|Appraisal District Operations Comptroller's Report 42nd Institute on Property Tax and Registration Form Delinquent Penalty & Interest Penalty and Interest Rate Schedule - 2000/2001|
Annual Report Finds 5 Percent Increase in Operating Costs
Preliminary budgets for Texas 253 county appraisal district (CAD) offices rose almost five percent for fiscal year 2000, increasing about $10 million above 1999 total costs. These districts serve 3,621 taxing units with about 14.8 million taxable property accounts at a total statewide cost of about $228 million. (Potter and Randall CADs form a single appraisal office.) Although 53 new taxing units will levy a 2000 property tax, the number of property accounts decreased slightly from 1998 to the 1999 tax year.Taxing units
These and the following items are some of the findings from the Comptrollers 1999 & 2000 Appraisal District Operations Report. The Comptroller's Property Tax Division (PTD) asked CADs to respond by survey about final 1999 operations and projected 2000 budgets and plans.
CADs reported a total of 3,621 taxing units for tax year 2000, compared to 3,592 in 1999. This represents a net increase of 29 taxing units, after adding for new taxing units and subtracting for taxing units that have dissolved or will no longer levy a property tax.Property parcels
For 2000, 53 new taxing units will levy a property tax for the first time. Some of these units may be located in more than one appraisal district. These included 17 municipal utility districts, eight cities, six fire districts, five water control improvement districts, three fresh water supply districts, three emergency service districts, three road districts, three utility water districts, two improvement districts, one water supply district, one hospital district and one development district.
Ten taxing units either dissolved or withdrew from their appraisal district or will no longer collect property taxes. Eight taxing units consolidated operations with other taxing units, and two taxing units joined another appraisal district.
From 1998 to 1999, the total number of taxable parcels (or accounts) decreased statewide by 140,946, to total just under 14.8 million parcels. The last time a decrease in taxable parcels occurred was from 1991 to 1992. CADs vary in how they divide and consolidate properties into parcels, particularly personal property parcels. These variations may affect the total parcels reported. CADs will determine their 2000 parcel counts after completing the 2000 appraisal roll this summer.Budgets
The greatest percentage increase in number of accounts occurred with taxable business personal property. CADs added 56,445 business personal property accounts a 5-percent increase to reach a total of 1,148,803 accounts.
Real property parcels (land and buildings) rose by 106,373 parcels to reach 10,743,342 total taxable real parcels in Texas, a 1-percent increase.
The number of mineral parcels decreased slightly by 7,602 parcels to total slightly more than 2.7 million parcels.
Non-business personal property accounts saw the largest decrease almost 66 percent, or 296,162 parcels. In 1999, non-business personal property totaled 154,212 accounts. The majority of the decrease in these accounts was because the City of Dallas no longer taxes personal vehicles used for personal use.
In the state, 7 percent of the appraisal districts 18 CADs have 150,000 or more taxable parcels, representing about 42 percent of all taxable property parcels. Of these 18 districts, six CADs have over 300,000 parcels and represent more than 27 percent of all taxable properties. The six largest districts with more than 300,000 parcels (in order beginning with the largest) are Harris, Dallas, Tarrant, Bexar, El Paso and Travis CADs.
CADs spent a total of about $218 million, or an average of $14.74 per parcel, to appraise property in 1999, about 7 percent more than in 1998. The average 1999 CAD operating expenses were $860,008.Appraisal district directors
The 1999 expenditures per parcel varied. The lowest per parcel was Crockett CAD at $0 per parcel; Crockett CAD does not report its expenditures separately from the Crockett County Tax Office. At the other end, Somervell CAD, home of the Comanche Peak power plant, continued to report the highest cost per parcel at $37.68, down about 8 percent from 1998.
Mid-sized CADs with 1999 parcel counts from 35,000 to 49,999 parcels (38 districts) averaged the lowest cost per parcel at $10.72. In contrast, the six largest districts averaged $20.69 per parcel. The size and complexity of urban properties and the higher costs of doing business in these CADs contribute to the higher cost per parcel. See the table "1999 CAD Spending by Size."
Property Tax Code 6.06(j) requires CADs to refund or credit budget surplus funds to their taxing units for the following fiscal year. About two-thirds of the CADs 157 districts reported a 1999 budget surplus; the state total surplus exceeded $9.7 million.
Preliminary 2000 budgets show a 5-percent increase above 1999 expenses to total almost $228 million. Using 1999 taxable property parcels/accounts, the average cost per parcel runs $15.43 per parcel. See the table "Appraisal District Spending, 1982-2000."
