By: Geren H.B. No. 3948

A BILL TO BE ENTITLED

AN ACT

relating to ad valorem taxation administered by the comptroller; relying on self-reports; sales disclosure by taxpayers; and the abolition of central appraisal districts and all related functions; providing penalties.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 2, Tax Code, is added to read as follows: CHAPTER 2. STATE ADMINISTRATION OF PROPERTY TAXES

Sec. 2.01. COUNTY APPRAISAL OFFICE; CHIEF ADMINISTRATOR (a) The comptroller shall operate an appraisal office in each county.

(b) The appraisal office is responsible for appraising property in the county for ad valorem tax purposes of each taxing unit that imposes ad valorem taxes on property in the county.

(c) For purposes of this title, each taxing unit with territory in the county is considered to participate in the appraisal office established for that county.

Sec. 2.02. CHIEF ADMINISTRATOR; APPRAISAL OFFICE STAFF. (a) The chief administrator is appointed by and serves at the pleasure of the comptroller. A chief administrator appointed under this section is not eligible to serve if the person held the position of chief appraiser or executive director of a central appraisal district 5 years preceding the effective date of this Act.

(b) The chief administrator is entitled to compensation as provided by the budget approved by the comptroller. The chief administrator may employ and compensate professional, clerical, and other personnel for the appraisal office as provided by the budget.

(c) The chief administrator may delegate authority to employees of the appraisal office.

Sec. 2.03. BUDGET AND FINANCING. (a) Each year the chief administrator shall prepare a proposed budget for the operations of the appraisal office for the following tax year and shall submit copies to the comptroller and to each taxing unit for which the office appraises property. The chief administrator shall include in the budget a list showing each proposed position, the proposed salary for the position, all benefits proposed for the position, each proposed capital expenditure, and an estimate of the amount of the budget that will be allocated to each taxing unit. Each taxing unit entitled to vote on the appointment of board members shall maintain a copy of the proposed budget for public inspection at its principal administrative office.

(d) Each taxing unit for which the office appraises property is allocated a portion of the amount of the budget equal to the proportion that the total dollar amount of property taxes imposed in the county for which the appraisal office is established by the unit for the tax year in which the budget proposal is prepared bears to the sum of the total dollar amount of property taxes imposed in the county by each participating unit for that year.

Sec. 2.03. RENDITION GENERALLY. (a) Except as provided by subsection (b), a person shall render for taxation all tangible real and personal property that is not otherwise exempt that the person owns or that the person manages and controls as a fiduciary on January 1. A rendition statement shall contain:

(1) the name and address of the property owner;

(2) a description of the property by type or category;

(3) if the property is inventory, a description of each type of inventory and a general estimate of the quantity of each type of inventory;

(4) the physical location or taxable situs of the property; and

(5) the property owner's good faith estimate of the market value of the property and the historical cost when new and the year of acquisition of the property.

(b) A rendition of real property remains in effect for subsequent years and a property owner is not required to file a rendition for subsequent years.

Sec. 2.04. DISCLOSURE AND USE OF SALES INFORMATION. (a) The comptroller shall prescribe the form and content of a real property conveyance report filed under this subchapter. The comptroller may prescribe different report forms for different kinds of property and shall ensure that each form requires the person filing the report to provide:

(1) the transferor's name and address;

(2) the transferee's name and address;

(3) information necessary to identify the property and to determine its location;

(4) the address to which tax notices concerning the property should be mailed;

(5) the value of any personal property included in the conveyance;

(6) the purchase price of the property;

(7) the date the transaction was closed; and

(8) the name and address of the person preparing the report.

(b) A person who files a report under this subchapter must:

(1) use the appropriate form prescribed by the comptroller; and

(2) include all information required by the form.

(c) The sales price of the property shall form the person's good faith estimate of market value and its presumed to be the appraised value of the property.

