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Chapter 2
Appraisal Districts

County appraisal districts continue to appraise property with uniform results and close to market value. Market value is the price at which a property would transfer for cash or its equivalent under prevailing market conditions if:

  • it is exposed for sale in the open market with a reasonable time for the seller to find a purchaser;
  • both the seller and the purchaser know of all the uses and purposes to which the property is adapted and for which it is capable of being used and of the enforceable restrictions on its use; and
  • both the seller and purchaser seek to maximize their gains and neither is in a position to take advantage of the exigencies of the other.

According to the 2005 PVS, the CADs’ median appraisal for market value was 99 percent. That is to say, that the CADs appraised half of the properties at less than 99 percent and the other half at more than 99 percent of market value.

State law requires tax appraisals to be equal, uniform and at market value. The median appraisal ratio measures how close an appraisal district’s typical appraisal is to market value. A median is a statistical measure of central tendency; the middle number in a group of numbers ranked from highest to lowest. If the sequence of numbers has an even number of entries, the median is the average of the two middle numbers.

The tool used by the appraisal industry to measure appraisal uniformity is the coefficient of dispersion (COD). The COD measures whether appraisal districts are appraising properties at an equal percent of market value. It does this by measuring how closely arrayed individual ratios are around the median ratio, the smaller the measure of dispersion, the greater the uniformity of the ratios.

Property assessment is more equitable when appraisers group the ratios more closely around the median, since they assessed properties similarly across the board. According to the International Association of Assessing Officers, “...a coefficient of 10% or less indicates a good distribution of assessments for residential properties. Similarly, a coefficient of 15% or less indicates a good distribution for more diverse classes (of property)...”

In 2005, the statewide COD was 11.24, compared to the previous year’s 11.29.

Table 11 compares the statewide median appraisal ratios from the 1995 to 2005 Property Value Studies. The Comptroller calculates the statewide median appraisal ratio for an individual property category using the appraisal ratios of all sample properties in that category from across the state. The Comptroller calculated the overall statewide median appraisal ratio using the appraisal ratios for all sample properties.

Table 11: Statewide Median Appraisal Ratios – 1995 through 2005 Property Value Studies[1]

Property Category 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
A. Single-family Residences 98% 97% 97% 98% 98% 98% 97% 98% 99% 99% 98%
B. Multi-family Residences 99% 99% 98% 99% 98% 98% 99% 98% 98% 98% 98%
C. Vacant Lots 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
D. Rural Real 100% 99% 98% 98% 98% 98% 98% 99% 99% 98% 99%
F1. Commercial Real 100% 99% 99% 99% 98% 97% 98% 98% 98% 97% 97%
F2. Industrial Real                      
G. Oil, Gas, Minerals 102% 102% 101% 100% 102% 103% 99% 101% 100% 100% 101%
J. Utilities 102% 99% 100% 100% 100% 100% 100% 100% 100% 100% 100%
L1. Commercial Personal 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
L2. Industrial Personal                      
M. Other Personal                      
O. Residential Inventory                      
Overall 100% 99% 99% 99% 99% 99% 99% 100% 99% 99% 99%

[1]Blank cells indicate that too few sample observations were available to produce meaningful statewide median appraisal ratios for these properties.
Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Value Studies, 1995 through 2005.

Table 12 compares the statewide coefficients of dispersion from the 1995 to the 2005 Property Value Studies. The Comptroller calculates the statewide coefficient of dispersion for an individual property category using the appraisal ratios of all sample properties in that category from across the state. The Comptroller calculates the overall statewide coefficient of dispersion using the appraisal ratios for all sample properties.

Table 12: Statewide Coefficients of Dispersion - 1995 through 2005 Property Value Studies[1]

Property Category 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
A. Single-family Residences 12.11 11.36 11.06 9.68 9.23 10.05 10.68 10.33 9.48 9.57 9.83
B. Multi-family Residences 10.06 8.43 7.71 7.34 7.63 7.70 8.91 8.74 10.49 8.45 8.46
C. Vacant Lots 18.21 19.86 17.10 15.17 13.68 14.79 17.29 18.50 18.07 18.31 16.46
D. Rural Real 14.92 14.60 15.62 16.09 14.51 14.96 15.64 15.01 16.65 16.52 15.45
F1. Commercial Real 13.28 11.34 11.01 10.51 10.59 10.56 10.39 9.82 10.93 11.37 12.00
F2. Industrial Real                      
G. Oil, Gas, Minerals 12.61 18.95 4.85 7.38 20.52 7.15 31.30 11.50 10.46 9.25 9.88
J. Utilities 12.50 12.40 10.76 9.64 12.78 12.26 12.00 11.72 11.66 10.18 12.55
L1. Commercial Personal 11.95 20.73 11.20 9.24 7.52 8.19 8.32 8.44 8.21 9.16 9.48
L2. Industrial Personal                      
M. Other Personal                      
O. Residential Inventory                      
Overall 13.17 13.47 11.64 10.86 11.79 11.53 12.26 11.49 11.38 11.29 11.24

[1]Blank cells indicate that too few sample observations were available to produce meaningful statewide median appraisal ratios for these properties.
Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division, Property Value Studies, 1995 through 2005.

