body of each taxing unit that participates
in the appraisal district, to the chief appraiser, and to the
presiding officer of the appraisal district board of directors. If
the audit was requested under Section 5.12(b) [5.12(c) of this
code], the comptroller shall also provide a report to a
representative of the property owners who requested the audit.
(g) If the audit is [required or] requested under Section
5.12(a) [or (b) of this code], the appraisal district shall
reimburse the comptroller for the costs incurred in conducting the
audit and making its report of the audit. The costs shall be
allocated among the taxing units participating in the district in
the same manner as an operating expense of the district. If the
audit is requested under Section 5.12(b) [5.12(c) of this code],
the property owners who requested the audit shall reimburse the
comptroller for the costs incurred in conducting the audit and
making its report of the audit and shall allocate the costs among
those property owners in proportion to the appraised value of each
property owner's property in the district or on such other basis as
the property owners may agree. If the audit confirms that the
median level of appraisal for a class of property exceeds 1.10 or
that the median level of appraisal for a class of property varies at
least 10 percent from the overall median level of appraisal for all
property in the district for which the comptroller determines a
median level of appraisal, within 90 days after the date a request
is made by the property owners for reimbursement the appraisal
district shall reimburse the property owners who requested the
audit for the amount paid to the comptroller for the costs incurred
in conducting the audit and making the report. Before conducting an
audit under Section 5.12(b) [5.12(c)], the comptroller may require
the requesting taxing units or property owners to provide the
comptroller with a bond, deposit, or other financial security
sufficient to cover the expected costs of conducting the audit and
making the report. For purposes of this subsection, "costs"
include expenses related to salaries, professional fees, travel,
reproduction or other printing services, and consumable supplies
that are directly attributable to conducting the audit.
(h) At any time after the request for an audit is made, the
comptroller may discontinue the audit in whole or in part if
requested to do so by:
(1) the governing bodies of a majority of the taxing
units participating in the district, if the audit was requested by a
majority of those units;
(2) the governing bodies of a majority of the taxing
units entitled to vote on the appointment of appraisal district
directors, if the audit was requested by a majority of those units;
or
(3) if the audit was requested under Section 5.12(b)
[5.12(c) of this code], [by] the taxpayers who requested the audit.
SECTION 2.12. Section 5.16(a), Tax Code, is amended to read
as follows:
(a) The comptroller may inspect the records or other
materials of an appraisal office or taxing unit, including the
relevant records and materials in the possession or control of a
consultant, advisor, or expert hired by the appraisal office or
taxing unit, for the purpose of:
(1) establishing, reviewing, or evaluating the value
of or an appraisal of any property; or
(2) conducting a detailed [study,] review[, or audit]
required by [Section 5.10 or 5.102 or by] Section 403.302,
Government Code.
SECTION 2.13. Section 41A.12, Tax Code, is amended to read
as follows:
Sec. 41A.12. USE OF PROPERTIES AS SAMPLES. An arbitrator's
determination of market value under this chapter is the market
value of the property subject to the appeal for the purposes of the
detailed review [annual study] conducted under Section 403.302,
Government Code.
SECTION 2.14. The following provisions of the Tax Code are
repealed:
(1) Section 5.10; and
(2) Section 42.26(c).
SECTION 2.15. This article takes effect January 1, 2010.
ARTICLE 3. REGULATION OF PROPERTY TAX PROFESSIONALS AND PROPERTY
TAX CONSULTANTS
SECTION 3.01. Section 5.04, Tax Code, is amended to read as
follows:
Sec. 5.04. TRAINING AND EDUCATION OF APPRAISERS. (a) The
comptroller shall set [consult and cooperate with the Board of Tax
Professional Examiners or any successor agency responsible for
certifying tax professionals in this state in setting] standards
for and approve [approving] curricula and materials for use in
training and educating appraisers and assessor-collectors, and
[the comptroller] may cooperate with [the board or with] other
public agencies, educational institutions, or private
organizations in sponsoring courses of instruction and training
programs.
(b) An appraisal district shall reimburse an employee of the
appraisal office for all actual and necessary expenses, tuition and
other fees, and costs of materials incurred in attending, with
approval of the chief appraiser, a course or training program
sponsored or approved by the comptroller [Board of Tax Professional
Examiners].
SECTION 3.02. Section 411.122(d), Government Code, is
amended to read as follows:
(d) The following state agencies are subject to this
section:
(1) Texas Appraiser Licensing and Certification
Board;
(2) Texas Board of Architectural Examiners;
(3) Texas Board of Chiropractic Examiners;
(4) State Board of Dental Examiners;
(5) Texas Board of Professional Engineers;
(6) Texas Funeral Service Commission;
(7) Texas Board of Professional Geoscientists;
(8) Department of State Health Services, except as
provided by Section 411.110, and agencies attached to the
department, including:
(A) Texas State Board of Examiners of Dietitians;
(B) Texas State Board of Examiners of Marriage
and Family Therapists;
(C) Midwifery Board;
(D) Texas State Board of Examiners of
Perfusionists;
(E) Texas State Board of Examiners of
Professional Counselors;
(F) Texas State Board of Social Worker Examiners;
(G) State Board of Examiners for Speech-Language
Pathology and Audiology;
(H) Advisory Board of Athletic Trainers;
(I) State Committee of Examiners in the Fitting
and Dispensing of Hearing Instruments;
(J) Texas Board of Licensure for Professional
Medical Physicists; and
(K) Texas Board of Orthotics and Prosthetics;
(9) Texas Board of Professional Land Surveying;
(10) Texas Department of Licensing and Regulation,
except as provided by Section 411.093;
(11) Texas Commission on Environmental Quality;
(12) Texas Board of Occupational Therapy Examiners;
(13) Texas Optometry Board;
(14) Texas State Board of Pharmacy;
(15) Texas Board of Physical Therapy Examiners;
(16) Texas State Board of Plumbing Examiners;
(17) Texas State Board of Podiatric Medical Examiners;
(18) Polygraph Examiners Board;
(19) Texas State Board of Examiners of Psychologists;
(20) Texas Real Estate Commission;
(21) Office of Property Appraisal [Board of Tax
Professional Examiners];
(22) Texas Department of Transportation;
(23) State Board of Veterinary Medical Examiners;
(24) Texas Department of Housing and Community
Affairs;
(25) secretary of state;
(26) state fire marshal;
(27) Texas Education Agency; and
(28) Department of Agriculture.
