85R3415 CJC/TJB-D
By: Zerwas H.B. No. 934
A BILL TO BE ENTITLED
AN ACT
relating to ad valorem taxation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 5, Tax Code, is amended by adding
Sections 5.01 and 5.02 to read as follows:
Sec. 5.01. PROPERTY TAX ADMINISTRATION ADVISORY BOARD. (a)
The comptroller shall appoint the property tax administration
advisory board to advise the comptroller with respect to the
division or divisions within the office of the comptroller with
primary responsibility for state administration of property
taxation and state oversight of appraisal districts and local tax
offices. The advisory board shall make recommendations to the
comptroller regarding:
(1) proposed property tax rules and prescribed
procedures and forms;
(2) minimum standards for the administration and
operation of an appraisal district;
(3) minimum standards for the administration and
operation of a local tax office;
(4) appointment of the director, managers, and other
executive staff of the division or divisions within the office of
the comptroller with primary responsibility for state
administration of property taxation and state oversight of
appraisal districts and local tax offices;
(5) property tax publications, guidelines, and
communications;
(6) property value studies for school districts and
ratio studies for appraisal districts;
(7) reviews of appraisal districts and appraisal
review boards;
(8) computer hardware and software needs for:
(A) the division or divisions within the office
of the comptroller with primary responsibility for state
administration of property taxation and state oversight of
appraisal districts and local tax offices;
(B) appraisal districts; and
(C) local tax offices; and
(9) other property tax operational matters.
(b) The advisory board is composed of six members appointed
by the comptroller with the advice of the governor, lieutenant
governor, and speaker of the house of representatives. Board
members serve at the pleasure of the comptroller.
(c) The members of the advisory board must have knowledge of
or experience in property tax administration, appraisal, or law.
(d) Appointments to the advisory board shall be made without
regard to the race, color, disability, gender, religion, age, or
national origin of appointees.
(e) Each member of the advisory board must be a resident of
this state.
(f) An elected official may not serve on the advisory board.
(g) The advisory board is governed exclusively by this
chapter.
(h) The comptroller's staff shall provide assistance to the
advisory board in performing its duties.
Sec. 5.02. RESTRICTIONS ON ADVISORY BOARD MEMBERSHIP. A
person is not eligible to serve on the property tax administration
advisory board if the person or the person's spouse:
(1) is employed by or contracts with the comptroller,
an appraisal district, or a taxing unit;
(2) owns or controls, directly or indirectly, more
than a 10 percent interest in a business entity or other
organization receiving money from the comptroller, an appraisal
district, or a taxing unit; or
(3) receives money from a business entity or other
organization receiving money from the comptroller, an appraisal
district, or a taxing unit in an amount that exceeds five percent of
the person's gross income for the preceding calendar year.
SECTION 2. Section 5.05, Tax Code, is amended by adding
Subsection (c-1) to read as follows:
(c-1) An appraisal district shall appraise property in
accordance with any appraisal manuals prepared and issued by the
comptroller under this section.
SECTION 3. Sections 5.102(a) and (c), Tax Code, are amended
to read as follows:
(a) At least once every two years, 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, to
determine compliance with generally accepted standards,
procedures, and methodology, including compliance with standards,
procedures, and methodology prescribed by appraisal manuals
prepared and issued by the comptroller. After consultation with
the property tax administration advisory board [committee created
under Section 403.302, Government Code], the comptroller by rule
may establish procedures and standards for conducting and scoring
the review.
(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
standards, procedures, and methodology, including compliance with
standards, procedures, and methodology prescribed by appraisal
manuals prepared and issued by the comptroller, 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.
SECTION 4. Section 5.13(d), Tax Code, is amended to read as
follows:
(d) In conducting a general audit, the comptroller shall
consider and report on:
(1) the extent to which the district complies with
applicable law or generally accepted standards of appraisal or
other relevant practice, including appraisal standards and
practices prescribed by appraisal manuals prepared and issued by
the comptroller;
(2) the uniformity and level of appraisal of major
kinds of property and the cause of any significant deviations from
ideal uniformity and equality of appraisal of major kinds of
property;
(3) duplication of effort and efficiency of operation;
(4) the general efficiency, quality of service, and
qualification of appraisal district personnel; and
(5) except as otherwise provided by Subsection (b) [of
this section], any other matter included in the request for the
audit.