Sec. 2.05. RENDITION OF PROPERTY LOSING EXEMPTION DURING TAX YEAR OR FOR WHICH EXEMPTION APPLICATION IS DENIED. (a) If an exemption applicable to a property on January 1 terminates during the tax year, the person who owns or acquires the property on the date applicability of the exemption terminates shall render the property for taxation within 30 days after the date of termination.

(b) If the chief administrator denies an application for an exemption for property, the person who owns the property on the date the application is denied shall render the property for taxation in the manner provided by herein within 30 days after the date of denial.

Sec. 2.06. REPORT OF DECREASED VALUE. (a) A person who believes the assessed value of his property decreased during the preceding tax year for any reason other than normal depreciation may file an information report describing the property involved and stating the nature and cause of the decrease.

(b) Except as provided by Subsection (d) of this section, before determining the appraised value of property that is the subject of a completed and timely filed report as provided by Subsection (a) of this section, the chief administrator must view the property to verify any reported change in appraised value and its cause and nature. The person who views the property shall note on the back of the property owner's report his name, the date he viewed the property, and his determination of any decrease in appraised value and its cause and nature.

(c) The chief administrator shall deliver a written notice to the property owner of the determination made as provided by Subsection (b) of this section.

Sec. 2.07. REPORT BY BAILEE, LESSEE, OR OTHER POSSESSOR. (a) When required by the chief administrator, a person shall file a report listing the name and address of each owner of property that is in his possession or under his management on January 1 by bailment, lease, consignment, or other arrangement.

(b) When required by the chief administrator, a person who leases or otherwise provides space to another for storage of personal property shall file an information report stating the name and address of each person to whom he leased or otherwise provided storage space on January 1.

Sec. 2.08. INSPECTION OF PROPERTY. (a) The chief administrator or his authorized representative may enter the premises of a business, trade, or profession and inspect the property to determine the existence and market value of tangible real or personal property having a taxable situs in the district.

(b) An inspection under this section must be during normal business hours or at a time mutually agreeable to the chief administrator or his representative and the person in control of the premises.

(c) The chief administrator may request, either in writing or by electronic means, that the property owner provide a statement containing supporting information indicating how the value rendered was determined. The statement must:

(1) summarize information sufficient to identify the property, including:

(A) the physical and economic characteristics relevant to the opinion of value, if appropriate; and

(B) the source of the information used;

(2) state the effective date of the opinion of value; and

(3) explain the basis of the value rendered.

(d) The property owner shall deliver the statement to the chief administrator, either in writing or by electronic means, not later than the 21st day after the date the chief administrator's request is received.

(e) A statement provided under this section is confidential information and may not be disclosed, except as provided herein.

(f) Failure to comply with this section in a timely manner is considered to be a failure to timely render and penalties as described herein shall be applied by the chief administrator.

Sec. 2.09. PUBLICIZING REQUIREMENTS. Each year the comptroller and each chief administrator shall publicize in a manner reasonably designed to notify all property owners the requirements of the law relating to filing rendition statements and property reports and of the availability of forms.

Sec. 2.10. FILING DATE. (a) For residential real property, rendition statements and property reports must be delivered to the chief administrator no later than 60 days after the date of closing of the real estate transaction and shall be submitted by a title agent or escrow agent.

(b) For all other real property, rendition statements and property reports must be delivered to the chief administrator after January 1 and not later than April 15.

(c) On written request by the property owner, the chief administrator shall extend a deadline for filing a rendition statement or property report to May 15. The chief administrator may further extend the deadline an additional 15 days upon good cause shown in writing by the property owner.

Sec. 2.11. RENDITION AND REPORT FORMS. (a) A person required to render property or to file a report as provided by this chapter shall use a form that complies with the appropriate form prescribed or approved by the comptroller.

(b) A person filing a rendition or report shall include all information required hereunder.

(c) The comptroller may prescribe or approve different forms for different kinds of property but shall ensure that each form requires a property owner to furnish the information necessary to identify the property and to determine its ownership, taxability, and situs. In addition, a form prescribed or approved under this subsection must contain the following statement in bold type: "If you make a false statement on this form you could be found guilty of a Class A misdemeanor or a state jail felony under Section 37.10, Penal Code."

