Property Tax Legislation: Pending Changes and Recommendations

Pending Property Tax Legislation Caveat: It ain t over til its over And It hasn t really started yet By Sands Stiefer 13th Annual Local Government Seminar January 19 2017

Senate Select Committee on Property Tax Reform & Relief Interim Charges 1. Study the property tax process, including the appraisal system, and recommend ways to promote transparency, simplicity, and accountability by all taxing entities. 2. Examine and develop options to further reduce the tax burden on property owners. 13th Annual Local Government Seminar January 19 2017

Tax Levy Recommendations 1. repealing the current petition driven rollback process. 2. replacing the existing rollback process with one that requires automatic tax ratification elections held on the uniform election date and locations in November if a taxing unit exceeds the ratification tax rate. 3. reducing the 8% growth limit in the rollback tax rate calculations to a 4% or lower amount more in line with Texans ability to pay. 4. simplifying the calculations used to generate the rollback tax rate as well as the other calculations that are used in the Truth in Taxation process. 5. simplifying and adjusting the tax year calendar to make it more favorable to the citizenry and government and in alignment with the requirements of the Elections Code. 13th Annual Local Government Seminar January 19 2017

Appraisal Recommendations STATE LEVEL SUMMARY RECOMMENDATIONS 1. creating an advisory board appointed by the comptroller to provide direct oversight over the property tax system, issue binding rulings with respect to the interpretation of the Property Tax Code, and have enforcement authority over those rulings. 2. giving the Property Tax Assistance Division in the Comptroller s Office authority to enforce the collection of property value, tax rate and tax levy data from local governments. 3. requiring taxing units to submit to the Comptroller their effective and rollback tax rate worksheets as well as the order adopting the tax rate each year before they may issue tax bills. 13th Annual Local Government Seminar January 19 2017

Appraisal Recommendations 4. requiring the Property Tax Assistance Division to increase the amount of training required for basic certification to serve on an appraisal review board as well as specialized training for appraisal review board members who will hear complex or technical protests. 5. requiring the Texas Department of Licensing and Regulation (TDLR) to share any data they gather from investigation of a property tax licensee with the Comptroller s Office. 6. requiring TDLR to take timely action on disciplinary actions that the comptroller has referred to TDLR. 7. giving the comptroller the authority to ensure that CADs follow the guidelines set out in any appraisal manuals issued by the Comptroller s Office. 13th Annual Local Government Seminar January 19 2017

Appraisal Recommendations 1. revising the required Truth in Taxation calculations to simplify the form used. The core calculation should be revised to subtract a taxing unit's levy from the prior year from the current year to determine the additional taxes that will be imposed, and then provide the additional cost to the average home due to the increase in taxes. 2. revising the open government laws to make clear in statute that the information or records of a third party that contracts with a central appraisal district are subject to open records requests. 3. revising the Property Tax Code to require the limited re-appraisal of property that is located in an area that is or was subject to an official disaster declaration by the governor. 4. repealing the ability of a taxing unit to challenge the values of an entire class of properties, even within its own boundaries, to the detriment of taxpayers and other taxing units. 5. adding language to the Property Tax Code to clarify that appraisal review board decisions, whether by a panel or the whole board, only require a majority vote, and not a unanimous vote. 13th Annual Local Government Seminar January 19 2017

Appraisal Recommendations 6. revising the Property Tax Code to provide that an appraisal review board may hold weekend hearings on Saturday or Sunday, but not both; evening hearings after 5 PM; and no hearings on federal holidays. 7. requiring appraisal districts to conduct internal ratio studies before the issue initial notice of appraised value to check for equity between properties. 8. the creation of a specialized protest panel to handle value protests brought by owners of complex or uncommon properties. 9. expanding access to arbitration as an alternative to an appeal to district court for properties that qualify for agricultural, open space or timber appraisal. 10. giving the comptroller the authority to use local funds to issue paychecks to ARB members. 11. removing the authority to appoint the ARB chair from the CAD board and give the authority to the members of the ARB. 13th Annual Local Government Seminar January 19 2017

Bills filed as of January 6 13th Annual Local Government Seminar January 19 2017

Appraisal Administration -- HB 495 by Phelan--CAD Directors elected by county precinct HB 85 by Keogh--Chief appraiser elected by voters of county HB 119 by Craddick--Mineral in place ownership determined on basis of recorded instruments, no operators can be compelled to provide HB 182 by Bernal--Study of sales disclosure HB 379 by Bernal--Mandatory sales disclosure 13th Annual Local Government Seminar January 19 2017

Appraisal Administration -- HB 457 by Holland--Peace officer s spouse and adult child home address confidential HB 513 by Davis of Harris--Mandatory reappraisal of property in disaster area SB 2 by Bettencourt--CAD Directors must be elected county or local government officials SB 2 by Bettencourt--Rendition deadline moved up SB 2 by Bettencourt--Changes to deadlines for CAD notices and roll approval SB 348 by Watson--Repeals requirement for taxing unit approval of CAD real property purchase or sale 13th Annual Local Government Seminar January 19 2017

Appraisal -- SB 2 by Bettencourt Appraisal in accordance with comptroller manuals 13th Annual Local Government Seminar January 19 2017

