BILL ANALYSIS

C.S.H.B. 4809

By: Meyer

Ways & Means

Committee Report (Substituted)

BACKGROUND AND PURPOSE

Under current law, Texas permits a taxing unit to exempt from property taxation part or all of the assessed value of property designated as a historic site. However, the bill author has informed the committee that the appraisals of such property for property tax purposes do not reflect the significant restrictions placed on these properties due to their historic designation and that such restrictions substantially reduce a historic property's development potential and, therefore, its market value. However, the bill author has further informed the committee that current appraisal practices often assign land values to historic properties comparable to those of unrestricted neighboring parcels, potentially resulting in disproportionate tax burdens. C.S.H.B. 4809 seeks to ensure that appraisals of historic sites for property tax purposes reflect the real-world effect of historic preservation restrictions on market value by entitling a property owner to protest certain determinations relating to the appraised value of a structure or archaeological site that qualifies for a historic or archaeological site property tax exemption and the land necessary to access the structure or site.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

C.S.H.B. 4809 amends the Tax Code to entitle a property owner to protest before the appraisal review board a determination of the following:

· the appraised value of a structure or archaeological site that qualifies for an exemption as a historic or archeological site;

· the appraised value of the land necessary to access the structure or site; and

· the allocation of the appraised value between the structure or site and the land.

The bill provides for such an entitlement in provisions that are effective until January 1, 2027, and provisions that are effective on that date. The bill authorizes a property owner, for purposes of a structure or archeological site and land subject to a historic or archeological site property tax exemption, to protest the appraised value of the structure or archeological site and the appraised value of the land separately. The bill authorizes the property owner to protest the allocation of appraised value between the structure or archeological site and the land.

C.S.H.B. 4809 applies only to a taxpayer protest for which a notice of protest is filed on or after the bill's effective date.

EFFECTIVE DATE

On passage, or, if the bill does not receive the necessary vote, September 1, 2025.

COMPARISON OF INTRODUCED AND SUBSTITUTE

While C.S.H.B. 4809 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

Whereas the substitute entitles a property owner to protest before the appraisal review board a determination of the appraised value of a structure or archaeological site that qualifies for a historic or archeological site property tax exemption, the appraised value of the land necessary to access the structure or site, and the allocation of the appraised value between the structure or site and the land, the introduced did the following:

· required a chief appraiser, in determining the market value of a historic site for property tax purposes, to consider the effect on the property's value of any restriction placed on the property owner's ability to alter, improve, or repair the property based on the property's designation as a historic site; and

· defined "historic site" for purposes of that requirement as a structure or archeological site and the land necessary for access to and use of the structure or archeological site subject to a historic or archeological site property tax exemption.

The substitute includes a provision absent from the introduced that does the following:

· authorizes a property owner, for purposes of a structure or archeological site and land subject to a historic or archeological site property tax exemption, to protest the appraised value of the structure or archeological site and the appraised value of the land separately; and

· authorizes the property owner to protest the allocation of appraised value between the structure or archeological site and the land.

The substitute changes the bill's effective date to provide for its possible immediate effect, contingent on receiving the requisite constitutional vote, or September 1, 2025 if it does not receive the requisite constitutional vote, whereas the introduced provided only for the bill to take effect January 1, 2026, with no possibility for immediate effect.

Whereas the introduced established that the bill's provisions applied to the appraisal for property tax purposes of property that qualifies for an exemption as a historic or archaeological site only for a tax year beginning on or after the bill's effective date, the substitute establishes that the bill's provisions apply only to a taxpayer protest for which a notice of protest is filed on or after the bill's effective date.