By Montford S.B. No. 642
74R4792 SMH-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the appraisal of property for ad valorem taxation and
1-3 the assessment and collection of ad valorem taxes.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Sections 17.091(a), (b), and (e), Civil Practice
1-6 and Remedies Code, are amended to read as follows:
1-7 (a) In a suit growing out of property taxation by the state
1-8 or a legal subdivision of the state in which a person who is a
1-9 defendant is a nonresident, the secretary of state <comptroller> is
1-10 an agent for service of process on that defendant if the defendant
1-11 owned, had, or claimed a taxable interest in property in this state
1-12 on the first day of a tax year for which taxes have not been paid.
1-13 (b) Process may be served on the secretary of state
1-14 <comptroller> in accordance with this section for a nonresident who
1-15 was a resident at the time the cause of action accrued but has
1-16 subsequently moved.
1-17 (e) Service of process on the secretary of state
1-18 <comptroller> under this section must be accompanied by a $25 fee
1-19 for the maintenance by the secretary of state <comptroller> of a
1-20 record of the service of process. The fee for the secretary of
1-21 state's <comptroller's> certification of the service of process on
1-22 the defendant or of any other matter related to the service of
1-23 process is $10.
1-24 SECTION 2. Sections 11.86(a), (c), (d), and (e), Education
2-1 Code, are amended to read as follows:
2-2 (a) The comptroller shall conduct an annual study using
2-3 comparable sales and generally accepted auditing and sampling
2-4 techniques to determine the total value of all taxable property in
2-5 each school district. The study shall determine the taxable value
2-6 of all property and of each category of property within the school
2-7 district and the productivity value of all land that qualifies for
2-8 appraisal on the basis of its productive capacity and for which the
2-9 owner has applied for and received a productivity appraisal. The
2-10 comptroller shall make appropriate adjustments in the study to
2-11 account for actions taken under Chapter 36. In conducting the
2-12 study, the comptroller shall review the appraisal standards,
2-13 procedures, and methodology used by each appraisal district to
2-14 determine the taxable value of property in each school district.
2-15 The review must test the validity of the taxable values assigned to
2-16 each category of property by the appraisal district:
2-17 (1) using, if appropriate, samples selected through
2-18 generally accepted sampling techniques; and
2-19 (2) according to generally accepted standard
2-20 valuation, statistical compilation, and analysis techniques. If
2-21 the comptroller finds in the annual study that generally accepted
2-22 appraisal standards and practices were used by the appraisal
2-23 district in valuing a particular category of property, and that the
2-24 taxable values assigned to each category of property by the
2-25 appraisal district are valid, the tax <appraisal> roll value of
2-26 that category of property is presumed to represent taxable value.
2-27 In the absence of such a presumption, the comptroller shall
3-1 estimate the taxable value of that category of property using
3-2 generally accepted standard valuation, statistical compilation, and
3-3 analysis techniques. For the purposes of this section, "taxable
3-4 value" means market value less:
3-5 (1) the total dollar amount of any exemptions of
3-6 part but not all of the value of taxable property required by the
3-7 constitution or a statute that a school district lawfully granted
3-8 in the year that is the subject of the study;
3-9 (2) the total dollar amount of any abatements
3-10 granted before May 31, 1993, within a reinvestment zone under
3-11 agreements authorized by the Property Redevelopment and Tax
3-12 Abatement Act (Chapter 312, Tax Code);
3-13 (3) the total dollar amount of any captured
3-14 appraised value of property that is located in a reinvestment zone
3-15 and that is eligible for tax increment financing under the Tax
3-16 Increment Financing Act (Chapter 311, Tax Code);
3-17 (4) the total dollar amount of any exemptions
3-18 granted under Section 11.251, Tax Code;
3-19 (5) the difference between the market value and
3-20 the productivity value of land that qualifies for appraisal on the
3-21 basis of its productive capacity, except that the productivity
3-22 value may not exceed the fair market value of the land;
3-23 (6) the portion of the appraised value of
3-24 residence homesteads of the elderly on which school district taxes
3-25 are not imposed in the year that is the subject of the study,
3-26 calculated as if the residence homesteads were appraised at the
3-27 full value required by law;
4-1 (7) a portion of the market value of property
4-2 not otherwise fully taxable by the school district at market value
4-3 because of action required by statute or the Texas Constitution
4-4 that, if the tax rate adopted by the school district is applied to
4-5 it, produces an amount equal to the difference between the tax that
4-6 the school district would have imposed on the property if the
4-7 property were fully taxable at market value and the tax that the
4-8 school district is actually authorized to impose on the property;
4-9 and
4-10 (8) the market value of all tangible personal
4-11 property, other than manufactured homes, owned by a family or
4-12 individual and not held or used for the production of income.
4-13 (c) The comptroller shall publish preliminary findings,
4-14 listing values by school district, before February 1 of the year
4-15 following the year of the study. Preliminary findings shall be
4-16 delivered to each school district and shall be certified to the
4-17 commissioner of education.
