Whats Happening at the Capitol?
The beginning of the 77th Texas Legislature started with new leadership and new committee assignments to tackle both new and old legislative issues.
As of January 9, the opening date of the regular session, Texas legislators had filed only 10 bills and two constitutional amendment resolutions dealing with property taxation. Pre-filing of proposed legislation began November 13. This years pre-filing represented about two-thirds of the number of pre-filed property tax bills two years ago.
Legislators have plenty of time, however, to file more bills. The deadline for regular bill filing is Friday, March 9. The last day of this legislative session will be Monday, May 28. The last day for the governor to sign or veto bills will be Sunday, June 17. Monday, August 27, is the date that bills without specific effective dates (that could not be effective immediately) become laws.
The Comptrollers Property Tax Division will track property tax legislation to advise local tax officials about law changes and to update Comptroller publications. For example, the division will include any legislative changes to the Truth in Taxation Manual - 2001, the guide for setting local property tax rates, and distribute it in mid-July after all the bills are final. The annual regional legislative seminars will be held in late July and August when staff will provide information on new and changed tax laws. More information about the regional seminar dates and locations will be in upcoming issues of STATEMENT.
With changes in key leadership positions already occurring, the Texas legislative session will be concentrating on redistricting, a major time commitment for legislators. Pre-filed bills for property tax changes included the following areas.
Local tax administration
In the appointment of appraisal district directors, House Bill (H. B.) 205 would give counties voting entitlement credit for hospital district property taxes, if the county commissioners determine or approve the hospital districts tax rate. The hospital district taxes would be added to the county taxes when computing the total county taxes used in allocating voting entitlement. The pre-filed bill includes an effective date of January 1, 2002 and would apply only to selecting appraisal district directors on or after that date.
Three pre-filed bills and two resolutions for constitutional amendments address property tax exemptions. Some tax exemptions would require Texas voters to approve constitutional amendments authorizing such exemptions.
H. B. 16 would provide for a late filing deadline for persons applying for the disabled veterans exemption. A late application could be filed up to one year after the property taxes were paid or went delinquent, whichever date is earlier. This change would be similar to current law allowing late applications for homestead exemptions. Current law requires disabled veterans and their survivors to file for exemptions by April 30.
H. B. 438, along with House Joint Resolution (H. J. R.) 25, would provide for a new exemption for "goods in transit." To qualify, the goods would have to be assembled, manufactured, stored, processed, or fabricated while in Texas. Oil and gas and their immediate derivatives would not be exempt. Such "goods in transit" inventory would be required to be transported or distributed to another location no later than 270 days after the property was acquired in or imported into the state. The chief appraiser would determine the exemption amount based on the owners percentage of inventory that was "goods in transit" in the preceding calendar year.
H. J. R. 25 is the constitutional amendment to exempts "goods in transit." It expands the freeport exemption for goods, wares, merchandise, and other personal property and would not require such property to leave the state to receive the exemption. Items would only be required to be moved within 270 days of being brought into the state or acquired by the owner.
Senate Bill (S. B.) 174 and Senate Joint Resolution (S. J. R.) 6 are the Senate companion bills to H. B. 438 and H. J. R. 25, providing for the same new exemption for "goods in transit."
H. B. 277 would repeal the rollback tax provisions for qualified open-space agricultural land that changes from an agricultural use to a non-agricultural use. The qualified land would have received the agricultural appraisal under Article VIII, Section 1-d-1, Texas Constitution. The bill would not repeal the rollback tax provisions for qualified land under Article VIII, Section 1-d, agricultural appraisal or for timberland appraisal.
H. B. 394 would amend the Business and Commerce Code to require the chief appraiser, rather than the county clerk, to handle the notice and permit process for a business conducting a "going out of business" sale. The business owner would file with the chief appraiser an original inventory, a sale inventory during each 30-day period of the sale, and a final inventory at the end of the "going out of business" sale. The chief appraiser would issue a permit for the sale and notify the comptroller and taxing units that tax the inventory.
