By: Otto, et al. (Senate Sponsor - Williams) H.B. No. 8
         (In the Senate - Received from the House April 27, 2009;
  May 1, 2009, read first time and referred to Committee on Finance;
  May 8, 2009, reported favorably by the following vote:  Yeas 12,
  Nays 0; May 8, 2009, sent to printer.)
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to certain studies and reviews of appraisal districts
  conducted by the comptroller of public accounts.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Sections 403.3011(1), (2), and (4), Government
  Code, are amended to read as follows:
               (1)  "Study" ["Annual study"] means a study conducted
  under Section 403.302.
               (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 for the school district determined in the [annual]
  study;
                     (B)  in the two studies [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 90 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; and
                     (D)  the appraisal district that appraises
  property for the school district was in compliance with the scoring
  requirement of the comptroller's most recent review of the
  appraisal district conducted under Section 5.102, Tax Code.
               (4)  "State value" means the value of property in a
  school district as determined in a [the annual] study.
         SECTION 2.  Section 403.302, Government Code, is amended by
  amending Subsections (a), (c), (c-1), (f), (h), (i), and (l) and
  adding Subsections (a-1), (a-2), (m), (n), and (o) to read as
  follows:
         (a)  The comptroller shall conduct a [an annual] study using
  comparable sales and generally accepted auditing and sampling
  techniques to determine the total taxable value of all property in
  each school district. The study shall determine the taxable value
  of all property and of each category of property in the district and
  the productivity value of all land that qualifies for appraisal on
  the basis of its productive capacity and for which the owner has
  applied for and received a productivity appraisal. The comptroller
  shall make appropriate adjustments in the study to account for
  actions taken under Chapter 41, Education Code.
         (a-1)  The comptroller shall conduct a study:
               (1)  at least every two years in each school district
  for which the most recent study resulted in a determination by the
  comptroller that the school district's local value was valid; and
               (2)  each year in a school district for which the most
  recent study resulted in a determination by the comptroller that
  the school district's local value was not valid.
         (a-2)  If in any year the comptroller does not conduct a
  study, the school district's local value for that year is
  considered to be valid.
         (c)  If after conducting the [annual] study the comptroller
  determines that the local value for a school district is valid, the
  local value is presumed to represent taxable value for the school
  district. In the absence of that presumption, taxable value for a
  school district is the state value for the school district
  determined by the comptroller under Subsections (a) and (b) unless
  the local value exceeds the state value, in which case the taxable
  value for the school district is the district's local value. In
  determining whether the local value for a school district is valid,
  the comptroller shall use a margin of error that does not exceed
  five percent unless the comptroller determines that the size of the
  sample of properties necessary to make the determination makes the
  use of such a margin of error not feasible, in which case the
  comptroller may use a larger margin of error.
         (c-1)  This subsection applies only to a school district
  whose central administrative office is located in a county with a
  population of 9,000 or less and a total area of more than 6,000
  square miles.  If after conducting the [annual] study for a tax
  year the comptroller determines that the local value for a school
  district is not valid, the comptroller shall adjust the taxable
  value determined under Subsections (a) and (b) as follows:
               (1)  for each category of property sampled and tested
  by the comptroller in the school district, the comptroller shall
  use the weighted mean appraisal ratio determined by the study,
  unless the ratio is more than four percentage points lower than the
  weighted mean appraisal ratio determined by the comptroller for
  that category of property in the immediately preceding study, in
  which case the comptroller shall use the weighted mean appraisal
  ratio determined in the immediately preceding study minus four
  percentage points;
               (2)  the comptroller shall use the category weighted
  mean appraisal ratios as adjusted under Subdivision (1) to
  establish a value estimate for each category of property sampled
  and tested by the comptroller in the school district; and
               (3)  the value estimates established under Subdivision
  (2), together with the local tax roll value for any categories not
  sampled and tested by the comptroller, less total deductions
  determined by the comptroller, determine the taxable value for the
  school district.