SECTION 3.03. Section 2054.352(a), Government Code, is
amended to read as follows:
(a) The following licensing entities shall participate in
the system established under Section 2054.353:
(1) Texas Board of Chiropractic Examiners;
(2) Court Reporters Certification Board;
(3) State Board of Dental Examiners;
(4) Texas Funeral Service Commission;
(5) Texas Board of Professional Land Surveying;
(6) Texas Medical Board;
(7) Texas Board of Nursing;
(8) Texas Optometry Board;
(9) Department of Agriculture, for licenses issued
under Chapter 1951, Occupations Code;
(10) Texas State Board of Pharmacy;
(11) Executive Council of Physical Therapy and
Occupational Therapy Examiners;
(12) Texas State Board of Plumbing Examiners;
(13) Texas State Board of Podiatric Medical Examiners;
(14) Office of Property Appraisal [Board of Tax
Professional Examiners];
(15) Polygraph Examiners Board;
(16) Texas State Board of Examiners of Psychologists;
(17) State Board of Veterinary Medical Examiners;
(18) Texas Real Estate Commission;
(19) Texas Appraiser Licensing and Certification
Board;
(20) Texas Department of Licensing and Regulation;
(21) Texas State Board of Public Accountancy;
(22) State Board for Educator Certification;
(23) Texas Board of Professional Engineers;
(24) Department of State Health Services;
(25) Texas Board of Architectural Examiners;
(26) Texas Racing Commission;
(27) Commission on Law Enforcement Officer Standards
and Education; and
(28) Texas Private Security Board.
SECTION 3.04. Section 1151.002(4), Occupations Code, is
amended to read as follows:
(4) "Board" means the Office of Property Appraisal
[Board of Tax Professional Examiners].
SECTION 3.05. Section 1152.001(1), Occupations Code, is
amended to read as follows:
(1) "Commission," "department," and "executive
director" mean [means] the Office of Property Appraisal [Texas
Commission of Licensing and Regulation].
SECTION 3.06 Sections 1152.102(a) and (b), Occupations
Code, are amended to read as follows:
(a) The council is composed of six members appointed by the
[presiding officer of the] commission[, with the commission's
approval].
(b) The [presiding officer of the] commission may appoint
not more than two members who are qualified for an exemption under
Section 1152.002(a)(3).
SECTION 3.07. Section 1152.104(b), Occupations Code, is
amended to read as follows:
(b) If a vacancy occurs during a member's term, the
[presiding officer of the] commission[, with the commission's
approval,] shall appoint to fill the unexpired part of the term a
replacement who meets the qualifications of the vacated office.
SECTION 3.08. Section 1152.105, Occupations Code, is
amended to read as follows:
Sec. 1152.105. PRESIDING OFFICER. The [presiding officer
of the] commission[, with the commission's approval,] shall appoint
a member of the council to serve as presiding officer of the council
for two years.
SECTION 3.09. The following provisions of the Occupations
Code are repealed:
(1) Section 1151.003;
(2) Subchapters B and B-1, Chapter 1151;
(3) Section 1151.1015; and
(4) Sections 1152.001(3) and (3-a).
SECTION 3.10. (a) The Board of Tax Professional Examiners
is abolished but continues in existence until March 1, 2010, for the
sole purpose of transferring obligations, property, full-time
equivalent positions, rights, powers, and duties to the Office of
Property Appraisal. The Office of Property Appraisal assumes all
of the obligations, property, full-time equivalent positions,
rights, powers, and duties of the Board of Tax Professional
Examiners as it existed immediately before the effective date of
this article. All unexpended funds appropriated to the Board of Tax
Professional Examiners are transferred to the Office of Property
Appraisal. The transfer of the obligations, property, full-time
equivalent positions, rights, powers, and duties of the Board of
Tax Professional Examiners to the Office of Property Appraisal must
be completed not later than March 1, 2010.
(b) All rules of the Board of Tax Professional Examiners are
continued in effect as rules of the Office of Property Appraisal
until superseded by a rule of the Office of Property Appraisal. A
registration or certification issued by the Board of Tax
Professional Examiners is continued in effect as provided by the
law in effect immediately before the effective date of this
article. A complaint, investigation, contested case, or other
proceeding pending on the effective date of this article is
continued without change in status after the effective date of this
article. An activity conducted by the Board of Tax Professional
Examiners is considered to be an activity conducted by the Office of
Property Appraisal.
