- CADs Handle 15 Million Properties for About 3,600 Taxing Units
- Rylander Reports
- Annual Property Tax Conference Program
- Joint Conference Pre-Registration Form
- PTD Staff Clarifies Fencing Cost Method and Adjustments
- Penalty and Interest Charges for Delinquent Tax Collections
- Penalty and Interest Rate Schedule - 1999/2000
- Insert: 1999 Texas Property Tax Law Changes
CADs Handle 15 Million Properties for About 3,600 Taxing Units
Texas' 253 county appraisal district (CAD) offices report appraising almost 15 million property tax parcels, an increase of almost 2 percent from 1998. CADs serve 3,592 taxing units -- four fewer than in 1998 -- at an annual cost of about $217 million. CAD operating costs are up about 6.5 percent from the preceding budget year.Taxing units
While Texas has 254 appraisal districts, Potter and Randall CADs form a single appraisal office for a total of 253 appraisal offices. The Comptroller's Property Tax Division (PTD) surveyed these offices about their final 1998 and planned 1999 operations, with the findings published in the Comptroller's 1998 and 1999 Appraisal District Operations Report.
Texas continues to add new taxing units. In 1999, 46 taxing units will levy a property tax for the first time, including 16 municipal utility districts, nine cities, seven fire districts, five underground water control districts, three road districts, two water districts, two emergency service districts, and two water control improvement districts.Property parcels
Some 26 taxing units either dissolved, withdrew from the appraisal district, or will no longer collect property taxes in 1999. Sixteen taxing units consolidated operations with other taxing units.
From 1997 to 1998, the total number of taxable property parcels (or accounts) increased statewide by 279,728 to reach 14.9 million parcels. CADs vary in how they divide and consolidate properties into parcels, particularly personal property parcels. These variations may affect the reliability in comparing total parcels reported.Budgets
Non-income producing personal property parcels showed the largest increase in number of accounts for 1998, adding almost 3 percent to total 450,374 parcels. The number of business personal property parcels decreased about 1 percent from 1997 to a total of 1,092,358. Real property parcels (including land and buildings) rose about 1.2 percent -- by 123,770 parcels -- to reach 10,636,969 total taxable real properties in Texas. Mineral accounts rose by less than 1 percent -- 154,399 parcels -- to number about 2.7 million parcels.
Almost 42 percent of all taxable property parcels are found in the 18 largest appraisal districts. About 29 percent of the properties are in the six largest districts that have more than 300,000 parcels - Harris, Dallas, Tarrant, Bexar, El Paso, and Travis. By comparison, 108 CADs -- almost 43 percent -- reported less than 25,000 total parcels in their districts.
CADs reported that total tax levy used to allocate their budgets increased from $17.2 billion in 1997 to about $18.1 billion in 1998. CADs spent an average of $13.66 per parcel to appraise property, about 2 percent more than in 1997. The average 1998 CAD operating budget was $804,350 - up almost 4 percent.Appointed officials
The 1998 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, continues to report the highest cost per parcel at $40.51, up about 1 percent.
Mid-sized CADs with 1998 parcel counts from 35,000 to 49,999 parcels (41 districts) averaged the lowest cost per parcel at $9.92. In contrast, the six largest districts averaged $18.34 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 table "1998 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 - 164 districts - reported a 1998 budget surplus; the state total was more than $10 million.
Preliminary 1999 budgets show the largest annual increase since 1984, a 6-percent increase from $204.5 million to $216.8 million. (See table "Appraisal District Spending, 1982-99".) 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 vetoed the 1999 budget.
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 1,563 CAD directors, with an average of six members on each CAD board. About 43 percent, or 677 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 206 districts have legal counsel on retainer, and 199 boards -- ten more than last year -- have purchased liability insurance with an average coverage per board of $1 million.
CAD directors appoint appraisal review boards (ARBs) to handle taxing unit challenges and taxpayer disputes with the appraisal office. In 1999, more than 27 percent (368) of the 1,346 ARB members are newly appointed. While state law allows the size of an ARB to range from three to 45 members (depending on the county's population), most ARBs average five members. In 77 CADs, the ARB retains legal counsel. ARBs in 175 CADs -- 14 more than in 1998 -- have obtained liability insurance at about $1 million per ARB. ARB members in 249 districts receive a per diem for their ARB service.Ag advisory board
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 member's place to hear the protest. Forty-two districts -- up from 35 in 1998 -- 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. Thirty CAD boards -- up from 21 in 1998 -- appointed auxiliary ARB members for 1999.
