By Palmer H.B. No. 1245
76R5624 SMH-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the annual ratio study of an appraisal district and the
1-3 annual school district property value study.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 5.10, Tax Code, is amended to read as
1-6 follows:
1-7 Sec. 5.10. RATIO STUDIES. (a) An [The comptroller shall
1-8 conduct an] annual study shall be conducted in each appraisal
1-9 district to determine the degree of uniformity of and the median
1-10 level of appraisals by the appraisal district within each major
1-11 category of property. The study shall be conducted in accordance
1-12 with standards adopted by the comptroller by rule. The comptroller
1-13 may adopt the Standard on Ratio Studies, International Association
1-14 of Assessing Officers, if the comptroller determines that standard
1-15 to be appropriate. The comptroller shall establish the major
1-16 categories of property for purposes of this subsection.
1-17 (b) A study in an appraisal district established for a
1-18 county with a population of 125,000 or more shall be conducted by
1-19 that appraisal district. A study in an appraisal district
1-20 established for a county with a population of less than 125,000
1-21 shall be conducted by the comptroller unless the appraisal district
1-22 chooses to conduct the study. An appraisal district may contract
1-23 with another person to conduct a study for that appraisal district.
1-24 The comptroller may:
2-1 (1) audit a study conducted by an appraisal district
2-2 or by another person on behalf of an appraisal district; and
2-3 (2) conduct a study in an appraisal district if the
2-4 comptroller determines that the study conducted by that appraisal
2-5 district or by another person on behalf of that appraisal district
2-6 was not conducted in accordance with standards adopted by the
2-7 comptroller.
2-8 (c) The comptroller shall publish a report of the findings
2-9 of each [the] study conducted under this section, including in the
2-10 report the median levels of appraisal for each major category of
2-11 property, the coefficient of dispersion around the median level of
2-12 appraisal for each major category of property, and any other
2-13 standard statistical measures that the comptroller considers
2-14 appropriate, as computed by the person conducting the study. The
2-15 person [In] conducting the study[, the comptroller] shall apply
2-16 appropriate standard statistical analysis techniques to data
2-17 collected as part of the annual study of school district taxable
2-18 values required by Section 403.302, Government Code.
2-19 (d) [(b)] The published findings [of a ratio study conducted
2-20 by the comptroller] shall be distributed to all members of the
2-21 legislature and to all appraisal districts.
2-22 (e) A person [(c) In] conducting a study under this
2-23 section[, the comptroller] or the person's [comptroller's]
2-24 authorized representative may enter the premises of a business,
2-25 trade, or profession and inspect the property to determine the
2-26 existence and market value of property used for the production of
2-27 income. An inspection under this subsection must be made during
3-1 normal business hours or at a time mutually agreeable to the person
3-2 conducting the study [comptroller] or the person's [comptroller's]
3-3 authorized representative and the person in control of the
3-4 premises.
3-5 SECTION 2. Sections 5.101(a) and (b), Tax Code, are amended
3-6 to read as follows:
3-7 (a) The comptroller shall appoint a technical advisory
3-8 committee for the purpose of providing professional and practical
3-9 expertise to the comptroller and to review and comment on the
3-10 methodology used [by the comptroller] to conduct the annual studies
3-11 required by Section 5.10 [of this code] and by Section 403.302,
3-12 Government Code. A member of the committee serves at the will of
3-13 the comptroller.
3-14 (b) The committee shall:
3-15 (1) review the methodology used [by the comptroller]
3-16 to conduct the studies described in Subsection (a) [of this
3-17 section];
3-18 (2) make an annual report to the comptroller that
3-19 includes the committee's findings and recommendations relating to
3-20 the methodology used to conduct the studies; and
3-21 (3) meet as often as necessary to perform its duties,
3-22 but not less often than semi-annually.
3-23 SECTION 3. Sections 5.12(a), (d), and (f), Tax Code, are
3-24 amended to read as follows:
3-25 (a) The comptroller shall audit the performance of an
3-26 appraisal district if one or more of the following conditions exist
3-27 according to each of two consecutive annual studies conducted [by
4-1 the comptroller] under Section 5.10 [of this code], regardless of
4-2 whether the prescribed condition or conditions that exist are the
4-3 same for each of those studies:
4-4 (1) the overall median level of appraisal for all
4-5 property in the district for which [the comptroller determines] a
4-6 median level of appraisal is determined is less than 0.75;
4-7 (2) the coefficient of dispersion around the overall
4-8 median level of appraisal of the properties used to determine the
4-9 overall median level of appraisal for all property in the district
4-10 for which [the comptroller determines] a median level of appraisal
4-11 is determined exceeds 0.30; or
4-12 (3) the difference between the median levels of
4-13 appraisal for any two classes of property in the district for which
4-14 [the comptroller determines] a median level of appraisal is
4-15 determined is more than 0.45.