Appraisal District Workload

The Comptroller reports on appraisal district operations in the Appraisal District Operations Report. Each year the Comptroller’s Property Tax Division (PTD) surveys the 253 appraisal offices to obtain data about their operations and the districts’ budgets and plans for the following year. Each year’s report is available on the Comptroller’s website.

In 2005, Texas CADs appraised more than 16.6 million pieces of property. This was an additional 179,322 properties than were appraised in 2004, a 1.0 percent increase. The CADs performed this task with operating expenses of about $282.7 million, a 1.2 percent increase from 2004. The result of these appraisals was a reported $1.6 trillion of property value. In contrast, 2004 appraised property totaled $1.5 trillion

The Property Tax Code, Section 25.18 requires CADs to reappraise property in their districts at least once every three years. Many CADs reappraise property every year. For the 2005 tax year 163 CADs, or 64.4 percent, reported complete reappraisals, while 105 CADs planned to reappraise for the 2006 tax year.

CADs mailed 9.5 million notices of property value in 2005. In response to those notices, property owners filed 855,245 written protests, 9.0 percent more than the 784,727 filed in the previous year on 2004 values.

Appraisal Review Boards (ARB) scheduled 472,537 formal hearings for these filed protests, an increase of 50,995 hearings or 12.1 percent more hearings than in 2004. Nearly a quarter of the taxpayers, 116,054 or 24.4 percent, were “no shows” for their scheduled hearing.

Taxing units also may file written challenges to the ARB if they disagree with CAD decisions. In 2005, 13 taxing units—compared to 11 in 2004—filed challenges.

Table 13 highlights the appraisal district workload for the 24-year period from 1982 through 2005. A parcel is any item of real property, regardless of size, that has a single owner or which the owners hold in undivided ownership and for which there is a separate appraisal record.

Table 13: 24-Year Review of Appraisal District Workload

Year Taxable Parcels Appraisal Notices Sent Taxing Unit Challenges ARB Hearings Scheduled
1982 10,811,817 6,509,076 235 52,707
1983 11,736,724 2,978,839 88 33,875
1984 12,206,774 4,629,682 270 151,144
1985 12,568,931 4,731,365 66 91,665
1986 12,803,055 4,428,225 106 125,246
1987 12,786,518 5,054,336 184 163,085
1988 12,937,341 3,977,007 39 170,711
1989 13,225,514 4,160,375 156 157,947
1990 13,139,219 7,191,615 32 178,124
1991 13,518,442 7,199,515 193 209,889
1992 13,320,845 7,465,478 36 196,503
1993 13,546,649 8,383,541 154 166,056
1994 13,723,699 7,810,313 10 218,538
1995 14,099,466 8,241,057 5 195,097
1996 14,304,085 7,654,301 19 189,769
1997 14,617,741 7,586,079 4 149,771
1998 14,847,469 8,160,120 3 189,622
1999 14,756,523 8,743,293 8 248,526
2000 15,022,588 8,420,244 18 234,691
2001 15,385,913 9,364,893 2 306,836
2002 15,618,958 9,068,428 8 379,325
2003 16,007,636 9,088,784 4 359,743
2004 16,470,682 9,161,839 11 421,542
2005 16,640,895 9,451,847 13 472,537

Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.

Appraisal District Expenditures

Final 2005 CAD operating expenses totaled $282.7 million, or an average of $16.99 per parcel. The average 2005 CAD operating budget exceeded $1.1 million, 3.3 percent more in expenses than in 2004.

The 2005 expenditures for individual CADs vary by size and type of property appraised. The lowest cost per parcel was Hansford CAD at $1.73. At the other end, Somervell CAD reported the highest cost at $55.43 per parcel. This range in operating costs per appraisal reflects the type of property a CAD appraises. Each interest, or share, in a mineral lease represents an account, and while the number of accounts within a lease can be numerous, only one appraisal is necessary per lease (the value is pro-rated among the shareholders). Therefore, the costs per account for mineral properties seem unrealistically low. Somervell CAD, on the other hand, is home to the Comanche Peak nuclear facility and has a high concentration of industrial property that requires great expertise to appraise. The higher cost of appraising industrial property accounts for Somervell’s high cost per parcel.

Local taxing units pay CAD expenses according to the proportion of their property tax levy to the total property taxes levied by all the taxing units in the CAD. Since local taxing units fund CAD budgets, the taxing units may veto the CAD budget adopted by the CAD’s board of directors. Taxing units in five CADs vetoed their 2006 budget, as allowed by Texas Property Tax Code, Section 6.06. While the average 2005 cost per account statewide was $16.99, grouping the CADs by account sizes shows the cost per account varies, with the largest group of appraisal districts exceeding the state average (Table 14).

Table 14: 2005 CAD Spending by Size

Number of Accounts Number of Districts Average 2005 Expenses Average Cost Per Account
Below 5,000 [1] 6 $67,503 $17.20
5,000 to 9,999 26 $139,620 $18.82
10,000 to 14,999 27 $165,512 $13.08
15,000 to 19,999 [2] 23 $297,873 $16.65
20,000 to 24,999 [3] 19 $345,120 $15.52
25,000 to 34,999 31 $461,368 $15.43
35,000 to 49,999 [4] 41 $574,766 $13.95
50,000 to 74,999 28 $768,485 $12.76
75,000 to 149,999 [5] 26 $1,495,496 $13.94
150,000 to 300,000 [6] 17 $2,853,357 $13.75
Over 300,000 9 $13,196,391 $20.82

[1] Motley CAD did not report 2005 figures. Their 2004 data was included.
[2] Lasalle CAD 2005 budget figures were not available. Their 2004 data was included.
[3] Bee CAD 2005 budget figures were not available. Their 2004 data was included.
[4] San Patricio CAD did not report 2005 figures. Their 2004 data was included.
[5]Crockett CAD budget figures were not available from either 2004 or 2005.
[6]Webb CAD did not report 2005 figures. Their 2004 data was included.
Source: Carole Keeton Strayhorn, Texas Comptroller of Public Accounts, Property Tax Division.

Local Self Report Data – 2005

Table 15 includes detailed appraisal information as reported by each county appraisal district in Texas. For each CAD, the reports list total appraised value in 16 property categories. The 16 property categories developed by the Comptroller, based on use, are:

  • Category A. Real Property: Single-Family Residential. This category includes houses, condominiums and mobile homes located on land owned by the occupant.
  • Category B. Real Property: Multifamily Residential. This includes residential structures containing two or more dwelling units whose individual units do not have separate owners. Includes apartments but does not include motels and hotels.
  • Category C. Real Property: Vacant Lots and Tracts. Unimproved land parcels usually located within or adjacent to cities. The land parcels do not have a minimum or maximum size requirement.
  • Category D. Real Property: Acreage (D1 and D2). Includes agricultural, timberland, recreational land and public access airport; all land receiving special-use appraisal and large vacant tracts owned by commercial, industrial or utility taxpayers.
  • Category F1. Real Property: Commercial. Land and improvements devoted to sales, entertainment or services to the public. The category does not include utility property, which is included in Category J.
  • Category F2. Real Property: Industrial. Land and improvements devoted to the development, manufacturing, fabrication, processing or storage of a product, except for utility property included in Category J.
  • Category G. Oil, Gas and Other Minerals. This category includes producing and non-producing wells, all other minerals and mineral interests and equipment used to bring the oil and gas to the surface. It does not include the surface rights.
  • Category H. Tangible Personal Property: Nonbusiness Vehicles. Includes privately owned automobiles, motorcycles and light trucks not used to produce income.
  • Category J. Real and Personal Property: Utilities. All real and tangible personal property of railroads, pipelines, electric companies, gas companies, telephone companies, water systems, cable TV companies and other utility companies.
  • Category L1. Personal Property: Commercial. This category consists of all tangible personal property, including fixtures, equipment and inventory used by a commercial business to produce income.
  • Category L2. Personal Property: Industrial. This consists of all tangible personal property, including fixtures, equipment and inventory used by an industrial business to produce income.
  • Category M. Mobile Homes and Other Tangible Personal Property (M1 and M2). Taxable personal property not included in other categories, such as mobile homes on land owned by someone else. Also may include privately owned aircraft, boats, travel trailers, motor homes and mobile homes on rented or leased land.
  • Category N. Intangible Personal Property. Includes all taxable intangible property not otherwise classified.
  • Category O. Real Property: Residential Inventory. Residential real property inventory held for sale and appraised as provided by Property Tax Code Section 23.12.
  • Category S. Special Inventory. This includes certain property inventory of businesses that provide items for sale to the public. State law requires the appraisal district appraise these inventory items based on the business’ total annual sales in the prior tax year. There are four types of Category S properties: dealers’ motor vehicle inventory, dealers’ heavy equipment inventory, dealers’ vessel and outboard motor inventory and retail manufactured housing inventory.

Many appraisal districts report little or no 2005 value in Category H: Vehicles. Personal property not used to produce income, such as personal vehicles, is exempt from taxation unless a taxing unit takes official action to tax it. Category M: Other Personal, is the property value of other personal property, such as manufactured homes. Although Category N: Intangible Personal, appears in this appendix, there is little or no intangible personal property value to tax.

Category S: Special Property includes certain property inventory of businesses that provide items for sale to the public. State law requires appraisal districts to appraise these inventory items based on the business’ total annual sales in the prior tax year. The following are the four types of Category S properties: Dealer’s Motor Vehicle Inventory, Dealer’s Heavy Equipment Inventory, Dealer’s Vessel and Outboard Motor Inventory and Retail Manufactured Housing Inventory.

The appraisal information includes the total appraised value for each appraisal district. Because taxing units in an appraisal district offer different exemptions, it is not appropriate to show total taxable value for the appraisal district. An exemption is the exclusion of all or part of a property’s value from property taxation. Absolute exemption excludes the total value of property. Partial exemption excludes a part of the property’s total value from taxation. Total taxable value is the value after reducing the appraised value for exemptions.

PDF fileTable 15: 2005 Appraised Value per Category for each Appraisal District (PDF, 588 KB)

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