2003 Texas Property Tax Law Changes
This pamphlet briefly summarizes changes in property tax laws made in the regular session of the 78th Texas Legislature. It lists changes according to the order in which they appear in the Property Tax Code and indicates any proposed amendments to the Texas Constitution. Other property tax-related legislation follows. The 2003 Texas Property Tax Law Changes (11 MB) are also available in PDF format. If you do not have Adobe Acrobat Reader, you will need to download the latest version to view and print this file.
Because this pamphlet is a summary of complex new laws, do not rely solely on it to implement this new legislation. Please read each new law carefully before implementation. To see an enrolled version of a bill, link to Texas Legislature Online at www.capitol.state.tx.us.
The pamphlet uses the following abbreviations:
ARB appraisal review board CAD county appraisal district H.B House Bill S.B Senate Bill H.J.R House Joint Resolution S.J.R Senate Joint Resolution PVS property value study TAC tax assessor-collector TDHCA Texas Department of Housing and Community Affairs
CHAPTER 1. GENERAL PROVISIONS
S.B 340 and S.B. 1833 amend Subsection (b) by adding to the requirements for electronic communication between the chief appraiser and a property owner. The agreement must be in writing and signed by the chief appraiser and property owner. For some appraisal districts, compliance begins January 1, 2005. For appraisal districts in counties with a population of 500,000 or less, the date is January 1, 2006. Appraisal districts are required to establish a means of protecting an e-mail address and for confirming delivery of a communication between the two parties. The Comptroller by rule shall prescribe acceptable media, formats, content and methods for exchanging information for notices required by Section 25.19. The Comptroller may prescribe requirements for electronic information for other notices, renditions and applications. If a property owner having 25 or more accounts requests an agreement for delivering Section 25.19 (appraisal) notices electronically, the chief appraiser shall enter into agreements and deliver notices in the prescribed electronic format. Effective January 1, 2005, and January 1, 2006.
S.B 340 and S.B. 1833 amend the section to provide that electronic versions of state required forms must be available to property owners without charge. Effective January 1, 2005, and January 1, 2006.
CHAPTER 5. STATE ADMINISTRATION
S.B. 671 amends Subsection (c) to require appraisal districts to maintain sales information collected by the district as part of the uniform recordkeeping system. Appraisal districts must submit the data annually in a form that can be used in conducting the Comptroller’s Property Value Study. Effective June 20, 2003.
S.B. 671 amends Subsections (a) and (b) and adds Subsections (c) and (d) to require the Comptroller during the first year of a school’s funding “grace period,” provided in Section 403.302 of the Government Code, to conduct an appraisal standards review of the appraisal district in which the school district is located. The recommendations from the review will be presented to the school district and to the appraisal district board of directors, superintendent and school board for implementation. Failure to comply with the recommendations within one year will result in the appointment of a board of conservators by the district judges of the county and paid by the appraisal district. The board will be required to administer the appraisal district until all school districts in the county have local value according to the Property Value Study. Effective June 20, 2003.
S.B. 671 adds Subsection (h) to permit a discretionary performance audit by the Comptroller to analyze the effectiveness and efficiency of the policies, management and operations of the appraisal district that appraised the eligible school district's property. The Comptroller may require the appraisal district to reimburse the state for audit costs. Eligibility for the “grace period” is defined in Section 403.3011 of the Government Code. Effective June 20, 2003.
CHAPTER 6. LOCAL ADMINISTRATION
H.B. 703 and H.B. 1082 add a new Subsection (d) addressing properties appraised by two or more appraisal districts. The new subsection requires that if the chief appraisers do not agree to one appraised value for an overlapping property, then each appraisal district shall enter in the appraisal records the lowest appraised or market value determined by the chief appraisers. If a protest, appeal or other action reduces that value, then the chief appraiser notifies the other chief appraisers who must reduce the value on their appraisal rolls. Effective January 1, 2004.
H.B. 2043 amends Subsections (j) – (l) by modifying the procedures for appointing appraisal district directors to provide that the ballot prepared by the chief appraiser include those names timely submitted and that taxing units submit their votes to the chief appraiser before December 15, rather than November 15. The chief appraiser submits results to the taxing units before December 31. In the case of board vacancies, taxing units are required to submit their nominees’ names to the chief appraiser within 45 days (previously 10 days) of notification of the vacancy. The change applies to the appointment procedures for the fall of 2003 for the directors whose terms begin January 1, 2004. Effective June 20, 2003.
S.B. 902 amends Subsection (c) to provide that an appraisal district depository contract shall be for a two-year term. The appraisal district board may agree to extend the contract for a second two-year term, after which the appraisal district must solicit bids for the depository contract. Effective June 20, 2003.
S.B. 726 amends the section to create Subsections (a) and (b) to change competitive bidding requirements for county appraisal districts. Titled as “Purchasing and Contracting Authority,” the new Tax Code provision requires an appraisal district to follow the same requirements and have the same authority as the laws applying to a municipality under Local Government Code Chapter 252, rather than those of a county. An example of the change is that competitive bidding is required for expenditures of more than $25,000, rather than $15,000 under previous law. Effective July 1, 2003.
H.B. 193 amends Subsection (b) to delete restrictions on the size of an appraisal review board (ARB) based on county population. The appraisal district board of directors may appoint the number of ARB members that the directors consider appropriate, with a minimum of three ARB members. Effective January 1, 2004.
S.B. 1452 adds Section 6.411 to provide penalties for an ARB member, chief appraiser or appraisal district employee who communicates on specific evidence, argument, facts, merits or property involved in a hearing pending before the ARB in violation of the ex parte communications provisions of Section 41.66(f). The offense is a Class C misdemeanor. The penalty does not apply to communications between the ARB and its legal counsel or to other communications between the ARB and the chief appraiser. Effective September 1, 2003.
CHAPTER 11. TAXABLE PROPERTY AND EXEMPTIONS
H.B. 1223 amends Subsection (l) to provide a time period that a qualified homeowner temporarily may not occupy a residence homestead and still receive homestead exemptions. The homestead does not lose its homestead status if the homeowner does not establish a different principal residence, intends to return and occupy the residence and is temporarily absent for a period of less than two years. This amendment excludes homeowners in military service or in a facility providing services related to health, infirmity or aging from the two-year provision. Effective June 18, 2003.
S.B. 510 amends Subsection (a) to exempt personal property not held for the production of income, except for "a structure that a person owns which is substantially affixed to real estate and is used or occupied as a residential dwelling.” The law provides in the proposition dealing with the effective date that it "applies to taxes imposed for 2002 and thereafter.” Effective September 1, 2003, contingent on the passage of S.J.R. 25 at the September 13, 2003 election.
S.B. 510 repeals Section 11.142 concerning travel trailers. Effective September 1, 2003.
H.B. 2416 amends Subsection (m) to change the period from three years to five years that an incomplete improvement owned by a charitable organization may be exempt from property taxation. However, on January 1, 2006, the time period reverts back to three years. Effective June 18, 2003.
H.B. 3546 revises the law concerning community housing development organizations (CHDOs). Section 11.182, Tax Code, is the total exemption statute for low and moderate-income housing. The bill adds subsection (j) to this section and provides that no exemption may be granted under Section 11.182 after January 1, 2004, unless it was granted in 2003. Basically, it is a “grandfather” clause to permit current exemptions to remain in place. The provisions of the new Sections 11.1825 and 11.1826 apply to all new construction and applications for the 2004 tax year. Effective January 1, 2004.
