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By: Staples S.B. No. 671
A BILL TO BE ENTITLED
AN ACT
relating to the determination of school district property values
and the accountability of appraisal district operations.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 403.301, Government Code, is amended to
read as follows:
Sec. 403.301. PURPOSE. (a) It is the policy of this state
to ensure equity among taxpayers in the burden of school district
taxes and among school districts in the distribution [payment] of
state financial aid for public education [to schools]. The purpose
of this subchapter is to promote that policy [equity] by providing
for uniformity in local property appraisal [the tax appraisal and
assessment] practices and procedures and in the determination of
property values for schools in order to distribute state funding
equitably [of school district tax offices, for improvement in the
administration and operation of school district tax offices, and
for greater competence among persons appraising and assessing
school districts' taxes].
(b) In this subchapter:
(1) "Annual study" means the study required of the
comptroller by Section 403.302(a).
(2) "Eligible school district" means a school district
for which the comptroller has determined the following:
(A) in the most recent annual study, the local
value is invalid under Section 403.302(c) and does not exceed the
state value determined by the comptroller;
(B) in the annual study for each of the two years
preceding the most recent annual study, the school district's local
value was valid under Section 403.302(c); and
(C) in the most recent annual study, the
aggregate local value of all of the categories of property sampled
by the comptroller is not less than 95 percent of the lower limit of
the margin of error as determined by the comptroller of the
aggregate value as determined by the comptroller of all of the
categories of property sampled by the comptroller.
(3) "Local value" means the market value of property
in a school district as determined by the appraisal district that
appraises property for the school district, less the total amounts
and values listed in Section 403.302(d) as determined by that
appraisal district.
(4) "State value" means the value determined by the
comptroller as provided by Sections 403.302(a) and (b).
SECTION 2. Section 403.302, Government Code, is amended by
amending Subsections (c) and (h) and adding Subsections (l) and (m)
to read as follows:
(c) If the comptroller determines in the annual study that
local value [the market value of property in a school district as
determined by the appraisal district that appraises property for
the school district, less the total of the amounts and values listed
in Subsection (d) as determined by that appraisal district,] is
valid, local value [the market value of property in the school
district as determined by the appraisal district that appraises
property for the school district, less the total of the amounts and
values listed in Subsection (d) as determined by that appraisal
district,] is presumed to represent taxable value. In the absence
of such a presumption, taxable value is the state value determined
by the comptroller under Subsections [Subsection] (a) and (b)
unless local value exceeds state value, in which case local value
shall represent taxable value.
(h) The [On request of the commissioner of education or a
school district, the] comptroller may audit [a school district to
determine] the total taxable value of property in a [the] school
district and may revise the findings of value in response to a
request by a school district or the commissioner of education. The
grounds for a request for a revision audit are limited to
corrections and changes in a school's tax roll that occurred after
preliminary certification of the annual study findings. The
request for a revision audit must be filed with the comptroller
within three years after the final certification of the findings to
the commissioner of education, except for changes in value due to
judicial determinations and material reductions in value resulting
from corrections of appraisal rolls made under Section 25.25, Tax
Code, that may be requested within one year after certification of
the changes to the appraisal rolls by the chief appraiser. The
comptroller may adopt rules to facilitate the efficient audit of
total taxable value[, including the productivity values of land
only if the land qualifies for appraisal on that basis and the owner
of the land has applied for and received a productivity appraisal].
The comptroller shall certify the comptroller's findings to the
commissioner of education.
(l) Beginning with the annual study conducted for the year
2004, the comptroller shall substitute local value for state value
in an eligible school district and local value shall represent
taxable value in the annual study for which the school district
becomes eligible and in the annual study immediately following the
annual study for which the school district becomes eligible.
Within 12 months of the substitution of local value for state value
as provided by this subsection, the comptroller shall complete an
appraisal standards review of the appraisal district that appraises
property for the school district, as provided by Section 5.102, Tax
Code.
(m) If the comptroller has certified local value as taxable
value for a school district in which local value is invalid and
exceeds state value, as provided by Subsection (c), the
commissioner of education shall compute the amount by which each
district's allocation of state funding is affected by this
certification rather than a certification of state value. The
total amount of state funding difference shall be allocated
proportionately to the school districts with certified state values
and maintenance and operation tax rates that exceed $1.42. This
subsection applies only to school funding for fiscal years 2004 and
2005.
SECTION 3. Subsection (c), Section 5.07, Tax Code, is
amended to read as follows:
(c) The comptroller shall also prescribe a uniform record
system to be used by all offices appraising property for tax
purposes. The record system must include a compilation of
information concerning sales of property within the boundaries of
the appraisal district. The sales information maintained in the
uniform record system shall be submitted annually in a form
prescribed by the comptroller for use in conducting the annual
study of school district property values under Section 403.302,
Government Code.
SECTION 4. Section 5.102, Tax Code, is amended to read as
follows:
Sec. 5.102. REVIEW OF APPRAISAL STANDARDS. (a) The
comptroller shall review the appraisal standards, procedures, and
methodology used by each appraisal district in which the
comptroller finds that a school district is an eligible school
district as defined by Section 403.301(b), Government Code, to
determine compliance with generally accepted appraisal standards
and practices. The comptroller may establish by rule procedures
and standards for conducting the review.
(b) If the review results in a finding that an appraisal
district is not in compliance with generally accepted appraisal
standards and practices, the comptroller shall deliver a report
that details the comptroller's findings and recommendations for
improvement to the appraisal district's chief appraiser and board
of directors and the superintendent and board of trustees of each
school district participating in the appraisal district.
(c) In conducting the review, the comptroller is entitled to
access to all records and reports of the appraisal district and to
the assistance of appraisal district employees or officers [If
noncompliance with generally accepted appraisal standards and
practices is found in two consecutive reviews and if an affected
appraisal district's chief appraiser and board of directors fail to
take effective remedial action as determined by the comptroller,
the comptroller may appoint a special master who may exercise
supervision and control over the operations of the district until
full compliance with generally accepted appraisal standards and
practices is achieved. The appraisal district shall bear the costs
related to the master's supervision and control].
(d) If the appraisal district fails to comply with the
recommendations made in the review and the comptroller finds that
the appraisal district board of directors failed to take remedial
action within one year after the issuance of the review, the
comptroller shall notify the district judges serving in the county,
who shall appoint a five-member board of conservators to implement
the recommendations. The members of the board of conservators
shall exercise supervision and control over the operations of the
appraisal district until all school districts for which the
appraisal district appraises property are determined by the
comptroller to have valid local value under Subchapter M, Chapter
403, Government Code, in the same annual study. The appraisal
district shall bear the costs related to the supervision and
control by the board of conservators.
SECTION 5. Section 5.12, Tax Code, is amended by adding
Subsection (h) to read as follows:
(h) In addition to the performance audits required by
Subsections (a), (b), and (c) and the review of appraisal standards
required by Section 5.102, the comptroller may audit an appraisal
district to analyze the effectiveness and efficiency of the
policies, management, and operations of the appraisal district.
The results of the audit shall be delivered in a report that details
the comptroller's findings and recommendations for improvement to
the appraisal district's chief appraiser and board of directors and
the governing bodies of all taxing units participating in the
appraisal district. The comptroller may require reimbursement by
the appraisal district for some or all of the costs of the audit,
not to exceed the actual costs associated with conducting the
audit.
SECTION 6. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2003.