         (f)  The study shall determine the values as of January 1 of
  each year:
               (1)  for a school district in which a study was
  conducted according to the results of the study; and
               (2)  for a school district in which a study was not
  conducted according to the market value determined by the appraisal
  district that appraises property for the district, less the amounts
  specified by Subsection (d).
         (h)  On request of the commissioner of education or a school
  district, the comptroller may audit the total taxable value of
  property in a school district and may revise the [annual] study
  findings. The request for audit is limited to corrections and
  changes in a school district's appraisal roll that occurred after
  preliminary certification of the [annual] study findings by the
  comptroller. Except as otherwise provided by this subsection, the
  request for audit must be filed with the comptroller not later than
  the third anniversary of the date of the final certification of the
  [annual] study findings. The request for audit may be filed not
  later than the first anniversary of the date the chief appraiser
  certifies a change to the appraisal roll if the chief appraiser
  corrects the appraisal roll under Section 25.25 or 42.41, Tax Code,
  and the change results in a material reduction in the total taxable
  value of property in the school district. The comptroller shall
  certify the findings of the audit to the commissioner of education.
         (i)  If the comptroller determines in the [annual] study that
  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,
  the comptroller, in determining the taxable value of property in
  the school district under Subsection (d), shall for purposes of
  Subsection (d)(14) subtract from the market value as determined by
  the appraisal district of residence homesteads to which Section
  23.23, Tax Code, applies the amount by which that amount exceeds the
  appraised value of those properties as calculated by the appraisal
  district under Section 23.23, Tax Code.  If the comptroller
  determines in the [annual] study that 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 not valid, the comptroller, in determining
  the taxable value of property in the school district under
  Subsection (d), shall for purposes of Subsection (d)(14) subtract
  from the market value as estimated by the comptroller of residence
  homesteads to which Section 23.23, Tax Code, applies the amount by
  which that amount exceeds the appraised value of those properties
  as calculated by the appraisal district under Section 23.23, Tax
  Code.
         (l)  If after conducting the [annual] study for [the year
  2003 or] a [subsequent] year the comptroller determines that a
  school district is an eligible school district, for that year and
  the following year the taxable value for the school district is the
  district's local value. [Not later than the first anniversary of
  the date of the determination that a school district is an eligible
  school district, the comptroller shall complete an appraisal
  standards review as provided by Section 5.102, Tax Code, of each
  appraisal district that appraises property for the school
  district.]
         (m)  The Comptroller's Property Value Study Advisory
  Committee is created. The committee is composed of:
               (1)  one member of the house of representatives,
  appointed by the speaker of the house of representatives;
               (2)  one member of the senate, appointed by the
  lieutenant governor;
               (3)  two members who represent appraisal districts,
  appointed by the comptroller;
               (4)  two members who represent school districts,
  appointed by the comptroller; and
               (5)  three members appointed by the comptroller who are
  residents of this state and are school district taxpayers or have
  expertise in school district taxation or ratio studies.
         (n)  Chapter 2110 does not apply to the size, composition, or
  duration of the Comptroller's Property Value Study Advisory
  Committee.
         (o)  The comptroller shall adopt rules governing the conduct
  of the study after consultation with the Comptroller's Property
  Value Study Advisory Committee.
         SECTION 3.  The heading to Section 403.304, Government Code,
  is amended to read as follows:
         Sec. 403.304.  COOPERATION WITH COMPTROLLER;
  CONFIDENTIALITY.
         SECTION 4.  Section 403.304, Government Code, is amended by
  amending Subsection (a) and adding Subsection (a-1) to read as
  follows:
         (a)  A school district, appraisal district, or other
  governmental entity in this state shall promptly comply with an
  oral or written request from the comptroller for information to be
  used in conducting a study, including information that is made
  confidential by Chapter 552 of this code, Section 22.27, Tax Code,
  or another law of this state.