H.B. 3546 adds Section 11.1825 entitled “Organizations Constructing or Rehabilitating Low-Income Housing: Property Not Previously Exempt.” Property under construction or rehabilitation and used to provide housing to eligible families may be exempt. The organization must for three prior years meet the following requirements: (1) be exempt from federal income taxation under Section 501(a), Internal Revenue Code, by being listed under 501(c)(3); (2) be operated in a way that does not result in accrual of distributable profits or the realization of private gain (excessive compensation, payment or individual gain); (3) use its assets in performing charitable functions; (4) provide by charter, bylaw or regulation that the organization will be transferred to the government or a charity upon its dissolution or discontinuance; and (5) has the purpose of providing low-income housing. The organization’s board must consist of a majority of Texas residents; at least two board members must be a low-income individual from Texas, someone who lives in an economically disadvantaged census tract or someone appointed by a neighborhood organization representing low-income households. The organization must have a formal policy for giving notice and receiving advice from low-income persons concerning projects.
Notwithstanding these provisions, an owner of a project may receive an exemption if the property otherwise qualifies for the exemption and the owner is: (1) a limited partnership of which an organization meeting the requirements listed above controls all of the general partner interest or (2) an entity with a parent entity that meets the requirement. A business entity must be organized and have its principal place of business in Texas.
Exempt property must either be rented or sold to low-income persons. Rentals must be to persons or families whose median income is 60 percent or less of either the area or the statewide median family income determined by Housing and Urban Development (HUD) and adjusted for family size, whichever is greater. Sales must be of single-family dwellings to persons or families whose median income is not more than the greater of either the area or statewide median family income determined by HUD and adjusted for family size.
A housing project may not receive a CHDO exemption unless at least 50 percent of the total square footage of the dwelling units is reserved for low-income persons as described in the previous paragraph. Rents charged to these persons may not exceed 30 percent of the area median family income (adjusted for family size and determined by HUD).
Property owned for the purpose of constructing a project is exempt only if it is ultimately used for low-income housing purposes as required by this new law or is under active construction (defined as engaged in architectural or engineering work, soil testing, land clearing or site improvement, or has conducted an environmental or land use study).
If property is being rehabilitated, there are four requirements: (1) the project must be at least 10 years old; (2) the previous owner must have owned the project for at least 5 years; (3) a written statement from a certified public accountant must be provided specifying that the organization spent at least $5,000 per unit or the amount required by the lender (whichever amount is greater); and (4) a reserve fund must be maintained, either the amount required by the lender or $300 per unit (for all units, not just those reserved for low-income persons) per year, whichever amount is greater. The reserve must be increased according to cost-of-living adjustments beginning in 2005. The only withdrawals from the reserve are those authorized by the lender or to pay the cost of capital improvements to maintain habitability under HUD or local government regulations (whichever is more restrictive). Capital improvements are defined as those with a depreciable life of at least five (5) years under generally accepted accounting principles, excluding typical “make ready” expenses such as those for plasterboard repair, interior painting or floor coverings. When a CHDO acquires property to construct or rehabilitate a housing project, it must rent or offer to rent the applicable square footage of dwelling units to persons meeting the eligibility requirements described above within three years of acquisition.
When property qualifies for an exemption, the chief appraiser must appraise the property using the income method. Specifically, the appraiser must consider the restrictions on who may rent the property and amount of rent to be charged. The same capitalization rate as for other rent-restricted properties must be used. By January 31 of each year, appraisal districts must give public notice of the capitalization rate to be used for these properties.
The amount of the exemption is 50 percent, except for taxing units located in part in counties with populations with at least 1.4 million. In those cases, the governing body of a taxing unit may approve an exemption, upon a written request from the organization. Within 60 days of receiving the request, the governing body must either approve the exemption at a 50-percent level or a reasonable percentage, or deny the exemption. A denial must be based on a determination that the taxing unit cannot afford the loss of tax revenue or additional low-income housing is not needed in the area. The taxing unit must issue a letter within five (5) days of the decision, stating the decision and reasoning to the organization and the chief appraiser. An administrative fee is authorized for processing the application. The chief appraiser must then determine if the organization and property qualify for the exemption.
An exemption does not end when ownership changes if it is due to foreclosure and the new owner submits to the chief appraiser within 30 days evidence that it meets the eligibility requirements of this section. Likewise, if the successor to a general partner or a parent entity changes, the exemption does not end so long as evidence is submitted to the chief appraiser that the new entity meets the eligibility requirements. The chief appraiser may extend this 30-day deadline for good cause. Effective January 1, 2004.
H.B. 3546 adds Section 11.1826 entitled “Monitoring of Compliance with Low-Income and Moderate-Income Housing Exemptions.” Property may not receive an exemption unless the organization owning or controlling the property has an audit prepared by an independent auditor covering the organization’s most recent fiscal year. The audit must be conducted according to generally accepted accounting principles and must include an opinion concerning the financial statements (whether they present the financial position, changes in net assets and cash flows of the organization) and compliance with the requirements of Section 11.1825. The organization must deliver the audit to the Texas Department of Housing and Community Affairs and the chief appraiser within 180 days after the last day of the most recent fiscal year of the organization. If the property has no more than 36 units, however, an audit is not required; only a detailed report and certification must be delivered.
The “grandfather” exemptions under Section 11.182 (pre-2004 properties) also must comply with this monitoring section. The audits must consider the requirements of 11.182, however, rather than the new law.
All information provided in the audits and reports under this section is subject to the disclosure and confidentiality requirements of the Public Information Act (Chapter 552, Government Code). Effective January 1, 2004.
H.B. 2416 amends Subsection (i) to change the period from three years to five years that an incomplete improvement owned by a charitable organization engaged primarily in performing charitable functions may be exempt from property taxation. However, on January 1, 2006, the time period reverts back to three years. Effective June 18, 2003.
H.B. 2416 amends Subsection (e) to change the period from three years to five years that an incomplete improvement owned by a youth spiritual, mental and physical development association may be exempt from property taxation. However, on January 1, 2006, the time period reverts back to three years. Effective June 18, 2003.
H.B. 1278 amends Subsection (a) and adds Subsections (h) and (i) to grant property owned by a religious organization an exemption if the property is leased for use as a school under Section 11.21 or land that is owned with the intent of expanding or constructing a religious facility. The bill also provides a limit of six years (for contiguous property) and three years (for non-contiguous) property during which land owned by a religious organization may be exempt if the land is held for expansion of a place of worship, so long as the land produces no revenues during that period. Effective January 1, 2004, contingent on the passage of H.J.R. 55 at the September 13, 2003 election.
H.B. 2383 amends Subsection (d) and adds Subsections (h) and (i) to provide an exemption to public property owned by the state or a taxing unit and leased to a religious organization. The property receives the religious organization exemption if the property is used as a place of regular religious worship and meets the other requirements of Tax Code Section 11.20. The religious organization applies and takes other action as required in Section 11.20 as if the organization owned the property. Effective January 1, 2004.
H.B. 2416 amends Subsection (f) to change the period from three years to five years that an incomplete improvement owned by a religious organization may be exempt from property taxation. However, on January 1, 2006, the time period reverts back to three years. Effective June 18, 2003.
H.B. 1278 adds Section 11.201 to provide for a rollback tax if land (or a part of it) receiving an exemption as land held for expansion by a religious organization is sold or otherwise transferred to another person. The rollback tax is imposed for the five years preceding the year of the sale, plus seven percent interest, for each year the land received the exemption. Effective January 1, 2004, contingent on the passage of H.J.R. 55 at the September 13, 2003 election.
H.B. 2416 amends Subsection (g) to change the period from three years to five years that an incomplete improvement owned by a qualified private school may be exempt from property taxation. However, on January 1, 2006, the time period reverts back to three years. Effective June 18, 2003.
Section 11.23 H.B. 2416 amends Subsection (l) to change the period from three years to five years that an incomplete improvement owned by a various qualified miscellaneous organizations may be exempt from property taxation. However, on January 1, 2006, the time period reverts back to three years. Effective June 18, 2003.
S.B. 658 repeals Subsection (g) to continue the exemption of motor vehicles used for personal use. The bill repeals the subsection that would have terminated the leased vehicle exemption on December 31, 2003. Effective June 20, 2003.
H.B. 217 amends Subsections (a), (d), (e), (g), (h) and (l) and adds Subsection (m) to extend the school tax limitation to homesteads of the disabled homeowner. It provides that the homeowners with the school tax limitation may transfer the same percentage of taxes paid to another qualified homestead. It also keeps the tax limitation in effect for a surviving spouse who is 55 years of age or older and resides (and continues to reside) in the residence qualified by the deceased qualified homeowner. The new law permits deductions in the rollback tax rate for the taxes and value for those homesteads that have the limitation, similar to the deductions school districts have for the 65 or older homeowners tax limitation. If the owner qualified prior to January 1, 2003, then the owner is considered to have first qualified for the exemption on January 1, 2003. For transferring the limitation to a subsequently qualified homestead, the owner must qualify the former homestead for a disabled school exemption for a tax year beginning on or after January 1, 2003. Effective January 1, 2004, contingent on the passage of H.J.R. 21 at the September 13, 2003 election.
H.B. 136 adds Section 11.261 to allow a county, city or junior college district to place a tax limitation on the homesteads of senior citizens and disabled homeowners. The taxing unit’s governing body or its voters (by petition and election) may adopt the limitation. Currently, only 65 or older homeowners receive a school tax limitation, also called tax ceiling, on their homestead taxes. The new law is subject to interpretation concerning whether or not a county, city or junior college district must first offer the optional homestead exemption before the limitation can be applied. The school tax exemption is required by law. Deductions are permitted in the effective and rollback tax rates for the taxes and value for those homesteads that have the limitation, similar to the deductions school districts have for the school tax limitation. The new law applies to taxes imposed on or after 2004, if Texas voters approve the constitutional amendment. Homeowners with the tax limitation may transfer the same percentage of taxes paid to a subsequent qualified homestead if the subsequent qualified homestead is in that same taxing unit. The new section provides for transfer of the tax limitation to a surviving spouse who is 55 years of age or older and resides (and continues to reside) in the residence qualified by the deceased qualified homeowner. Taxing units should consult with their attorneys about the application of this optional tax limitation if the exemption is not adopted. Effective January 1, 2004, contingent on passage of H.J.R. 16 at the September 13, 2003 election.
H.B. 2416 amends Subsection (b) to change the period from three years to five years that an incomplete improvement owned by a qualified nonprofit water supply or wastewater service corporation may be exempt from property taxation. However, on January 1, 2006, the time period reverts back to three years. Effective June 18, 2003.
H.B. 217 amends Subsection (c) to provide that a homestead exemption provided in Section 11.13 (c) or (d) for a disabled person is effective as of January 1 of the tax year in which the person qualifies and applies to the entire tax year. Effective January 1, 2004, contingent on the passage of H.J.R. 21 at the September 13, 2003 election.
H.B. 179 amends Subsection (c) to provide that county fair associations organized to hold agricultural fairs and encourage agricultural pursuits under Section 11.23(h) need only apply once, rather than annually. Effective January 1, 2004.
H.B. 2147 amends Subsection (a) by changing the deadline for filing of late homestead exemption applications to be no later than one year after the delinquency date for the tax year. The amendment deletes the language “were paid or became delinquent, whichever is earlier.” Effective June 20, 2003.
S.B. 521 amends Subsections (a), (b) and (c) to require the owner of a manufactured home to provide a copy of a statement of ownership and location from the Texas Department of Housing and Community Affairs to the appraisal district when the owner applies for a homestead exemption. For the land on which a manufactured home is located to qualify for the homestead exemption, the manufactured home must qualify for the exemption and the home be listed with the land in the appraisal records. Effective January 1, 2004.
H.B. 3507 amends Subsections (a) and (c) to conform Tax Code language regarding references to manufactured homes in Occupations Code. Effective September 1, 2003.
H.B. 3546 amends Subsections (a) and (c) with conforming references to new exemption for low-income and moderate-income housing. Effective January 1, 2003.
H.B. 500 adds Section 11.48 requiring the chief appraiser to keep confidential a driver’s license number, personal identification certificate number or social security number provided on an exemption application. The information may be disclosed only in specific circumstances, similar to those circumstances found in Tax Code Section 22.27 for renditions, including in judicial and administrative proceedings pursuant to a lawful subpoena and to the Comptroller for property value study purposes. Effective September 1, 2003.
CONSTITUTIONAL AMENDMENTS FOR EXEMPTIONS
Article III, Section 48-d
S.J.R. 45 will have voters decide September 13, 2003 election whether to repeal the authority of the Legislature to create rural fire prevention districts. The enabling legislation (S.B. 1021) would be effective September 1, 2003.
Article VIII, Section 1-b (d)
H.J.R. 21, if passed by voters at the September 13, 2003 election, would extend the school property tax limitation to disabled homeowners, as well as persons over 65 years of age. The enabling legislation (H.B. 217) would be effective January 1, 2004.
Article VIII, Section 1 (d) and (j)
S.J.R. 25, designed to address the taxability of travel trailers, if passed by voters at the September 13, 2003 election, authorizes the legislature to exempt, subject to Subsections (e) [local option taxation of non-income producing personal property] and (g) [exemption for small income producing personal property accounts] and in addition to other exemptions, all other tangible personal property, except structures which are substantially affixed to real estate and are used or occupied as residential dwellings and except property held or used for the production of income. The resolution includes a "temporary provision" to permit the retroactive application of the law to January 1, 2002. The law states that it applies to 2002 taxes, if the exemption passes. Any determination of 2002 tax refunds and taxability of travel trailers for 2002 and 2003 must be made locally or through an attorney general's opinion. The enabling legislation (S.B. 510) would be effective January 1, 2004.
Article VIII, Section 1-b (h)
H.J.R. 16, if passed by voters at the September 13, 2003 election, authorizes the governing body of a county, city or junior college to limit the property taxes on the homesteads of a person who is disabled or is 65 years of age or older. As an alternative, on receipt of a petition signed by five percent of the registered voters, the governing body would call an election to determine by majority vote whether to establish the limitation. The enabling legislation (H.B. 136) would be effective January 1, 2004.
Article VIII, Section 2 (a)
H.J.R. 55, if passed by voters at the September 13, 2003 election, authorizes the Legislature to exempt from property taxation property owned by a church or religious society and leased for use as a school under Section 11.21 and land owned by a church or religious society that owns an actual place of worship, if the land is owned for the purpose of expanding an existing place of worship or constructing a new place of worship. The enabling legislation (H.B. 1278) would be effective January 1, 2004.
Article VIII, Section 13 (c) and (d)
H.J.R. 51, if passed by voters at the September 13, 2003 election, extends the redemption period for a mineral interest sold for unpaid taxes at a tax sale from six months to two years. The enabling legislation (H.B. 1125) would be effective January 1, 2004.
CHAPTER 22. RENDITIONS
S.B. 340 amends Subsection (a) and adds Subsections (f) – (j), enforcing the requirement that all tangible personal property used for the production of income in Texas be rendered annually with appraisal districts. Rendition statements must contain the following information: 1) the name and address of the property owner; 2) a description of the property by type or category; 3) if inventory, a description and general estimate of quantity for each type; 4) the physical location or taxable situs of the property; and 5) the owner’s good faith estimate of the property’s market value or, at the owner’s option, the historical cost when new and the year of acquisition of the property. An exception to these requirements, however, concerns property with an aggregate value of less that $20,000 (in the owner’s opinion). In those cases, the owner renders only the name and address of the owner, a general description of the property by type or category and the physical location or taxable situs of the property.
The owner’s good faith estimate of value is inadmissible in administrative or judicial proceedings involving the property, except to determine compliance with this section, whether there was an effort to falsify a report or evade taxes, or the owner alters documents or presents fraudulent documents to the chief appraiser for purposes of affecting of an appraisal district proceeding. An owner of property regulated by the Public Utilities Commission, Railroad Commission, Surface Transportation Board or Federal Energy Regulatory Commission complies with rendition requirements by submitting a copy of the annual regulatory report and sufficient allocation information; however, the chief appraiser must make a written request first.
Excepted from the rendition requirements outlined above is property appraised by a “third party” – generally an appraisal firm under contract with an appraisal district – if the owner provides substantially equivalent information to the party. In addition, exempt property does not have to be rendered (i.e., implements of husbandry used for farm, ranch and timber production). Effective January 1, 2004.
S.B. 340 adds Subsection (b) to provide that if an exemption application is denied, the owner on the date of denial must render the tangible personal property within 30 days of the denial. Effective January 1, 2004.
S.B. 340 adds Subsection (c) to authorize the chief appraiser to request a statement explaining how the owner arrived at the good faith estimate of market value for the subject property. The statement must summarize information sufficient to identify the property (physical and economic characteristics and source of information), specify the effective date and explain the basis of the rendered value. If the business owner has 50 employees or less, the owner may base the estimate on depreciation schedules used for federal income tax purposes. The owner must deliver the statement (in writing or electronically) within 21 days of the request. The statement is inadmissible in administrative or judicial proceedings, except to (1) determine compliance with this section, (2) find whether there was an effort to evade taxes, (3) determine if documents were falsified or (4) decide the owner’s protest before an appraisal review board. The statement is confidential and may only be disclosed as provided in Section 22.27. Failure to comply with this provision will result in the same penalties as failure to render timely that may have contributed to the violation. Effective January 1, 2004.
S.B. 340 amends Subsection (b) to provide that if a property owner makes a written request to file a rendition statement or property report late, a chief appraiser shall extend the deadline to May 15 (from current extension deadline of April 30). The chief appraiser may extend the deadline another 15 days upon good cause shown in writing by the owner. Effective January 1, 2004.
A temporary provision was adopted [Section 22.23(c)]. If a rendition is filed for tax year 2003 according to the provisions of this new law (not effective until 2004), and the chief appraiser discovers that some or all of the property had been omitted in one of the two preceding years, the property may not be added to the 2001 and 2002 appraisal rolls as omitted. This subsection expires on January 1, 2005.
S.B. 340 amends Subsections (b), (c) and (d) concerning personal property renditions. The Comptroller currently has the authority to prescribe a rendition form, and property owners need only substantially comply with the requirements on that form. Section 22.24(b) was amended to state that a person must include all information required by the newly written Section 22.01. The Comptroller is authorized to prescribe different rendition forms for different property types. Those forms, however, must contain the following statement in bold type: “If you make a false statement on this form, you could be found guilty of a Class A misdemeanor or a state jail felony under Section 37.10, Penal Code.” Effective January 1, 2004.
Sections 22.28 – 22.30
S.B. 340 adds Sections 22.28 – 22.30 concerning penalties for delinquent and fraudulent renditions and waiver of penalties by appraisal districts. If a property owner files a rendition late, the chief appraiser is required to charge a penalty of 10 percent of the amount of annual taxes imposed on the property. The chief appraiser shall impose an additional penalty of 50 percent if a court finally determines that: (1) the person filed a false statement or report with the intent to commit fraud or to evade taxes; or (2) the person altered or destroyed records or other information in the course of proceedings before the appraisal district. Enforcement is required by proceedings initiated by district or county attorneys. The court must consider the property owner’s compliance history; the type, nature and taxability of the property involved; the type of business involved; the completeness of records; the owner’s reliance on appraisal district advice that may have contributed to the violation; changes in district policies affecting renditions; and any other relevant factor. The appraisal district is authorized to retain 20 percent of these penalties to pay for collection costs, with the remainder distributed to the taxing units participating in the district. The chief appraiser is permitted to waive these penalties if it is determined that the property owner exercised reasonable diligence to comply or has substantially complied with rendition requirements. The owner must request the waiver in writing (with supporting documentation) within 30 days of being notified of the penalty. The chief appraiser must then determine whether to waive the penalty according to the same considerations of a court (listed above). The owner may protest before the appraisal review board the failure or refusal of the chief appraiser to waive the penalty. Effective January 1, 2004.
CHAPTER 23. APPRAISAL METHODS AND PROCEDURES
H.B. 1460 amends and renumbers the section to include Subsection (a) and (b) to change the requirements on using the income method of appraisal. If the chief appraiser determines that the most appropriate method to determine market value is the income approach, the appraiser shall perform certain analyses and projections. The chief appraiser shall consider historical information and trends, current supply and demand factors and anticipated events such as competition from similar properties. Effective January 1, 2004.
H.B 1460 adds a new Section 23.014 to provide that the chief appraiser shall analyze the effect on the market value of real property from any tangible personal property (including trade fixtures), intangible personal property or other property not part of the real property and exclude those values from a property’s market value. Effective January 1, 2004.
H.B. 3507 amends Subsections (a) (5), (7) and (10) to conform Tax Code language regarding references to manufactured homes in Occupations Code. Effective September 1, 2003.
H.B. 136 amends Subsections (b) and (g) to add references to the optional city, county and junior college tax limitation for homeowners 65 or older and disabled homeowners. Effective January 1, 2004, contingent on passage of H.J.R. 16 at the September 13, 2003 election.
H.B. 2726 amends Subsections (a) – (e) to allow a property owner to waive special appraisal of real property inventory at the price for which it would sell as a unit. The property owner may file a written waiver request at any time requesting that the real property be appraised individually rather than as a unit. Effective January 1, 2004.
H.B. 3546 adds Section 23.215 to require the chief appraiser to use the income method of appraisal when appraising real property owned by an organization and: 1) is rented to low-income or moderate-income persons, who satisfy the organization’s income eligibility requirements; 2) was financed under the low income housing tax credit program in Subchapter DD, Chapter 2306 of the Government Code; 3) does not receive an exemption under Sections 11.182 or 11.1825; and 4) is not subject to an agreement with any taxing unit to make payments to the taxing unit instead of taxes on the property. Effective January 1, 2004.
S.B. 340 adds Subsection (f) to provide that when calculating an improvement value for the purposes of a limited taxable value of a residence homestead, a “new” improvement is not a replacement structure for a structure that was rendered uninhabitable or unusable by a casualty or by mold or water damage. Effective January 1, 2004.
H.B. 3607 amends the definition of “net-to-land” for the open-space land appraisal. The chief appraiser may not include hunting or recreational lease income for land that qualifies for wildlife management appraisal in net-to-land calculations. Effective January 1, 2004.
S.B. 480 amends Subsection (f) and adds Subsection (m) to exclude the sale of land from the state, a political subdivision of the state or a nonprofit corporation created by a city with more than one million population to an individual or business from the agricultural rollback tax, based on certain conditions of economic development. The Comptroller determines if the business located on the land is likely to generate for the state general revenue fund during the next two fiscal bienniums an amount of taxes and revenues equal to 20 times the calculated rollback tax. The chief appraiser determines if a rollback has occurred. Effective June 20, 2003.
H.B. 2416 amends Subsection (m) to provide that there is no agricultural rollback tax on land owned by a charitable organization qualified under Tax Code Section 11.18(d) for providing housing and related services to persons 62 years of age or older in a retirement community if the land is eligible for the exemption within five years. Effective June 18, 2003.
S.B. 1646 amends Subsection (2) to change the definition of “net-to-land.” The new definition provides that, in addition to pine and hardwood sawtimber and pulpwood, small pine sawtimber (chip-n-saw) and other significant timber products are to be considered when determining value and that cutting contracts and gatewood sales are to be included in determining stumpage prices. Information for the timber region as a whole is to be considered. The management costs used to determine net-to-land are those of a prudent manager seeking to maximize return. Effective January 1, 2004.
S.B. 1646 amends the section to change the method for determining the capitalization (cap) rate to be used in calculating timberland value. The cap rate will be the greater of the interest rate specified by the Farm Credit Bank of Texas on December 31 of the previous year plus 2 percent or the cap rate used the previous year (Method A). In the first year the cap rate determined by Method A is 10 percent or greater, the cap rate will be determined by adding 2 percent to the interest rate specified by the Farm Credit Bank of Texas on December 31 of the previous year (Method B). In all subsequent years, the cap rate will be determined by averaging the current year’s cap rate from Method B and the cap rates used for the preceding four years. The years included in this average cannot be years prior to the first year the cap rate, determined by Method A, was 10 percent or greater. Effective January 1, 2004.
CHAPTER 25. LOCAL APPRAISAL
H.B. 2819 amends Subsection (a) to provide confidentiality to appraisal district information pertaining to a victim of family violence as defined by Section 71.004 of the Family Code, if as a result of the act of family violence against the victim, the actor is convicted of a felony or a Class A misdemeanor. Effective June 20, 2003.
S.B. 521 amends Subsection (a) and adds Subsections (e) and (f) to require the appraisal district to list the home and land together if the statement reflects that the owner has elected to treat the home as real property and has filed the TDHCA statement with the real property records at the county. Otherwise, the appraisal district lists the manufactured home separately from the land. Effective January 1, 2004.
S.B. 340 adds Subsection (k) to prohibit the chief appraiser from sending notices of appraised value for business personal property until after the deadline for filing renditions (April 15). Effective January 1, 2003.
CHAPTER 26. ASSESSMENT
H.B. 136 amends Subsections (6), (13) and (14) to exclude the value of the optional tax limitation for cities, counties and junior colleges from taxable value calculations for truth-in-taxation purposes. Effective January 1, 2004, contingent on passage of H.J.R. 16 at the September 13, 2003 election.
S.B. 657 amends Subsections (b) and (c) concerning tax rate calculations for property value located in a tax increment financing (TIF) zone. It repeals language that excluded captured value from these effective and rollback tax rate calculations only for taxing units located in counties with a population less than 500,000. The exclusion language now applies to all taxing units, except school districts. School districts have their own step for adjusting the rollback tax rate for a TIF. The bill also provides that if a taxing unit does not have any captured value in the current year to exclude from the effective and rollback calculation, it does not have any tax increment from the prior year to exclude in those calculations. Effective January 1, 2004.
H.B. 390 amends Subsection (c) by addressing calculation of the effective and rollback tax rates concerning the captured appraised value located in a tax increment financing zone. The amendment provides that the captured appraised value corresponding to the taxes deposited in the TIF fund does not include any value that was included in the “new property value,” as defined by Tax Code Section 26.012. This provision has the effect of preventing the taxing unit from deducting the same value in two different places in the calculation. Effective January 1, 2004.
H.B. 217 amends Subsection (b) to require that taxes are prorated for a residence homestead if the homestead receives the disabled homestead exemption(s) for only part of a year. Effective January 1, 2004, contingent on the passage of H.J.R. 21 at the September 13, 2003 election
H.B. 217 amends Subsection (a) and (b) to provide that for an individual that qualifies for a homestead exemption provided in Section 11.13 (c) or (d) for a disabled person during the year, the tax is calculated as if the individual owned the property as of January 1 of the tax year. Effective January 1, 2004, contingent on the passage of H.J.R. 21 at the September 13, 2003 election
CHAPTERS 31 – 34. COLLECTIONS AND DELINQUENCY
S.B. 173 amends Subsections (b), (c), (f) and (g) and repeals Subsection (h) to provide for deferred payment of property taxes by certain persons in the United States armed forces during a war or national emergency declared in accordance with federal laws. The person has 60 days to pay taxes without penalty and interest from the earliest date of the following events: (1) discharge from active military service, (2) return to the state for more than 10 days, (3) return to non-active duty status in the reserves or (4) the war or national emergency ends. Subsection (h) concerning the Persian Gulf War is repealed. Effective May 28, 2003.
S.B. 725 adds Subsection (a-1) and amends Subsection (e) to provide for the payment of taxes when a property was erroneously omitted from the tax rolls in preceding tax years. The delinquency date is postponed to February 1 of the first year that will provide at least 180 days after mailing the bill to pay the taxes. Effective September 1, 2003.
H.B. 3540 amends Subsection (a) to change the process for the refund of an overpayment or erroneous payment by a tax collector for a consolidated tax collection office. For a consolidated collection office, the governing body of the taxing unit that employs the collector determines that the payment was erroneous or excessive and approves the refund if the amount of the refund exceeds $2,500. The tax collector for the consolidated office determines and refunds amounts for $2,500 or less. Effective September 1, 2003.
S.B. 521 amends Subsections (a) and (b) and adds Subsections (d) and (e) to provide that if a manufactured home is listed with the land on the appraisal records, the tax lien attaches to the land on which the home is affixed and that if a manufactured home is listed separately from the land, the tax lien on the home does not attach to the land on which the home is located. The bill further authorizes a taxing unit, if a manufactured home is listed with the land on which the home is located, to place a lien on the home to the same extent it can place a lien on the land. If a home moved from its location and a new statement of ownership and location is not issued by the Department of Housing and Community Affairs, a taxing unit retains the right to record and enforce liens on the home to secure payment of taxes, regardless of where the home is currently located. Effective January 1, 2004.
H.B. 3507 amends Subsection (b) to conform Tax Code language regarding references to manufactured homes in Occupations Code. Effective September 1, 2003.
S.B. 521 amends Subsection (c) and adds Subsection (j) to provide that the unpaid taxes reported by the chief appraiser for a permit to move a manufactured home includes the taxes due for the current year. If the current year taxes are not levied, an estimated amount of taxes is due. Effective January 1, 2004.
S.B. 725 amends Subsection (a) concerning waiver of penalty and interest on a delinquent tax bill. A taxing unit’s governing body may waive interest on a delinquent tax (in addition to the mandatory waiver of penalties) if an act or omission of the taxing unit or its agent caused or resulted in the delinquency. It returns the former provision that the taxpayer must also pay the delinquent tax no later than the 21st day after the date the taxpayer knows or should know of the delinquency, rather than within three years. Effective September 1, 2003.
H.B. 3504 amends Subsections (a), (b) and (c) and adds Subsections (c-1) and (f) concerning the deferral or abatement of taxes on a residence homestead by an elderly or disabled person. The bill provides that the residence homestead may not be sold at a sale to foreclose the tax lien until the 181st day after the date the individual no longer owns and occupies the property as a residence homestead. It also outlines how a person who has a pending sale to foreclose on the homestead’s tax lien may abate that sale. It also extends the tax deferral to the surviving spouse of an individual who deferred the taxes on the homestead. Effective September 1, 2003.
H.B. 195 amends Subsections (a) – (d) to require the transfer of delinquent county education district (CED) taxes. The successor-in-interest to a CED transfers any money collected after August 31, 1993, less collection costs, to the component school districts in the CED by September 15, 2003. The successor-in-interest also transfers any uncollected delinquent taxes to each component school district. The amount of taxes transferred to each school district is the delinquent CED taxes imposed on property located in the school district. Each component school district is responsible for collecting those delinquent CED taxes and submitting any reports to the education commissioner and Comptroller. Effective September 1, 2003.
H.B. 2148 adds a new Section 33.10 to provide that placing a restriction or conditional payment on a check for an amount less than the delinquent taxes, penalties and interest is void. Effective June 20, 2003.