(c) A reference in another law or an administrative rule to
the Board of Tax Professional Examiners means the Office of
Property Appraisal.
SECTION 3.11. This article takes effect January 1, 2010,
but only if the constitutional amendment proposed by the 81st
Legislature, Regular Session, 2009, authorizing the legislature to
provide that ad valorem tax appraisal services in any county are
under the jurisdiction of the entity specified by the legislature,
to provide for the consolidation of ad valorem tax appraisal
services, and to provide for enforcement of ad valorem tax
standards and procedures by the specified entity is approved by the
voters. If that amendment is not approved by the voters, this
article has no effect.
ARTICLE 4. REMEDIES FOR VIOLATIONS OF LAW BY AD VALOREM TAX
OFFICIALS OR ENTITIES
SECTION 4.01. Section 43.01, Tax Code, is amended to read as
follows:
Sec. 43.01. AUTHORITY TO BRING SUIT. (a) Any of the
following persons [A taxing unit] may sue an appropriate [the]
appraisal district or appraisal review board [that appraises
property for the unit] to compel the appraisal district or
appraisal review board to comply with the provisions of this title,
rules of the comptroller, or other applicable law if the person is
affected by the appraisal district's or appraisal review board's
failure to comply with the law:
(1) a taxing unit;
(2) a property owner;
(3) a lessee of property who is contractually
obligated to pay taxes imposed on the property;
(4) an agent of a property owner designated under
Section 1.111; or
(5) any other person authorized to bring an action on
behalf of a person listed in Subdivisions (1)-(4).
(b) The court shall award court costs and reasonable
attorney's fees to a plaintiff who prevails in a suit brought under
this section.
SECTION 4.02. The changes in law made by this article to
Section 43.01, Tax Code, apply only to a suit filed under Section
43.01, Tax Code, on or after the effective date of this article. A
suit filed under Section 43.01, Tax Code, before the effective date
of this article is governed by the law in effect on the date the suit
was filed, and the former law is continued in effect for that
purpose.
SECTION 4.03. This article takes effect September 1, 2009.
ARTICLE 5. CONSOLIDATION OF APPRAISAL DISTRICTS
SECTION 5.01. Subchapter A, Chapter 6, Tax Code, is amended
by adding Section 6.025 to read as follows:
Sec. 6.025. CONSOLIDATION OF APPRAISAL DISTRICTS BY
COMPTROLLER. (a) The comptroller may order the consolidation of
two or more appraisal districts.
(b) An order consolidating appraisal districts:
(1) must:
(A) identify the districts to be consolidated;
(B) state the effective date of the
consolidation;
(C) state the name of the consolidated district;
(D) provide for the governance of the
consolidated district during and after a reasonable transition
period;
(E) provide for the financing of the consolidated
district, including the disposition of money and property of the
district; and
(F) provide for the status of proceedings pending
before each appraisal district or proceedings to which an appraisal
district is a party on the effective date of the consolidation; and
(2) may contain other provisions as determined by the
comptroller.
SECTION 5.02. This article takes effect January 1, 2010,
but only if the constitutional amendment proposed by the 81st
Legislature, Regular Session, 2009, authorizing the legislature to
provide that ad valorem tax appraisal services in any county are
under the jurisdiction of the entity specified by the legislature,
to provide for the consolidation of ad valorem tax appraisal
services, and to provide for enforcement of ad valorem tax
standards and procedures by the specified entity is approved by the
voters. If that amendment is not approved by the voters, this
article has no effect.
ARTICLE 6. COMMUNICATION IN ELECTRONIC FORMAT
SECTION 6.01. Sections 1.085(a) and (e), Tax Code, are
amended to read as follows:
(a) Except as provided by Section 1.07(d), any notice,
rendition, application form, or completed application that is
required or permitted by this title to be delivered between a chief
appraiser and a property owner or between a chief appraiser and a
person designated by a property owner under Section 1.111(f) may be
delivered in an electronic format if the chief appraiser and the
property owner agree under this section. If a property owner
requests that the chief appraiser enter into an agreement under
this section, the chief appraiser must enter into the agreement.
(e) The comptroller by rule [:
[(1)] shall prescribe acceptable media, formats,
content, and methods for the electronic transmission of notices
[required by Section 25.19; and
[(2) may prescribe acceptable media, formats, content,
and methods for the electronic transmission of other notices],
renditions, and applications.
SECTION 6.02. Section 1.085(g), Tax Code, is repealed.
SECTION 6.03. This article takes effect January 1, 2010.
ARTICLE 7. NOTICE OF PROPOSED TAX RATE
SECTION 7.01 Section 26.05(a), Tax Code, is amended to read
as follows:
(a) The governing body of each taxing unit, before the later
of September 30 or the 60th day after the date the certified
appraisal roll is received by the taxing unit, shall adopt a tax
rate for the current tax year and shall notify the assessor for the
unit of the rate adopted. The tax rate consists of two components,
each of which must be approved separately. The components are:
(1) for a taxing unit other than a school district, the
rate that, if applied to the total taxable value, will impose the
total amount published under Section 26.04(e)(3)(C), less any
amount of additional sales and use tax revenue that will be used to
pay debt service, or, for a school district, the rate published
under Section 44.004(c)(3)(B)(ii) [44.004(c)(5)(A)(ii)(b)],
Education Code; and
(2) the rate that, if applied to the total taxable
value, will impose the amount of taxes needed to fund maintenance
and operation expenditures of the unit for the next year.
