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The Statement newsletter articles (August 1999):

This pamphlet briefly summarizes changes in property tax laws made in the regular session of the 76th 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.

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.

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
TAC tax assessor-collector
Chapter 1. General Provisions
Section 1.07

S.B. 1209 amends Subsection (a) to allow a property owner and chief appraiser to agree in writing to provide notices to a property owner in electronic format. Effective September 1, 1999.

Section 1.085

S.B. 1209 adds Section 1.085 to provide that any notice, rendition, application form, or completed application between a property owner (or a property owner's agent) and a chief appraiser may be delivered in an electronic format. An agreement between the owner and chief appraiser must be in writing, signed by both parties, and must specify: (a) the medium of communication, (b) the type of communication covered, and (c) the means of protecting the security of a communication. An agreement may address other matters, and communications under this section are effective upon receipt. Effective September 1, 1999.

Chapter 6. Local Administration
Section 6.025

H.B. 1037 amends Subsection (c) to require that chief appraisers of CADs with properties that are appraised by two or more districts with overlapping boundaries coordinate their appraisal activities "to the extent practicable" so as to "encourage" and facilitate the appraisal of the same property at the same value. The bill also repeals Subsections (d) through (f) that required CADs to share a residence homestead exemption application filed at one of the appraisal offices; to agree on a value by May 1 or average each district's proposed value; and to have an ARB ruling in one district also apply in the other district(s). Effective January 1, 2000.

Section 6.03

H.B. 834 amends Subsection (a) to remove the provision requiring a county having a population of at least 200,000 bordering a county having a population of at least 2,000,000 and the Gulf of Mexico (Galveston County) to have its CAD board of directors composed entirely of elected officials from taxing units. Effective January 1, 2000.

Section 6.12

S.B. 977 amends Subsection (b) to provide that a member of the agricultural appraisal advisory board may be a landowner whose land qualifies for special appraisal under Chapter 23, Subchapter H, appraisal of restricted-use timber land. Effective September 1, 1999.

Section 6.14

S.B. 1367 adds Section 6.14 to require a CAD that maintains its appraisal records in electronic format to provide a copy of the information or data maintained in the district's appraisal records to the Texas Legislative Council at its written request and at no charge. The CAD shall provide the requested information no later than 30 days after the date the request is received by the district. The CAD shall provide the information in a form approved by the Council. Effective June 20, 1999.

Section 6.28

H.B. 3458 amends Subsection (a) to require a county TAC and county treasurer, before beginning the duties of office, to give bonds to the state and to the county conditioned on the faithful performance of their duties. The bill deletes the 20-day provision. Effective August 30, 1999.

Section 6.41

H.B. 79 amends Subsection (c) to repeal the language that an individual appointed to serve on the ARB may not have served on the CAD's board of directors or governing body of a taxing unit or have been employed by the CAD, a taxing unit, or Comptroller's office. Effective June 19, 1999.

Section 6.412

H.B. 79 amends Subsection (c) and adds Subsections (d) and (e) to address when a person is ineligible to serve on the ARB. In all appraisal districts, a person is ineligible to serve on the ARB if the person is a CAD director, officer, or employee; a Comptroller employee; or, a member of the governing body, officer, or employee of a taxing unit. In counties having a population of more than 100,000, a person is ineligible to serve on the ARB if the person has served for all or part of three previous terms as an ARB member or auxiliary ARB member or is a former director, officer, or employee of the CAD. A person also is ineligible to serve on the ARB in counties having a population of more than 100,000 until the fourth anniversary of the date the person ceased to serve as a member or officer of a taxing unit for which the appraisal district appraises property or if the person has ever appeared before the ARB for compensation. In counties having a population of 100,000 or less, a person is ineligible to be appointed to the ARB for a fourth term if the person has served for all or part of three consecutive terms. The person, however, may serve in some future year. Effective June 19, 1999.

Chapter 11. Exemptions
Section 11.13

H.B. 3549 amends Subsection (h) to provide that successive owners may not each receive the same homestead exemption(s) for the same residence homestead in the same year. Effective January 1, 2000.

S.B. 435 amends Subsection (n) to change the deadline for a taxing unit governing body to adopt an optional homestead exemption from before May 1 to before July 1. Effective June 19, 1999.