4-16 (d) A request for a performance audit of an appraisal
4-17 district may not be made under Subsection (b) or (c) [of this
4-18 section] if according to each of the two most recently published
4-19 annual studies conducted [by the comptroller] under Section 5.10
4-20 [of this code]:
4-21 (1) the overall median level of appraisal for all
4-22 property in the district for which [the comptroller determines] a
4-23 median level of appraisal is determined is more than 0.90 and less
4-24 than 1.10;
4-25 (2) the coefficient of dispersion around the overall
4-26 median level of appraisal of the properties used to determine the
4-27 overall median level of appraisal for all property in the district
5-1 for which [the comptroller determines] a median level of appraisal
5-2 is determined is less than 0.15; and
5-3 (3) the difference between the highest and lowest
5-4 median levels of appraisal in the district for the classes of
5-5 property for which [the comptroller determines] a median level of
5-6 appraisal is determined is less than 0.20.
5-7 (f) For purposes of this section, "class of property" means
5-8 a major category [kind] of property for which [the comptroller
5-9 determines] a median level of appraisal is determined under Section
5-10 5.10 [of this code].
5-11 SECTION 4. Section 42.26(c), Tax Code, is amended to read as
5-12 follows:
5-13 (c) For purposes of establishing the median level of
5-14 appraisal under Subsection (a)(1), the median level of appraisal in
5-15 the appraisal district as determined [by the comptroller] under
5-16 Section 5.10 is admissible as evidence of the median level of
5-17 appraisal of a reasonable and representative sample of properties
5-18 in the appraisal district for the year of the [comptroller's]
5-19 determination, subject to the Texas Rules of Evidence and the Texas
5-20 Rules of Civil Procedure.
5-21 SECTION 5. Section 403.302, Government Code, as amended by
5-22 Section 44, Chapter 1039, Section 63, Chapter 1040, and Section 27,
5-23 Chapter 1071, Acts of the 75th Legislature, Regular Session, 1997,
5-24 is reenacted and amended to read as follows:
5-25 Sec. 403.302. DETERMINATION OF SCHOOL DISTRICT PROPERTY
5-26 VALUES. (a) An [The comptroller shall conduct an] annual study
5-27 shall be conducted using comparable sales and generally accepted
6-1 auditing and sampling techniques to determine the total taxable
6-2 value of all property in each school district. The study shall be
6-3 conducted in accordance with standards adopted by the comptroller
6-4 by rule. The comptroller may adopt the Standard on Ratio Studies,
6-5 International Association of Assessing Officers, if the comptroller
6-6 determines that standard to be appropriate. The study shall
6-7 determine the taxable value of all property and of each major
6-8 category of property in the district, as established by the
6-9 comptroller under Section 5.10, Tax Code, and the productivity
6-10 value of all land that qualifies for appraisal on the basis of its
6-11 productive capacity and for which the owner has applied for and
6-12 received a productivity appraisal. Each person conducting a study
6-13 [The comptroller] shall make appropriate adjustments in the study
6-14 to account for actions taken under Chapter 41, Education Code.
6-15 (b) A study relating to a school district for which an
6-16 appraisal district established for a county with a population of
6-17 125,000 or more appraises property shall be conducted by the
6-18 appraisal district. A study relating to a school district for
6-19 which an appraisal district established for a county with a
6-20 population of less than 125,000 appraises property shall be
6-21 conducted by the comptroller unless the appraisal district chooses
6-22 to conduct the study. An appraisal district may contract with
6-23 another person to conduct a study relating to a school district for
6-24 which the appraisal district appraises property. If a school
6-25 district participates in more than one appraisal district, a
6-26 separate study shall be conducted in each appraisal district in
6-27 which the school district participates for the appropriate portion
7-1 of the school district. The comptroller may:
7-2 (1) audit any study conducted by an appraisal district
7-3 or by another person on behalf of an appraisal district; and
7-4 (2) conduct a study relating to a school district for
7-5 which an appraisal district appraises property if the comptroller
7-6 determines that the study conducted by that appraisal district or
7-7 by another person on behalf of that appraisal district was not
7-8 conducted in accordance with standards adopted by the comptroller.
7-9 (c) The person [In] conducting a [the] study relating to a
7-10 school district[, the comptroller] shall determine the taxable
7-11 value of property in the [each] school district:
7-12 (1) using, if appropriate, samples selected through
7-13 generally accepted sampling techniques; and
7-14 (2) according to generally accepted standard
7-15 valuation, statistical compilation, and analysis techniques.