(d) To be valid, a rendition or report must be sworn to before an officer authorized by law to administer an oath. The comptroller may not prescribe or approve a rendition or report form unless the form provides for the person filing the form to swear that the information provided in the rendition or report is true and accurate to the best of the person's knowledge and belief.

Sec. 2.12. PLACE AND MANNER OF FILING. A rendition statement or property report required or authorized by this chapter must be filed with the chief administrator for the district in which the property listed in the statement or report is taxable.

Sec. 2.13. SIGNATURE. (a) Each rendition statement or property report required or authorized by this chapter must be signed by an individual who is required to file the statement or report.

(b) When a corporation is required to file a statement or report, an officer of the corporation or an employee or agent who has been designated in writing by the board of directors or by an authorized officer to sign in behalf of the corporation must sign the statement or report.

Sec. 2.14. CONFIDENTIAL INFORMATION. (a) Rendition statements, real and personal property reports, attachments to those statements and reports, and other information the owner of property provides to the appraisal office in connection with the appraisal of the property are confidential and not open to public inspection. The information they contain will be held confidential and may not be disclosed to anyone other than an employee of the appraisal office who appraises property except as authorized by Subsection (b) of this section.

(b) Information made confidential by this section may be disclosed:

(1) in a judicial or administrative proceeding pursuant to a lawful subpoena;

(2) to the person who filed the statement or report or the owner of property subject to the statement, report, or information or to a representative of either authorized in writing to receive the information;

(3) to the comptroller and the comptroller's employees authorized by the comptroller in writing to receive the information or to an assessor or a chief administrator if requested in writing;

(4) in a judicial or administrative proceeding relating to property taxation to which the person who filed the statement or report or the owner of the property that is a subject of the statement, report, or information is a party; or

(5) for statistical purposes if in a form that does not identify specific property or a specific property owner.

(c) A person who legally has access to a statement or report or to other information made confidential by this section or who legally obtains the confidential information commits a Class B misdemeanor if he knowingly:

(1) permits inspection of the statement or report by a person not authorized to inspect it by Subsection (b) of this section; or

(2) discloses the confidential information to a person not authorized to receive the information by Subsection (b) of this section.

(d) No person who directly or indirectly provides information to the comptroller or appraisal office about real or personal property sales prices shall be liable to any other person as the result of providing such information.

Sec. 2.15. MARGIN OF ERROR OF RENDITION STATEMENT FILED BY PROPERTY OWNER. A person who files a rendition statement for real property with the chief administrator shall not be subject to a penalty of fraud or intent to evade tax if the market value rendered for real property is within 5 percent of the market value as determined by an audit order of the comptroller.

Sec. 2.16. PENALTY FOR FRAUD OR INTENT TO EVADE TAX. (a) The chief administrator shall impose an additional penalty on the person equal to 25 percent of the total amount of taxes imposed on the property for the tax year of the statement or report by the taxing units participating in the appraisal district if it is finally determined by a court that:

(1) the person filed a false statement or report with the intent to commit fraud or to evade the tax; or

(2) the person alters, destroys, or conceals any record, document, or thing, or presents to the chief administrator any altered or fraudulent record, document, or thing, or otherwise engages in fraudulent conduct, for the purpose of affecting the course or outcome of an inspection, investigation, determination, or other proceeding before the appraisal district.

(b) Enforcement of this section shall be by a proceeding initiated by the district or county attorney of the county in which the appraisal is established, on behalf of the appraisal district.

(c) In making a determination of liability under this section, the court shall consider:

(1) the person's compliance history with respect to paying taxes and filing statements or reports;

(2) the type, nature, and taxability of the specific property involved;

(3) the type, nature, size, and sophistication of the person's business or other entity for which property is rendered;

(4) the completeness of the person's records;

(5) the person's reliance on advice provided by the appraisal district that may have contributed to the violation;

(6) any change in appraisal district policy during the current or preceding tax year that may affect how property is rendered; and

(7) any other factor the court considers relevant.