Section 11.16

S.B. 977 amends Subsections (c)(1) and (c)(2) to include timber in the definition of "farm products" exempt from taxation. The definition of "in the hands of the producer" includes standing timber or timber that has been harvested and on January 1 is located on the real property on which it was produced and is under the ownership of the person who owned the timber when it was standing. Effective January 1, 2000.

Section 11.161

S.B. 977 amends Section 11.161 to provide that implements of husbandry that are used in the production of timber are exempt from property taxation. Effective January 1, 2000.

Section 11.18

H.B. 873 amends Subsections (a), (l), and (m) to allow an exemption for up to three years for an incomplete improvement of real property owned by a charitable organization if active construction or other physical preparations are in progress on January 1. The bill defines "physical preparation" to mean architectural or engineering work, soil testing, land clearing activities, site improvement, or any environmental or land use study conducted relating to the construction of the improvement. Effective May 18, 1999.

H.B. 1978 amends Subsection (d)(3) and adds Subsection (l). The bill in Subsection (d)(3) expands the types of charitable functions that charitable organizations may perform to qualify for property tax exemption. Charitable organizations may qualify for an exemption by providing recreational or social activities and facilities designed to address the special needs of elderly persons or the handicapped. Subsection (l) allows a charitable organization that provides support to the elderly under Subsection (d)(3) to engage in other activities that support or are related to its charitable functions. Effective January 1, 2000, contingent on the passage of H.J.R. 4 by voters at the November 2, 1999 election.

H.B. 2269 amends Subsection (d)(17) to allow a charitable organization operating a public television station to qualify for an exemption based on subsequent amendments to the federal Corporation for Public Broadcasting Act. The bill also adds Subsection (d)(20) to allow a charitable organization to qualify for an exemption by providing housing on a cooperative basis to students of an institution of higher education. Effective January 1, 2000.

H.B. 2821 amends Subsection (h) to allow a division of responsibilities between two charitable organizations to further the charitable functions of the organizations without the loss of the property tax exemption. The organizations would have to be exempt from federal income tax under the Internal Revenue Service Code, Section 501(c)(3); meet the requirements of a charitable organization under Section 11.18(e) and (f); and be under common control. Effective September 1, 1999.

Section 11.183

H.B. 541 adds Section 11.183 to provide a charitable exemption for associations that provide assistance to ambulatory health care centers. The association must: be exempt from federal income tax under the Internal Revenue Code, Section 501(a) and (c)(3); meet the requirements of a charitable organization under Section 11.18(e) and (f); engage exclusively in providing assistance to ambulatory health care centers that provide medical care to individuals without regard to ability to pay; be funded by a grant under Section 330 of the federal Public Health Service; and not perform abortion or abortion services. Effective January 1, 2000.

Section 11.19

H.B. 873 amends Subsections (a), (e), and (f) to allow an exemption for up to three years for an incomplete improvement of real property owned by a youth development association if active construction or other physical preparations are in progress on January 1. The bill defines "physical preparation" to mean architectural or engineering work, soil testing, land clearing activities, site improvement, or any environmental or land use study conducted relating to the construction of the improvement. Effective May 18, 1999.

Section 11.20

H.B. 873 amends Subsection (f) to allow an exemption for up to three (rather than two) years for incomplete improvements owned by religious organizations. Effective May 18, 1999.

Section 11.21

H.B. 873 amends Subsections (a), (g), and (h) to allow an exemption for up to three years for an incomplete improvement of real property owned by a private school if active construction or other physical preparations are in progress on January 1. The bill defines "physical preparation" to mean architectural or engineering work, soil testing, land clearing activities, site improvement, or any environmental or land use study conducted relating to the construction of the improvement. Effective May 18, 1999.

Section 11.23

H.B. 873 adds Subsection (l) to allow an exemption for up to three years for an incomplete improvement of real property owned by an organization listed in Section 11.23 if active construction or other physical preparations are in progress on January 1. The bill defines "physical preparation" to mean architectural or engineering work, soil testing, land clearing activities, site improvement, or any environmental or land use study conducted relating to the construction of the improvement. Effective May 18, 1999.

Section 11.26

H.B. 3549 amends Subsections (a) and (j) to remove prorating the over-65 exemption as calculated in Section 26.112. Effective January 1, 2000.