         (a-1)  All information the comptroller obtains from a
  person, other than a government or governmental subdivision or
  agency, under an assurance that the information will be kept
  confidential, in the course of conducting a study [of school
  district values] is confidential and may not be disclosed except as
  provided in Subsection (b).
         SECTION 5.  Section 5.07(c), Tax Code, is amended to read as
  follows:
         (c)  The comptroller shall also prescribe a uniform record
  system to be used by all appraisal districts for the purpose of
  submitting data to be used in the [annual] studies required by
  Section 5.10 of this code and by Section 403.302, Government Code.
  The record system shall include a compilation of information
  concerning sales of real 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.
         SECTION 6.  Section 5.10(a), Tax Code, is amended to read as
  follows:
         (a)  At least once every two years, the [The] comptroller
  shall conduct a [an 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. The comptroller shall publish a report of the findings of
  the study, including in the report the median levels of appraisal
  for each major category of property, the coefficient of dispersion
  around the median level of appraisal for each major category of
  property, and any other standard statistical measures that the
  comptroller considers appropriate. In conducting the study, the
  comptroller shall apply appropriate standard statistical analysis
  techniques to data collected as part of the [annual] study of school
  district taxable values required by Section 403.302, Government
  Code.
         SECTION 7.  Section 5.102, Tax Code, is amended to read as
  follows:
         Sec. 5.102.  REVIEW OF APPRAISAL DISTRICTS [STANDARDS].  (a)
  At least once every two years, the [The] comptroller shall review
  the governance of each appraisal district, taxpayer assistance
  provided, and the operating and appraisal standards, procedures,
  and methodology used by each appraisal district [that appraises
  property for an eligible school district as defined by Section
  403.3011, Government Code], to determine compliance with generally
  accepted [appraisal] standards, procedures, and methodology [and
  practices]. After consultation with the advisory committee created
  under Section 403.302, Government Code, the [The] comptroller by
  rule may establish procedures and standards for conducting and
  scoring the review.
         (b)  In conducting the review, the comptroller is entitled to
  access to all records and reports of the appraisal district, to copy
  or print any record or report of the appraisal district, and to the
  assistance of the appraisal district's officers and employees.
         (c)  At the conclusion of the review, the comptroller shall,
  in writing, notify the appraisal district concerning its
  performance in the review.  If the review results in a finding that
  an appraisal district is not in compliance with generally accepted
  [appraisal] standards, procedures, and methodology [and
  practices], the comptroller shall deliver a report that details the
  comptroller's findings and recommendations for improvement to:
               (1)  the appraisal district's chief appraiser and board
  of directors; and
               (2)  the superintendent and board of trustees of each
  school district participating in the appraisal district.
         (d)  If the appraisal district fails to comply with the
  recommendations in the report and the comptroller finds that the
  board of directors of the appraisal district failed to take
  remedial action reasonably designed to ensure substantial
  compliance with each recommendation in the report before the first
  anniversary of the date the report was issued, the comptroller
  shall notify the Board of Tax Professional Examiners, or a
  successor to the board, which shall take action necessary to ensure
  that the recommendations in the report are implemented as soon as
  practicable [judge of each district court in the county for which
  the appraisal district is established, who shall appoint a board of
  conservators consisting of five members to implement the
  recommendations. The board of conservators shall exercise
  supervision and control over the operations of the appraisal
  district until the comptroller determines under Section 403.302,
  Government Code, that in the same year the taxable value of each
  school district for which the appraisal district appraises property
  is the local value for the school district. The appraisal district
  shall bear the costs related to the supervision and control of the
  district by the board of conservators].
         (e)  Before February 1 of the year following the year in
  which the Board of Tax Professional Examiners, or its successor,
  takes action under Subsection (d), and with the assistance of the
  comptroller, the board shall determine whether the recommendations
  in the most recent report have been substantially implemented. The
  presiding officer of the board shall notify the chief appraiser and
  the board of directors of the appraisal district in writing of the
  board's determination.