SECTION 7.02. Section 26.06(b), Tax Code, is amended to
read as follows:
(b) The notice of a public hearing may not be smaller than
one-quarter page of a standard-size or a tabloid-size newspaper,
and the headline on the notice must be in 24-point or larger
type. The notice must contain a statement in the following form:
"NOTICE OF PUBLIC HEARING ON TAX INCREASE
"The (name of the taxing unit) will hold two public hearings
on a proposal to increase total tax revenues from properties on the
tax roll in the preceding tax year by (percentage by which proposed
tax rate exceeds lower of rollback tax rate or effective tax rate
calculated under this chapter) percent. Your individual taxes may
increase at a greater or lesser rate, or even decrease, depending on
the change in the taxable value of your property in relation to the
change in taxable value of all other property and the tax rate that
is adopted.
"The first public hearing will be held on (date and time) at
(meeting place).
"The second public hearing will be held on (date and time) at
(meeting place).
"(Names of all members of the governing body, showing how
each voted on the proposal to consider the tax increase or, if one
or more were absent, indicating the absences.)
"Last year's tax rate was (tax rate for preceding year)
per $100 of taxable value.
"The tax rate that would raise the taxes required to fund the
same level of services as were provided last year is (effective
tax rate) per $100 of taxable value.
"The proposed tax rate is (proposed tax rate) per $100 of
taxable value.
["The average taxable value of a residence homestead in (name
of taxing unit) last year was $ (average taxable value of a
residence homestead in the taxing unit for the preceding tax year,
disregarding residence homestead exemptions available only to
disabled persons or persons 65 years of age or older). Based on
last year's tax rate of $ (preceding year's adopted tax rate) per
$100 of taxable value, the amount of taxes imposed last year on the
average home was $ (tax on average taxable value of a residence
homestead in the taxing unit for the preceding tax year,
disregarding residence homestead exemptions available only to
disabled persons or persons 65 years of age or older).
["The average taxable value of a residence homestead in (name
of taxing unit) this year is $ (average taxable value of a
residence homestead in the taxing unit for the current tax year,
disregarding residence homestead exemptions available only to
disabled persons or persons 65 years of age or older). If the
governing body adopts the effective tax rate for this year of
$ (effective tax rate) per $100 of taxable value, the amount of
taxes imposed this year on the average home would be $ (tax on
average taxable value of a residence homestead in the taxing unit
for the current tax year, disregarding residence homestead
exemptions available only to disabled persons or persons 65 years
of age or older).
["If the governing body adopts the proposed tax rate of
$ (proposed tax rate) per $100 of taxable value, the amount of
taxes imposed this year on the average home would be $ (tax on
the average taxable value of a residence in the taxing unit for the
current year disregarding residence homestead exemptions available
only to disabled persons or persons 65 years of age or older).]
"Members of the public are encouraged to attend the hearings
and express their views."
SECTION 7.03. Section 26.06(d), Tax Code, as amended by
Chapters 1105 (H.B. 3495) and 1112 (H.B. 3630), Acts of the 80th
Legislature, Regular Session, 2007, is reenacted and amended to
read as follows:
(d) At the public hearings the governing body shall announce
the date, time, and place of the meeting at which it will vote on the
proposed tax rate. After each hearing the governing body shall give
notice of the meeting at which it will vote on the proposed tax rate
and the notice shall be in the same form as prescribed by
Subsections (b) and (c), except that it must state the following:
"NOTICE OF TAX REVENUE INCREASE
"The (name of the taxing unit) conducted public hearings on
(date of first hearing) and (date of second hearing) on a proposal
to increase the total tax revenues of the (name of the taxing unit)
from properties on the tax roll in the preceding year by (percentage
by which proposed tax rate exceeds lower of rollback tax rate or
effective tax rate calculated under this chapter) percent.
"Last year's tax rate was (tax rate for preceding year)
per $100 of taxable value.
"The tax rate that would raise the taxes required to fund the
same level of services as were provided last year is (effective
tax rate) per $100 of taxable value.
"The proposed tax rate is (proposed tax rate) per $100 of
taxable value.
["The total tax revenue proposed to be raised last year at
last year's tax rate of (insert tax rate for the preceding year) for
each $100 of taxable value was (insert total amount of taxes imposed
in the preceding year).
["The total tax revenue proposed to be raised this year at the
proposed tax rate of (insert proposed tax rate) for each $100 of
taxable value, excluding tax revenue to be raised from new property
added to the tax roll this year, is (insert amount computed by
multiplying proposed tax rate by the difference between current
total value and new property value).
["The total tax revenue proposed to be raised this year at the
proposed tax rate of (insert proposed tax rate) for each $100 of
taxable value, including tax revenue to be raised from new property
added to the tax roll this year, is (insert amount computed by
multiplying proposed tax rate by current total value).]
"The (governing body of the taxing unit) is scheduled to vote
on the tax rate that will result in that tax increase at a public
meeting to be held on (date of meeting) at (location of meeting,
including mailing address) at (time of meeting)."