4-18 (d) On request of the commissioner of education or a school
4-19 district, the comptroller may <shall> audit a school district to
4-20 determine the total taxable value of property in the school
4-21 district, including the productivity values of land only if the
4-22 land qualifies for appraisal on that basis and the owner of the
4-23 land has applied for and received a productivity appraisal. The
4-24 comptroller shall certify the <its> findings of the audit to the
4-25 commissioner.
4-26 (e) A school district or a property owner whose property is
4-27 included in the study and whose tax liability on the property is
5-1 $100,000 or more may protest the comptroller's findings under
5-2 Subsection (c) or (d) of this section within 30 days after the date
5-3 on which the findings are certified to the commissioner by filing a
5-4 petition with the comptroller specifying the grounds for objection
5-5 and the value claimed to be correct by the school district or
5-6 property owner. After receipt of a petition, the comptroller shall
5-7 notify the commissioner of education of the values specified by the
5-8 school district or property owner and shall hold a hearing. The
5-9 comptroller has the burden to prove the accuracy of the findings.
5-10 Until a final decision is made by the comptroller, the taxable
5-11 value of property in the school district is determined, with
5-12 respect to property subject to the protest, according to the value
5-13 claimed by the school district or property owner, except that the
5-14 value to be used while a final decision is pending shall not be
5-15 less than the tax <appraisal> roll value for the year of the study.
5-16 If after a hearing the comptroller concludes that the findings
5-17 should be changed, the comptroller shall order the appropriate
5-18 changes and shall certify the changes to the commissioner of
5-19 education. The comptroller shall complete all protest hearings and
5-20 certify all changes as necessary to comply with the provisions of
5-21 Chapter 16 of this code. Hearings conducted pursuant to this
5-22 subsection are not contested cases as defined in Subsection (2) of
5-23 Section 3, Administrative Procedure and Texas Register Act (Article
5-24 6252-13a, Vernon's Texas Civil Statutes). The comptroller shall
5-25 adopt procedural rules governing the conduct of protest hearings.
5-26 The rules shall provide each protesting school district and
5-27 property owner with the requirements for submitting a petition
6-1 initiating a protest and shall provide each protesting school
6-2 district and property owner with adequate notice of a hearing, an
6-3 opportunity to present evidence and oral argument, and notice of
6-4 the comptroller's decision on the hearing.
6-5 SECTION 3. Section 825.405(i), Government Code, is amended
6-6 to read as follows:
6-7 (i) Not later than the seventh day after the final date the
6-8 comptroller certifies to the commissioner of education changes to
6-9 the property value study conducted under Section 11.86, Education
6-10 Code, the <The> comptroller shall certify to the Teacher Retirement
6-11 System of Texas <by June 7 of each year>:
6-12 (1) the effective tax rate for school district
6-13 maintenance and operation revenues for each school district in the
6-14 state for the immediately preceding tax year; and
6-15 (2) the statewide average effective tax rate for
6-16 school district maintenance and operation revenues for the
6-17 immediately preceding tax year.
6-18 SECTION 4. Section 23.53, Tax Code, is amended to read as
6-19 follows:
6-20 Sec. 23.53. Capitalization Rate. The capitalization rate to
6-21 be used in determining the appraised value of qualified open-space
6-22 land as provided by this subchapter is 10 percent or the interest
6-23 rate specified by the Farm Credit Bank of Texas or its successor
6-24 <Federal Land Bank of Houston> on December 31 of the preceding year
6-25 plus 2 1/2 percentage points, whichever percentage is greater.
6-26 SECTION 5. Section 23.74, Tax Code, is amended to read as
6-27 follows:
7-1 Sec. 23.74. Capitalization Rate. The capitalization rate to
7-2 be used in determining the appraised value of qualified timber land
7-3 as provided by this subchapter is the interest rate specified by
7-4 the Farm Credit Bank of Texas or its successor <Federal Land Bank
7-5 of Houston> on December 31 of the preceding year plus 2 1/2
7-6 percentage points.
7-7 SECTION 6. Section 23.75(j), Tax Code, is amended to read as
7-8 follows:
7-9 (j) If the chief appraiser discovers that appraisal under
7-10 this subchapter has been erroneously allowed in any one of the five
7-11 <10> preceding years because of failure of the person whose land
7-12 was allowed appraisal under this subchapter to give notice that its
7-13 eligibility had ended, the chief appraiser <he> shall add the
7-14 difference between the appraised value of the land under this
7-15 subchapter and the market value of the land to the appraisal roll
7-16 as provided by Section 25.21 of this code for other property that
7-17 escapes taxation.
7-18 SECTION 7. Section 23.84(e), Tax Code, is amended to read as
7-19 follows:
7-20 (e) If the chief appraiser discovers that appraisal under
7-21 this subchapter has been erroneously allowed in any one of the five
7-22 <10> preceding years, the chief appraiser <he> shall add the
7-23 difference between the appraised value of the land under this
7-24 subchapter and the market value of the land if it had not been
7-25 restricted to recreational, park, or scenic uses to the appraisal
7-26 roll as provided by Section 25.21 of this code for other property
7-27 that escapes taxation.