(d) The chief administrator may retain a portion of a penalty collected under this section, not to exceed 20 percent of the amount of the penalty, to cover the chief administrator's costs of collecting the penalty. The chief administrator shall distribute the remainder of the penalty to each taxing unit participating in the appraisal district that imposes taxes on the property in proportion to the taxing unit's share of the total amount of taxes imposed on the property by all taxing units participating in the district.

Sec. 2.17. WAIVER OF PENALTY. (a) The chief administrator may waive the penalty imposed if the chief administrator determines that the person exercised reasonable diligence to comply with or has substantially complied with the requirements of this chapter. A written request, accompanied by supporting documentation, stating the grounds on which penalties should be waived must be sent to the chief administrator not later than the 30th day after the date the person received notification of the imposition of the penalty. The chief administrator shall make a determination of the penalty waiver request based on the information submitted.

(b) the chief administrator shall notify the person of the chief administrator's determination regarding the penalty waiver request after considering:

(1) the person's compliance history with respect to paying taxes and filing statements or reports;

(2) the type, nature, and taxability of the specific property involved;

(3) the type, nature, size, and sophistication of the person's business or other entity for which property is rendered;

(4) the completeness of the person's records;

(5) the person's reliance on advice provided by the appraisal district or any other licensed professional with experience in the real estate market that may have contributed to the person's failure to comply and the imposition of the penalty;

(6) any change in appraisal district policy during the current or preceding tax year that may affect how property is rendered; and

(7) any other factors that may have caused the person to fail to timely file a statement or report.

Sec. 2.18. APPRAISALS GENERALLY. (a) All taxable property is appraised at its market value as of January 1. The market value of property shall be determined based upon the good faith estimate of value set forth in the owner's rendition.

Sec. 2.19. PREPARATION OF APPRAISAL RECORDS. (a) By May 15 or as soon thereafter as practicable, the chief administrator shall prepare appraisal records listing all property that is taxable in the district and stating the appraised value of each.

Sec. 2.20. SPECIAL APPRAISAL RECORDS. (a) The chief administrator for each appraisal district shall prepare and maintain a record of property specially appraised under Chapter 23 of this code and subject, in the future, to additional taxation for change in use or status.

(b) The record for each type of specially appraised property must be maintained in a separate document for each 12-month period beginning June 1. The document must include the name of at least one owner of the property, the acreage of the property, and other information sufficient to identify the property as required by the comptroller. All entries in each document must be kept in alphabetical order according to the last name of each owner whose name is part of the record.

Sec. 2.21. FORM AND CONTENT. (a) The appraisal records shall be in the form prescribed by the comptroller and shall include:

(1) the name and address of the owner or, if the name or address is unknown, a statement that it is unknown;

(2) real property;

(3) separately taxable estates or interests in real property, including taxable possessory interests in exempt real property;

(4) personal property;

(5) the appraised value of land and, if the land is appraised as provided by Subchapter C, D, E, or H, Chapter 23, the market value of the land;

(6) the appraised value of improvements to land;

(7) the appraised value of a separately taxable estate or interest in land;

(8) the appraised value of personal property;

(9) the kind of any partial exemption the owner is entitled to receive, whether the exemption applies to appraised or assessed value, and, in the case of an exemption authorized by Section 11.23, the amount of the exemption;

(10) the tax year to which the appraisal applies; and

(11) an identification of each taxing unit in which the property is taxable.

(b) A mistake in the name or address of an owner does not affect the validity of the appraisal records, of any appraisal or tax roll based on them, or of the tax imposed. The mistake may be corrected as provided by this code.