SECTION 7.04. Section 44.004(c), Education Code, is amended
to read as follows:
(c) The notice of public meeting to discuss and adopt the
budget and the proposed tax rate may not be smaller than one-quarter
page of a standard-size or a tabloid-size newspaper, and the
headline on the notice must be in 18-point or larger type. Subject
to Subsection (d), the notice must:
(1) contain a statement in the following form:
"NOTICE OF PUBLIC MEETING TO DISCUSS BUDGET AND PROPOSED TAX RATE
"The (name of school district) will hold a public meeting at
(time, date, year) in (name of room, building, physical location,
city, state). The purpose of this meeting is to discuss the school
district's budget that will determine the tax rate that will be
adopted. Public participation in the discussion is invited." The
statement of the purpose of the meeting must be in bold type. In
reduced type, the notice must state: "The tax rate that is
ultimately adopted at this meeting or at a separate meeting at a
later date may not exceed the proposed rate shown below unless the
district publishes a revised notice containing the same information
and comparisons set out below and holds another public meeting to
discuss the revised notice.";
(2) contain a section entitled "Comparison of Proposed
Budget with Last Year's Budget," which must show the difference,
expressed as a percent increase or decrease, as applicable, in the
amounts budgeted for the preceding fiscal year and the amount
budgeted for the fiscal year that begins in the current tax year for
each of the following:
(A) maintenance and operations;
(B) debt service; and
(C) total expenditures;
(3) [contain a section entitled "Total Appraised Value
and Total Taxable Value," which must show the total appraised value
and the total taxable value of all property and the total appraised
value and the total taxable value of new property taxable by the
district in the preceding tax year and the current tax year as
calculated under Section 26.04, Tax Code;
[(4) contain a statement of the total amount of the
outstanding and unpaid bonded indebtedness of the school district;
[(5)] contain a section entitled "Comparison of
Proposed Rates with Last Year's Rates," which must[:
[(A)] show in rows the tax rates described by
Paragraphs (A)-(C) [Subparagraphs (i)-(iii)], expressed as amounts
per $100 valuation of property, for columns entitled "Maintenance &
Operations," "Interest & Sinking Fund," and "Total," which is the
sum of "Maintenance & Operations" and "Interest & Sinking Fund":
(A) [(i)] the school district's "Last Year's
Rate";
(B) [(ii)] the "Rate to Maintain Same Level of
Maintenance & Operations Revenue & Pay Debt Service," which:
(i) [(a)] in the case of "Maintenance &
Operations," is the tax rate that, when applied to the current
taxable value for the district, as certified by the chief appraiser
under Section 26.01, Tax Code, and as adjusted to reflect changes
made by the chief appraiser as of the time the notice is prepared,
would impose taxes in an amount that, when added to state funds to
be distributed to the district under Chapter 42, would provide the
same amount of maintenance and operations taxes and state funds
distributed under Chapter 42 per student in average daily
attendance for the applicable school year that was available to the
district in the preceding school year; and
(ii) [(b)] in the case of "Interest &
Sinking Fund," is the tax rate that, when applied to the current
taxable value for the district, as certified by the chief appraiser
under Section 26.01, Tax Code, and as adjusted to reflect changes
made by the chief appraiser as of the time the notice is prepared,
and when multiplied by the district's anticipated collection rate,
would impose taxes in an amount that, when added to state funds to
be distributed to the district under Chapter 46 and any excess taxes
collected to service the district's debt during the preceding tax
year but not used for that purpose during that year, would provide
the amount required to service the district's debt; and
(C) [(iii)] the "Proposed Rate";
[(B) contain fourth and fifth columns aligned
with the columns required by Paragraph (A) that show, for each row
required by Paragraph (A):
[(i) the "Local Revenue per Student," which
is computed by multiplying the district's total taxable value of
property, as certified by the chief appraiser for the applicable
school year under Section 26.01, Tax Code, and as adjusted to
reflect changes made by the chief appraiser as of the time the
notice is prepared, by the total tax rate, and dividing the product
by the number of students in average daily attendance in the
district for the applicable school year; and
[(ii) the "State Revenue per Student,"
which is computed by determining the amount of state aid received or
to be received by the district under Chapters 42, 43, and 46 and
dividing that amount by the number of students in average daily
attendance in the district for the applicable school year; and
[(C) contain an asterisk after each calculation
for "Interest & Sinking Fund" and a footnote to the section that, in
reduced type, states "The Interest & Sinking Fund tax revenue is
used to pay for bonded indebtedness on construction, equipment, or
both. The bonds, and the tax rate necessary to pay those bonds,
were approved by the voters of this district.";
[(6) contain a section entitled "Comparison of
Proposed Levy with Last Year's Levy on Average Residence," which
must:
[(A) show in rows the information described by
Subparagraphs (i)-(iv), rounded to the nearest dollar, for columns
entitled "Last Year" and "This Year":
[(i) "Average Market Value of Residences,"
determined using the same group of residences for each year;
[(ii) "Average Taxable Value of
Residences," determined after taking into account the limitation on
the appraised value of residences under Section 23.23, Tax Code,
and after subtracting all homestead exemptions applicable in each
year, other than exemptions available only to disabled persons or
persons 65 years of age or older or their surviving spouses, and
using the same group of residences for each year;
[(iii) "Last Year's Rate Versus Proposed
Rate per $100 Value"; and
[(iv) "Taxes Due on Average Residence,"
determined using the same group of residences for each year; and
[(B) contain the following
information: "Increase (Decrease) in Taxes" expressed in dollars
and cents, which is computed by subtracting the "Taxes Due on
Average Residence" for the preceding tax year from the "Taxes Due on
Average Residence" for the current tax year;]
(4) [(7)] contain the following statement in bold
print: "Under state law, the dollar amount of school taxes imposed
on the residence of a person 65 years of age or older or of the
surviving spouse of such a person, if the surviving spouse was 55
years of age or older when the person died, may not be increased
above the amount paid in the first year after the person turned 65,
regardless of changes in tax rate or property value.";
(5) [(8)] contain the following statement in bold
print: "Notice of Rollback Rate: The highest tax rate the
district can adopt before requiring voter approval at an election
is (the school district rollback rate determined under Section
26.08, Tax Code). This election will be automatically held if the
district adopts a rate in excess of the rollback rate of (the school
district rollback rate)."; and
(6) [(9)] contain a section entitled "Fund Balances,"
which must include the estimated amount of interest and sinking
fund balances and the estimated amount of maintenance and operation
or general fund balances remaining at the end of the current fiscal
year that are not encumbered with or by corresponding debt
obligation, less estimated funds necessary for the operation of the
district before the receipt of the first payment under Chapter 42 in
the succeeding school year.