S.B. 1368 repeals Subsections (g), (h), and (i) added by the 75th Texas Legislature because these sections are substantively duplicative of Subsections (i), (j), and (k), also added to this section by the 75th Texas Legislature. Effective September 1, 1999.

Section 11.30

H.B. 873 amends Section 11.30 to allow an exemption for up to three years for an incomplete improvement of real property owned by a nonprofit water supply or wastewater service corporation if active construction or other physical preparations are in progress on January 1. The bill defines "physical preparation" to mean architectural or engineering work, soil testing, land clearing activities, site improvement, or any environmental or land use study conducted relating to the construction of the improvement. Effective May 18, 1999.

Section 11.42

H.B. 3549 amends Subsections (a), (b), (c), and (d) to provide that a homestead exemption provided in Section 11.13(c) or (d) for an individual 65 years of age or older 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, 2000.

Section 11.43

H.B. 541 amends Subsection (c) to provide that an exemption application for an association that provides assistance to ambulatory health care centers, once allowed, need not be claimed in subsequent years. Effective January 1, 2000.

H.B. 3549 amends Subsection (d) and (k) to refer to the new provision in Section 11.42(d) for over-65 homestead exemptions applying to the entire tax year. Effective January 1, 2000.

S.B. 1368 amends Subsection (d) to correct the three different changes to this section by the 75th Texas Legislature. Effective September 1, 1999.

S.B. 1368 repeals Subsection (j) added by the 75th Texas Legislature because it is substantively duplicative of Subsection (k) of this section. Effective September 1, 1999.

Section 11.433

S.B. 1254 amends Subsection (a) to allow a religious organization to file a late exemption application within five years of the tax year in which taxes are imposed. Effective June 18, 1999. S.B. 1254 and H.B. 1604 repeal Subsection (e) allowing the late filing of exemption applications for religious organizations if filed no later than December 31, 1997. Effective June 18, 1999 (S.B. 1254) and September 1, 1999 (H.B. 1604)

Section 11.434

S.B. 1254 amends Subsection (a) to allow a private school to file a late exemption application within five years of the tax year in which taxes are imposed. Effective June 18, 1999. S.B. 1254 repeals Subsection (d) allowing the late filing of exemption applications for private schools if filed no later than December 31, 1997. Effective June 18, 1999.

Section 11.435

S.B. 1254 amends Subsection (a) to allow a charitable organization to file a late exemption application within five years of the tax year in which taxes are imposed. Effective June 18, 1999. S.B. 1254 repeals Subsection (e) allowing the late filing of exemption applications for charitable organizations if filed no later than December 31, 1997. Effective June 18, 1999.

Section 11.438

S.B. 1254 amends Subsection (a) to allow a veteran's organization to file a late exemption application within five years of the tax year in which taxes are imposed. Effective June 18, 1999. S.B. 1254 repeals Subsection (d) allowing the late filing of exemption applications for veterans' organizations if filed no later than December 31, 1997. Effective June 18, 1999.

Constitutional Amendments for Exemptions
Article VIII, Section 2(a)

H.J.R. 4, if passed by voters at the November 2, 1999 election, provides that a public charity no longer be a "purely public charity," but "institutions engaged primarily in public functions, which may conduct auxiliary activities to support those charitable functions," for purposes of qualifying for property tax exemptions. The wording on the November ballot proposition will read: "The constitutional amendment to authorize the legislature to exempt property owned by institutions engaged primarily in public charitable functions from ad valorem taxation."

Article VIII, Section 1(d) and (e)

S.J.R. 21, if passed by` voters at the November 2, 1999 election, authorizes the Legislature to exempt a leased motor vehicle that is not held primarily for the production of income by the lessee. The wording on the November ballot will read: "The constitutional amendment to authorize the legislature to exempt from ad valorem taxation leased motor vehicles not held by the lessee primarily to produce income." The 76th Legislature did not pass any implementing legislation for this constitutional amendment.

Chapter 21. Situs
Section 21.055

H.B. 2574 and H.B. 3549 add Section 21.055 to require CADs to allocate to Texas the portion of the market value of a non-commercial aircraft used for business purposes within the state, using a formula based on the number of departures from Texas compared to departures from other states. CADs are prohibited from allocating to Texas the portion of market value that reflects an aircraft's use outside of the state. H.B. 2574 is effective June 19, 1999; H.B. 3549 is effective September 1, 1999.

Tax Law Changes (continued)