8-1 SECTION 8. Section 23.94(e), Tax Code, is amended to read as
8-2 follows:
8-3 (e) If the chief appraiser discovers that appraisal under
8-4 this subchapter has been erroneously allowed in any one of the five
8-5 <10> preceding years, the chief appraiser <he> shall add the
8-6 difference between the appraised value of the property under this
8-7 subchapter and the value of the property if it had not been
8-8 restricted to use as public access airport property to the
8-9 appraisal roll as provided by Section 25.21 of this code for other
8-10 property that escapes taxation.
8-11 SECTION 9. Section 25.06, Tax Code, is amended to read as
8-12 follows:
8-13 Sec. 25.06. PROPERTY ENCUMBERED BY POSSESSORY OR SECURITY
8-14 INTEREST. Except as provided by Section <Sections> 25.07 <and
8-15 25.15> of this code, property encumbered by a leasehold or other
8-16 possessory interest or by a mortgage, deed of trust, or other
8-17 interest securing payment or performance of an obligation shall be
8-18 listed in the name of the owner of the property so encumbered.
8-19 SECTION 10. Section 32.07(b), Tax Code, is amended to read
8-20 as follows:
8-21 (b) The person in whose name a property is required to be
8-22 listed by Section 25.13 <or 25.15> of this code is personally
8-23 liable for the taxes imposed on the property.
8-24 SECTION 11. Section 31.015, Tax Code, is transferred to
8-25 Section 33.011, Tax Code, as Subsections (b)-(g) of that section,
8-26 and Section 33.011 is amended to read as follows:
8-27 Sec. 33.011. Waiver of Penalties and Interest. (a) The
9-1 governing body of a taxing unit shall waive penalties and may
9-2 provide for the waiver of interest on a delinquent tax if an act or
9-3 omission of an officer, employee, or agent of the taxing unit or
9-4 the appraisal district in which the taxing unit participates caused
9-5 or resulted in the taxpayer's failure to pay the tax before
9-6 delinquency and if the tax is paid within 21 days after the
9-7 taxpayer knows or should know of the delinquency. <A request for a
9-8 waiver of penalties under this section must be made within six
9-9 months of the delinquency date.>
9-10 (b) <Sec. 31.015. CERTAIN TAX BILLS: PENALTY AND INTEREST
9-11 EXCLUDED. (a)> If a tax bill is returned undelivered to the
9-12 taxing unit by the United States Postal Service, the governing body
9-13 of the taxing unit shall waive penalties and interest <on the
9-14 amount of the tax to which the bill applies shall be waived> if:
9-15 (1) the taxing unit does not send another tax bill on
9-16 the property in question at least 21 days before the delinquency
9-17 date to the current mailing address furnished by the taxpayer
9-18 <property owner> and the taxpayer <property owner> establishes that
9-19 a current mailing address was furnished to the appraisal district
9-20 by the taxpayer <property owner> for the tax bill before September
9-21 1 of the year in which the tax is assessed; or
9-22 (2) the tax bill was returned because of an act or
9-23 omission of an officer, employee, or agent of the taxing unit or
9-24 the appraisal district in which the taxing unit participates and
9-25 the taxing unit or appraisal district did not send another tax bill
9-26 on the property in question at least 21 days before the delinquency
9-27 date to the proper mailing address.
10-1 (c) <(b)> For the purposes of this section, a taxpayer
10-2 <property owner> is considered to have furnished a current mailing
10-3 address to the taxing unit or to the appraisal district if the
10-4 current address is expressly communicated to the appraisal district
10-5 in writing or if the appraisal district received a copy of a
10-6 recorded instrument transferring ownership of real property and the
10-7 current mailing address of the new owner is included in the
10-8 instrument or in accompanying communications or letters of
10-9 transmittal.
10-10 (d) <(c)> A request for a waiver of penalties and interest
10-11 under this section must be made before the 181st day after the
10-12 delinquency date <within six months of the delinquency date>.
10-13 (e) <(d)> Penalties and interest do not accrue during the
10-14 period that a bill is not sent under Section 31.01(f).
10-15 (f) <(e)> A taxpayer <property owner> is not entitled to
10-16 relief under Subsection (b) of this section if the taxpayer
10-17 <property owner> or the taxpayer's <owner's> agent furnished an
10-18 incorrect mailing address to the appraisal district or the taxing
10-19 unit or to an employee or agent of the district or unit.
10-20 (g) Taxes for which penalties and interest have been waived
10-21 under Subsection (b) of this section must be paid within 21 days
10-22 after <of> the taxpayer <property owner having> received a bill for
10-23 those taxes at the current mailing address.
10-24 SECTION 12. The change in law made by Section 1 of this Act
10-25 applies only to service of process in a suit filed on or after the
10-26 effective date of this Act. Service of process in a suit filed
10-27 before the effective date of this Act is covered by the law in
11-1 effect when the suit was filed, and the former law is continued in
11-2 effect for that purpose.
11-3 SECTION 13. This Act takes effect January 1, 1996.
11-4 SECTION 14. The importance of this legislation and the
11-5 crowded condition of the calendars in both houses create an
11-6 emergency and an imperative public necessity that the
11-7 constitutional rule requiring bills to be read on three several
11-8 days in each house be suspended, and this rule is hereby suspended.