BILL ANALYSIS S.B. 642 By: Montford (Holzheauser) May 8, 1995 Committee Report (Amended) BACKGROUND The Comptroller is responsible for administering certain provision of property tax laws. Currently, the Comptroller serves as an agent for non-resident delinquent property taxpayers. This responsibility is similar to the Secretary of State's role as agent for service under several sections in the Civil Practice and Remedies Code and other statutes. Section 11.86, Education Code, requires the Comptroller to conduct a property value study using generally accepted techniques to determine the total taxable value for each school district. The Comptroller certifies these taxable values to the Commissioner of Education for use in the state's school funding formula. Currently, the Comptroller is required to audit its value findings on a school district request. The audit is required regardless of whether the school district has exhausted administrative remedies. Section 825.405, Government Code, requires the Comptroller to issue a report on school district effective tax rates to the Teachers' Retirement System by June 7. There could be instances when the study is not certified by June 7. PURPOSE This bill proposes changes to the property tax code as follows: * Transfer out-of-state delinquent citation functions from the Comptroller to the Secretary of State. * Provide the Comptroller discretion in allowing an audit of Comptroller property value study results requested by a school district. * Change the reporting date for the Comptroller's report on school district effective tax rates to the Teachers' Retirement System. * Change references of "Federal Land Bank of Houston" to "Federal Land Bank of Texas or its successor" to reflect a name change. * Change the period for back assessing erroneously granted special appraisal for timber; recreational, park and scenic land; and public access airport property from 10 to 5 years. * Delete references to repealed section of the Tax Code. * Consolidate two sections of the Tax Code allowing waiver of penalties and interest into one section. 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. SECTION BY SECTION ANALYSIS SECTION 1. Amends Sections 17.091 (Substituted Service in Delinquent Tax Cases), Subsections (a), (b) and (e), Civil Practice and Remedies Code, by transferring out-of-state delinquent citation functions from the Comptroller to the Secretary of State and by changing the current fee of $25 charged for services of process to the standard fee of $40 collected by the Secretary of State for similar service. SECTION 2. Amends Sections 11.86 (Determination of School District Property Values), Subsection (d), Education Code, by giving the Comptroller discretion to perform a school district requested audit of Comptroller property value study results. SECTION 3. Amends Section 825.405 (Contributions Based on Compensation Above Statutory Minimum), Subsection (i), Government Code, by changing the reporting date for the Comptroller's report on school district effective tax rates to the Teachers' Retirement system from June 7th to not later than the seventh day after final certification of property value study results to the Commissioner of Education. SECTION 4. Amends Section 23.53 (Capitalization Rate), Tax Code, by changing "Federal Land Bank of Houston" to "Farm Credit Bank of Texas or its successor." SECTION 5. Amends Section 23.74 (Capitalization Rate), Tax Code, by changing "Federal Land Bank of Houston" to "Farm Credit Bank of Texas or its successor." SECTION 6. Amends Subchapter E (Appraisal of Timber Land), Section 23.75(j), Tax Code, by changing the period for back assessing erroneously allowed appraisals from 10 to 5 years for timber land. SECTION 7. Amends Subchapter F (Appraisal of Recreational, Park and Scenic Land), Section 23.84(e), Tax Code, by changing the period for back assessing erroneously allowed appraisals from 10 to 5 years for recreational, park and scenic land. SECTION 8. Amends Subchapter G (Appraisal of Public Access Airport Property), Section 23.94(e), Tax Code, by changing the period for back assessing erroneously allowed appraisals from 10 to 5 years for public access airport property. SECTION 9. Amends Section 25.06 (Property Encumbered by Possessory or Security Interest), Tax Code, by deleting references to repealed Section 25.15, Tax Code. SECTION 10. Amends Section 32.07 (Personal Liability for Tax), Subsection (b), Tax Code, by deleting references to repealed Section 25.15, Tax Code. SECTION 11. Amends Section 33.011 (Waivers of Penalties and Interest), Tax Code, by transferring Section 31.015 (Certain Tax Bills: Penalty and Interest Excluded), Tax Code, to it and by providing that the governing body of the taxing unit shall conditionally waive penalties and interest, and by substituting "taxpayer" for "property owner." SECTION 12. Section 1 of the Act applies only to service of process in a suit filed on or after the effective date of this Act. SECTION 13. Effective date: January 1, 1996. SECTION 14. Emergency clause. EXPLANATION OF AMENDMENTS COMMITTEE AMENDMENT #1 amends Section 11 of the bill to change references of "taxpayer" to "property owner." The current law uses "property owner" and this amendment would maintain that language. SUMMARY OF COMMITTEE ACTION On April 27, 1995, the committee met in a formal meeting and considered S.B. 642. The committee considered committee amendment #1 by Representative Holzheauser. Without objection, the amendment was adopted. By a record vote of 8 ayes, 0 nays, 0 present not voting and 3 absent, the committee voted to report S.B. 642 to the House with amendment with the recommendation that it do pass.