Sec. 2.22. DESCRIPTION. (a) Property shall be described in the appraisal records with sufficient certainty to identify it. The description of a manufactured home shall include the correct identification or serial number of the home or the Department of Housing and Urban Development label number or the state seal number in addition to the information required in Subsection (c) of this Section. A manufactured home shall not be included in the appraisal records unless this identification and descriptive information is included.

(b) The comptroller may adopt rules establishing minimum standards for descriptions of property.

(c) Each description of a manufactured home shall include the approximate square footage, the approximate age, the general physical condition, and any characteristics which distinguish the particular manufactured home.

Sec. 2.23. SEPARATE ESTATES OR INTERESTS. Except as otherwise provided by this chapter, when different persons own land and improvements in separate estates or interests, each separately owned estate or interest shall be listed separately in the name of the owner of each if the estate or interest is described in a duly executed and recorded instrument of title.

Sec. 2.24. LIFE ESTATES. Real property owned by a life tenant and remainderman shall be listed in the name of the life tenant.

Sec. 2.25. PROPERTY ENCUMBERED BY POSSESSORY OR SECURITY INTEREST. (a) Property encumbered by a leasehold or other possessory interest or by a mortgage, deed of trust, or other interest securing payment or performance of an obligation shall be listed in the name of the owner of the property so encumbered.

(b) Except as otherwise directed in writing, real property that is subject to an installment contract of sale shall be listed in the name of the seller if the installment contract is not filed of record in the real property records of the county.

(c) This section does not apply to:

(1) any portion of a facility owned by the Texas Department of Transportation that is part of the Trans-Texas Corridor, is a rail facility or system, or is a highway in the state highway system and that is licensed or leased to a private entity by that department under Chapter 91, 227, or 361, Transportation Code; or

(2) a leasehold or other possessory interest granted by the Texas Department of Transportation in a facility owned by that department that is part of the Trans-Texas Corridor, is a rail facility or system, or is a highway in the state highway system.

Sec. 2.26. LEASEHOLD AND OTHER POSSESSORY INTERESTS IN EXEMPT PROPERTY. (a) Except as provided by Subsection (b) of this section, a leasehold or other possessory interest in real property that is exempt from taxation to the owner of the estate or interest encumbered by the possessory interest shall be listed in the name of the owner of the possessory interest if the duration of the interest may be at least one year.

(b) Except as provided by Subsections (b)and (c) of Section 11.11 of this code, a leasehold or other possessory interest in exempt property may not be listed if:

(1) the property is permanent university fund land;

(2) the property is county public school fund agricultural land;

(3) the property is a part of a public transportation facility owned by an incorporated city or town and:

(A) is an airport passenger terminal building or a building used primarily for maintenance of aircraft or other aircraft services, for aircraft equipment storage, or for air cargo;

(B) is an airport fueling system facility;

(C) is in a foreign-trade zone:

(i) that has been granted to a joint airport board under Chapter 129, Acts of the 65th Legislature, Regular Session, 1977 (Article 1446.8, Vernon's Texas Civil Statutes);

(ii) the area of which in the portion of the zone located in the airport operated by the joint airport board does not exceed 2,500 acres; and

(iii) that is established and operating pursuant to federal law; or

(D)(i) is in a foreign trade zone established pursuant to federal law after June 1, 1991, which operates pursuant to federal law;

(ii) it is contiguous to or has access via a taxiway to an airport located in two counties, one of which has a population of 500,000 or more according to the federal decennial census most recently preceding the establishment of the foreign trade zone; and

(iii) is owned, directly or through a corporation organized under the Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes), by the same incorporated city or town which owns the airport;

(4) the interest is in a part of:

(A) a park, market, fairground, or similar public facility that is owned by an incorporated city or town; or

(B) a convention center, visitor center, sports facility with permanent seating, concert hall, arena, or stadium that is owned by an incorporated city or town as such leasehold or possessory interest serves a governmental, municipal, or public purpose or function when the facility is open to the public, regardless of whether a fee is charged for admission;

(5) the interest involves only the right to use the property for grazing or other agricultural purposes;

(6) the property is owned by the Texas National Research Laboratory Commission or by a corporation formed by the Texas National Research Laboratory Commission under Section 465.008(g), Government Code, and is used or is useful in connection with an eligible undertaking as defined by Section 465.021, Government Code; or

(7) the property is:

(A) owned by a municipality, a public port, or a navigation district created or operating under Section 59, Article XVI, Texas Constitution, or under a statute enacted under Section 59, Article XVI, Texas Constitution; and

(B) used as an aid or facility incidental to or useful in the operation or development of a port or waterway or in aid of navigation-related commerce.