Property Tax Code Section 6.12 requires the chief appraiser -- with the advice and consent of the CAD's 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 timberland use. Some 176 CADs have active agricultural advisory boards with a state total of 668 members.CAD staff and salaries
Salaries of 229 chief appraisers averaged $46,316 for 1999, a 3.5-percent increase from the 1998 average salary of $44,763. Chief appraisers in 227 CADs receive fringe benefits, such as expense accounts, mileage, medical insurance, and/or retirement. About 172 CADs have liability insurance for the chief appraiser.Overlapping property values
Twenty-four 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.
Full-time CAD employees numbered 3,848 compared to 3,855 in 1997, with 198 part-time employees compared to 204 for the previous year. Of these employees, about 1,313 are appraisers. Some 21 districts employ only part-time appraisers. In some CADs, chief appraisers perform all appraisal work or have contracts with private appraisal firms. A staff appraiser's average salary ranged from a low of $21,812 to an average high of $31,853.
Employees in 175 CADs receive mileage allowances, and 205 districts provided staff with fringe benefits, including insurance and/or retirement.
More than 88 percent of the CADs -- 223 -- continue to budget funds for staff to meet or retain state certification standards. CADs reported 1,927 employees are registered with the Board of Tax Professional Examiners. Of these employees, 1,168 attained the registered professional appraiser designation, 232 are registered Texas assessors, 118 are registered Texas collectors, and 86 individuals have all three designations.
Effective January 1, 1998, Property Tax Code Section 6.025(c) and (e) required CADs to agree on the same value for a property appraised by two or more districts. These were properties being appraised by different CADs for different taxing units. If the CADs could not reach an agreement by May 1, state law required the CADs to average the proposed values so that the property would have one value. CADs in 220 counties had taxing units with boundaries in other counties and overlapping properties. CADs in 161 of these counties agreed on values before May 1, while 11 CADs averaged property values. About 43 CADs agreed on some properties and averaged the values on others. Five CADs did not average or agree on these values.Reappraisal plans
State law requires CADs to reappraise property in their districts at least once every three years. For the 1998 tax year, 164 CADs -- almost 65 percent -- completed reappraisals, while 153 CADs plan to reappraise for the 1999 tax year. In their last reappraisal, 183 CADs used both in-house staff and an outside appraisal firm for their reappraisal. In the remaining districts, 57 CADs used staff only and 12 CADs used appraisal firms alone for the reappraisal. By contract, Haskell CAD has Stephens CAD provide appraisal services.Taxpayer protests
For 1998, CADs mailed almost 8.2 million reappraisal notices, including more than 7.6 million notices containing estimated taxes on proposed taxable values. The remaining 497,166 notices were the shorter version allowed by Property Tax Code Section 25.19(i) with no estimated taxes. Fewer CADs mailed reappraisal notices in May or earlier -- only 189 CADs mailed during this time in 1998 compared to 212 CADs in 1997.
CAD officials reported that property owners filed almost 10 percent more written protests in 1998 -- about 426,000 compared to about 381,000 -- than in 1997. Almost 65 percent of the protesting taxpayers met with CAD staff in informal hearings to attempt a protest settlement without continuing with a formal ARB hearing.Hearing schedules
CADs scheduled only 189,622 formal ARB hearings for these filed protests -- about 27 percent more than in 1997. Some 72,000 taxpayers, however, did not attend their scheduled hearing, representing a 38-percent "no show" rate. In 1997, about 31 percent were "no shows."
Beginning in 1998, Property Tax Code Section 41.71 required ARBs by rule to provide taxpayers with hearing times in the evening or on a Saturday or Sunday. ARBs in 18 districts offered protest hearings on Saturday or Sunday; about 91 ARBs offered protest hearings in the evenings; 110 ARBs offered all three; and 34 CADs did not offer an alternate time.
Taxing units may file written challenges if they disagree with CAD decisions. Only three taxing units in three CADs filed challenges in 1998.