Property Tax Code Section 6.06(b) and (d) require local taxing units to fund CAD budgets and give taxing units veto power after the CAD directors adopt the CAD budget. Taxing units in only one CAD Atascosa CAD vetoed the 2000 budget.
CAD budgets are allocated to taxing units based on the property taxes levied by each taxing unit in comparison to the total taxes of all units within the CAD. CADs reported that total tax levy used to allocate their budgets increased from $18.1 billion in 1998 to more than $19.7 billion in 1999. CAD operating expenses as a percentage of taxes levied was 1.10 percent.
A board of directors governs CAD operations and establishes goals and policies. State law requires that if the county tax assessor-collector is not appointed to the CAD board, the county assessor-collector serves as a non-voting CAD director. County tax assessor-collectors, however, are ineligible to serve if they serve as the chief appraiser or if the county commissioners' court contracted for county taxes to be collected by another taxing unit or the CAD.Appraisal review boards
Texas has a total of 1,555 CAD directors, with an average of six members on each CAD board. About 42 percent, or 653 directors, are taxing unit officials -- that is, they are county tax assessor-collectors, school board members, county commissioners, city councilmen and other elected officials. Directors in 65 CADs serve staggered two-year terms.
CAD boards in 207 districts have legal counsel on retainer. CADs reported that 197 boards two less than last year have purchased liability insurance with an average coverage per board of more than $1 million.
CAD directors appoint appraisal review board (ARB) members to handle taxing unit challenges and taxpayer disputes with the appraisal office. For tax year 2000, more than 20 percent (281) of the 1,354 ARB members are newly appointed. While state law allows the size of an ARB to range from three to 45 members (depending on the countys population), most ARBs average five members.Ag advisory board
ARBs retain legal counsel in 74 CADs three less than 1999. ARBs in 176 CADs one more than in 1999 have obtained liability insurance at more than $1 million per ARB. ARB members in 248 districts receive a per diem for their ARB service.
CAD directors also may appoint temporary and auxiliary review board members. Property Tax Code Section 41.66(f) prohibits an ARB member from communicating with another person about a protested property except during the ARB hearing or another protest in which the property is part of a sample of properties. If an ARB member does communicate about a protested property outside of the hearing, then a temporary ARB member must take that members place to hear the protest. Twenty-nine districts down from 42 in 1999 appointed temporary members in case a regular ARB member could not serve.
Property Tax Code Section 6.411 provides for appointing auxiliary ARB members to help hear taxing unit challenges and taxpayer protests. Twenty-six CAD boards down from 30 in 1999 appointed auxiliary ARB members for 2000.
Property Tax Code Section 6.12 requires the chief appraiser with the advice and consent of the CADs board to appoint three or more members to an agricultural advisory board. The advisory board advises the chief appraiser on appraisal and use of land designated for agricultural, open space or timber land use. Some 174 CADs two less than 1999 have active agricultural advisory boards, with a state membership total of 664 members.CAD staff
Full-time CAD employees numbered 3,899 statewide, compared to 3,848 in 1999, a gain of 51 full-time positions. The number of part-time employees also increased from 198 in 1999 to 211 in 2000. Of these employees, about 1,357 are appraisers. Some 27 districts employ only part-time appraisers. In some CADs, chief appraisers perform all appraisal work or have contracts with private appraisal firms. A staff appraisers average salary ranged from a low of $22,065 to an average high of $33,420.Overlapping property values
Employees in 187 CADs receive mileage allowances, and 218 districts provided staff with fringe benefits, including insurance and/or retirement programs.
Almost 88 percent of the CADs 222 budget training funds for staff to meet or retain state certification standards. CADs reported 1,958 employees are registered with the Board of Tax Professional Examiners. Of these employees, 1,215 attained the registered professional appraiser designation, 219 are registered Texas assessors, 104 are registered Texas collectors, and 62 individuals have all three designations.
Twenty-four CADs contract with a taxing unit to serve as the appraisal office. These CADs, therefore, have no employees. The chief appraisers are employees of taxing units that operate the appraisal office by contract with the CAD board. The statistical data for these chief appraisers and their staffs were not included in the average salaries.
Salaries of 229 chief appraisers averaged $47,442 for the 2000 budget, a 2-percent increase from the 1999 average salary of $46,316. Chief appraisers in 228 CADs receive fringe benefits, such as expense accounts, mileage, medical insurance and/or retirement programs. About 173 CADs have liability insurance for the chief appraiser, with an average coverage of more than $1 million per chief appraiser.