Exemptions HB 102 by Guillen 10 year local option exemption for the real and personal property of a new business HB 150 by Bell Changes to donated homestead veteran exemption HB 302 by Goldman Increases mineral interest exemption to $2,000 HB 382 by Murphy Exempt real property leased to charter school HB 425 by Button Exempt retail inventory from property tax HB 445 by Frank Limits on abatements for wind facilities near military installations HB 570 by Button Total homestead exemption for surviving spouse of first responder killed in line of duty HB 626 by Workman Extends late homestead application deadline by one year 13th Annual Local Government Seminar January 19 2017

Exemptions HB 734 by Workman Phases out taxation of inventory by school districts HB 820 by Shaheen County tax Homestead exemption for doctor who provides indigent care HB 845 by Lozano Mineral interests owned by nonprofit corporations SB 2 by Bettencourt Increased exemption for small personal property accounts SB 15 by Huffines 100% Homestead Exemption for first responder survivor SB 97 by Hall Late application for 100% DAV exemption SB 240 by Creighton Changes to donated homestead veteran exemption SB 277 by Campbell Limits on abatements for wind facilities near military installations 13th Annual Local Government Seminar January 19 2017

Special Appraisal HB 231 by Rodriguez, Eddie Urban farm bill; adds fruits and vegetables & small scale production to 1-d-1 agricultural appraisal HB 320 by Canales Reduces open-space rollback period from 5 years to 2 years HB 386 by Murphy Qualifying jobs for Chapter 313 agreement HB 643 by Phillips, Larry Removes requirement of ag or timber before wildlife management HB 777 by Ashby Ag appraisal continued for member of armed forces deployed out of state. HB 801 by Murphy Repeal rollback tax for 1-d-1 open-space agricultural land SB 175 by Nichols Ag appraisal continued for member of armed forces deployed out of state. SB 330 by Rodriguez Eases open space qualifications for veterans 13th Annual Local Government Seminar January 19 2017

Appraisal Caps HB 44 by Keogh--Reduces cap to 5% & extends it to all real property HB 167 by Bell--Reduces cap to 5% & extends it to all real property HB 301 by Larson--Cap on increases in value of property previously lowered HB 376 by Metcalf--Reduce HS cap to 5% HB 586 by Bohac--Reduces homestead cap to 5% SB 172 by Nichols--Local option county election to reduce homestead cap below 10%. SB 376 by Creighton--Lowers homestead cap to 3% or 5%, depending on value SB 403 by Kolkhorst--Two year limit on increasing value of property reduced on appeal 13th Annual Local Government Seminar January 19 2017

Appraisal Review Board -- HB 139 by Bell Certified mail hearing notice on property owner request; ARB may set charges HB 566 by Keogh Election of appraisal review board by voters HB 455 by Metcalf Allow property owner to present argument to ARB by telephone HB 804 by Dale Notice and protest deadlines for lessee obligated to reimburse taxes SB 2 by Bettencourt Special ARB panels for commercial and industrial property Changes to ARB challenge and protest procedures and deadlines 13th Annual Local Government Seminar January 19 2017

Appraisal Appeals -- HB 540 by Metcalf Unlimited attorney fees for repeated homestead appeal SB 2 by Bettencourt Arbitration threshold raised to $5 million 13th Annual Local Government Seminar January 19 2017

Assessment -- HB 345 by Canales Reduces rollback rate to 1.05 unless inflation rate is greater HB 486 by Howard Rollback rate for some school districts HB 486 by VanDeaver Rollback rate for some school districts HB 738 by Shaheen Ballot language for bond elections 13th Annual Local Government Seminar January 19 2017

Assessment -- HB 739 by Shaheen Ballot language for bond elections SB 2 by Bettencourt Changes to rollback rate and tax ratification election SB 201 by Campbell Changes to ballot for certain bond elections SB 245 by Burton Voter information prior to some tax-backed bond elections 13th Annual Local Government Seminar January 19 2017

Collections -- HB 198 by Bernal Extends right to pay taxes in installments to all who receive homestead exemption HB 217 by Canales Extends tax deferral to holder of disabled veteran's exemption HB 598 by Koop Use of private collection agency by county tax assessor collector HB 758 by Keogh Refund of taxes on property leased to religious organization HJR 49 by Keough Authorize HB 758 refund of taxes on leased religious property SB 2 by Bettencourt Conforming amendments 13th Annual Local Government Seminar January 19 2017

Comptroller -- HB 559 by Hernandez Comptroller verification and confidentiality of Chapter 313 report information SB 200 by Campbell Comptroller database of political subdivision information SB 400 by Kolkhorst Requires comptroller to verify Chapter 313 report SB 2 by Bettencourt New Property Tax Administration Advisory Board SB 2 by Bettencourt Review of CAD compliance with comptroller s directives 13th Annual Local Government Seminar January 19 2017

General Government SB 241 by Burton Use of public money for lobbying 13th Annual Local Government Seminar January 19 2017

School Finance SB 290 by Watson Adopts state policy that increases in local property value should not decrease state contributions to public education 13th Annual Local Government Seminar January 19 2017

Update on the website www.olsonllp.com Click Legis. Updates button on the menu bar, or http://www.olsonllp.com/legislative-updates/ 13th Annual Local Government Seminar January 19 2017