CADs and ARBs continue to complete their work timely. In 1998, ARBs in 162 districts approved the appraisal records on or before July 20, 1998, the mandatory deadline for ARB approval. About 72 ARBs - compared to 61 in 1997 - approved the records before hearing all the protests as allowed by the Property Tax Code Section 41.12.Geographical information
ARBs approved appraisal rolls listing over $1 trillion in 1998 value, a 5-percent increase from 1997. Chief appraisers in 217 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 the claim of improperly including property on the appraisal roll under Section 25.25(c). About 24 CADs reported this type of change on 1,974 properties worth more than $360 million.
Section 25.25(c) allows changes for clerical errors and multiple appraisals of the same property. Clerical error for 523 properties worth over $152 million occurred in 45 CADs. Some 24 districts reported multiple appraisals of a total of 249 parcels worth almost $40 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 taxpayer's tax liability. Chief appraisers in 90 CADs reported 721 protests with a total of almost $101.6 million in value.
Property owners in 49 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 840 properties with a total value of about $307 million.
Section 25.25(h) changes are for joint motion corrections requiring both the chief appraiser and property owner (or owner's agent) to agree to the correction. About 564 joint motions in 29 CADs were filed on properties worth almost $112 million.
Finally, 35 CADs reported that 362 property owners with properties appraised at more than $105 million filed Section 41.411 "no-notice" appeals. These owners claimed that the CAD or ARB failed to send the property owner or owner's agent a required notice.
As of the January 1999 survey date, 94 CADs reported that taxpayers had filed 1,400 lawsuits on their 1998 values, compared to 87 CADs reporting 1,641 lawsuits at the same time in the previous year. About 1,368 lawsuits were still pending for tax year 1997 and prior years in 95 CADs.
All CADs must establish and maintain tax maps for property identification purposes. About 55 percent of the CADs have developed geographical information systems (GIS). These 140 CADs, compared to 131 in 1997, have invested resources in developing or have completed their GIS systems for better mapping and information systems.Freeport exemption
The 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 1,590 taxing units taxed or retained the right to tax freeport property in 1998. For an updated list of these taxing units, call the PTD's 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 1998, 28 CADs reported that 102 taxing units tax non-income producing personal property, such as automobiles, boats, and airplanes. These units include 15 counties, 30 cities, 37 school districts, and 20 special districts. A listing of these units is available by calling the number listed earlier.Consolidated collections
Some 162 CADs both appraise property and perform assessment functions -- down from 169 CADs in 1997. Assessment functions include calculating effective and rollback tax rates, publishing required notices, and preparing and mailing tax bills.Report available
CADs collecting taxes for taxing units increased in 1998 by one CAD, from 119 to 120 CADs. The number of taxing units receiving collection services also increased from 915 taxing units in 1997 to 918 units in 1998. These CADs budgeted an average of $111,972 to perform the 1998 collection function, about a 14-percent increase from the preceding year. CAD collection budgets ranged from as low as $2,287 to $888,777, with an average cost per parcel to collect of 34 cents. In 1998, ten CADs also collected property taxes for multi-county taxing units for which they did not appraise these taxing units' property. The CAD Operations Report shows that 169 counties collect for 1,576 taxing units. The table "Who Collects and For Whom" below shows consolidated collections with the type of collecting unit and the number of taxing units receiving the service. More private companies collected taxes in 1998, increasing from 39 firms in 1997 to 54 in 1998. These private companies collected taxes for 459 taxing units in 1998. Only about 472 taxing units still collect only their own taxes as more taxing units move to consolidated collection offices.
Total consolidation of collections into one office has occurred in 103 CADs. The single tax collecting office in these CADs included 42 county tax offices, 60 CAD offices, and one city that collected property taxes for all taxing units in that county.
The 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 Comptroller's office a copy of their 1999 appraisal budget, and some CADs that collect taxes provided copies of their collection budgets. To request a CAD's survey, appraisal budget, or collection budget, call the PTD's technical assistance hotline at 1-800-252-9121. In Austin, call 512/305-9999.Directory
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 1999 Appraisal District Directory. The PTD sent each appraisal district and county tax office a copy of the 1998 and 1999 Appraisal District Operations Report and the 1999 Appraisal District Directory. Anyone may purchase either book by sending a check or money order for $10 each to the Comptroller's Property Tax Division, P. O. Box 13528, Austin, Texas 78711-3528.
Note: For the past 18 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