H.B. No. 8
AN ACT
relating to certain studies and reviews of appraisal districts
conducted by the comptroller of public accounts.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 403.3011(1), (2), and (4), Government
Code, are amended to read as follows:
(1) "Study" ["Annual study"] means a 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 [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 [annual]
study;
(B) in the two studies [annual study for each of
the two years] preceding the most recent [annual] study, the school
district's local value was valid under Section 403.302(c); [and]
(C) in the most recent [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; and
(D) the appraisal district that appraises
property for the school district was in compliance with the scoring
requirement of the comptroller's most recent review of the
appraisal district conducted under Section 5.102, Tax Code.
(4) "State value" means the value of property in a
school district as determined in a [the annual] study.
SECTION 2. Section 403.302, Government Code, is amended by
amending Subsections (a), (c), (c-1), (f), (h), (i), and (l) and
adding Subsections (a-1), (a-2), (m), (n), and (o) to read as
follows:
(a) The comptroller shall conduct a [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. The 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 study to account for
actions taken under Chapter 41, Education Code.
(a-1) The comptroller shall conduct a study:
(1) at least every two years in each school district
for which the most recent study resulted in a determination by the
comptroller that the school district's local value was valid; and
(2) each year in a school district for which the most
recent study resulted in a determination by the comptroller that
the school district's local value was not valid.
(a-2) If in any year the comptroller does not conduct a
study, the school district's local value for that year is
considered to be valid.
(c) If after conducting the [annual] study the comptroller
determines that the local value for a school district is valid, the
local value is presumed to represent taxable value for the school
district. In the absence of that presumption, taxable value for a
school district is the state value for the school district
determined by the comptroller under Subsections (a) and (b) unless
the local value exceeds the state value, in which case the taxable
value 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 [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 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 study, in
which case the comptroller shall use the weighted mean appraisal
ratio determined in the immediately preceding 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.
(f) The study shall determine the values as of January 1 of
each year:
(1) for a school district in which a study was
conducted according to the results of the study; and
(2) for a school district in which a study was not
conducted according to the market value determined by the appraisal
district that appraises property for the district, less the amounts
specified by Subsection (d).
(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 [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 [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
[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 [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 [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 [annual] study for [the year
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.]
(m) The Comptroller's Property Value Study Advisory
Committee is created. The committee is composed of:
(1) one member of the house of representatives,
appointed by the speaker of the house of representatives;
(2) one member of the senate, appointed by the
lieutenant governor;
(3) two members who represent appraisal districts,
appointed by the comptroller;
(4) two members who represent school districts,
appointed by the comptroller; and
(5) three members appointed by the comptroller who are
residents of this state and are school district taxpayers or have
expertise in school district taxation or ratio studies.
(n) Chapter 2110 does not apply to the size, composition, or
duration of the Comptroller's Property Value Study Advisory
Committee.
(o) The comptroller shall adopt rules governing the conduct
of the study after consultation with the Comptroller's Property
Value Study Advisory Committee.
SECTION 3. The heading to Section 403.304, Government Code,
is amended to read as follows:
Sec. 403.304. COOPERATION WITH COMPTROLLER;
CONFIDENTIALITY.
SECTION 4. Section 403.304, Government Code, is amended by
amending Subsection (a) and adding Subsection (a-1) to read as
follows:
(a) A school district, appraisal district, or other
governmental entity in this state shall promptly comply with an
oral or written request from the comptroller for information to be
used in conducting a study, including information that is made
confidential by Chapter 552 of this code, Section 22.27, Tax Code,
or another law of this state.
(a-1) 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 study [of school
district values] is confidential and may not be disclosed except as
provided in Subsection (b).
SECTION 5. 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 [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 6. Section 5.10(a), Tax Code, is amended to read as
follows:
(a) At least once every two years, the [The] comptroller
shall conduct a [an annual] study in each appraisal district to
determine the degree of uniformity of and the median level of
appraisals by the appraisal district within each major category of
property. The comptroller shall publish a report of the findings of
the study, including in the report the median levels of appraisal
for each major category of property, the coefficient of dispersion
around the median level of appraisal for each major category of
property, and any other standard statistical measures that the
comptroller considers appropriate. In conducting the study, the
comptroller shall apply appropriate standard statistical analysis
techniques to data collected as part of the [annual] study of school
district taxable values required by Section 403.302, Government
Code.