7-16 (d) [(c)] If the person conducting a study relating to a
7-17 school district [comptroller] determines [in the annual study] that
7-18 the market value of property in the [a] school district according
7-19 to the appraisal roll for the tax year for which the study is
7-20 conducted [as determined by the appraisal district that appraises
7-21 property for the school district], less the total of the amounts
7-22 and values listed in Subsection (e) according to the appraisal roll
7-23 [(d) as determined by that appraisal district], is valid, the
7-24 market value of property in the school district according to the
7-25 appraisal roll for the tax year for which the study is conducted
7-26 [as determined by the appraisal district that appraises property
7-27 for the school district], less the total of the amounts and values
8-1 listed in Subsection (e) according to the appraisal roll [(d) as
8-2 determined by that appraisal district], is presumed to represent
8-3 taxable value. If the person conducts the study for only a portion
8-4 of a school district that participates in more than one appraisal
8-5 district, the person shall make the determination only for that
8-6 portion of the school district. In the absence of [such] a
8-7 presumption under this subsection, the taxable value is the value
8-8 determined [by the comptroller] under Subsection (a).
8-9 (e) [(d)] For the purposes of this section, "taxable value"
8-10 means the market value of all taxable property less:
8-11 (1) the total dollar amount of any residence homestead
8-12 exemptions lawfully granted under Section 11.13(b) or (c), Tax
8-13 Code, in the year that is the subject of the study for each school
8-14 district;
8-15 (2) the total dollar amount of any exemptions granted
8-16 before May 31, 1993, within a reinvestment zone under agreements
8-17 authorized by Chapter 312, Tax Code;
8-18 (3) the total dollar amount of any captured appraised
8-19 value of property that is located in a reinvestment zone on August
8-20 31, 1999, generates a tax increment paid into a tax increment fund,
8-21 and is eligible for tax increment financing under Chapter 311, Tax
8-22 Code, under a reinvestment zone financing plan approved under
8-23 Section 311.011(d), Tax Code, before September 1, 1999;
8-24 (4) the total dollar amount of any exemptions granted
8-25 under Section 11.251, Tax Code;
8-26 (5) the difference between the [comptroller's estimate
8-27 of the] market value and the productivity value of land that
9-1 qualifies for appraisal on the basis of its productive capacity,
9-2 except that the productivity value [estimated by the comptroller]
9-3 may not exceed the fair market value of the land;
9-4 (6) the portion of the appraised value of residence
9-5 homesteads of the elderly on which school district taxes are not
9-6 imposed in the year that is the subject of the study, calculated as
9-7 if the residence homesteads were appraised at the full value
9-8 required by law;
9-9 (7) a portion of the market value of property not
9-10 otherwise fully taxable by the district at market value because of
9-11 action required by statute or the constitution of this state that,
9-12 if the tax rate adopted by the district is applied to it, produces
9-13 an amount equal to the difference between the tax that the district
9-14 would have imposed on the property if the property were fully
9-15 taxable at market value and the tax that the district is actually
9-16 authorized to impose on the property, if this subsection does not
9-17 otherwise require that portion to be deducted;
9-18 (8) the market value of all tangible personal
9-19 property, other than manufactured homes, owned by a family or
9-20 individual and not held or used for the production of income;
9-21 (9) the appraised value of property the collection of
9-22 delinquent taxes on which is deferred under Section 33.06, Tax
9-23 Code;
9-24 (10) the portion of the appraised value of property
9-25 the collection of delinquent taxes on which is deferred under
9-26 Section 33.065, Tax Code; and
9-27 (11) the amount by which the market value of a
10-1 residence homestead to which Section 23.23, Tax Code, applies
10-2 exceeds the appraised value of that property as calculated under
10-3 that section.
10-4 (f) A [(e) The] study shall determine the values as of
10-5 January 1 of each year.
10-6 (g) If a study is conducted by an appraisal district or by
10-7 another person on behalf of an appraisal district, the appraisal
10-8 district shall provide a copy of the study to the comptroller. If a
10-9 school district is the subject of more than one study because the
10-10 school district participates in more than one appraisal district,
10-11 the comptroller shall combine the findings of the studies.
10-12 [(f)] The comptroller shall publish preliminary findings, listing
10-13 values by school district, before February 1 of the year following
10-14 the year of a [the] study. Preliminary findings shall be delivered
10-15 to each school district and shall be certified to the commissioner
10-16 of education.
10-17 [(g) On request of the commissioner of education or a school
10-18 district, the comptroller may audit a school district to determine
10-19 the total taxable value of property in the school district,
10-20 including the productivity values of land only if the land
10-21 qualifies for appraisal on that basis and the owner of the land has
10-22 applied for and received a productivity appraisal. The comptroller
10-23 shall certify the comptroller's findings to the commissioner.]