SECTION 5. Section 6.03(a), Tax Code, is amended to read as
follows:
(a) The appraisal district is governed by a board of
directors. Five directors are appointed by the taxing units that
participate in the district as provided by this section. If the
county assessor-collector is not appointed to the board, the county
assessor-collector serves as a nonvoting director. The county
assessor-collector is ineligible to serve if the board enters into
a contract under Section 6.05(b) or if the commissioners court of
the county enters into a contract under Section 6.24(b). To be
eligible to serve on the board of directors, an individual other
than a county assessor-collector serving as a nonvoting director
must:
(1) be a resident of the district;
(2) [and must] have resided in the district for at
least two years immediately preceding the date the individual takes
office; and
(3) be an elected county officer or an elected
official of a political subdivision all or part of the territory of
which is located in the county. [An individual who is otherwise
eligible to serve on the board is not ineligible because of
membership on the governing body of a taxing unit. An employee of a
taxing unit that participates in the district is not eligible to
serve on the board unless the individual is also a member of the
governing body or an elected official of a taxing unit that
participates in the district.]
SECTION 6. Section 6.41, Tax Code, is amended by amending
Subsections (b) and (d-9) and adding Subsections (b-1), (b-2), and
(d-10) to read as follows:
(b) Except as provided by Subsection (b-1) or (b-2), an
appraisal review [The] board consists of three members.
(b-1) An appraisal [However, the] district board of
directors by resolution of a majority of the board's [its] members
may increase the size of the district's appraisal review board to
the number of members the board of directors considers appropriate.
(b-2) An appraisal district board of directors for a
district established in a county described by Subsection (d-1) by
resolution of a majority of the board's members shall increase the
size of the district's appraisal review board to the number of
members the board of directors considers appropriate to manage the
duties of the appraisal review board, including the duties of each
special panel established under Section 6.425.
(d-9) In selecting individuals who are to serve as members
of the appraisal review board, the local administrative district
judge shall select an adequate number of qualified individuals to
permit the chairman of the appraisal review board to fill the
positions on each special panel established under Section 6.425.
(d-10) Upon selection of the individuals who are to serve as
members of the appraisal review board, the local administrative
district judge shall enter an appropriate order designating such
members and setting each member's respective term of office, as
provided elsewhere in this section.
SECTION 7. Section 6.414(d), Tax Code, is amended to read as
follows:
(d) An auxiliary board member may hear taxpayer protests
before the appraisal review board. An auxiliary board member may
not hear taxpayer protests before a special panel established under
Section 6.425 unless the member is eligible to be appointed to the
special panel. If one or more auxiliary board members sit on a panel
established under Section 6.425 or 41.45 to conduct a protest
hearing, the number of regular appraisal review board members
required by that section to constitute the panel is reduced by the
number of auxiliary board members sitting. An auxiliary board
member sitting on a panel is considered a regular board member for
all purposes related to the conduct of the hearing.
SECTION 8. Section 6.42, Tax Code, is amended by adding
Subsection (d) to read as follows:
(d) The concurrence of a majority of the members of the
appraisal review board or a panel of the board present at a meeting
of the board or panel is sufficient for a recommendation,
determination, decision, or other action by the board or panel, and
the concurrence of more than a majority of the members of the board
or panel may not be required.
SECTION 9. Subchapter C, Chapter 6, Tax Code, is amended by
adding Section 6.425 to read as follows:
Sec. 6.425. SPECIAL APPRAISAL REVIEW BOARD PANELS IN
CERTAIN DISTRICTS. (a) This section applies only to the appraisal
review board for an appraisal district described by Section
6.41(b-2).
(b) The appraisal review board shall establish a separate
special panel for each of the following classifications of property
to conduct protest hearings under Chapter 41 relating to property
included in that classification:
(1) commercial real and personal property;
(2) real and personal property of utilities;
(3) industrial and manufacturing real and personal
property; and
(4) multifamily residential real property.
(c) The chairman of the appraisal review board may establish
additional special panels described by this section to conduct
protest hearings relating to property included in a classification
described by Subsection (b) if the chairman determines that
additional panels are necessary.
(d) Each special panel described by this section consists of
three members of the appraisal review board appointed by the
chairman of the board.