(c) Subsection (a) does not apply to:

(1) any portion of a facility owned by the Texas Department of Transportation that is part of the Trans-Texas Corridor, is a rail facility or system, or is a highway in the state highway system and that is licensed or leased to a private entity by that department under Chapter 91, 227, or 361, Transportation Code; or

(2) a leasehold or other possessory interest granted by the Texas Department of Transportation in a facility owned by that department that is part of the Trans-Texas Corridor, is a rail facility or system, or is a highway in the state highway system.

Sec. 2.27. IMPROVEMENTS. (a) Except as provided by Subsections (b) through (f), an improvement may be listed in the name of the owner of the land on which the improvement is located.

(b) If a person who is not entitled to exemption owns an improvement on exempt land, the improvement shall be listed in the name of the owner of the improvement.

(c) When a person other than the owner of an improvement owns the land on which the improvement is located, the land and the improvement shall be listed separately in the name of the owner of each if either owner files with the chief administrator before May 1 a written request for separate taxation on a form furnished for that purpose together with proof of separate ownership. After an improvement qualifies for taxation separate from land, the qualification remains effective in subsequent tax years and need not be requested again. However, the qualification ceases when ownership of the land or the improvement is transferred or either owner files a request to cancel the separate taxation.

(d) Within 30 days after an owner of land or an improvement qualifies for separate taxation or cancels a qualification, the chief administrator shall deliver a written notice of the qualification or cancellation to the other owner.

(e) A manufactured home shall be listed together with the land on which the home is located if:

(1) the statement of ownership and location for the home issued under Section 1201.207, Occupations Code, reflects that the owner has elected to treat the home as real property; and

(2) a certified copy of the statement of ownership and location has been filed in the real property records in the county in which the home is located.

(f) A manufactured home shall be listed separately from the land on which the home is located if either of the conditions provided by Subsection (e) is not satisfied.

Sec. 2.28. CONDOMINIUMS AND PLANNED UNIT DEVELOPMENTS. (a) A separately owned apartment or unit in a condominium as defined in the Condominium Act shall be listed in the name of the owner of each particular apartment or unit. The value of each apartment or unit shall include the value of its fractional share in the common elements of the condominium.

(b) Property owned by a planned unit development association may be listed and taxes imposed proportionately against each member of the association if the association files with the chief administrator before May 1 a resolution adopted by vote of a majority of all members of the association authorizing the proportionate imposition of taxes. A resolution adopted as provided by this subsection remains effective in subsequent tax years unless it is revoked by a similar resolution.

(c) If property is listed and taxes imposed proportionately as authorized by Subsection (b) of this section, the amount of tax to be imposed on the associations's property shall be divided by the number of parcels of real property in the development. The quotient is the proportionate amount of tax to be imposed on each parcel, and a tax lien attaches to each parcel to secure payment of its proportionate share of the tax on the association's property.

(d) For purposes of this section, "planned unit development association" means an association that owns and maintains property in a real property development project for the benefit of its members, who are owners of individual parcels of real property in the development and are members of the association because of that ownership.

Sec. 2.29. STANDING TIMBER. (a) Except as provided by Subsections (b) and (c) of this section, standing timber may be listed together with the land on which it is located in the name of the owner of the land.

(b) If a person who is not entitled to exemption owns standing timber on exempt land, the timber shall be listed separately in the name of the owner of the timber.