H.B. 3419 amends Subsections (a) and (b) and adds Subsections (c) – (h) to allow counties having a population of three million or more to authorize a peace officer or collector to enter into an agreement with a licensed auctioneer o advertise and conduct the sale of foreclosed property, including the use of online bidding through the Internet. Proceeds from a tax sale will be applied in a listed order with payment of a licensed auctioneer receiving the highest priority. Effective June 18, 2003.
H.B. 3419 amends Subsection (a) and adds Subsection (c) to provide that both land and improvements are subject to seizure by a municipality if the owner abandons the property for at least a year. Property is presumed to be abandoned for at least one year if it remains vacant for a year, and there is “no lawful act of ownership,” including mowing, weed cutting or other property maintenance performed by the owner or the owner’s agent. The collector may rely on the affidavit of any competent person with personal knowledge of the facts to determine whether a property is vacant or abandoned. Effective June 18, 2003.
H.B. 3419 amends Subsection (a) and adds Subsection (c) to provide that both land and improvements are subject to seizure by a county if the owner abandons the property for at least a year. Property is presumed to be abandoned for at least one year if it remains vacant for a year, and there is “no lawful act of ownership,” including mowing, weed cutting or other property maintenance performed by the owner or the owner’s agent. The collector may rely on the affidavit of any competent person with personal knowledge of the facts to determine whether a property is vacant or abandoned. Effective June 18, 2003.
H.B. 3419 amends Subsection (a) and adds Subsection (b) to address situations when a taxing unit has failed to provide a delinquent taxpayer delinquent tax notices in prior years. The new provisions permit an assessor-collector or attorney for the taxing unit to give notice by: 1) serving a copy of the tax warrant on the owners; 2) publishing the notice in a newspaper if ownership cannot be determined; or 3) posting a notice of intent to seize the property. Notice is required at the time of filing the application for tax warrant and must be sent to the person’s last known address. The bill prescribes requirements for notice by publication or posting and allows multiple properties landowners to be included in a notice by publication or posting. Effective June 18, 2003.
H.B. 3419 amends Subsection (b) and adds Subsection (d) to allow a tax warrant to be issued if a collector submits an affidavit indicating that the property has been abandoned for at least one year and to allow attorney’s fees up to 20 percent to be collected under a tax warrant seizure. Effective June 18, 2003.
H.B. 3419 amends Subsections (a) and (c) to allow the collection of attorney’s fees relative to issuance of a tax warrant, in addition to fees allowed for taxes, penalties and interest. A sale following the issuance of a tax warrant will be made by the officer charged with selling the property. Effective June 18, 2003.
H.B. 3419 amends Subsection (a) to require the collector to deliver a notice of tax sale to all persons who received notice of a tax warrant or seizure, as well as the person against whom the warrant is issued. Effective June 18, 2003.
H.B. 3419 amends Subsections (a) and (r) to include conforming language relating to tax warrants and seizure under Chapter 33. Effective June 18, 2003.
H.B. 335 adds Section 34.015 to require a person purchasing property at a tax foreclosure sale to show the officer conducting the sale that the person owes no delinquent property taxes to that county or the school districts or cities in that county. The person requests in writing a statement of no taxes owed for those taxing units from the county tax assessor-collector. The sworn request identifies property the person owns or formerly owned in the county. The county tax assessor-collector issues a statement showing either no delinquent taxes for the taxing units or shows the amounts owed each unit. The collector may charge a fee not to exceed $10 for each statement requested. Effective September 1, 2003.
H.B. 3419 amends Subsections (b) and (d) – (f) to restate how proceeds of a tax sale must be applied, in order of priority as follows: 1) cost of advertising the sale; 2) any fees ordered paid to an attorney ad litem; 3) court costs; 4) fees and commissions payable to the sheriff or constable conducting the sale; 5) expenses incurred by the taxing unit for title research if awarded by the court; 6) taxes, penalties, interest and attorney’s fees; 7) any other amount awarded to a taxing unit under judgment; and 8) any excess proceeds due participants in the sale. Effective June 18, 2003.
H.B. 3419 amends Subsection (c) to allow excess proceeds to be distributed lastly to former owners of the subject property. Effective June 18, 2003.
H.B. 3419 amends Subsection (d) to require the purchasing taxing unit at a tax foreclosure sale to pay costs in the same order of priority as provided in Section 34.02(b), after paying for the costs of maintaining the property, marketing and any hazardous waste clean-up. Effective June 18, 2003.
H.B. 1125 amends Subsections (a), (b), (c) and (e) to extend the redemption period for a mineral interest sold for unpaid taxes at a tax sale. The owner of a mineral interest may redeem from the purchaser (other than a taxing unit) the mineral interest on or before the second anniversary of the date that the purchaser’s deed was recorded. Currently, such an owner has six months to redeem the mineral interest. The amended section treats a mineral interest, relative to the redemption period, the same as a residence homestead or qualified agricultural land. Effective January 1, 2004, contingent on passage of H.J.R. 51 (allowing a two year redemption period for a mineral interest) at the September 13, 2003 election.
H.B. 3419 amends Subsection (k) to provide that homeowners’ association dues and assessments included as “costs” when property is held by taxing units does not affect the units’ immunity from suit and liability for the payment of those homeowners’ association dues and assessments. Effective June 18, 2003.
CHAPTER 41. LOCAL REVIEW
H.B. 1082 amends Subsections (a) and (b) concerning a taxpayer protest on unequal appraisal to other properties to provide that the appraisal district has the burden of proof in an ARB hearing on unequal appraisal and an unequal appraisal protest must be determined in favor of the protesting party unless the appraisal district establishes: 1) the property’s appraisal ratio is equal to or less than the median level of appraisal of a reasonable and representative sample of other properties in the appraisal district or a sample of properties similar to the subject property or 2) the property’s appraised value is equal to or less than the median appraised value of a reasonable number of comparable properties. Effective September 1, 2003; applies only to ARB protests filed on or after this date.
S.B. 340 amends Subsections (a) and (d) to provide that if an owner fails to deliver a rendition or requested information prior to an appraisal review board hearing, the owner has the burden of proof by a preponderance of the evidence. If the property owner fails to meet the burden, the protest must be determined in favor of the appraisal district. Effective January 1, 2004.
CHAPTER 42. JUDICIAL REVIEW
H.B. 1082 amends Subsections (a) – (g) to allow an owner of regulated telecommunications or railroad property to consolidate judicial appeals from multiple appraisal districts in a single district court cause of action. The option was previously extended only to owners of electric utility and pipeline properties. Effective September 1, 2003.
H.B. 1082 amends Subsections (a), (b) and (d) to require a district court to grant relief on the ground of unequal appraisal if the property’s appraisal ratio exceeds by at least 10 percent the median level of appraisal of a sample of properties in the appraisal district, or if the property’s appraised value exceeds the median appraised value of a reasonable number of comparable properties, appropriately adjusted.
If a court finds a property owner entitled to relief because the property’s appraised value is greater than the median appraised value of comparable properties, the court must order the appraised value to be changed to the median level of appraisal. If a property owner is entitled to relief under more than one ground, the value will be changed to the lowest appraisal. The value of the subject property and the value of a comparable or sample property used for comparison will be the market value determined by the appraisal district if the property is a residence homestead subject to the appraisal limitation under Tax Code Section 23.23. Effective September 1, 2003.
H.B. 893 amends Section 42.41 to create Subsections (a) – (c), requiring the chief appraiser to certify any change by final order from a court decision to each taxing unit not later than the 45th day after the final decision. The chief appraiser is irrefutably presumed to have complied with the new certification requirement. Effective September 1, 2003.
CHAPTER 43. SUIT AGAINST APPRAISAL OFFICE
CHAPTER 311. TAX INCREMENT FINANCING
S.B. 1771 adds Subsection (e) allowing the Texas Department of Economic Development or its successor to recommend that a taxing unit enter into a tax abatement agreement with a person. The board of directors of the reinvestment zone and the governing body of a taxing unit are required to consider the Department’s recommendation. Effective September 1, 2003.
