LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION April 2, 2025 TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB329 by Bell, Cecil (Relating to a requirement that an appraisal review board rely on an appraisal of residential real property prepared by an appraiser and submitted to the board by the property owner to determine a protest regarding the value of the property.), As Introduced Estimated Two-year Net Impact to General Revenue Related Funds for HB329, As Introduced: a negative impact of ($81,759,000) through the biennium ending August 31, 2027. General Revenue-Related Funds, Five- Year Impact: Fiscal Year Probable Net Positive/(Negative) Impact toGeneral Revenue Related Funds2026($32,311,000)2027($49,448,000)2028($49,484,000)2029($62,290,000)2030($81,610,000)All Funds, Five-Year Impact: Fiscal Year Probable Savings/(Cost) fromFoundation School Fund193 Probable Revenue Gain/(Loss) fromRecapture Payments Atten Crdts8905 Probable Revenue Gain/(Loss) fromSchool Districts Levy Loss2026($32,311,000)($9,158,000)($38,453,000)2027($49,448,000)($10,929,000)($44,457,000)2028($49,484,000)($9,280,000)($42,730,000)2029($62,290,000)($10,109,000)($46,202,000)2030($81,610,000)($11,001,000)($54,703,000) Fiscal AnalysisThe bill would provide that if a property owner files a protest related to residential property and timely files with the appraisal review board (ARB) and chief appraiser a copy of an appraisal of the property performed by a certified appraiser that supports the appraised or market value of the property, the ARB is required to determine the protest in favor of the property owner and issue an order changing the property's appraised or market value to the value determined by the appraisal submitted by the property owner.
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 89TH LEGISLATIVE REGULAR SESSION
April 2, 2025
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means FROM: Jerry McGinty, Director, Legislative Budget Board IN RE: HB329 by Bell, Cecil (Relating to a requirement that an appraisal review board rely on an appraisal of residential real property prepared by an appraiser and submitted to the board by the property owner to determine a protest regarding the value of the property.), As Introduced
TO: Honorable Morgan Meyer, Chair, House Committee on Ways & Means
FROM: Jerry McGinty, Director, Legislative Budget Board
IN RE: HB329 by Bell, Cecil (Relating to a requirement that an appraisal review board rely on an appraisal of residential real property prepared by an appraiser and submitted to the board by the property owner to determine a protest regarding the value of the property.), As Introduced
Honorable Morgan Meyer, Chair, House Committee on Ways & Means
Honorable Morgan Meyer, Chair, House Committee on Ways & Means
Jerry McGinty, Director, Legislative Budget Board
Jerry McGinty, Director, Legislative Budget Board
HB329 by Bell, Cecil (Relating to a requirement that an appraisal review board rely on an appraisal of residential real property prepared by an appraiser and submitted to the board by the property owner to determine a protest regarding the value of the property.), As Introduced
HB329 by Bell, Cecil (Relating to a requirement that an appraisal review board rely on an appraisal of residential real property prepared by an appraiser and submitted to the board by the property owner to determine a protest regarding the value of the property.), As Introduced
Estimated Two-year Net Impact to General Revenue Related Funds for HB329, As Introduced: a negative impact of ($81,759,000) through the biennium ending August 31, 2027.
Estimated Two-year Net Impact to General Revenue Related Funds for HB329, As Introduced: a negative impact of ($81,759,000) through the biennium ending August 31, 2027.
General Revenue-Related Funds, Five- Year Impact:
2026 ($32,311,000)
2027 ($49,448,000)
2028 ($49,484,000)
2029 ($62,290,000)
2030 ($81,610,000)
All Funds, Five-Year Impact:
2026 ($32,311,000) ($9,158,000) ($38,453,000)
2027 ($49,448,000) ($10,929,000) ($44,457,000)
2028 ($49,484,000) ($9,280,000) ($42,730,000)
2029 ($62,290,000) ($10,109,000) ($46,202,000)
2030 ($81,610,000) ($11,001,000) ($54,703,000)
Fiscal Analysis
The bill would provide that if a property owner files a protest related to residential property and timely files with the appraisal review board (ARB) and chief appraiser a copy of an appraisal of the property performed by a certified appraiser that supports the appraised or market value of the property, the ARB is required to determine the protest in favor of the property owner and issue an order changing the property's appraised or market value to the value determined by the appraisal submitted by the property owner.
Methodology
The bill would direct the ARB to rule in favor of the property owner's certified appraisal of the residential real property under protest. It is expected there could be significant variance in independent appraisals from appraisal district values as they often would not be products of the same mass appraisal methodology in use by appraisal districts, with independent appraisals both higher and lower than appraisal district values. But property owners would file for use of independent appraisals only when they are lower than appraisal district values, with the result that average appraised values determined by ARBs would be reduced. Total ARB reductions below original appraised values for residential property value protests in 2023 were $27,551,555,447. This estimate assumes total ARB reductions of residential property appraisals would increase by twenty percent, representing a decline in total taxable value of residential property of approximately 2/10 of one percent.Under provisions of the Education Code, the school district tax revenue loss is partially transferred to the state. The estimated cost to the Foundation School Program (FSP) is $32.3 million in fiscal year 2026, $49.4 million in fiscal year 2027, increasing to $81.6 million in fiscal year 2030. The cost to the FSP includes estimated decreases in Recapture Payments - Attendance Credits of $9.2 million in fiscal year 2026, $10.9 million in fiscal year 2027, increasing to $11.0 million in fiscal year 2030 as a result of school district tax revenue loss. The decrease in recapture is reflected as a revenue loss in the table above because recapture is appropriated as a method of finance for the FSP in the General Appropriations Act.
Under provisions of the Education Code, the school district tax revenue loss is partially transferred to the state. The estimated cost to the Foundation School Program (FSP) is $32.3 million in fiscal year 2026, $49.4 million in fiscal year 2027, increasing to $81.6 million in fiscal year 2030. The cost to the FSP includes estimated decreases in Recapture Payments - Attendance Credits of $9.2 million in fiscal year 2026, $10.9 million in fiscal year 2027, increasing to $11.0 million in fiscal year 2030 as a result of school district tax revenue loss. The decrease in recapture is reflected as a revenue loss in the table above because recapture is appropriated as a method of finance for the FSP in the General Appropriations Act.
Local Government Impact
Passage of the bill would direct an ARB to rule in favor of the property owner's certified appraisal of the residential real property under protest. As a result, taxable property values would decrease. However, the no-new-revenue and voter-approval tax rates as provided by Section 26.04, Tax Code would be higher as a consequence of the reduced taxable property value proposed by the bill. If cities, counties, and special districts did not adopt higher rates, local levies would be reduced by $55.0 million in fiscal year 2026. If those jurisdictions adopted higher tax rates, the initial revenue loss would be offset by increased tax levies from owners of property that does not receive value reduction and slightly reduced tax savings from owners who receive a value reduction. The fiscal impact to school districts is shown in the table above.
Source Agencies: b > td > 304 Comptroller of Public Accounts
304 Comptroller of Public Accounts
LBB Staff: b > td > JMc, KK, SD, BRI
JMc, KK, SD, BRI