(c) When a person other than the owner of standing timber owns the land on which the timber is located, the land and the timber shall be listed separately in the name of the owner of each if either owner files with the chief administrator before May 1 a written request for separate taxation on a form furnished for that purpose together with proof of separate ownership. A qualification for separate taxation of timber expires at the end of the tax year.

(d) Within 30 days after an owner of land or timber qualifies for separate taxation, the shall deliver a written notice of the qualification to the other owner.

Sec. 2.30. UNDIVIDED INTERESTS. (a) Except as provided by Section 25.12 of this code and by Subsection (b) of this section, a property owned in undivided interests may be listed jointly in the name of all owners of undivided interests in the property or in the name of any one or more owners.

(b) An undivided interest in a property shall be listed separately from other undivided interests in the property in the name of its owner if the interest is described in a duly executed and recorded instrument of title and the owner files with the appraisal office before May 1 a written request for separate taxation on a form furnished for that purpose together with proof of ownership and of the proportion his interest bears to the whole. After an undivided interest qualifies for separate taxation, the qualification remains effective in subsequent tax years and need not be requested again. However, the qualification ceases when ownership is transferred or when any owner files a request to cancel separate taxation.

(c) Within 30 days after an owner qualifies for separate taxation or cancels a qualification, the chief administrator shall deliver a written notice of the qualification or cancellation to the other owners.

Sec. 2.31. MINERAL INTEREST (a) Except as provided by Subsection (b) of this section, each separate interest in minerals in place shall be listed separately from other interests in the minerals in place in the name of the owner of the interest.

(b) Separate interests in minerals in place, other that interests having a taxable value of less than $500, shall be listed jointly in the name of the operator designated with the railroad commission or the name of all owners or any combination of owners if the designated operator files with the appraisal office before May 1 a written request for joint taxation on a form furnished for that purpose. A qualification pursuant to this subsection for joint taxation remains effective in subsequent tax years and need not be requested again. However, the qualification ceases when the designated operator files a request to cancel joint taxation.

(c) If a written request for joint taxation has been filed under Subsection (b), the notice of appraised value provided for by Section 25.19 for the owners included in the request for joint taxation shall be delivered to the operator, owner, or owners of the mineral interest in whose name the mineral interest is designated for joint taxation. The chief administrator is not required to deliver a separate notice of appraised value to each owner included in the request for joint taxation. However, the chief administrator shall deliver a separate notice of appraised value to an owner of an interest in the property who before May 1 files a written request to receive a separate notice of appraised value with the chief administrator on a form provided by the appraisal district for that purpose. The request is effective for each subsequent year until revoked by the owner or until the owner no longer owns an interest in the property.

Sec. 2.32. EXEMPT PROPERTY SUBJECT TO CONTRACT OF SALE. Property that is exempt from taxation to the titleholder but is subject on January 1 to a contract of sale to a person not entitled to exemption shall be listed in the name of the purchaser.

Sec. 2.33. QUALIFYING TRUSTS. The interest of a qualifying trust as defined by Section 11.13(j) in a residence homestead shall be listed in the name of the trustor of the trust.

Sec. 2.34. PROPERTY LOSING EXEMPTION DURING TAX YEAR. (a) If an exemption applicable to a property on January 1 terminates during the tax year, the property shall be listed in the name of the person who owns or acquires the property on the date applicability of the exemption terminates.

(b) The chief administrator shall make an entry on the appraisal records showing that taxes on the property are to be calculated as provided by Section 26.10 of this code and showing the date on which exemption terminated.

Sec. 2.35. PROPERTY OVERLAPPING TAXING UNIT BOUNDARIES. If real property is located partially outside and partially inside a taxing unit's boundaries, the portion inside the unit's boundaries shall be listed separately from the remaining portion.

Sec. 2.36. OMITTED PROPERTY. (a) If the chief administrator discovers that the real property was omitted from an appraisal roll in any one of the five preceding years or that personal property was omitted from an appraisal roll in one of the two preceding years, he shall appraise the property as of January 1 of each year that it was omitted and enter the property and its appraised value in the appraisal records.