SECTION 7. Section 5.102, Tax Code, is amended to read as
follows:
Sec. 5.102. REVIEW OF APPRAISAL DISTRICTS [STANDARDS]. (a)
At least once every two years, the [The] comptroller shall review
the governance of each appraisal district, taxpayer assistance
provided, and the operating and 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, procedures, and methodology [and
practices]. After consultation with the advisory committee created
under Section 403.302, Government Code, the [The] comptroller by
rule may establish procedures and standards for conducting and
scoring the review.
(b) In conducting the review, the comptroller is entitled to
access to all records and reports of the appraisal district, to copy
or print any record or report of the appraisal district, and to the
assistance of the appraisal district's officers and employees.
(c) At the conclusion of the review, the comptroller shall,
in writing, notify the appraisal district concerning its
performance in the review. If the review results in a finding that
an appraisal district is not in compliance with generally accepted
[appraisal] standards, procedures, and methodology [and
practices], the comptroller shall deliver a report that details the
comptroller's findings and recommendations for improvement to:
(1) the appraisal district's chief appraiser and board
of directors; and
(2) the superintendent and board of trustees of each
school district participating in the appraisal district.
(d) If the appraisal district fails to comply with the
recommendations in the report and the comptroller finds that the
board of directors of the appraisal district failed to take
remedial action reasonably designed to ensure substantial
compliance with each recommendation in the report before the first
anniversary of the date the report was issued, the comptroller
shall notify the Board of Tax Professional Examiners, or a
successor to the board, which shall take action necessary to ensure
that the recommendations in the report are implemented as soon as
practicable [judge of each district court in the county for which
the appraisal district is established, who shall appoint a board of
conservators consisting of five members to implement the
recommendations. The board of conservators shall exercise
supervision and control over the operations of the appraisal
district until the comptroller determines under Section 403.302,
Government Code, that in the same year the taxable value of each
school district for which the appraisal district appraises property
is the local value for the school district. The appraisal district
shall bear the costs related to the supervision and control of the
district by the board of conservators].
(e) Before February 1 of the year following the year in
which the Board of Tax Professional Examiners, or its successor,
takes action under Subsection (d), and with the assistance of the
comptroller, the board shall determine whether the recommendations
in the most recent report have been substantially implemented. The
presiding officer of the board shall notify the chief appraiser and
the board of directors of the appraisal district in writing of the
board's determination.
SECTION 8. Sections 5.12(a), (d), and (e), Tax Code, are
amended to read as follows:
(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.
(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; or
(3) during a year in which the comptroller is
conducting a review of the district under Section 5.102.
SECTION 9. Section 5.13(a), Tax Code, is 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(b)
or (c) [of this code] as soon as practicable after the request is
made.
SECTION 10. 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
[annual] study conducted under Section 403.302, Government Code.
SECTION 11. Sections 5.101 and 5.12(g), Tax Code, are
repealed.
SECTION 12. As soon as possible after the effective date of
this Act, the speaker of the house of representatives, lieutenant
governor, and comptroller shall appoint members to the
Comptroller's Property Value Study Advisory Committee in
accordance with Section 403.302(m), Government Code, as added by
this Act.
SECTION 13. The change in law made by this Act applies only
to a study conducted under Section 5.10, Tax Code, or Section
403.302, Government Code, or a review conducted under Section
5.102, Tax Code, for a year that begins on or after January 1, 2009.
A study or review for a year that began before that date is covered
by the law in effect immediately before the effective date of this
Act, and the former law is continued in effect for that purpose.
SECTION 14. This Act takes effect January 1, 2010.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 8 was passed by the House on April 24,
2009, by the following vote: Yeas 141, Nays 0, 1 present, not
voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 8 was passed by the Senate on May 21,
2009, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor