BILL ANALYSIS C.S.H.B. 3093 By: Villalobos Ways & Means Committee Report (Substituted) BACKGROUND AND PURPOSE The Property Tax Code requires local appraisal districts to appraise property values annually, but a property owner is entitled to protest a determination of the appraised value of their property and appeal a decision made by an appraisal review board (ARB) regarding such a protest. Under current law, the ARB must approve the appraisal records for the taxing unit by July 20, and the chief appraiser must certify the appraisal roll by July 25. If the ARB has not resolved all taxpayer protests and approved the appraisal records by July 20, the chief appraiser may prepare and certify an estimate of the taxable value of the property in that taxing unit. However, taxing units are required to consider the total appraised value of a property as taxable, even when a property owner is likely to pay a lower amount of taxes on the property because of unresolved litigation. This can result in the overestimation of tax revenue and significant funding gaps for local governments. For example, according to a report by KRIS 6 News Corpus Christi, a property valuation dispute between Valero Energy, Flint Hills Resources, and Nueces County resulted in roughly $30 million in uncollected property taxes for the county in 2023. C.S.H.B. 3093 seeks to address these issues and prevent further situations like this one from occurring by providing for modifying the calculation of property tax rates for tax years in which owners of high-value property provide notice that they intend to pursue litigation over appraised property values. CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS C.S.H.B. 3093 amends the Tax Code to require a property owner in an affected taxing unit, defined by the bill as a taxing unit that is wholly or partly located in a county that has a population of less than 500,000 and is located on the Gulf of Mexico, who owns a property that had a taxable value in the preceding tax year that was one of the 20 highest in the appraisal district in which the property is located, or an associated business entity of the owner, that intends to file an appeal of an order of an appraisal review board (ARB) determining a protest by the owner regarding the appraisal of the owner's property that is part of anticipated substantial litigation to submit the following to the officer or employee designated to calculate the no-new-revenue (NNR) tax rate and the voter-approval tax rate (VATR) for each taxing unit in which the property included in the litigation is located: the total amount of uncontested taxable value of all property located in the taxing unit that may be the subject of an appeal by the property owner or entity and that is part of the litigation; and a written statement providing that the property owner or entity intends to pay the tax due on the amount of the uncontested taxable value. The bill requires an applicable property owner or associated business entity of the property owner to submit the required information not later than the earlier of August 7 or the 21st day after the date the first hearing regarding a protest of the value of any property included in the anticipated substantial litigation is conducted. The amount of uncontested taxable value submitted to a designated officer or employee may be used by the designated officer or employee only for the purpose of calculating the NNR tax rate or the VATR and may not be construed as an amount of property value that is not in dispute for purposes of a proceeding under statutory provisions relating to a property owner's appeal of an ARB order through judicial review. The bill requires the officer or employee designated to calculate the NNR tax rate or the VATR by the governing body of each affected taxing unit, not later than July 1, to notify each applicable property owner in the taxing unit that the owner may have to comply with these requirements. The bill defines the following terms: "anticipated substantial litigation" as one or more appeals filed or intended to be filed under statutory provisions relating to a property owner's appeal of an ARB order through judicial review for a tax year by a single property owner or by one or more associated business entities of a single property owner of one or more orders of an ARB determining one or more protests by the owner or entities of the taxable value of one or more parcels of property located in an affected taxing unit, if any of the properties: o had a taxable value in the preceding tax year that was one of the 20 highest in the appraisal district in which the property is located; and o has a current year taxable value that exceeds 125 percent of the amount of the uncontested taxable value of the property; "associated business entity" as a subsidiary or other associated business entity of a property owner; "contested taxable value" as, for a tax year, the difference between the current year taxable value of a property and either the taxable value of the property asserted by the owner of the property in an appeal of the ARB order through judicial review or, if the owner has not filed an appeal, a good faith determination of the taxable value the owner will assert in the appeal; "current year taxable value" as the taxable value of a property stated in or determined from: o an order issued by the ARB hearing a protest pertaining to the property for the tax year; or o if the ARB has not issued an order determining the protest, the notice of appraised value for the property delivered for the most recent tax year; and "uncontested taxable value" as the portion of the taxable value of a property that is not contested taxable value. C.S.H.B. 3093 establishes that the current total value, defined under current law as the total taxable value of property listed on the appraisal roll for the current year for purposes of property tax assessment, excludes, for an affected taxing unit, the portion of the aggregate taxable value of all of the property located in the taxing unit that is included as part of anticipated substantial litigation that consists of contested taxable value. If such an amount is excluded from the current total value of an affected taxing unit for a tax year, the officer or employee designated to calculate the NNR tax rate and the VATR for the taxing unit must include the following as an addendum to the tax rate calculation forms prescribed by the comptroller of public accounts and submitted to the governing body of the taxing unit for that tax year: documentation that supports the exclusion; and each statement submitted to the designated officer or employee providing that the applicable property owner or associated business entity intends to pay the tax due on the amount of the uncontested taxable value for that tax year. Accordingly, the bill requires the tax rate calculation forms prescribed by the comptroller to be capable of including that required addendum. C.S.H.B. 3093 includes the addendum to the tax rate calculation forms required by the bill's provisions, if applicable, among the information that a county assessor-collector must post on the county's website for each taxing unit all or part of the territory of which is located in the county. The bill additionally includes the required addendum, if applicable, among the following: the information that the officer or employee designated by the governing body of each taxing unit in which the property is located to calculate the NNR tax rate and the VATR for the taxing unit must electronically incorporate into the chief appraiser's property tax database; and the information from the database that the chief appraiser must make available to the public not later than the third business day after the date the information is incorporated into the database. C.S.H.B. 3093 applies to a property tax year that begins on or after January 1, 2026, except that if the bill receives a vote of two-thirds of all the members elected to each house of the legislature, the bill applies to a property tax year that begins on or after January 1, 2025. EFFECTIVE DATE On passage, or, if the bill does not receive the necessary vote, September 1, 2025. COMPARISON OF INTRODUCED AND SUBSTITUTE While C.S.H.B. 3093 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill. Both the introduced and the substitute set out provisions requiring certain property owners in an affected taxing unit, or associated business entities of such owners, that intend to file an appeal of an ARB protest determination that is part of anticipated substantial litigation to provide to the appropriate taxing unit officers or employees specified information regarding the amount of uncontested taxable value of property and requiring certain officers and employees of affected taxing units to notify applicable property owners that they may have to comply with that requirement. However, whereas the introduced applied those provisions to an owner of property that had a taxable value in the preceding tax year that was one of the 10 highest in the affected taxing unit, the substitute applies those provisions to an owner of property that had a taxable value in the preceding tax year that was one of the 20 highest in the appraisal district in which the property is located. The substitute revises the introduced version's definition of "anticipated substantial litigation" to make those same changes with respect to the property described in the definition and to add the condition that applicable property has a current year taxable value that exceeds 125 percent of the uncontested taxable value of the property. Accordingly, the substitute includes a definition of "current year taxable value" that did not appear in the introduced but aligns with a description of such value in the introduced version's definition of "contested taxable value."
BILL ANALYSIS
# BILL ANALYSIS
C.S.H.B. 3093
By: Villalobos
Ways & Means
Committee Report (Substituted)
C.S.H.B. 3093
By: Villalobos
Ways & Means
Committee Report (Substituted)
BACKGROUND AND PURPOSE The Property Tax Code requires local appraisal districts to appraise property values annually, but a property owner is entitled to protest a determination of the appraised value of their property and appeal a decision made by an appraisal review board (ARB) regarding such a protest. Under current law, the ARB must approve the appraisal records for the taxing unit by July 20, and the chief appraiser must certify the appraisal roll by July 25. If the ARB has not resolved all taxpayer protests and approved the appraisal records by July 20, the chief appraiser may prepare and certify an estimate of the taxable value of the property in that taxing unit. However, taxing units are required to consider the total appraised value of a property as taxable, even when a property owner is likely to pay a lower amount of taxes on the property because of unresolved litigation. This can result in the overestimation of tax revenue and significant funding gaps for local governments. For example, according to a report by KRIS 6 News Corpus Christi, a property valuation dispute between Valero Energy, Flint Hills Resources, and Nueces County resulted in roughly $30 million in uncollected property taxes for the county in 2023. C.S.H.B. 3093 seeks to address these issues and prevent further situations like this one from occurring by providing for modifying the calculation of property tax rates for tax years in which owners of high-value property provide notice that they intend to pursue litigation over appraised property values.
CRIMINAL JUSTICE IMPACT It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS C.S.H.B. 3093 amends the Tax Code to require a property owner in an affected taxing unit, defined by the bill as a taxing unit that is wholly or partly located in a county that has a population of less than 500,000 and is located on the Gulf of Mexico, who owns a property that had a taxable value in the preceding tax year that was one of the 20 highest in the appraisal district in which the property is located, or an associated business entity of the owner, that intends to file an appeal of an order of an appraisal review board (ARB) determining a protest by the owner regarding the appraisal of the owner's property that is part of anticipated substantial litigation to submit the following to the officer or employee designated to calculate the no-new-revenue (NNR) tax rate and the voter-approval tax rate (VATR) for each taxing unit in which the property included in the litigation is located: the total amount of uncontested taxable value of all property located in the taxing unit that may be the subject of an appeal by the property owner or entity and that is part of the litigation; and a written statement providing that the property owner or entity intends to pay the tax due on the amount of the uncontested taxable value. The bill requires an applicable property owner or associated business entity of the property owner to submit the required information not later than the earlier of August 7 or the 21st day after the date the first hearing regarding a protest of the value of any property included in the anticipated substantial litigation is conducted. The amount of uncontested taxable value submitted to a designated officer or employee may be used by the designated officer or employee only for the purpose of calculating the NNR tax rate or the VATR and may not be construed as an amount of property value that is not in dispute for purposes of a proceeding under statutory provisions relating to a property owner's appeal of an ARB order through judicial review. The bill requires the officer or employee designated to calculate the NNR tax rate or the VATR by the governing body of each affected taxing unit, not later than July 1, to notify each applicable property owner in the taxing unit that the owner may have to comply with these requirements. The bill defines the following terms: "anticipated substantial litigation" as one or more appeals filed or intended to be filed under statutory provisions relating to a property owner's appeal of an ARB order through judicial review for a tax year by a single property owner or by one or more associated business entities of a single property owner of one or more orders of an ARB determining one or more protests by the owner or entities of the taxable value of one or more parcels of property located in an affected taxing unit, if any of the properties: o had a taxable value in the preceding tax year that was one of the 20 highest in the appraisal district in which the property is located; and o has a current year taxable value that exceeds 125 percent of the amount of the uncontested taxable value of the property; "associated business entity" as a subsidiary or other associated business entity of a property owner; "contested taxable value" as, for a tax year, the difference between the current year taxable value of a property and either the taxable value of the property asserted by the owner of the property in an appeal of the ARB order through judicial review or, if the owner has not filed an appeal, a good faith determination of the taxable value the owner will assert in the appeal; "current year taxable value" as the taxable value of a property stated in or determined from: o an order issued by the ARB hearing a protest pertaining to the property for the tax year; or o if the ARB has not issued an order determining the protest, the notice of appraised value for the property delivered for the most recent tax year; and "uncontested taxable value" as the portion of the taxable value of a property that is not contested taxable value. C.S.H.B. 3093 establishes that the current total value, defined under current law as the total taxable value of property listed on the appraisal roll for the current year for purposes of property tax assessment, excludes, for an affected taxing unit, the portion of the aggregate taxable value of all of the property located in the taxing unit that is included as part of anticipated substantial litigation that consists of contested taxable value. If such an amount is excluded from the current total value of an affected taxing unit for a tax year, the officer or employee designated to calculate the NNR tax rate and the VATR for the taxing unit must include the following as an addendum to the tax rate calculation forms prescribed by the comptroller of public accounts and submitted to the governing body of the taxing unit for that tax year: documentation that supports the exclusion; and each statement submitted to the designated officer or employee providing that the applicable property owner or associated business entity intends to pay the tax due on the amount of the uncontested taxable value for that tax year. Accordingly, the bill requires the tax rate calculation forms prescribed by the comptroller to be capable of including that required addendum. C.S.H.B. 3093 includes the addendum to the tax rate calculation forms required by the bill's provisions, if applicable, among the information that a county assessor-collector must post on the county's website for each taxing unit all or part of the territory of which is located in the county. The bill additionally includes the required addendum, if applicable, among the following: the information that the officer or employee designated by the governing body of each taxing unit in which the property is located to calculate the NNR tax rate and the VATR for the taxing unit must electronically incorporate into the chief appraiser's property tax database; and the information from the database that the chief appraiser must make available to the public not later than the third business day after the date the information is incorporated into the database. C.S.H.B. 3093 applies to a property tax year that begins on or after January 1, 2026, except that if the bill receives a vote of two-thirds of all the members elected to each house of the legislature, the bill applies to a property tax year that begins on or after January 1, 2025.