SECTION 7.05. Section 49.236, Water Code, as added by
Chapters 248 (H.B. 1541) and 335 (S.B. 392), Acts of the 78th
Legislature, Regular Session, 2003, is reenacted and amended to
read as follows:
Sec. 49.236. NOTICE OF TAX HEARING. (a) Before the board
adopts an ad valorem tax rate for the district for debt service,
operation and maintenance purposes, or contract purposes, the board
shall give notice of each meeting of the board at which the adoption
of a tax rate will be considered. The notice must:
(1) contain a statement in substantially the following
form:
"NOTICE OF PUBLIC HEARING ON TAX RATE
"The (name of the district) will hold a public hearing on a
proposed tax rate for the tax year (year of tax levy) on (date and
time) at (meeting place). Your individual taxes may increase or
decrease, depending on the change in the taxable value of your
property in relation to the change in taxable value of all other
property and the tax rate that is adopted.
"(Names of all board members and, if a vote was taken, an
indication of how each voted on the proposed tax rate and an
indication of any absences.)";
(2) contain the following information:
(A) the district's total adopted tax rate for the
preceding year [and the proposed tax rate], expressed as an amount
per $100;
(B) the district's effective tax rate [the
difference], expressed as an amount per $100 [and as a percent
increase or decrease, as applicable, in the proposed tax rate
compared to the adopted tax rate for the preceding year]; and
(C) the district's proposed tax rate, expressed
as an amount per $100 [the average appraised value of a residence
homestead in the district in the preceding year and in the current
year; the district's total homestead exemption, other than an
exemption available only to disabled persons or persons 65 years of
age or older, applicable to that appraised value in each of those
years; and the average taxable value of a residence homestead in the
district in each of those years, disregarding any homestead
exemption available only to disabled persons or persons 65 years of
age or older];
[(D) the amount of tax that would have been
imposed by the district in the preceding year on a residence
homestead appraised at the average appraised value of a residence
homestead in that year, disregarding any homestead exemption
available only to disabled persons or persons 65 years of age or
older;
[(E) the amount of tax that would be imposed by
the district in the current year on a residence homestead appraised
at the average appraised value of a residence homestead in that
year, disregarding any homestead exemption available only to
disabled persons or persons 65 years of age or older, if the
proposed tax rate is adopted; and
[(F) the difference between the amounts of tax
calculated under Paragraphs (D) and (E), expressed in dollars and
cents and described as the annual percentage increase or decrease,
as applicable, in the tax to be imposed by the district on the
average residence homestead in the district in the current year if
the proposed tax rate is adopted;] and
(3) contain a statement in substantially the following
form:
"NOTICE OF TAXPAYERS' RIGHT TO
ROLLBACK ELECTION
"If taxes on the average residence homestead increase by more
than eight percent, the qualified voters of the district by
petition may require that an election be held to determine whether
to reduce the operation and maintenance tax rate to the rollback tax
rate under Section 49.236(d), Water Code."
(b) Notice of the hearing shall be:
(1) published at least once in a newspaper having
general circulation in the district at least seven days before the
date of the hearing; or
(2) mailed to each owner of taxable property in the
district, at the address for notice shown on the most recently
certified tax roll of the district, at least 10 days before the date
of the hearing.
(c) The notice provided under this section may not be
smaller than one-quarter page of a standard-size or tabloid-size
newspaper of general circulation, and the headline on the notice
must be in 18-point or larger type.
(d) If the governing body of a district adopts a combined
debt service, operation and maintenance, and contract tax rate that
would impose more than 1.08 times the amount of tax imposed by the
district in the preceding year on a residence homestead appraised
at the average appraised value of a residence homestead in the
district in that year, disregarding any homestead exemption
available only to disabled persons or persons 65 years of age or
older, the qualified voters of the district by petition may require
that an election be held to determine whether [or not] to reduce the
tax rate adopted for the current year to the rollback tax rate in
accordance with the procedures provided by Sections 26.07(b)-(g)
and 26.081, Tax Code. For purposes of Sections 26.07(b)-(g) and
this subsection, the rollback tax rate is the current year's debt
service and contract tax rates plus the operation and maintenance
tax rate that would impose 1.08 times the amount of the operation
and maintenance tax imposed by the district in the preceding year on
a residence homestead appraised at the average appraised value of a
residence homestead in the district in that year, disregarding any
homestead exemption available only to disabled persons or persons
65 years of age or older.