         SECTION 8.  Sections 5.12(a), (d), and (e), Tax Code, are
  amended to read as follows:
         (a)  The comptroller shall audit the performance of an
  appraisal district if one or more of the following conditions exist
  according to each of two consecutive [annual] studies conducted by
  the comptroller under Section 5.10 [of this code], regardless of
  whether the prescribed condition or conditions that exist are the
  same for each of those studies:
               (1)  the overall median level of appraisal for all
  property in the district for which the comptroller determines a
  median level of appraisal is less than 0.75;
               (2)  the coefficient of dispersion around the overall
  median level of appraisal of the properties used to determine the
  overall median level of appraisal for all property in the district
  for which the comptroller determines a median level of appraisal
  exceeds 0.30; or
               (3)  the difference between the median levels of
  appraisal for any two classes of property in the district for which
  the comptroller determines a median level of appraisal is more than
  0.45.
         (d)  A request for a performance audit of an appraisal
  district may not be made under Subsection (b) or (c) [of this
  section] if according to each of the two most recently published
  [annual] studies conducted by the comptroller under Section 5.10
  [of this code]:
               (1)  the overall median level of appraisal for all
  property in the district for which the comptroller determines a
  median level of appraisal is more than 0.90 and less than 1.10;
               (2)  the coefficient of dispersion around the overall
  median level of appraisal of the properties used to determine the
  overall median level of appraisal for all property in the district
  for which the comptroller determines a median level of appraisal is
  less than 0.15; and
               (3)  the difference between the highest and lowest
  median levels of appraisal in the district for the classes of
  property for which the comptroller determines a median level of
  appraisal is less than 0.20.
         (e)  A request for a performance audit of an appraisal
  district may not be made under Subsection (b) or (c) [of this
  section]:
               (1)  during the two years immediately following the
  publication of the second of two consecutive [annual] studies
  according to which the comptroller is required to conduct an audit
  of the district under Subsection (a) [of this section]; [or]
               (2)  during the year immediately following the date the
  results of an audit of the district conducted by the comptroller
  under Subsection (a) [of this section] are reported to the chief
  appraiser of the district; or
               (3)  during a year in which the comptroller is
  conducting a review of the district under Section 5.102.
         SECTION 9.  Section 5.13(a), Tax Code, is amended to read as
  follows:
         (a)  The comptroller shall complete an audit required by
  Section 5.12(a) [of this code] within two years after the date of
  the publication of the second of the two [annual] studies the
  results of which required the audit to be conducted. The
  comptroller shall complete an audit requested under Section 5.12(b)
  or (c) [of this code] as soon as practicable after the request is
  made.
         SECTION 10.  Section 41A.12, Tax Code, is amended to read as
  follows:
         Sec. 41A.12.  USE OF PROPERTIES AS SAMPLES.  An arbitrator's
  determination of market value under this chapter is the market
  value of the property subject to the appeal for the purposes of the
  [annual] study conducted under Section 403.302, Government Code.
         SECTION 11.  Sections 5.101 and 5.12(g), Tax Code, are
  repealed.
         SECTION 12.  As soon as possible after the effective date of
  this Act, the speaker of the house of representatives, lieutenant
  governor, and comptroller shall appoint members to the
  Comptroller's Property Value Study Advisory Committee in
  accordance with Section 403.302(m), Government Code, as added by
  this Act.
         SECTION 13.  The change in law made by this Act applies only
  to a study conducted under Section 5.10, Tax Code, or Section
  403.302, Government Code, or a review conducted under Section
  5.102, Tax Code, for a year that begins on or after January 1, 2009.
  A study or review for a year that began before that date is covered
  by the law in effect immediately before the effective date of this
  Act, and the former law is continued in effect for that purpose.
         SECTION 14.  This Act takes effect January 1, 2010.
 
  * * * * *