HBA-JRA H.B. 1245 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 1245 By: Palmer Ways & Means 3/10/1999 Introduced BACKGROUND AND PURPOSE Currently, annual ratio studies of appraisal districts and school districts are conducted by chief appraisers in appraisal districts who set local values for annual school district funding. The Comptroller of Public Accounts then conducts another ratio study to set state values. This may result in school districts challenging the comptroller's findings in court, at district expense. Eliminating this duplication of effort would simplify the process by which school districts receive their funding. H.B. 1245 requires the annual ratio studies for appraisal districts and school districts in counties with more than 125,000 people, and permits the studies in counties with less than 125,000 people, to be conducted by the appraisal districts or someone on their behalf in accordance with the comptroller's standards, rather than requiring them to be conducted by the comptroller. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that rulemaking authority is expressly delegated to the Comptroller of Public Accounts of the State of Texas in SECTIONS 1 and 5 (Section 5.10, Tax Code, and Section 403.302, Government Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 5.10, Tax Code, as follows: (a) Requires the annual study in each appraisal district to determine the degree of uniformity of and the median level of appraisals by the appraisal district within each major category of property to be conducted in accordance with standards adopted, by rule, by the Comptroller of Public Accounts of the State of Texas, rather than requiring the comptroller to conduct the study. Authorizes the comptroller to adopt the Standard on Ratio Studies, International Association of Assessing Officers. Requires the comptroller to establish the major categories of property for purposes of this subsection. (b) Requires a study to be conducted by the county's appraisal district in a county with a population of 125,000 or more and by the comptroller in a county with a population of less than 125,000, unless that county's appraisal district chooses to conduct the study. Authorizes an appraisal district to contract with another person to conduct a study for that appraisal district. Authorizes the comptroller to audit a study conducted by an appraisal district, or another person on behalf of the district, and to conduct a study in an appraisal district if the comptroller determines that the study conducted by that appraisal district, or another person on behalf of the district, was not conducted in accordance with standards adopted by the comptroller. (c) Makes conforming changes. (d) Redesignated from existing Subsection (b). Makes conforming changes. (e) Redesignated from existing Subsection (c). Makes conforming changes. SECTION 2. Amends Sections 5.101(a) and (b), Tax Code, to make conforming and nonsubstantive changes. SECTION 3. Amends Sections 5.12(a), (d), and (f), Tax Code, to make conforming and nonsubstantive changes. SECTION 4. Amends Section 42.26(c), Tax Code, to make conforming changes. SECTION 5. Amends Section 403.302, Government Code, as amended by Section 44, Chapter 1039, Section 63, Chapter 1040, and Section 27, Chapter 1071, Acts of the 75th Legislature, Regular Session, 1997, to reenact this section and make amendments, as follows: (a) Requires the annual study in each school district to determine the total taxable value of all property in each school district to be conducted in accordance with standards adopted, by rule, by the comptroller, rather than requiring the comptroller to conduct the study. Authorizes the comptroller to adopt the Standard on Ratio Studies, International Association of Assessing Officers. Requires the study to use the major categories of property established by the comptroller under Section 5.10 (Ratio Studies), Tax Code. Makes conforming changes. (b) Requires a study relating to a school district to be conducted by the county's appraisal district in a county with a population of 125,000 or more and by the comptroller in a county with a population of less than 125,000, unless that county's appraisal district chooses to conduct the study. Authorizes an appraisal district to contract with another person to conduct a study relating to a school district for that appraisal district. Requires a separate study to be conducted in each appraisal district in which the school district participates for the appropriate portion of the school district, if a school district participates in more than one appraisal district. Authorizes the comptroller to audit a study relating to a school district conducted by an appraisal district, or another person on behalf of the district, and to conduct a study in an appraisal district if the comptroller determines that the study conducted by that appraisal district, or another person on behalf of the district was not conducted in accordance with standards adopted by the comptroller. (c) Makes conforming changes. (d) Redesignated from existing Subsection (c). Establishes that the market value of property in the school district is based on the appraisal roll for the tax year for which the study is conducted, rather than a determination by the appraisal district. Requires a person conducting a study of only a portion of a school district that participates in more than one appraisal district to make a determination of taxable value only for that portion of the school district. Makes conforming changes. (e) Redesignated from existing Subsection (d). Makes conforming changes. (f) Redesignated from existing Subsection (e). Makes a nonsubstantive change. (g) Redesignated from existing Subsection (f). Requires an appraisal district to provide a copy of the study to the comptroller if the study is conducted by the appraisal district or another person on behalf of an appraisal district. Requires the comptroller to combine the findings if a school district is the subject of more than one study because it participates in more than one appraisal district. Makes conforming and nonsubstantive changes. Deletes existing Subsections (g)-(i), relating to the comptroller certifying its findings of an audit of a school district to the commissioner of education. SECTION 6. Amends Sections 403.303(a)-(c), Government Code, to require the comptroller to notify the appraisal district, as well as the commissioner of education, of the values specified by the school district or property owner on receipt of a petition to protest the findings filed by the school district or property owner if the study was conducted by an appraisal district or by another person acting on behalf of the appraisal district. Requires the comptroller, if the school district participates in more than one appraisal district, to notify each appraisal district in which a school district participates, in the case of a petition filed by a school district, or the appraisal district that appraises the owner's property, in the case of a petition filed by a property owner. Makes conforming changes. SECTION 7. Amends Section 403.304, Government Code, to make conforming changes. SECTION 8. Effective date: September 1, 1999. Establishes that this Act applies only to an annual ratio study of an appraisal district or an annual school district property value study conducted for a tax year that begins on or after January 1, 2000. SECTION 9. Emergency clause.