SECTION 7.06. This article applies only to ad valorem taxes
imposed for a tax year beginning on or after January 1, 2010.
SECTION 7.07. This article takes effect January 1, 2010.
ARTICLE 8. NOTICE OF APPRAISED VALUE
SECTION 8.01. Sections 25.19(b) and (i), Tax Code, are
amended to read as follows:
(b) The chief appraiser shall separate real from personal
property and include in the notice for each:
(1) a list of the taxing units in which the property is
taxable;
(2) the appraised value of the property in the
preceding year;
(3) the taxable value of the property in the preceding
year for each taxing unit taxing the property;
(4) the appraised value of the property for the
current year and the kind and amount of each partial exemption, if
any, approved for the current year;
(5) [if the appraised value is greater than it was in
the preceding year, the amount of tax that would be imposed on the
property on the basis of the tax rate for the preceding year;
[(6)] in italic typeface, the following
statement: "The Texas Legislature does not set the amount of your
local taxes. Your property tax burden is decided by your locally
elected officials, and all inquiries concerning your taxes should
be directed to those officials";
(6) [(7)] a detailed explanation of the time and
procedure for protesting the value;
(7) [(8)] the date and place the appraisal review
board will begin hearing protests; and
(8) [(9)] a brief explanation that the governing body
of each taxing unit decides whether or not taxes on the property
will increase and the appraisal district only determines the value
of the property.
(i) Delivery with a notice required by Subsection (a) or (g)
of a copy of the pamphlet published by the comptroller under Section
5.06 or a copy of the notice published by the chief appraiser under
Section 41.70 is sufficient to comply with the requirement that the
notice include the information specified by Subsection (b)(6)
[(b)(7)] or (g)(3), as applicable.
SECTION 8.02. This article takes effect January 1, 2010.
ARTICLE 9. COMPOSITION AND OPERATION OF APPRAISAL REVIEW BOARDS
SECTION 9.01. Subchapter C, Chapter 6, Tax Code, is amended
by adding Section 6.44 to read as follows:
Sec. 6.44. MEMBERSHIP ON BOARD OF ADMINISTRATIVE LAW JUDGE.
(a) The comptroller may employ administrative law judges to serve
on appraisal review boards. To be eligible for employment with the
comptroller as an administrative law judge, an individual must be
licensed to practice law in this state and meet other requirements
prescribed by the comptroller.
(b) The comptroller may appoint an administrative law judge
employed by the comptroller to serve on an appraisal review board.
Section 6.41(c) does not apply to a person appointed under this
section. If the comptroller appoints an administrative law judge
to serve on an appraisal review board, the administrative law judge
serves on the board as an additional member and serves as the
chairman of the board.
(c) A vacancy in the position on an appraisal review board
held by an administrative law judge is filled in the same manner as
the original appointment.
(d) A member of an appraisal review board appointed under
this subsection holds office for a term of one year beginning
January 1.
(e) A member of an appraisal review board appointed under
this section may be removed from the board by the comptroller.
Grounds for removal are the grounds specified by Section 6.41(f),
except that the provision of Section 6.412(c) pertaining to an
employee of the comptroller does not apply to a person appointed
under this section.
(f) Notwithstanding Section 6.42(c), a member of an
appraisal review board appointed under this section is not entitled
to per diem.
SECTION 9.02. Section 41.45(d), Tax Code, is amended to
read as follows:
(d) An appraisal review board consisting of more than three
members may sit in panels of not fewer than three members to conduct
protest hearings. However, the determination of a protest heard by
a panel must be made by the board. If the comptroller has appointed
an administrative law judge to serve on the board, the
administrative law judge, to the extent practicable, shall sit on
panels that determine complex matters. If the recommendation of a
panel is not accepted by the board, the board may refer the matter
for rehearing to a panel composed of members who did not hear the
original hearing or, if there are not at least three members who did
not hear the original protest, the board may determine the protest.
Before determining a protest or conducting a rehearing before a new
panel or the board, the board shall deliver notice of the hearing or
meeting to determine the protest in accordance with the provisions
of this subchapter.
SECTION 9.03. This article takes effect January 1, 2010,
but only if the constitutional amendment proposed by the 81st
Legislature, Regular Session, 2009, authorizing the legislature to
provide that ad valorem tax appraisal services in any county are
under the jurisdiction of the entity specified by the legislature,
to provide for the consolidation of ad valorem tax appraisal
services, and to provide for enforcement of ad valorem tax
standards and procedures by the specified entity is approved by the
voters. If that amendment is not approved by the voters, this
article has no effect.
ARTICLE 10. CAPITALIZATION RATE USED TO APPRAISE INCOME-PRODUCING
TANGIBLE PERSONAL PROPERTY
SECTION 10.01. Section 22.01(a), Tax Code, is amended to
read as follows:
(a) Except as provided by Chapter 24, a person shall render
for taxation all tangible personal property used for the production
of income that the person owns or that the person manages and
controls as a fiduciary on January 1. A rendition statement shall
contain:
(1) the name and address of the property owner;
(2) a description of the property by type or category;
(3) if the property is inventory, a description of
each type of inventory and a general estimate of the quantity of
each type of inventory;
(4) the physical location or taxable situs of the
property; [and]
(5) the property owner's good faith estimate of the
market value of the property or, at the option of the property
owner, the historical cost when new and the year of acquisition of
the property; and
(6) if the property owner provides a good faith
estimate of the market value of the property, the capitalization
rate, if any, used by the owner to estimate the value.