S.B. 353 repeals Subsection (h) requiring cities with a population of more than 230,000 that border Mexico to pay into a tax increment fund relative to a tax increment financing zone. Effective April 24, 2003.
CHAPTER 312. TAX ABATEMENT AGREEMENTS
S.B. 1771 adds Subsection (g) allowing the Texas Department of Economic Development or its successor to recommend that a taxing unit enter into a tax abatement agreement with a person. The governing body of a municipality is required to consider the Department’s recommendation. Effective September 1, 2003.
S.B. 1771 adds Subsection (f) allowing the Texas Department of Economic Development or its successor to recommend that a taxing unit enter into a tax abatement agreement with a person. The commissioners court of a county is required to consider the Department’s recommendation. Effective September 1, 2003.
CHAPTER 313. TEXAS ECONOMIC DEVELOPMENT ACT
H.B. 2425 amends Subsection (2) defining tangible personal property that is a qualified property for an agreement. Pharmaceutical biotechnology cleanrooms and equipment is excepted from the requirement that the personal property is first placed in service in the new building or improvement. Effective June 20, 2003.
S.B. 1771 adds Subsection (g) allowing the Texas Department of Economic Development or its successor to recommend that a school district grant a person a limitation on appraised value under Chapter 313. The governing body of the school district is required to consider the Department’s recommendation. Effective September 1, 2003.
Civil Practices and Remedies Code
H.B. 335 adds Section 34.0445 to require a person purchasing property at a sale of real property taken in execution following a civil judgment to show the officer conducting the sale that the person owes no delinquent property taxes to that county or the school districts or cities in that county. The person requests in writing a statement of no taxes owed for those taxing units from the county tax assessor-collector as required by Section 34.015 of the Tax Code. Effective September 1, 2003.
H.B. 2964 adds Section 11.303 to authorize a municipal school district operating under former Chapter 24 of the Education Code to continue to operate under that chapter as it existed on May 1, 1995, and under law generally applicable to school district that does not conflict with that chapter. New language establishes the manner in which the governing body of a municipality approves and levies property taxes for the district. Effective September 1, 2003.
S.B. 850 adds Section 44.044 to prohibit school districts from contracting with persons who are indebted to those units, including delinquent property taxes. Effective September 1, 2003.
H.B. 2898 adds Section 2051.0441 setting out the type of newspapers required for publication of notices in certain counties. The bill establishes what is required for a legal newspaper in a county with a population of at least 30,000 and not more than 36,000 that borders the Red River. In these counties, the newspaper has specific requirements. It must devote at least 20 percent of its column lineage to general interest items (rather than 25 percent) and be entered as second-class postal matter or have a mailed or delivered circulation of at least 51 percent of the residences in the county where published. Effective June 20, 2003.
S.B. 671 amends the Purpose Clause for the Comptroller’s Property Value Study to conform with current policy and practice. Effective June 20, 2003.
S.B. 671 adds Section 403.3011 to the Government Code to add definitions, specifically to define "eligible school districts" for purposes of the proposed "grace period." To be eligible, a school district must have two consecutive years of local value assignments. If in the third year the annual study shows that the school district has state value, the district will be assigned a substituted local value for that year and the following year.
A substituted local value will be assigned only if, in the most recent annual study, the aggregate local value of all 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 categories of property sampled.
School districts that appraised property higher than the amount determined to be valid (or state value) in the PVS would be assigned local value for purposes of school funding. (This provision would address the current situation where a school district is assigned the lower state value and therefore gets more state funding, while at the same time receiving more taxes on higher values locally.) Effective June 20, 2003.
S.B. 671 amends Subsections (c) and (h) and adds Subsections (l) and (m) to provide for substituting local values for state values. Subsection (c) clarifies the determinations of state and local values by the Comptroller. It also states that school districts that appraise property higher than the amount determined to be valid (or state value) would be assigned local value for purposes of school funding. Beginning with the 2003 study year (affecting school funding for 2004-05), a school district will have to have two consecutive years of local value to be eligible to have a substituted local value in the third year. The "grace" period will exist for two years to allow enough time for the appraisal district to correct problems. Subsection (h) provides for audit procedures by the Comptroller for corrections to prior year study determinations.
For the 2003-04 school year only, the bill provides funds for school districts that meet two criteria: 1) the Comptroller assigned them a state value higher than their local taxable value and, as a result, they received less state funding than they expected and 2) they had an M&O tax rate greater than $1.42. The commissioner of education allocates the funds. Effective June 20, 2003.
H.B. 217 amends Subsection (d) to reword the deduction from taxable value for the school property value study relative to the over-65 homeowners’ school tax limitation. The term “elderly” is replaced with the phrase “individuals who receive a tax limitation under Section 11.26, Tax Code.” Effective January 1, 2004, contingent on the passage of H.J.R. 21 at the September 13, 2003 election.
H.B. 983 adds Section 411.1296 granting an appraisal district access to the criminal history record maintained by the Texas Department of Public Safety for any person who is applying for appraisal district employment. Effective September 1, 2003.
H.B. 9, concerning homeland security, adds Section 418.176 to define nonprofit water supply and wastewater service corporations exempt from property taxation under Section 11.30 of the Tax Code as “governmental entities” for confidentiality purposes regarding information relating to emergency response providers. Effective June 22, 2003.
H.B. 9 adds Section 418.183 to specify otherwise confidential information that a port authority or navigation district may voluntarily disclose relating to emergency response providers. Effective June 22, 2003.
Sections 552.117 and 552.1175
S.B. 1388 adds to information on public records that are excepted from public disclosure. Certain addresses, telephone numbers, social security numbers and personal information may not be disclosed for certain individuals. The list is expanded to include a current or former employee of the Texas Department of Criminal Justice or predecessor department or division. All documents filed with the county clerk or district clerk are subject to public disclosure. Effective June 20, 2003.
H.B. 2032 amends Subsection (a) and adds Subsections (c) and (d) to provide that an e-mail address of a member of the public is confidential except for some circumstances. The e-mail address may be disclosed if it is provided by a person who has a contractual arrangement with the governing body; by a vendor who seeks a contract with the governmental body; in a response to a request for bids or proposals; or on a letterhead, coversheet, printed document or other document made available to the public. A governmental body is allowed to disclose an e-mail address for any reason to another governmental body or to a federal agency. Effective September 1, 2003.
S.B. 84 amends Subsection (a) to define the term “promptly” when a public information officer must produce public information. Promptly means “as soon as possible under the circumstances, that is, within a reasonable time, without delay.” Effective June 20, 2003.
S.B. 653 amends Subsection (a) to provide that, with respect to requests for 50 or fewer pages of a paper record, the cost of copying shall be the charge for each page of the paper record and may not include costs of materials, labor or overhead. Effective September 1, 2003.
S.B. 653 amends Subsection (b) to provide that a request for public information is not considered to be withdrawn if the requestor has filed a timely complaint with the Texas Building and Procurement Commission alleging that the requestor has been overcharged for being provided with a copy of the public information. The requestor must respond in writing to the government body within 10 business days following receipt of itemized charges for public information on any matter concerning acceptance or complaint regarding charges. Effective September 1, 2003.
S.B. 653 amends Subsections (a) and (b) to substitute Texas Building and Procurement Commission for General Services Commission and to require a governmental body to respond within 10 business days to the agency concerning a requestor’s complaint of overcharge or overpayment for public information. Effective September 1, 2003.
S.B. 919 amends Subsection (a) to extend timeliness of an open records action by mail to include receipts made of a common or contract carriers. Current law only lists mail or interagency mail as appropriate methods of submitting requests, notices or other documents within a specified time. Effective June 20, 2003.