(e) To be eligible to be appointed to a special panel
described by this section, a member of the appraisal review board
must:
(1) hold a juris doctor or equivalent degree;
(2) hold a master of business administration degree;
(3) be licensed as a certified public accountant under
Chapter 901, Occupations Code;
(4) be accredited by the American Society of
Appraisers as an accredited senior appraiser;
(5) possess an MAI professional designation from the
Appraisal Institute;
(6) possess a Certified Assessment Evaluator (CAE)
professional designation from the International Association of
Assessing Officers; or
(7) have at least 20 years of experience in property
tax appraisal or consulting.
(f) Notwithstanding Subsection (e), the chairman of the
appraisal review board may appoint to a special panel described by
this section a member of the appraisal review board who does not
meet the qualifications prescribed by that subsection if:
(1) the number of persons appointed to the board by the
local administrative district judge who meet those qualifications
is not sufficient to fill the positions on each special panel; and
(2) the board member being appointed to the panel:
(A) holds a bachelor's degree in any field; or
(B) is licensed as a real estate broker or sales
agent under Chapter 1101, Occupations Code.
SECTION 10. Section 23.01(b), Tax Code, is amended to read
as follows:
(b) The market value of property shall be determined by the
application of generally accepted appraisal methods and
techniques, including appraisal methods and techniques prescribed
by appraisal manuals prepared and issued by the comptroller. If
the appraisal district determines the appraised value of a property
using mass appraisal standards, the mass appraisal standards must
comply with the Uniform Standards of Professional Appraisal
Practice. The same or similar appraisal methods and techniques
shall be used in appraising the same or similar kinds of
property. However, each property shall be appraised based upon the
individual characteristics that affect the property's market
value, and all available evidence that is specific to the value of
the property shall be taken into account in determining the
property's market value.
SECTION 11. Section 25.19, Tax Code, is amended by adding
Subsection (b-3) to read as follows:
(b-3) This subsection applies only to an appraisal district
described by Section 6.41(b-2). In addition to the information
required by Subsection (b), the chief appraiser shall state in a
notice of appraised value of property included in a classification
described by Section 6.425(b) that the property owner has the right
to have a protest relating to the property heard by a special panel
of the appraisal review board.
SECTION 12. Section 41.44(d), Tax Code, is amended to read
as follows:
(d) A notice of protest is sufficient if it identifies the
protesting property owner, including a person claiming an ownership
interest in the property even if that person is not listed on the
appraisal records as an owner of the property, identifies the
property that is the subject of the protest, and indicates apparent
dissatisfaction with some determination of the appraisal office.
The notice need not be on an official form, but the comptroller
shall prescribe a form that provides for more detail about the
nature of the protest. The form must permit a property owner to
include each property in the appraisal district that is the subject
of a protest. The form must permit a property owner to request that
the protest be heard by a special panel established under Section
6.425 if the protest will be determined by an appraisal review board
to which that section applies and the property is included in a
classification described by that section. The comptroller, each
appraisal office, and each appraisal review board shall make the
forms readily available and deliver one to a property owner on
request.
SECTION 13. Section 41.45, Tax Code, is amended by amending
Subsection (d) and adding Subsections (d-1), (d-2), and (d-3) to
read as follows:
(d) This subsection does not apply to a special panel
established under Section 6.425. 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 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.]
(d-1) An appraisal review board to which Section 6.425
applies shall sit in special panels established under that section
to conduct protest hearings. A special panel may conduct a protest
hearing relating to property only if the property is included in the
classification for which the panel was established and the property
owner has requested that the panel conduct the hearing. The board
may rehear a protest heard by a special panel if the board elects
not to accept the recommendation of the panel.
(d-2) The determination of a protest heard by a panel under
Subsection (d) or (d-1) must be made by the board.
(d-3) The board must deliver notice of a hearing or meeting
to determine a protest heard by a panel, or to rehear a protest,
under Subsection (d) or (d-1) in accordance with the provisions of
this subchapter.
