Enrolled Bill Summary

            Senate Bill 841 amends various property tax provisions of the Tax Code. It requires a public hearing on a tax rate that results in taxes exceeding the previous year's levy, eliminating provisions that based the hearing requirement instead on determinations involving rollback and effective rates. The act requires a chief appraiser to consider the cost, income, and market data comparison methods of appraisal and sets criteria for their use and for the use of mass appraisal standards. It also requires that a chief appraiser consider any effect on the value of property resulting from governmentally imposed restrictions or from affordable housing limitations that affect rental or lease rates. The act requires that tax notices contain more details on the time and procedure for protesting appraised values and directs appraisal review boards to provide for protest hearings on evenings or weekends. For protests of appraisal value, the appraisal district has the burden to establish the value of the property based on a preponderance of the evidence presented at the hearing. Other provisions of the act relate to unequal appraisal, taxpayer rights and remedies, other protest and appeal procedures, notices and communications to property owners, rendition statements and property reports, appraisal roll corrections, refund interest rates, the abatement or deferral of suits to collect delinquent taxes, appraisal district directors and appraisal review board members, the comptroller's annual study of property values, exemption forms and amounts, and the exemptions for schools, religious organizations, charitable organizations, and youth development associations.

            The act sets a ceiling on the appraised value of a residence homestead equal to the lesser of the property's market value or the sum of the last appraised value, 10 percent of that value for each year since the last appraisal, and the market value of all new improvements. This provision is implicitly contingent on the constitutional amendment proposed by Senate Joint Resolution 43. The act prohibits anyone from receiving a residence homestead exemption for more than one homestead in the same year. It authorizes special penalties for certain situations in which residence homestead exemptions are received improperly.

            The guaranteed and optional residence homestead exemptions for the elderly, and certain other exemptions, become effective immediately on qualification. Under prior law, application of the exemption waited until the next tax year. The act prorates tax exemption amounts for exemptions covering only part of a year. The school district tax freeze for residence homesteads of the elderly, and the freeze eligibility of surviving spouses, are likewise adjusted to reflect the change to immediate qualification. If voters in August 1997 adopt the constitutional amendment proposed by House Joint Resolution 4, the freeze calculation is adjusted additionally on a one-time basis to take into account the exemption increase authorized by that amendment.

            Contingent on that same amendment, House Bill 4 includes enabling legislation for the transfer of a tax freeze from one residence homestead to another. If that amendment fails, but voters in November 1997 adopt the constitutional amendment proposed by Senate Joint Resolution 43, Senate Bill 841 instead contains the freeze transfer enabling legislation. Likewise contingent on the November 1997 amendment, the act authorizes school districts in counties of less than 75,000 population to opt to apply a freeze transfer retroactively. This last provision takes effect concurrently with the amendment. All other provisions of Senate Bill 841 take effect January 1, 1998.