H.B. 2032 adds Subsections (a-1) and (a-2) to provide that an officer or employee of a governmental body, including a member of a governmental advisory committee, commits an offense punishable by a fine of not more than $1,000, confinement in the county jail for not more than six months or both for: 1) using confidential information for an unauthorized purpose, including solicitation of political contributions or solicitation of clients; 2) permits inspection of confidential information by an unauthorized person; or 3) discloses confidential information to an unauthorized person. Effective September 1, 2003.
Health and Safety Code
S.B. 948 adds Section 281.096 and grants specific authority to a county commissioners court to grant local option exemptions, to elect to tax property otherwise exempt and to contract with attorneys to collect delinquent taxes for the hospital district. The new language excludes the hospital district board from these duties. Effective September 1, 2003.
S.B. 200 adds Section 281.106 authorizing a hospital district created under Article IX, Section 4 of the Texas Constitution that has previously held a successful election approving a tax rate not greater than $.75 to pledge tax revenues to the payment of tax and revenue bonds if approved by voters. Effective May 15, 2003.
H.B. 2073 adds Section 285.201 establishing the election procedures for a hospital district to increase its maximum tax rate to not exceed $.75 per $100. District voters may, by petition of the lesser of 100 or 15 percent of the registered voters, require the hospital district governing body to hold an election to increase the district’s maximum tax rate. Effective June 18, 2003.
Chapters 775 and 776
S.B. 1021 amends various sections in the Health and Safety Code to convert all rural fire prevention districts to emergency service districts. Conforming language is also included in several Government Code sections. Effective September 1, 2003, passage of S.J.R. 45 at the September 13, 2003 election repeals rural fire districts.
S.B. 1022 amends various sections in the Health and Safety Code to authorize an emergency service district to employ a peace officer and provides that a district may contract with another political subdivision or the state for law enforcement services, as well as providing standards for adoption of a fire code by a district. This bill also expands the options for a district to construct public works to include the alternative bidding procedures and provides that districts may borrow money or enter into other financial arrangement to construct facilities. Effective September 1, 2003.
Local Government Code
S.B. 850 adds Section 252.0436 to prohibit cities from contracting with persons who are indebted to those units, including delinquent property taxes. Effective September 1, 2003.
Sections 375.301 – 375.314
S.B. 1565 adds Subchapter O to Chapter 375 to allow a city to create a defense adjustment management authority that may levy a property tax. The stated purpose of the proposed entities is “to foster economic opportunity, job generation and capital investment by promoting a favorable business climate, preparing the workforce for productive employment and supporting infrastructure development in areas around defense bases that are intended to be annexed by the municipality.” Effective June 20, 2003.
S.B. 850 adds Section 262.0276 to prohibit counties from contracting with persons who are indebted to those units, including delinquent property taxes. Effective September 1, 2003.
S.B. 276 amends Section 1151 to continue the Board of Tax Professional Examiners (BTPE) and establishes a September 1, 2015 sunset date. The bill changes the current composition of the board to be only five members, with four from the tax profession and one from the general public. It requires an interagency contract with the Comptroller’s office to provide administrative support to BTPE. The Comptroller and BTPE will report to the lieutenant governor and speaker of the house the feasibility of relocating the BTPE office to the Comptroller’s office by December 1, 2004.
BTPE will develop negotiated rulemaking procedures and alternative dispute resolution for internal and external disputes, implement technology that ensures the public easily finds information on the Internet and establish public participation and complaint procedures. Effective September 1, 2003.
H.B. 2844 amends Subsection (a) to exempt from registration as a property tax consultant a person who provides property tax consulting service only in connection with farms, ranches or single-family residences. Current law exempts only persons providing consulting services relative to single-family residences. To qualify for the exemption, a person must hold an active real estate broker license or sales person license, or be a licensed or certified real estate appraiser. Effective June 20, 2003.
S.B. 521 amends and adds sections to Chapter 1201 and adds conforming amendments to the Finance Code, Property Code, Tax Code and Transportation Code to address various areas dealing with manufactured homes. It addresses tax liens and when liens attach to both the home and the land on which the home occupies. The owner of a manufactured home may receive a statement of ownership and location issued by the manufactured housing division of the Texas Department of Housing and Community Affairs (TDHCA). The owner provides a copy of this statement to the appraisal district when the owner applies for homestead exemptions. The appraisal district lists the home and land together if the statement reflects that the owner has elected to treat the home as real property and has filed the TDHCA statement with the real property records at the county. Otherwise, the appraisal district lists the manufactured home separately from the land. The tax lien attaches to both the home and land if the statement is filed. The unpaid taxes reported by the chief appraiser for a permit to move the manufactured home include the taxes due for the current year. If the current year taxes are not levied, an estimated amount of taxes is due. Effective June 18, 2003.
S.B. 521 amends Subsections (c) and (i) to include updated references to the Occupations Code concerning manufactured housing. Effective June 18, 2003.
S.B. 1559 adds Section 11.008 concerning confidential information in real property records applicable to a deed, mortgage or deed of trust executed on or after January 1, 2004. A notice on an instrument transferring an interest in property shall state in 12-point type that a person may strike from the public records his or her social security number or driver’s license number. Effective September 1, 2003.
S.B. 1559 adds Subsection (2) to provide that an instrument property recorded in the proper county is subject to inspection by the public. Effective September 1, 2003.
H.B. 803 adds Section 21.0421 concerning the assessment of damages and groundwater rights relative to condemnation proceedings initiated by a political subdivision. In determining the market value of groundwater rights as property apart from the land, the special commissioners or court is required to base the value on generally accepted appraisal methods and techniques, including the methods of appraisal under Subchapter A, Chapter 23 of the Tax Code. The new section does not authorize groundwater rights appraised separately from real property for condemnation purposes to be appraised separately for property tax purposes or subject real property condemned under this section to agricultural rollback taxes. Effective September 1, 2003.
S.B. 853 amends Subsection (b) and adds Subsection (c) to require a disclosure by a person who solicits (by mail or phone) a homeowner to pay a fee for the service of applying for a property tax refund. Before accepting money or signing a contract, the person must disclose to the homeowner the name of the appraisal district or taxing unit that owes the homeowner a refund. Effective September 1, 2003.
Vernons Texs Civil Statutes
H.B. 3075 adds Subsection (u) to Article 5190.6 to allow certain development corporations and taxing units to invest in and receive tax revenues from certain regional economic development projects. Effective June 20, 2003.
H.B. 1541 adds Section 49.236 to require a hearing and notice of tax rate for those water districts governed by Water Code Chapter 49. The notice is similar to those published by other types of taxing units for a proposed tax rate. The notice includes information for both the preceding and current year, including the tax rate, the difference in the rate and percentage increase or decrease, the average appraised value of a residence homestead, the taxes on that average homestead value and the difference in the taxes. The notice is published at least seven days before the hearing or mailed to each owner at least 10 days before the hearing date. For the 2003 tax rate, it applies to any water district that adopts the 2003 tax rate on or after September 1, 2003. Effective June 18, 2003.
S.B. 392 adds Section 49.236 to require a hearing and notice of tax rate in the Water Code for water districts. Very similar to the provisions above in H.B. 1541, this bill requires the notice to also include the water district board members’ names and how each member voted on the proposed tax rate and a statement about the taxpayers’ right to a rollback election. It contains a provision on how to calculate a water district rollback tax rate. Notices are required to be at least a quarter-page ad in a standard-size or tabloid size newspaper of general circulation, with a headline of at least 18-point type. District voters are allowed to petition for a rollback election if the district’s governing body adopts a combined debt, maintenance and operations and contract tax rate that is more than 8 percent of taxes on the prior year’s residence homestead value. For the 2003 tax rate, it applies to any water district that adopts the 2003 tax rate on or after September 1, 2003. Effective September 1, 2003