(b) The entry shall show that the appraisal is for property that was omitted from an appraisal roll in a prior year and shall indicate the year and the appraised value for each year.

Sec. 2.37. SUPPLEMENTAL APPRAISAL RECORDS. (a) After submission of appraisal records, the chief administrator shall prepare supplemental appraisal records listing:

(1) each taxable property the chief administrator discovers that is not included in the records already submitted, including property that was omitted from an appraisal roll in a prior tax year;

(2) property on which the appraisal review board has not determined a protest at the time of its approval of the appraisal records; and

(3) property that qualifies for an exemption under Section 11.13(n) that was adopted by the governing body of a taxing unit after the date the appraisal records were submitted.

(b) Supplemental appraisal records shall be in the form prescribed by the comptroller and shall include the items required by Section 25.02 of this code.

Sec. 2.38. APPRAISAL ROLL. The appraisal records as approved by the chief administrator constitute the appraisal roll for the district.

Sec. 2.39. CORRECTION OF APPRAISAL ROLL. (a) The chief administrator may change the appraisal roll at any time to correct a name or address, a determination of ownership, a description of property, multiple appraisals of a property, or a clerical error or other inaccuracy as prescribed by board rule that does not increase the amount of tax liability. Before the 10th day after the end of each calendar quarter, the chief administrator shall submit to the appraisal review board and to the board of directors of the appraisal district a written report of each change made under this subsection that decreases the tax liability of the owner of the property. The report must include:

(1) a description of each property; and

(2) the name of the owner of that property.

Sec. 2.40. AUDITS. The chief administrator shall have the authority to conduct audits of taxpayers to determine whether the taxpayer's good faith estimate of value is a reasonable estimate of the market value of the property. If the chief administrator determines that the good faith estimate of value is not a reasonable estimate of value, the chief administrator may add the additional value to the appraisal roll as omitted property.

Sec. 2.41. TAXPAYER CHALLENGES. The comptroller shall adopt rules consistent with Chapter 111, Tax Code, and Section 112, Tax Code, for taxpayer challenges to the imposition of the appraised value of the property by the chief administrator.

SECTION 2. (a) A reference in a law other than the Tax Code to an appraisal district means the appraisal office established for a county.

(b) A reference in law to the chief appraiser of an appraisal district or to the board or directors of an appraisal district means the chief administrator of an appraisal office.

SECTION 3. (a) Chapters 5, 6, 22, 24, 41, 41A, 42 and 43 of the Tax Code are repealed.

(b) Subchapters A and B of Chapter 25, Tax Code, are repealed.

SECTION 4. (a) This Act takes effect January 1, 2008.

(b) On the effective date of this Act:

(1) each appraisal district, appraisal district board of directors, and appraisal review board is abolished;

(2) all personnel, property, records, and funds of an appraisal district are transferred to the Comptroller of Public Accounts for the benefit of the appraisal office for the county for which the appraisal district was established; and

(3) the comptroller is substituted for an appraisal district in any pending action, including a protest or challenge before an appraisal review board or an appeal or other action in a court.

(c) On the effective date of this Act, all unpaid debts incurred by an appraisal district become debts of this state.

SECTION 5. The comptroller shall have rule making authority for purposes of the effective implementation of this act. The rules shall be consistent with other provisions relating to the administration of taxes by the comptroller.

SECTION 6. This Act takes effect on the date on which the constitutional amendment proposed by the 80th Legislature, Regular Session, 2007, authorizing the legislature to allow for ad valorem taxation be administered by the comptroller; relying on self-reports; sales disclosure by taxpayers; abolition of central appraisal districts and all related functions; and requiring a statewide referendum before the legislature may impose a real estate transfer fee or tax, takes effect, if that constitutional amendment is approved by the voters. If that constitutional amendment is not approved by the voters, this Act has no effect.