EFFECTIVE DATE On passage, or, if the bill does not receive the necessary vote, September 1, 2025.
COMPARISON OF INTRODUCED AND SUBSTITUTE While C.S.H.B. 3093 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill. Both the introduced and the substitute set out provisions requiring certain property owners in an affected taxing unit, or associated business entities of such owners, that intend to file an appeal of an ARB protest determination that is part of anticipated substantial litigation to provide to the appropriate taxing unit officers or employees specified information regarding the amount of uncontested taxable value of property and requiring certain officers and employees of affected taxing units to notify applicable property owners that they may have to comply with that requirement. However, whereas the introduced applied those provisions to an owner of property that had a taxable value in the preceding tax year that was one of the 10 highest in the affected taxing unit, the substitute applies those provisions to an owner of property that had a taxable value in the preceding tax year that was one of the 20 highest in the appraisal district in which the property is located. The substitute revises the introduced version's definition of "anticipated substantial litigation" to make those same changes with respect to the property described in the definition and to add the condition that applicable property has a current year taxable value that exceeds 125 percent of the uncontested taxable value of the property. Accordingly, the substitute includes a definition of "current year taxable value" that did not appear in the introduced but aligns with a description of such value in the introduced version's definition of "contested taxable value."
BACKGROUND AND PURPOSE
The Property Tax Code requires local appraisal districts to appraise property values annually, but a property owner is entitled to protest a determination of the appraised value of their property and appeal a decision made by an appraisal review board (ARB) regarding such a protest. Under current law, the ARB must approve the appraisal records for the taxing unit by July 20, and the chief appraiser must certify the appraisal roll by July 25. If the ARB has not resolved all taxpayer protests and approved the appraisal records by July 20, the chief appraiser may prepare and certify an estimate of the taxable value of the property in that taxing unit. However, taxing units are required to consider the total appraised value of a property as taxable, even when a property owner is likely to pay a lower amount of taxes on the property because of unresolved litigation. This can result in the overestimation of tax revenue and significant funding gaps for local governments. For example, according to a report by KRIS 6 News Corpus Christi, a property valuation dispute between Valero Energy, Flint Hills Resources, and Nueces County resulted in roughly $30 million in uncollected property taxes for the county in 2023. C.S.H.B. 3093 seeks to address these issues and prevent further situations like this one from occurring by providing for modifying the calculation of property tax rates for tax years in which owners of high-value property provide notice that they intend to pursue litigation over appraised property values.
CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
ANALYSIS
C.S.H.B. 3093 amends the Tax Code to require a property owner in an affected taxing unit, defined by the bill as a taxing unit that is wholly or partly located in a county that has a population of less than 500,000 and is located on the Gulf of Mexico, who owns a property that had a taxable value in the preceding tax year that was one of the 20 highest in the appraisal district in which the property is located, or an associated business entity of the owner, that intends to file an appeal of an order of an appraisal review board (ARB) determining a protest by the owner regarding the appraisal of the owner's property that is part of anticipated substantial litigation to submit the following to the officer or employee designated to calculate the no-new-revenue (NNR) tax rate and the voter-approval tax rate (VATR) for each taxing unit in which the property included in the litigation is located:
the total amount of uncontested taxable value of all property located in the taxing unit that may be the subject of an appeal by the property owner or entity and that is part of the litigation; and
a written statement providing that the property owner or entity intends to pay the tax due on the amount of the uncontested taxable value.