H. B. 468 would change tax lien procedures on manufactured homes. The bill would delete provisions in Tax Code Section 32.015 for filing a delinquent tax lien with the Texas Department of Housing and Community Affairs by September 1 after property taxes go delinquent on a manufactured home. Current law requires a tax collector to file notice of a delinquent tax lien on a manufactured home by this date to keep the lien enforceable against a bona fide purchaser of the home or holder of a lien recorded on the manufactured homes document of title. That current law would remain for all tax liens filed before September 1, 2001. The new changes would provide enforcing tax liens for manufactured homes after that date as provided in Tax Code Sections 32.01 and 32.05, the current law for personal property tax liens.
H. B. 468 also would amend the Transportation Code to require that a tax certificate showing no unpaid property taxes must accompany an application for a permit to transport a manufactured home from a location (other than the location of the manufacturer or retailer). The new law change would include a process for adding an omitted home to the appraisal and tax rolls if it was not listed on the most recent tax rolls of each taxing unit. The bill also would add that moving a manufactured home without a permit is a misdemeanor punishable by a $500 fine, with the fine appropriated to the city or county treasury of the law enforcement agency arresting or issuing the citation.
H. B. 490 would provide a number of procedural and technical corrections dealing with appraisal corrections, delinquent notices, additional delinquent tax penalty, personal property seizures, delinquent tax sales, and other tax lien issues. The bill would expand Tax Code Section 25.25(b) to provide that the chief appraiser may change the appraisal roll at any time for ownership determinations and multiple appraisals. It would repeal the five-year limit on multiple appraisal corrections under Section 25.25(c) but would retain the five-year limit on other changes found in that subsection.
For delinquent tax deferrals filed by senior citizens under Tax Code Section 33.06, H. B. 490 would allow the Section 33.07 penalty to be imposed during the deferral period but be collected only if deferred taxes remain unpaid on or after the 91st day after the deferral expires.
H. B. 490 also addresses the seizure of personal property for delinquent taxes and would amend Section 33.21 to include a definition for personal property, amend Section 33.23 to include possession of seized personal property, and Section 33.25 on application of seized property to the payment of delinquent taxes. It also would amend Section 33.48 for recovery of costs for a delinquent tax sale and other tax judgment provisions in Chapters 33 and 34.
In Tax Code Section 42.02, H. B. 490 would require the appraisal district boards written approval for the chief appraiser to appeal an appraisal review board decision.
S. B. 20 would repeal Education Code Section 42.2522 and Government Code Section 403.302(j) that set out specific provisions for school districts that offer optional homestead exemptions to receive additional dollars when excess state school funds are available under Chapter 42, Education Code. The bill does not repeal Section 403.302(d)(2) that requires the Comptroller to deduct one-half of the optional homestead exemption from a school districts taxable value. The net effect of these repeals would be to make permanent and automatic payments to school districts granting the optional homestead exemption. School district taxable values would be reduced by 50 percent of the value of the optional exemption.
S. B. 28 would increase the threshold for the wealth per student for property rich (Education Code Chapter 41) school districts. The bill would change the wealth per student from $295,000 to $320,000 per student.
With President George W. Bush at the White House and Lt. Governor Rick Perry sworn in as Texas Governor, the Texas Senate selected Senator Bill Ratliff to serve as acting Lt. Governor. Acting Lt. Governor Ratliff of Mt. Pleasant has appointed Senate committee chairs for this session. Chair and vice-chair appointments for committees that tend to deal with property tax issues include:
Chair Rodney Ellis, Houston
Vice-Chair Chris Harris, Arlington
Chair David Cain, Dallas
Vice-Chair Steve Ogden, College Station
Business & Commerce:
Chair David Sibley, Waco
Vice-Chair Troy Fraser, Marble Falls
Border Affairs Subcommittee:
Chair Eddie Lucio, Jr., Brownsville
Chair Teel Bivins, Amarillo
Vice-Chair Judith Zaffirini, Laredo
Chair Florence Shapiro, Plano
Vice-Chair Carlos F. Truan, Corpus Christi
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