87R3792 TJB-D

By: Beckley H.B. No. 1099

A BILL TO BE ENTITLED

AN ACT

relating to ad valorem tax protests and appeals on the ground of the unequal appraisal of property.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 23.01(f), Tax Code, is amended to read as follows:

(f) The selection of comparable properties [and the application of appropriate adjustments] for the determination of an appraised value of property by any person under Section 41.43(b)(3) or 42.26(a)(3) must be based on the application of generally accepted appraisal methods and techniques. [Adjustments must be based on recognized methods and techniques that are necessary to produce a credible opinion.]

SECTION 2. Section 41.43, Tax Code, is amended by amending Subsection (b) and adding Subsections (e) and (f) to read as follows:

(b) A protest on the ground of unequal appraisal of property shall be determined in favor of the protesting party unless the appraisal district establishes that:

(1) the appraisal ratio of the property is equal to or less than the median level of appraisal of a reasonable and representative sample of other properties in the appraisal district;

(2) the appraisal ratio of the property is equal to or less than the median level of appraisal of a sample of properties in the appraisal district consisting of a reasonable number of other properties similarly situated to, or of the same general kind or character as, the property subject to the protest; or

(3) the appraisal ratio [appraised value] of the property is equal to or less than the median level of appraisal [appraised value] of a reasonable number of comparable properties in the appraisal district [appropriately adjusted].

(e) For the purpose of Subsection (b)(3):

(1) a person making a determination that property is comparable to another property must base the determination on the similarity of the properties with regard to the characteristics described by Section 23.013(d); and

(2) a person calculating the median level of appraisal of comparable properties must base the calculation on the appraised value of each comparable property as shown in the appraisal records submitted to the appraisal review board by the chief appraiser under Section 25.22 or 25.23.

(f) The comptroller shall by rule establish standards for the development and calibration of adjustments to the appraised value for industrial, petrochemical refining and processing, and utility properties and other unique properties.

SECTION 3. Section 42.26, Tax Code, is amended by amending Subsections (a) and (b) and adding Subsections (e) and (f) to read as follows:

(a) The district court shall grant relief on the ground that a property is appraised unequally if:

(1) the appraisal ratio of the property exceeds by at least 10 percent the median level of appraisal of a reasonable and representative sample of other properties in the appraisal district;

(2) the appraisal ratio of the property exceeds by at least 10 percent the median level of appraisal of a sample of properties in the appraisal district consisting of a reasonable number of other properties similarly situated to, or of the same general kind or character as, the property subject to the appeal; or

(3) the appraisal ratio [appraised value] of the property exceeds by at least 10 percent the median level of appraisal [appraised value] of a reasonable number of comparable properties in the appraisal district [appropriately adjusted].

(b) If a property owner is entitled to relief under a subdivision of Subsection (a) [(a)(1)], the court shall order the property's appraised value changed to the value as calculated on the basis of the median level of appraisal according to that subdivision [Subsection (a)(1). If a property owner is entitled to relief under Subsection (a)(2), the court shall order the property's appraised value changed to the value calculated on the basis of the median level of appraisal according to Subsection (a)(2). If a property owner is entitled to relief under Subsection (a)(3), the court shall order the property's appraised value changed to the value calculated on the basis of the median appraised value according to Subsection (a)(3)]. If a property owner is entitled to relief under more than one subdivision of Subsection (a), the court shall order the property's appraised value changed to the value that results in the lowest appraised value. The court shall determine each applicable median level of appraisal [or median appraised value] according to law, and is not required to adopt the median level of appraisal [or median appraised value] proposed by a party to the appeal. The court may not limit or deny relief to the property owner entitled to relief under a subdivision of Subsection (a) because the appraised value determined according to another subdivision of Subsection (a) results in a higher appraised value.

(e) For the purpose of Subsection (a)(3):

(1) a person making a determination that property is comparable to another property must base the determination on the similarity of the properties with regard to the characteristics described by Section 23.013(d); and

(2) a person calculating the median level of appraisal of comparable properties must base the calculation on the appraised value of each comparable property as shown in the appraisal records certified by the chief appraiser under Section 26.01.

(f) The comptroller shall by rule establish standards for the development and calibration of adjustments to the appraised value for industrial, petrochemical refining and processing, and utility properties and other unique properties.

SECTION 4. Section 42.29, Tax Code, is amended by amending Subsection (b) and adding Subsection (c) to read as follows:

(b) Notwithstanding Subsection (a), the amount of an award of attorney's fees to a property owner may not exceed the lesser of:

(1) $100,000; or

(2) the total amount by which the property owner's tax liability is reduced as a result of the appeal.

(c) An appraisal district, an appraisal review board, or a chief appraiser that prevails in an appeal under Section 42.26 may be awarded reasonable attorney's fees. The amount of the award may not exceed $15,000.

SECTION 5. Not later than January 1, 2022, the comptroller shall establish the standards required by Sections 41.43(f) and 42.26(f), Tax Code, as added by this Act.

SECTION 6. Section 41.43, Tax Code, as amended by this Act, applies only to a protest under Chapter 41, Tax Code, for which a notice of protest is filed on or after the effective date of this Act. A protest under Chapter 41, Tax Code, for which a notice of protest was filed before the effective date of this Act is governed by the law in effect on the date the notice of protest was filed, and the former law is continued in effect for that purpose.

SECTION 7. Sections 42.26 and 42.29, Tax Code, as amended by this Act, apply only to an appeal under Chapter 42, Tax Code, for which a petition for review is filed on or after the effective date of this Act. An appeal under Chapter 42, Tax Code, for which a petition for review was filed before the effective date of this Act is governed by the law in effect on the date the petition for review was filed, and the former law is continued in effect for that purpose.

SECTION 8. This Act takes effect September 1, 2021.