10-24 [(h) For purposes of Sections 41.0011 and 42.2511, Education
10-25 Code, for the 1996 and 1997 tax years, the comptroller shall
10-26 certify to the commissioner of education:]
10-27 [(1) a final value for each school district computed
11-1 on a residence homestead exemption under Section 1-b(c), Article
11-2 VIII, Texas Constitution, of $5,000; and]
11-3 [(2) a final value for each school district computed
11-4 on:]
11-5 [(A) a residence homestead exemption under
11-6 Section 1-b(c), Article VIII, Texas Constitution, of $15,000; and]
11-7 [(B) the effect of the additional limitation on
11-8 tax increases under Section 1-b(d), Article VIII, Texas
11-9 Constitution, as proposed by H.J.R. No. 4, 75th Legislature,
11-10 Regular Session, 1997.]
11-11 [(i) Subsection (h) and this subsection expire September 1,
11-12 1999.]
11-13 SECTION 6. Sections 403.303(a)-(c), Government Code, are
11-14 amended to read as follows:
11-15 (a) A school district or a property owner whose property is
11-16 included in the study under Section 403.302 and whose tax liability
11-17 on the property is $100,000 or more may protest the [comptroller's]
11-18 findings under Section 403.302(g) [403.302(f) or (g)] by filing a
11-19 petition with the comptroller. The petition must be filed not later
11-20 than the 40th day after the date on which the [comptroller's]
11-21 findings are certified to the commissioner of education and must
11-22 specify the grounds for objection and the value claimed to be
11-23 correct by the school district or property owner.
11-24 (b) After receipt of a petition, the comptroller shall
11-25 notify the commissioner of education of the values specified by the
11-26 school district or property owner. If the study was conducted by an
11-27 appraisal district or by another person acting on behalf of the
12-1 appraisal district, the comptroller shall also notify the appraisal
12-2 district. If the school district participates in more than one
12-3 appraisal district, the comptroller shall notify each appraisal
12-4 district in which the school district participates, in the case of
12-5 a petition filed by a school district, or the appraisal district
12-6 that appraises the property owner's property, in the case of a
12-7 petition filed by a property owner. The comptroller [and] shall
12-8 hold a hearing. The comptroller or the appraisal district, as
12-9 appropriate, has the burden to prove the accuracy of the findings.
12-10 Until a final decision is made by the comptroller, the taxable
12-11 value of property in the district is determined, with respect to
12-12 property subject to the protest, according to the value claimed by
12-13 the school district or property owner, except that the value to be
12-14 used while a final decision is pending may not be less than the
12-15 appraisal roll value for the year of the study. If after a hearing
12-16 the comptroller concludes that the findings should be changed, the
12-17 comptroller shall order the appropriate changes and shall certify
12-18 the changes to the commissioner of education. The comptroller
12-19 shall complete all protest hearings and certify all changes as
12-20 necessary to comply with Chapter 42, Education Code. A hearing
12-21 conducted under this subsection is not a contested case for
12-22 purposes of Section 2001.003.
12-23 (c) The comptroller shall adopt procedural rules governing
12-24 the conduct of protest hearings. The rules shall provide each
12-25 protesting school district and property owner with the requirements
12-26 for submitting a petition initiating a protest and shall provide
12-27 each protesting school district and property owner and an appraisal
13-1 district described by Subsection (b) with adequate notice of a
13-2 hearing, an opportunity to present evidence and oral argument, and
13-3 notice of the comptroller's decision on the hearing.
13-4 SECTION 7. Section 403.304, Government Code, is amended to
13-5 read as follows:
13-6 Sec. 403.304. CONFIDENTIALITY. (a) All information a
13-7 person conducting a study under Section 403.302 [the comptroller]
13-8 obtains from a person, other than a government or governmental
13-9 subdivision or agency, under an assurance that the information will
13-10 be kept confidential, in the course of conducting the [a] study [of
13-11 school district values] is confidential and may not be disclosed
13-12 except as provided in Subsection (b).
13-13 (b) Information made confidential by this section may be
13-14 disclosed:
13-15 (1) in a judicial or administrative proceeding
13-16 pursuant to a lawful subpoena;
13-17 (2) to the person who gave the information to the
13-18 person conducting the study [comptroller]; or
13-19 (3) for statistical purposes if in a form that does
13-20 not identify specific property or a specific property owner.
13-21 SECTION 8. This Act takes effect September 1, 1999, and
13-22 applies only to an annual ratio study of an appraisal district or
13-23 an annual school district property value study conducted for a tax
13-24 year that begins on or after January 1, 2000.
13-25 SECTION 9. The importance of this legislation and the
13-26 crowded condition of the calendars in both houses create an
13-27 emergency and an imperative public necessity that the
14-1 constitutional rule requiring bills to be read on three several
14-2 days in each house be suspended, and this rule is hereby suspended.