Effective January 1, 2000, Property Tax Code Section 6.025 no longer required CADs to agree on the same value for a property appraised by two or more districts. CADs shall, to the extent practicable, coordinate their appraisal activities so as to encourage and facilitate the appraisal of the same property appraised by each district at the same value. CADs in 216 counties had taxing units with boundaries in other counties and, thus, overlapping properties. CADs in 189 counties contractually agreed to work together on these overlapping properties.Reappraisal plans
State law requires CADs to reappraise property in their districts at least once every three years. For the 1999 tax year, 190 CADs 75 percent completed reappraisals, while 137 CADs plan to reappraise for the 2000 tax year. In their last reappraisal, 209 CADs used both in-house staff and an outside appraisal firm for their reappraisal. In the remaining districts, 30 CADs used staff only and 13 CADs used appraisal firms alone for the reappraisal. By contract, Haskell CAD has Stephens CAD provide appraisal services.Taxpayer protests
For 1999, CADs mailed more than 8.7 million reappraisal notices, of which almost 8 million notices (referred to as the "long notice") contained estimated taxes on the proposed taxable values. The remaining 744,999 notices were the "shorter" version allowed by Property Tax Code Section 25.19(i), with no estimated taxes. More CADs mailed reappraisal notices in May or earlier 199 CADs mailed during this time in 1999, compared to 189 CADs in 1998.
CAD officials in 239 counties reported that property owners filed four percent more written protests in 1999 444,820 protests compared to about 426,283 protests reported by 241 CADs in 1998. Almost 64 percent of the protesting taxpayers met with CAD staff in informal hearings to attempt a settlement without continuing with a formal ARB hearing.Roll approval
CADs scheduled only 248,526 formal ARB hearings for these filed protests about 31 percent more than in 1998. More than 67,000 taxpayers, however, did not attend their scheduled hearing, representing a 27-percent "no show" rate. In 1998, about 38 percent were "no shows."
Property Tax Code Section 41.71 requires ARBs by rule to provide taxpayers with hearing times in the evening or on a Saturday or Sunday. ARBs in 90 counties offered protest hearings during all three times Saturday, Sunday and evenings. About 77 ARBs offered protest hearings in the evenings, another 52 ARBs offered hearings on Saturday and evenings. About 14 ARBs offered hearings on a Saturday; and one district offered hearings on Saturday and Sunday and another Sunday and evening. Some 18 ARBs did not offer an alternate time.
Taxing units also may file written challenges if they disagree with CAD decisions. Eight taxing units compared to three in 1998 filed challenges in 1999.
CADs and ARBs continue to complete their work timely. In 1999, ARBs in 176 districts approved the appraisal records on or before July 20, 1999, the mandatory deadline for ARB approval. Fifty-six ARBs compared to 91 in 1998 approved the records before hearing all the protests as allowed by the Property Tax Code Section 41.12. The remaining 21 ARBs approved the appraisal records after July 20, 1999.Late corrections
ARBs approved appraisal rolls listing more than $1 trillion in 1999 value, a 3.5-percent increase from 1998. Chief appraisers in 218 districts certified those appraisal rolls to taxing units by July 25, the mandatory date.
After an ARB approves the appraisal records, it may change the records for specific reasons set out in Property Tax Code Sections 25.25 and 41.411. The most common late change was for Section 41.411, the "no-notice" appeal. These owners claimed that the CAD or ARB failed to send the property owner or owners agent a required notice. About 34 CADs reported that 2,190 property owners with properties appraised at more than $442 million filed Section 41.411 "no-notice" appeals.Geographical information
The next group of late changes were those filed under Section 25.25(c), allowing changes for clerical errors and multiple appraisals of the same property. Clerical errors for 1,618 properties worth about $729 million occurred in 34 CADs. Some 21 districts reported multiple appraisals on a total of 395 parcels worth more than $40 million.
Another group of late changes were for those property owners filing under Section 25.25(c), claiming that the appraisal district improperly included property on the appraisal roll. About 25 CADs reported this type of change on 1,476 properties worth more than $397 million.
Section 25.25(b) allows the chief appraiser to change the appraisal roll at any time to correct any inaccuracy that does not increase the amount of a taxpayers tax liability. Chief appraisers in 75 CADs reported 312 changed properties with a total of almost $24.5 million in value.
Property owners in 51 CADs reported changes under Section 25.25(d), an incorrect appraisal that exceeds the correct value by more than one-third. These CADs reported substantial value errors on 1,181 properties with a total value of more than $396 million.
Finally, Section 25.25(h) allows for joint motion corrections, requiring both the chief appraiser and property owner (or owners agent) to agree to the correction. About 966 joint motions in 21 CADs were filed on properties worth about $345 million.
Property owners who disagree with the ARB's decision on their property may continue on to district court. As of the January 2000 survey date, 87 CADs reported that taxpayers had filed 1,752 lawsuits on their 1999 values, compared to 94 CADs reporting 1,400 lawsuits at the same time in the previous year. About 2,059 lawsuits were still pending for tax year 1998 and prior years in 103 CADs.