SECTION 10.02. Subchapter C, Chapter 22, Tax Code, is
amended by adding Section 22.42 to read as follows:
Sec. 22.42. REPORT OF CAPITALIZATION RATES USED BY PROPERTY
OWNERS TO ESTIMATE VALUE. Not later than April 20 of each year, the
chief appraiser of each appraisal district shall deliver a written
report to the comptroller containing the following information
regarding each rendition statement delivered to the chief appraiser
in that year that contains a capitalization rate as provided by
Section 22.01(a)(6):
(1) the capitalization rate contained in the
statement; and
(2) the information required by Sections
22.01(a)(2)-(4) to be contained in the statement.
SECTION 10.03. Subchapter B, Chapter 23, Tax Code, is
amended by adding Section 23.26 to read as follows:
Sec. 23.26. DETERMINATION OF CAPITALIZATION RATE TO BE USED
IN APPRAISING INCOME-PRODUCING TANGIBLE PERSONAL PROPERTY. (a) Not
later than May 1 of each year, the comptroller shall:
(1) determine the capitalization rate to be used by
the chief appraiser of each appraisal district in using the income
method of appraisal to appraise tangible personal property used for
the production of income that a person owns or that the person
manages and controls as a fiduciary on January 1; and
(2) notify in writing the chief appraiser of each
appraisal district of the comptroller's determination.
(b) In determining the capitalization rate to be used in
appraising property, the comptroller shall consider the
information reported to the comptroller under Section 22.42.
(c) The comptroller may specify different capitalization
rates to be used in appraising property depending on:
(1) the type or category of the property; and
(2) the physical location or taxable situs of the
property.
(d) The comptroller must provide notice and an opportunity
for public comment before determining the capitalization rate to be
used in appraising property.
SECTION 10.04. This article takes effect January 1, 2010.
ARTICLE 11. APPRAISAL OF RESIDENCE HOMESTEADS
SECTION 11.01. Subchapter B, Chapter 23, Tax Code, is
amended by adding Section 23.27 to read as follows:
Sec. 23.27. APPRAISAL OF RESIDENCE HOMESTEAD. (a) This
section applies only to the appraisal of a residence homestead.
(b) In appraising the property, the chief appraiser may not
consider any factor other than a factor relating to the value of the
property for use as a residence homestead.
(c) If generally accepted appraisal methods and techniques
require consideration of the highest and best use of the property,
the chief appraiser shall consider the highest and best use of the
property to be its use as a residence homestead.
(d) If the chief appraiser uses the market data comparison
method of appraisal to appraise the property, the chief appraiser
may not use comparable sales data pertaining to the sale of property
that after the sale ceased to be used as a residence homestead.
(e) If the chief appraiser uses the income method of
appraisal to appraise the property, the chief appraiser shall
analyze comparable rental data pertaining to residential property
available to the chief appraiser or the potential earnings capacity
of the property if the property were rented for residential use, or
both, to estimate the gross income potential of the property.
SECTION 11.02. This article takes effect January 1, 2010,
but only if the constitutional amendment proposed by the 81st
Legislature, Regular Session, 2009, authorizing the legislature to
provide for the ad valorem taxation of a residence homestead solely
on the basis of the property's value as a residence homestead is
approved by the voters. If that amendment is not approved by the
voters, this article has no effect.
ARTICLE 12. DEFERRED COLLECTION OF TAXES ON APPRECIATING RESIDENCE
HOMESTEAD
SECTION 12.01. Sections 33.065(a) and (g), Tax Code, are
amended to read as follows:
(a) An individual is entitled to defer or abate a suit to
collect a delinquent tax imposed on the portion of the appraised
value of property the individual owns and occupies as the
individual's residence homestead that exceeds the sum of:
(1) [105 percent of] the appraised value of the
property for the preceding year; and
(2) the market value of all new improvements to the
property.
(g) A tax lien remains on the property and interest
continues to accrue during the period collection of delinquent
taxes is deferred or abated under this section. The annual interest
rate during the deferral or abatement period is the prime rate, as
published in The Wall Street Journal on the first day of each
calendar year that is not a Saturday, Sunday, or legal holiday,
[eight percent] instead of the rate provided by Section 33.01.
Interest and penalties that accrued or that were incurred or
imposed under Section 33.01 or 33.07 before the date the individual
files the deferral affidavit under Subsection (c) or the date the
judgment abating the suit is entered, as applicable, are preserved.
A penalty is not incurred on the delinquent taxes for which
collection is deferred or abated during a deferral or abatement
period. The additional penalty under Section 33.07 may be imposed
and collected only if the delinquent taxes for which collection is
deferred or abated remain delinquent on or after the 91st day after
the date the deferral or abatement period expires. A plea of
limitation, laches, or want of prosecution does not apply against
the taxing unit because of deferral or abatement of collection as
provided by this section.
SECTION 12.02. Section 33.065(g), Tax Code, as amended by
this article, applies only to interest that accrued on a delinquent
tax before September 1, 2009, or that accrues on or after that date,
regardless of whether the deferral or abatement period under
Section 33.065, Tax Code, began before September 1, 2009, or begins
on or after that date.
SECTION 12.03. This article takes effect September 1, 2009.