Appendices
Appendix 1-14 Appendix 15-19 Appendix 1
Sec. 5.102. Review of Appraisal Standards.(a) The comptroller shall review the 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 and practices. The comptroller by rule may establish procedures and standards for conducting the review.
(b) In conducting the review, the comptroller is entitled to access to all records and reports of the appraisal district and to the assistance of the appraisal district's officers and employees.
(c) If the review results in a finding that an appraisal district is not in compliance with generally accepted appraisal standards 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 before the first anniversary of the date the report was issued, the comptroller shall notify the 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.
Added by Acts 1991, 72nd Leg., ch. 843, § 9, eff. Sept. 1, 1991.Amended by Acts 1995, 74th Leg., ch. 260, § 46, eff. May 30, 1995; Acts 1997, 75th Leg., ch. 1040, § 65, eff. Sept. 1, 1997; Acts 2003, 78th Leg., ch. 1183, § 5, eff. June 20, 2003.
Appendix 2
Sec. 1.04. Definitions.In this title:
(1) "Property" means any matter or thing capable of private ownership.
(2) "Real property" means:
(A) land;
(B) an improvement;
(C) a mine or quarry;
(D) a mineral in place;
(E) standing timber; or
(F) an estate or interest, other than a mortgage or deed of trust creating a lien on property or an interest securing payment or performance of an obligation, in a property enumerated in Paragraphs (A) through (E) of this subdivision.
(3) "Improvement" means:
(A) a building, structure, fixture, or fence erected on or affixed to land; or
(B) a transportable structure that is designed to be occupied for residential or business purposes, whether or not it is affixed to land, if the owner of the structure owns the land on which it is located, unless the structure is unoccupied and held for sale or normally is located at a particular place only temporarily.
(C) for purposes of an entity created under Section 52, Article III, or Section 59, Article XVI, Texas Constitution, the:
- subdivision of land by plat;
- installation of water, sewer, or drainage lines; or
- paving of undeveloped land.
(4) "Personal property" means property that is not real property.
(5) "Tangible personal property" means personal property that can be seen, weighed, measured, felt, or otherwise perceived by the senses, but does not include a document or other perceptible object that constitutes evidence of a valuable interest, claim, or right and has negligible or no intrinsic value.
(6) "Intangible personal property" means a claim, interest (other than an interest in tangible property), right, or other thing that has value but cannot be seen, felt, weighed, measured, or otherwise perceived by the senses, although its existence may be evidenced by a document. It includes a stock, bond, note or account receivable, franchise, license or permit, demand or time deposit, certificate of deposit, share account, share certificate account, share deposit account, insurance policy, annuity, pension, cause of action, contract, and goodwill.
(7) "Market value" means the price at which a property would transfer for cash or its equivalent under prevailing market conditions if:
(D) exposed for sale in the open market with a reasonable time for the seller to find a purchaser;
(E) 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
(F) 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.
(8) "Appraised value" means the value determined as provided by Chapter 23 of this Code.
(9) "Assessed value" means, for the purposes of assessment of property for taxation, the amount determined by multiplying the appraised value by the applicable assessment ratio, but, for the purposes of determining the debt limitation imposed by Article III, Section 52, of the Texas Constitution, shall mean the market value of the property recorded by the chief appraiser.
(10) "Taxable value" means the amount determined by deducting from assessed value the amount of any applicable partial exemption.
(11) "Partial exemption" means an exemption of part of the value of taxable property.
(12) "Taxing unit" means a county, an incorporated city or town (including a home-rule city), a school district, a special district or authority (including a junior college district, a hospital district, a district created by or pursuant to the Water Code, a mosquito control district, a fire prevention district, or a noxious weed control district), or any other political unit of this state, whether created by or pursuant to the constitution or a local, special, or general law, that is authorized to impose and is imposing ad valorem taxes on property even if the governing body of another political unit determines the tax rate for the unit or otherwise governs its affairs.
(13) "Tax year" means the calendar year.
(14) "Assessor" means the officer or employee responsible for assessing property taxes as provided by Chapter 26 of this code for a taxing unit by whatever title he is designated.
(15) "Collector" means the officer or employee responsible for collecting property taxes for a taxing unit by whatever title he is designated.
(16) "Possessory interest" means an interest that exists as a result of possession or exclusive use or a right to possession or exclusive use of a property and that is unaccompanied by ownership of a fee simple or life estate in the property. However, "possessory interest" does not include an interest, whether of limited or indeterminate duration, that involves a right to exhaust a portion of a real property.
(17) "Conservation and reclamation district" means a district created under Article III, Section 52, or Article XVI, Section 59, of the Texas Constitution, or under a statute enacted under Article III, Section 52, or Article XVI, Section 59, of the Texas Constitution.
(18) "Clerical error" means an error:
(A) that is or results from a mistake or failure in writing, copying, transcribing, entering or retrieving computer data, computing, or calculating: or
(B) that prevents an appraisal roll or a tax roll from accurately reflecting a finding or determination made by the chief appraiser, the appraisal review board, or the assessor; however, "clerical error" does not include an error that is or results from a mistake in judgment or reasoning in the making of the finding or determination.
(19) "Comptroller" means the Comptroller of Public Accounts of the State of Texas.
Appendix 3
Sec. 23.01. Appraisals Generally.(b) Except as otherwise provided by this chapter, all taxable property is appraised at its market value as of January 1.
(c) The market value of property shall be determined by the application of generally accepted appraisal methods and techniques. If the appraisal district determines the appraised value of a property using mass appraisal standards, the mass appraisal standards must comply with the Uniform Standards of Professional Appraisal Practice. The same or similar appraisal methods and techniques shall be used in appraising the same or similar kinds of property. However, each property shall be appraised based upon the individual characteristics that affect the property's market value. See Exhibit 8, page 22 for the address of the Appraisal Foundation to obtain a copy of the USPAP.
Appendix 4
Sec. 25.18. Periodic Reappraisals.(d) Each appraisal office shall implement a plan for periodic reappraisal of property to update appraised values.
(e) The plan shall provide for reappraisal of all real property in the district at least once every three years.
(f) A taxing unit by resolution adopted by its governing body may require the appraisal office to appraise all property within the unit or to identify and appraise newly annexed territory and new improvements in the unit as of a date specified in the resolution. On or before the deadline requested by the taxing unit, which deadline may not be less than 30 days after the date the resolution is delivered to the appraisal office, the chief appraiser shall complete the appraisal and deliver to the unit an estimate of the total appraised value of property taxable by the unit as of the date specified in such resolution. The unit must pay the appraisal district for the cost of making the appraisal. The chief appraiser shall provide sufficient personnel to make the appraisals required by this subsection on or before the deadline requested by the taxing unit. An appraisal made pursuant to this subsection may not be used by a taxing unit as the basis for the imposition of taxes.
Appendix 5
Sec. 23.011. Cost Method of Appraisal.If the chief appraiser uses the cost method of appraisal to determine the market value of real property, the chief appraiser shall:
(1) use cost data obtained from generally accepted sources;
(2) make any appropriate adjustment for physical, functional, or economic obsolescence;
(3) make available to the public on request cost data developed and used by the chief appraiser as applied to all properties within a property category and may charge a reasonable fee to the public for the data;
(4) clearly state the reason for any variation between generally accepted cost data and locally produced cost data if the data vary by more than 10 percent; and
(5) make available to the property owner on request all applicable market data that demonstrate the difference between the replacement cost of the improvements to the property and the depreciated value of the improvements.
Added by Acts 1997, 75th Leg., ch. 1039, § 22, eff. Jan. 1, 1998.
Appendix 6
Sec. 23.012. Income Method of Appraisal.(a) If the income method of appraisal is the most appropriate method to use to determine the market value of real property, the chief appraiser shall:
(1) analyze comparable rental data available to the chief appraiser or the potential earnings capacity of the property, or both, to estimate the gross income potential of the property;
(2) analyze comparable operating expense data available to the chief appraiser to estimate the operating expenses of the property;
(3) analyze comparable data available to the chief appraiser to estimate rates of capitalization or rates of discount; and
(4) base projections of future rent or income potential and expenses on reasonably clear and appropriate evidence.
(b) In developing income and expense statements and cash-flow projections, the chief appraiser shall consider:
(1) historical information and trends;
(2) current supply and demand factors affecting those trends; and
(3) anticipated events such as competition from other similar properties under construction.
Added by Acts 1997, 75th Leg., ch. 1039, § 22, eff. Jan. 1, 1998. Amended by Acts 2003, 78th Leg., ch. 548, § 1, eff. Jan. 1, 2004.
Appendix 7
Sec. 23.013. Market Data Comparison Method of Appraisal.If the chief appraiser uses the market data comparison method of appraisal to determine the market value of real property, the chief appraiser shall use comparable sales data and shall adjust the comparable sales to the subject property.
Added by Acts 1997, 75th Leg., ch. 1039, § 22, eff. Jan. 1, 1998. Amended by Acts 1999, 76th Leg., ch. 1295, § 2, eff. Jan. 1, 2000.
Appendix 8
Government Code
Sec. 403.302. Determination of School District Property Values.(a) The comptroller shall conduct 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.
(b) In conducting the study, the comptroller shall determine the taxable value of property in each school district:
(1) using, if appropriate, samples selected through generally accepted sampling techniques;
(2) according to generally accepted standard valuation, statistical compilation, and analysis techniques; and
(3) ensuring that different levels of appraisal on sold and unsold property do not adversely affect the accuracy of the study.
(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) Notwithstanding Subsection (c), if after conducting the annual study for the year 2002 the comptroller determines that the local value for a school district is invalid and the local value exceeds the state value for the school district determined by the comptroller under Subsections (a) and (b), the taxable value for the school district for that year is the district's state value as established by the comptroller. This subsection expires September 30, 2004.(d) For the purposes of this section, "taxable value" means the market value of all taxable property less:
(1) the total dollar amount of any residence homestead exemptions lawfully granted under Section 11.13(b) or (c), Tax Code, in the year that is the subject of the study for each school district;
(2) one-half of the total dollar amount of any residence homestead exemptions granted under Section 11.13(n), Tax Code, in the year that is the subject of the study for each school district;
(3) the total dollar amount of any exemptions granted before May 31, 1993, within a reinvestment zone under agreements authorized by Chapter 312, Tax Code;
(4) subject to Subsection (e), the total dollar amount of any captured appraised value of property that:
(A) is within a reinvestment zone created on or before May 31, 1999, or is proposed to be included within the boundaries of a reinvestment zone as the boundaries of the zone and the proposed portion of tax increment paid into the tax increment fund by a school district are described in a written notification provided by the municipality or the board of directors of the zone to the governing bodies of the other taxing units in the manner provided by Section 311.003(e), Tax Code, before May 31, 1999, and within the boundaries of the zone as those boundaries existed on September 1, 1999, including subsequent improvements to the property regardless of when made;
(B) generates taxes paid into a tax increment fund created under Chapter 311, Tax Code, under a reinvestment zone financing plan approved under Section 311.011(d), Tax Code, on or before September 1, 1999; and
(C) is eligible for tax increment financing under Chapter 311, Tax Code;
(5) the total dollar amount of any exemptions granted under Section 11.251, Tax Code;
(6) the difference between the comptroller's estimate of the market value and the productivity value of land that qualifies for appraisal on the basis of its productive capacity, except that the productivity value estimated by the comptroller may not exceed the fair market value of the land;
(7) the portion of the appraised value of residence homesteads of individuals who receive a tax limitation under Section 11.26, Tax Code, on which school district taxes are not imposed in the year that is the subject of the study, calculated as if the residence homesteads were appraised at the full value required by law;
(8) subject to Subsection (e), the total dollar amount of any captured appraised value of property that:
(A) action required by statute or the constitution of this state that, if the tax rate adopted by the district is applied to it, produces an amount equal to the difference between the tax that the district would have imposed on the property if the property were fully taxable at market value and the tax that the district is actually authorized to imposed on the property, if this subsection does not otherwise require that portion to be deducted, or
(B) action taken by the district under Subchapter B or C, Chapter 313, Tax Code;
(9) the market value of all tangible personal property, other than manufactured homes, owned by a family or individual and not held or used for the production of income;
(10) the appraised value of property the collection of delinquent taxes on which is deferred under Section 33.06, Tax Code;
(11) the portion of the appraised value of property the collection of delinquent taxes on which is deferred under Section 33.065, Tax Code; and
(12) the amount by which the market value of a residence homestead to which Section 23.23, Tax Code, applies exceeds the appraised value of that property as calculated under that section.
(e) The total dollar amount deducted in each year as required by Subsection (d)(4) in a reinvestment zone created after January 1, 1999, may not exceed the captured appraised value estimated for that year as required by Section 311.011(c)(8), Tax Code, in the reinvestment zone financing plan approved under Section 311.011(d), Tax Code, before September 1, 1999. The number of years for which the total dollar amount may be deducted under Subsection (d)(4) shall for any zone, including those created on or before January 1, 1999, be limited to the duration of the zone as specified as required by Section 311.011(c)(9), Tax Code, in the reinvestment zone financing plan approved under Section 311.011(d), Tax Code, before September 1, 1999. The total dollar amount deducted under Subsection (d)(4) for any zone, including those created on or before January 1, 1999, may not be increased by any reinvestment zone financing plan amendments that occur after August 31, 1999. The total dollar amount deducted under Subsection (d)(4) for any zone, including those created on or before January 1, 1999, may not be increased by a change made after August 31, 1999, in the portion of the tax increment retained by the school district.
(f) The study shall determine the values as of January 1 of each year.
(g) The comptroller shall publish preliminary findings, listing values by district, before February 1 of the year following the year of the study. Preliminary findings shall be delivered to each school district and shall be certified to the commissioner of education.
(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)(12) 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)(12) 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.
(j) For purposes of Section 42.2511, Education Code, the comptroller shall certify to the commissioner of education:
(1) a final value for each school district computed on a residence homestead exemption under Section 1-b(c), Article VIII, Texas Constitution, of $5,000;and
(2) a final value for each school district computed on:
(A) a residence homestead exemption under Section 1-b(c), Article VIII, Texas Constitution, of $15,000; and
(B) the effect of the additional limitation on tax increases under Section 1-b(d), Article VIII, Texas Constitution.
(k) For purposes of Section 42.2522, Education Code, the comptroller shall certify to the commissioner of education:
(1) a final value for each school district computed without any deduction for residence homestead exemptions granted under Section 11.13(n), Tax Code; and
(2) a final value for each school district computed after deducting one-half the total dollar amount of residence homestead exemptions granted under Section 11.13(n), 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) Repealed by Acts 2003, 78th Leg., 3rd C.S., ch. 10, § 3.02.
Added by Acts 1995, 74th Leg., ch. 260, § 26, eff. May 30, 1995. Amended by Acts 1997, 75th Leg., ch. 592, § 1.07, eff. Sept. 1, 1997; Acts 1997, 75th Leg., ch. 1039, § 44, eff. Jan. 1, 1998; Acts 1997, 75th Leg., ch. 1040, § 63, eff. Sept. 1, 1997; Acts 1997, 75th Leg., ch. 1071, § 27, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 62, § 8.04, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 396, § 3.01(b), eff. Aug. 31, 1999; Acts 1999, 76th Leg., ch. 396, § 1.36, eff. Sept. 1, 1999; Acts 1999, 76th Leg., ch. 983, § 9, 10, eff. June 18, 1999; Acts 1999, 76th Leg., ch. 1467, § 1.19, eff. June 19, 1999; Acts 1999, 76th Leg., ch; 1525, § 1, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 1420, §9.005, eff. Sept. 1, 2001; Acts 2001, 77th Leg., ch. 1505, § 7, eff. Jan. 1, 2002; Acts 2003, 78th Leg., ch. 411, § 7, eff. Jan. 1, 2004; Acts 2003, 78th Leg., ch. 1183, § 3, eff. June 20, 2003; Acts 2003, 78th Leg., ch. 1276, § 9.004, eff. Sept. 1, 2003; Acts 2003, 78th Leg., 3rd C.S., ch. 10, § 3.01, 3.02, eff. Oct. 20, 2003.
Appendix 9
Sec. 5.07. Property Tax Forms and Records Systems.(a) The comptroller shall prescribe the contents of all forms necessary for the administration of the property tax system and on request shall furnish sufficient copies of model forms of each Type to the appropriate local officials. The comptroller may require reimbursement for the costs of printing and distributing the forms.
(b) The comptroller shall make the contents of the forms uniform to the extent practicable but may prescribe or approve additional or substitute forms for special circumstances.
(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.
Acts 1979, 66th Leg., p. 2222, ch. 841, Sec. 1, eff. Jan. 1, 1980. Amended by Acts 1991, 72nd Leg., 2nd C.S., ch. 6, Sec. 4, eff. Sept. 1, 1991; Acts 2003, 78th Leg., ch. 1183, Sec. 4, eff. June 20, 2003.
Appendix 10
Uniform Standard of Professional Appraisal Practice StandardsThe USPAP Standards may be obtained from the Appraisal Foundation,1029 Vermont Avenue, NW, Suite 900 Washington, DC 20005-3517, Phone: 202/347-7722, FAX: 202/347-7727, or they may be viewed on the Internet at the following location: www.appraisalfoundation.org.
Appendix 11
International Association of Assessing Officers StandardsInternational Association of Assessing Officers (IAAO) Standards of Assessment Practice. The standards can be obtained from the IAAO Office, 130 East Randolph St., Suite 850, Chicago, IL, 60601. Phone 312/819-6100, Fax 312/819-6149, Web site: www.iaao.com.
Appendix 12
Appraisal Standards Review Protocol3.5.1.0
Determine County Appraisal District's Compliance with Appraisal Standards and State Laws.3.5.1.1
Review of the Board of Directors.The quality of the property tax system depends on the appraisal district's Board of Directors. Individuals serving on the Board of Directors bring to the board knowledge, judgment and expertise in establishing policies and procedures for the district's organization and operation.
3.5.1.2
Activities to be Performed.A. Examine the current budget for the District for compliance with Texas Tax Code requirements as set forth in Section 6.06 and where deviations are noted, discuss the deviations and suggest possible remedies;
B. Examine the most recent District financial audits and determine how the District has addressed the findings in the management letter or any noted material weaknesses. If material weaknesses are present, make specific recommendations for immediate remediation if the District has not already taken steps to rectify the situation. Discuss any findings that have not been remedied and suggest ways to address these issues; and
C. Examine all contracts entered into by the District for the last year to determine compliance with the Tax Code and Subchapter C, Chapter 271, Local Government Code. Where deviations are noted, discuss the deviations and make recommendations to bring the District into compliance with state laws and regulations.
3.5.2
Review of Appraisal District Policies, Procedures & Operations.In organizing and administering a county appraisal district, the Chief Appraiser is responsible for hiring, firing, and training personnel, for ensuring compliance with a wide range of legal requirements and for the maintenance of policies and procedures for the effective appraisal district office operations.
3.5.2.1
Activities to be Performed.A. Review the District's policies and procedures and note and discuss all efforts aimed at compliance and note any deviations from law, regulations or rules. Make comprehensive, well-reasoned recommendations to remediate any exceptions or non-compliance found to be applicable;
B. Examine the District's application forms to determine whether the forms are in compliance with Comptroller's Rules found at 34 Texas Administrative Code (TAC) Sections 9.402, 9.415, 9.417, and 9.419. Where applications do not comply with any of the foregoing rules, the exceptions or non-compliance must be identified, noted and recommendation must be made to outline the necessary changes required to achieve full compliance;
C. Examine a sample of the District's appraisal records to determine whether the records conform to the requirements set forth in Comptroller's Rule found at 34 TAC Section 9.3059, as well as with Section 26.01, Tax Code. Where deviations are noted, Successful Respondent must make recommendations to ensure compliance; and
D. Examine the District's documentation for evidence of compliance with certification of the appraisal roll to each taxing unit as required by law. If certifications were not done timely, determine the reason for the delay and determine what actions have been taken to ensure compliance in the future. Additionally, where applicable, make recommendations for improvements that will ensure full compliance.
3.5.3
Evaluation of the Appraisal District's Information Processing System(s).Conduct a comprehensive examination and evaluation of the information processing system, including the systems and information technology operations, in each county appraisal district reviewed under the Review Contract.
3.5.3.1
Activities to be Performed.A. Examine documentation on the real property discovery methods utilized by the District to determine whether the District is in compliance with Section 23.12, Tax Code, as well as IAAO and IAAO on Personal Property. Where deviations are noted, discuss and make recommendations for improvement;
B. Examine the internal control mechanisms within the District's information management system(s) to determine whether sufficient controls exist to ensure uniformity and accuracy of appraisals. Evidence that additional controls may be needed may be found by examining measures for uniformity, such as a ratio study, as outlined in the Uniform Standards of Appraisal Practice (USAP). Where control weaknesses are noted, discuss and make recommendations for improvement;
C. Examine the District's method of obtaining and entering sales information to determine if the methods used are in compliance with USAP. Where system or procedural weaknesses are noted, discuss and make recommendations for improvement;
D. Examine the District's method for verifying and confirming sales data gathered to determine whether the methods used are in compliance with the USAP. Where system or procedural weaknesses are noted, discuss and make recommendations for improvement;
E. Examine the District's method of maintaining its sales files, including the written procedures for maintaining the District's sales file. In this regard, Successful Respondent must check the District's procedures for adequacy. Where system or procedural weaknesses are noted, discuss and make recommendations for improvement;
F. Examine all documentation and output to determine whether the current District information system adequately ensures compliance with applicable Comptroller rules; and
G. Determine whether the District is in compliance with Tax Code on granting, verifying, and denying exemptions, and or special appraisals, as shown in Subchapters A, B, and C of the Tax Code. Where system or procedural weaknesses are noted, discuss and make recommendations for improvement.
3.5.4
Review District Staffing, Personnel Qualifications & Positions.Conduct a comprehensive examination and evaluation of the District's Staffing, Personnel Qualifications, and the system of positions, as well as assess the human resources in the District available to perform District functions in each county appraisal district reviewed.
3.5.4.1
Activities to be Performed.A. Examine the qualifications of District staff to determine compliance with certifications and other legal requirements. Note any areas of deviation from the law and recommend improvements; and
B. Examine the District's policies on staff conflicts of interest and note any deviations from law, as well as make recommendations and commendations for achieving full compliance.
3.5.5
Compliance with Generally Accepted Appraisal Practices; Equality & Uniformity
of Appraisal Standards.In general, in appraisal circles there are three approaches to value - cost, income, and market - that a Chief Appraiser must consider in determining the market value of property. The Chief Appraiser must consider all three and use the method most appropriate in appraising a particular property. These three approaches are outlined below.
3.5.5.1
Appraisal Methods.Additional information about the approaches to determining or appraising value may be found in appraisal textbooks. Appraisers usually determine the value of producing mineral deposits-such as oil, gas, and coal-by using the income approach to value. Most appraisal districts contract with consultants to appraise mineral properties. The Chief Appraiser can provide information concerning the method used to appraise certain mineral properties.
Cost Approach.
When using the cost method of appraisal, the appraiser will:
1. use cost data obtained from generally accepted sources;
2. adjust appropriately for physical, functional, or economic obsolescence;
3. make available to the public on request, for a reasonable charge, cost data developed and used by the chief appraiser on properties within a property category;
4. state clearly the reason for any variation between generally accepted cost data and locally produced cost data, if the data vary by more than 10 percent; and
5. make available to a property owner on request all applicable market data that demonstrates the difference between an improvement's replacement cost and the improvement's depreciated value.
Income Approach.
When using the income method of appraisal, the appraiser will:
1. analyze comparable rental data available to the chief appraiser or the potential earnings capacity of the property, or both, to estimate the gross income potential of the property;
2. analyze comparable operating expense data available to the chief appraiser to estimate the operating expenses of the property;
3. analyze comparable data available to the chief appraiser to estimate rates of capitalization or rates of discount; and
4. base projections of future rent or income potential and expenses on reasonably clear and appropriate evidence.
Market Approach.
When using the market data comparison method of appraisal, the appraiser will use comparable sales data and adjust the comparable sales data to the subject property.
3.5.5.2
Special Use Property Appraisals.The Tax Code also requires appraisers to use special methods or principles for the following Type of property: Land qualifying for agricultural or timber appraisal (Chapter 23, subchapters C, D, E and H); (See Appraisal Standards for Uniformity and Equality as well as Tax Code, Sections 23.01, 1.43, and 42.26).
A. Examine use of special methods by district. Report any findings.
3.5.6
International Association of Assessing Officers (IAAO) Standards on Ratio Studies and Uniform Standards of Professional Appraisal Practices Standard 6.3.5.6.1
Activities to be Performed.1. Examine the district's re-appraisal plan for the last two years to see if it complies with Section 25.18, Tax Code, and the guidelines set out in the Comptroller's Board of Directors Manual. Where deviations are noted, discuss and make recommendations for improvement;
2. Examine appraisal manuals for each category of property to determine compliance with the Uniform Standard of Professional Appraisal Procedures and International Association Assessing Officers (IAAO) Standard on Appraisal. Where deviations are noted, discuss and make recommendations for improvement;
3. Examine the District's cost approach system for compliance with the Uniform Standard on Professional Appraisal Practice, IAAO, and Tax Code. Where deviations are noted, discuss and make recommendations for improvement;
4. Examine the District's income approach system for compliance with the Uniform Standards on Professional Appraisal Practice, IAAO Standard on Appraisal, and Tax Code. Where deviations are noted, discuss and make recommendations for improvement;
5. Examine the District's sales comparison system for compliance with the Uniform Standards on Professional Appraisal Practice, IAAO, and Tax Code. Where deviations are noted, discuss and make recommendations for improvement;
6. Examine the District's agricultural use appraisal system and procedure's for granting and verifying qualified lands for compliance with the Tax Code, Comptrollers Agricultural Manual, and Wildlife Management Guidelines. Where deviations are noted, discuss and make recommendations for improvement;
7. Examine the District's timber appraisal system and procedures for granting and verifying qualified lands for compliance with the Tax Code and the Comptroller's Timber Manual. Where deviations are noted, discuss and make recommendations for improvement;
8. Examine the District's personal property appraisal system and procedures for discovery and verification of personal property for compliance with the Tax Code, IAAO Standard on Personal Property, and Uniform Standards of Professional Appraisal Practice. Where deviations are noted, discuss and make recommendations for improvement;
9. Assess the District's compliance with Uniform Standard of Appraisal Practice and standards promulgated by the IAAO. Where deviations are noted, discuss and make recommendations for improvement;
10. Evaluate the District's consistency in appraisal practices by reviewing ratios for uniformity and equality among the following categories of property: single family residential real property; multi-family residential real property; vacant lots and tracts; real property acreage; farm and ranch improvements; commercial real property; industrial real property; oil, gas, and other mineral property; non-business vehicle; utility real and personal property; commercial business personal property; industrial business personal property; non-business tangible personal property; intangible personal property; and residential real property inventory;
11. Examine the District's procedures for using sales in the appraisal process and confirm that procedures are written and updated. Determine whether these procedures and the corresponding computer system used to maintain that data is adequate and in compliance with generally accepted standards. Where system or procedural weaknesses are noted, discuss and make recommendations for improvement; and
12. By examining ratio studies conducted by the District and methods, procedures and output measures produced determine what output measures are produced and how they are used in the process to ensure compliance with Uniform Standards on Appraisal Practice and IAAO Standards. Where system or procedural weaknesses are noted, discuss and make recommendations for improvement.
Appendix 13
Comanche School District Summary Worksheet.Appendix 14
Comanche School District Confidence Interval Detail.