The bill requires an applicable property owner or associated business entity of the property owner to submit the required information not later than the earlier of August 7 or the 21st day after the date the first hearing regarding a protest of the value of any property included in the anticipated substantial litigation is conducted. The amount of uncontested taxable value submitted to a designated officer or employee may be used by the designated officer or employee only for the purpose of calculating the NNR tax rate or the VATR and may not be construed as an amount of property value that is not in dispute for purposes of a proceeding under statutory provisions relating to a property owner's appeal of an ARB order through judicial review. The bill requires the officer or employee designated to calculate the NNR tax rate or the VATR by the governing body of each affected taxing unit, not later than July 1, to notify each applicable property owner in the taxing unit that the owner may have to comply with these requirements. The bill defines the following terms:
"anticipated substantial litigation" as one or more appeals filed or intended to be filed under statutory provisions relating to a property owner's appeal of an ARB order through judicial review for a tax year by a single property owner or by one or more associated business entities of a single property owner of one or more orders of an ARB determining one or more protests by the owner or entities of the taxable value of one or more parcels of property located in an affected taxing unit, if any of the properties:
o had a taxable value in the preceding tax year that was one of the 20 highest in the appraisal district in which the property is located; and
o has a current year taxable value that exceeds 125 percent of the amount of the uncontested taxable value of the property;
"associated business entity" as a subsidiary or other associated business entity of a property owner;
"contested taxable value" as, for a tax year, the difference between the current year taxable value of a property and either the taxable value of the property asserted by the owner of the property in an appeal of the ARB order through judicial review or, if the owner has not filed an appeal, a good faith determination of the taxable value the owner will assert in the appeal;
"current year taxable value" as the taxable value of a property stated in or determined from:
o an order issued by the ARB hearing a protest pertaining to the property for the tax year; or
o if the ARB has not issued an order determining the protest, the notice of appraised value for the property delivered for the most recent tax year; and
"uncontested taxable value" as the portion of the taxable value of a property that is not contested taxable value.
C.S.H.B. 3093 establishes that the current total value, defined under current law as the total taxable value of property listed on the appraisal roll for the current year for purposes of property tax assessment, excludes, for an affected taxing unit, the portion of the aggregate taxable value of all of the property located in the taxing unit that is included as part of anticipated substantial litigation that consists of contested taxable value. If such an amount is excluded from the current total value of an affected taxing unit for a tax year, the officer or employee designated to calculate the NNR tax rate and the VATR for the taxing unit must include the following as an addendum to the tax rate calculation forms prescribed by the comptroller of public accounts and submitted to the governing body of the taxing unit for that tax year:
documentation that supports the exclusion; and
each statement submitted to the designated officer or employee providing that the applicable property owner or associated business entity intends to pay the tax due on the amount of the uncontested taxable value for that tax year.
Accordingly, the bill requires the tax rate calculation forms prescribed by the comptroller to be capable of including that required addendum.
C.S.H.B. 3093 includes the addendum to the tax rate calculation forms required by the bill's provisions, if applicable, among the information that a county assessor-collector must post on the county's website for each taxing unit all or part of the territory of which is located in the county. The bill additionally includes the required addendum, if applicable, among the following:
the information that the officer or employee designated by the governing body of each taxing unit in which the property is located to calculate the NNR tax rate and the VATR for the taxing unit must electronically incorporate into the chief appraiser's property tax database; and
the information from the database that the chief appraiser must make available to the public not later than the third business day after the date the information is incorporated into the database.
C.S.H.B. 3093 applies to a property tax year that begins on or after January 1, 2026, except that if the bill receives a vote of two-thirds of all the members elected to each house of the legislature, the bill applies to a property tax year that begins on or after January 1, 2025.
EFFECTIVE DATE
On passage, or, if the bill does not receive the necessary vote, September 1, 2025.
COMPARISON OF INTRODUCED AND SUBSTITUTE
While C.S.H.B. 3093 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.
Both the introduced and the substitute set out provisions requiring certain property owners in an affected taxing unit, or associated business entities of such owners, that intend to file an appeal of an ARB protest determination that is part of anticipated substantial litigation to provide to the appropriate taxing unit officers or employees specified information regarding the amount of uncontested taxable value of property and requiring certain officers and employees of affected taxing units to notify applicable property owners that they may have to comply with that requirement. However, whereas the introduced applied those provisions to an owner of property that had a taxable value in the preceding tax year that was one of the 10 highest in the affected taxing unit, the substitute applies those provisions to an owner of property that had a taxable value in the preceding tax year that was one of the 20 highest in the appraisal district in which the property is located. The substitute revises the introduced version's definition of "anticipated substantial litigation" to make those same changes with respect to the property described in the definition and to add the condition that applicable property has a current year taxable value that exceeds 125 percent of the uncontested taxable value of the property. Accordingly, the substitute includes a definition of "current year taxable value" that did not appear in the introduced but aligns with a description of such value in the introduced version's definition of "contested taxable value."