All CADs must establish and maintain tax maps for property identification purposes. About 57 percent of the CADs have developed geographical information systems (GIS). These 144 CADs, compared to 140 in 1998, have invested resources in developing or have completed their GIS systems for better mapping and information systems.Freeport exemption
The 1999 & 2000 CAD Operations Report updates the listing of taxing units that tax or retain the right to tax freeport property. The Tax Code defines freeport property as goods, wares and merchandise (other than oil, gas and petroleum products) that leave Texas within 175 days of the date they are brought into or acquired in the state. Counties, cities, school districts and junior college districts may tax or retain the right to tax freeport property. Other special districts must exempt freeport property.Non-income producing property
About 1,564 taxing units taxed or retained the right to tax freeport property in 1999, a decrease from 1,590 units in 1998. For an updated list of these taxing units, call the PTDs technical assistance hotline at 1-800-252-8121. In Austin, call 512/305-9999.
Property Tax Code Section 11.14 allows taxing units to tax non-income producing personal property, after the units follow certain hearing and notice requirements. For 1999, 25 CADs reported that 95 taxing units tax non-income producing personal property, such as private automobiles, boats and airplanes. These units include 14 counties, 25 cities, 36 school districts and 20 special districts. For 1999, the cities of Dallas (Dallas County), Weimer (Colorado County) and Petersburg (Hale County) and Junction Independent School District (Kimble County) discontinued taxing non-income producing personal property. A listing of these units is available by calling the numbers listed earlier.Other services
Some 156 CADs also perform assessment functions, a decrease from 162 CADs in 1998. Assessment functions include calculating effective and rollback tax rates, publishing required notices and preparing and mailing tax bills.Report available
Some CADs also collect property taxes. The number of CADs collecting taxes for taxing units decreased in 1999 by three CADs, from 120 to 117 CADs. The number of taxing units receiving collection services from CADs also decreased from 918 taxing units in 1998 to 907 units in 1999.
CADs that collect establish a separate collection budget. CADs that collect taxes budgeted an average of $109,051 to perform the 1999 collection function, about a 3-percent decrease from the preceding year. CAD collection budgets ranged from as low as $2,650 to $805,742, with an average cost per parcel to collect of 42 cents. In 1999, nine CADs also collected property taxes for multi-county taxing units for which they did not appraise these taxing units property.
The survey also asked CADs to report on other taxing units that offer consolidated collection services. Some 167 county tax offices collect for 1,636 taxing units. The table "Who Collects and For Whom" shows consolidated collections with the type of collecting unit and the number of taxing units receiving the service. Some taxing units used private companies to collect taxes in 1999; some 49 private companies collected in 1999, compared to 54 companies in 1998. These private companies collected taxes for 466 taxing units in 1999. Only about 430 taxing units still collect only their own taxes as more taxing units move to consolidated collection offices.
Consolidation of all property tax collections for all taxing units into one office has occurred in 104 CADs one more than 1998. The single tax collecting office in these CADs included 58 CAD offices, 45 county tax offices and one city that collected property taxes for all taxing units in that county.
The 1999 & 2000 CAD Operations Report also contains information on ARB compensation, CAD office space, software companies, computer facilities, appraisal firms, electronic data submission, tax rate rollback activity and more. Many CADs also mailed the Comptrollers office a copy of their 2000 appraisal budget, and some CADs that collect taxes provided copies of their 2000 collection budgets.Directory
To request any CADs survey, appraisal budget or collection budget, please e-mail the Property Tax Division at firstname.lastname@example.org or call the PTDs technical assistance hotline at 1-800-252-9121. In Austin, call 512/305-9999.
From the CAD surveys, the PTD also updates names and addresses of CAD directors, ARB members and chief appraisers. This information is contained in the 2000 Appraisal District Directory. The PTD will send each appraisal district and county tax office a copy of the 1999 & 2000 Appraisal District Operations Report and has sent the 2000 Appraisal District Directory. Anyone may purchase either book by sending a check or money order for $10 each to the Comptrollers Property Tax Division, P. O. Box 13528, Austin, Texas 78711-3528.Tables
For the past 19 years, CADs have completed the Appraisal District Operations Survey. State Comptroller Carole Keeton Rylander thanks the districts for their time to complete the survey.
Contributing to this article: Carolyn Kyzar
Appraisal District Spending 1982-2000
1999 CAD Spending by Size
Eighteen Year Review of Appraisal District Workload
Taxing Units Served by a Consolidated Tax Collection Office, 1986-1999
Who collect and for Whom