SECTION 14. Section 41.66, Tax Code, is amended by amending
Subsection (k) and adding Subsection (k-1) to read as follows:
(k) This subsection does not apply to a special panel
established under Section 6.425. If an appraisal review board sits
in panels to conduct protest hearings, protests shall be randomly
assigned to panels, except that the board may consider the type of
property subject to the protest or the ground of the protest for the
purpose of using the expertise of a particular panel in hearing
protests regarding particular types of property or based on
particular grounds. If a protest is scheduled to be heard by a
particular panel, the protest may not be reassigned to another
panel without the consent of the property owner or designated
agent. If the appraisal review board has cause to reassign a
protest to another panel, a property owner or designated agent may
agree to reassignment of the protest or may request that the hearing
on the protest be postponed. The board shall postpone the hearing
on that request. A change of members of a panel because of a
conflict of interest, illness, or inability to continue
participating in hearings for the remainder of the day does not
constitute reassignment of a protest to another panel.
(k-1) On the request of a property owner, an appraisal
review board to which Section 6.425 applies shall assign a protest
relating to property included in a classification described by that
section to the special panel established to conduct protest
hearings relating to property included in that classification. If
the board has established more than one special panel to conduct
protest hearings relating to property included in a particular
classification, protests relating to property included in that
classification shall be randomly assigned to those special panels.
If a protest is scheduled to be heard by a particular special panel,
the protest may not be reassigned to another special panel without
the consent of the property owner or designated agent. If the board
has cause to reassign a protest to another special panel, a property
owner or designated agent may agree to reassignment of the protest
or may request that the hearing on the protest be postponed. The
board shall postpone the hearing on that request. A change of
members of a special panel because of a conflict of interest,
illness, or inability to continue participating in hearings for the
remainder of the day does not constitute reassignment of a protest
to another special panel.
SECTION 15. Section 403.302(o), Government Code, is amended
to read as follows:
(o) The comptroller shall adopt rules governing the conduct
of the study after consultation with the comptroller's property tax
administration advisory board [Comptroller's Property Value Study
Advisory Committee].
SECTION 16. Sections 403.302(m-1) and (n), Government Code,
are repealed.
SECTION 17. Sections 5.05, 5.102, 5.13, and 23.01, Tax
Code, as amended by this Act, apply only to the appraisal of
property for ad valorem tax purposes for a tax year beginning on or
after January 1, 2018.
SECTION 18. Section 6.03(a), Tax Code, as amended by this
Act, does not affect the right of a person serving on the board of
directors of an appraisal district on January 1, 2018, to complete
the person's term on the board.
SECTION 19. Section 6.41(d-9), Tax Code, as amended by this
Act, and Section 6.41(d-10), Tax Code, as added by this Act, apply
only to the appointment of appraisal review board members to terms
beginning on or after January 1, 2019.
SECTION 20. Section 6.42(d), Tax Code, as added by this Act,
applies only to a recommendation, determination, decision, or other
action by an appraisal review board or a panel of such a board on or
after January 1, 2018. A recommendation, determination, decision,
or other action by an appraisal review board or a panel of such a
board before January 1, 2018, is governed by the law as it existed
immediately before that date, and that law is continued in effect
for that purpose.
SECTION 21. Section 25.19(b-3), Tax Code, as added by this
Act, applies only to a notice of appraised value for a tax year
beginning on or after January 1, 2019. A notice of appraised value
for a tax year beginning before January 1, 2019, is governed by the
law in effect immediately before that date, and that law is
continued in effect for that purpose.
SECTION 22. Sections 41.45 and 41.66, Tax Code, as amended
by this Act, apply only to a protest filed under Chapter 41, Tax
Code, on or after January 1, 2019. A protest filed under that
chapter before January 1, 2019, is governed by the law in effect on
the date the protest was filed, and the former law is continued in
effect for that purpose.
SECTION 23. (a) Except as provided by Subsection (b) of
this section, this Act takes effect January 1, 2018.
(b) The following provisions take effect September 1, 2018:
(1) Sections 6.41(b) and (d-9), Tax Code, as amended
by this Act;
(2) Sections 6.41(b-1), (b-2), and (d-10), Tax Code,
as added by this Act;
(3) Section 6.414(d), Tax Code, as amended by this
Act;
(4) Section 6.425, Tax Code, as added by this Act;
(5) Section 25.19(b-3), Tax Code, as added by this
Act;
(6) Section 41.44(d), Tax Code, as amended by this
Act;
(7) Section 41.45(d), Tax Code, as amended by this
Act;
(8) Sections 41.45(d-1), (d-2), and (d-3), Tax Code,
as added by this Act;
(9) Section 41.66(k), Tax Code, as amended by this
Act; and
(10) Section 41.66(k-1), Tax Code, as added by this
Act.