Legislation and Property Taxes

By Jerry Lee

The Texas Legislature is back in session for the 85^th time, and one of the high priority items for some of the legislators is property tax reform. Of the thousands of bills that are filed, many will never go anywhere in the legislative process. And the same holds true for the over 150 bills that have been filed so far that address the Texas Property Tax System. Changes to the Texas Property Tax Code are anticipated each session because property taxes make up such a huge portion of the revenue that sustains our cities, schools, counties and special districts in Texas. Texas is one of only nine states that does not have an income based tax. Every state has some form of property tax, yet Texas ranks among the lowest overall taxation states in the nation when combining all the forms of state taxation (sales, income, property, etc.). I wonder; if it is not broke then, why mess with it?

A couple of sessions ago, the legislature directed the Property Tax Division of the Texas Comptroller’s Office to implement a survey system from taxpayers that had attended Appraisal Review Board Hearings at any appraisal district across the state. The results of that survey from over 14,000 entries across the state indicate an overwhelming approval of the Appraisal Review Board System (the detailed results are available on the Comptroller’s web site). Again, if it is not broke then, why mess with it?

Here is an overview of some of the proposed changes that legislators will be considering:

• Reducing appraisal caps from the current 10 percent for residential homestead properties to as low as 3 percent for residential, commercial, or both property types.
• Adding tax exemptions for surviving spouses of military personnel and for first responders.
• Changing the rollback requirements for change of use on lands receiving agricultural use special appraisal.
• Adding tax deferrals for disabled veterans.
• Lowering taxing entities’ rollback tax rates from the current 8 percent to 4 percent and changing rollback election dates.
• Significantly changing the structure, training, and qualifications for Appraisal Review Board members.
• Requiring the election of appraisal district Board of Directors, chief appraisers and Appraisal Review Board members.
• Requiring mandatory sales disclosure for all properties except mineral interests.
• Changing several tax calendar dates concerning Notices of Appraised Value, tax rate adoption, appraisal roll certification, and filing deadlines for Business Personal Property Renditions of Taxable Property.

The Texas Legislature and the governor will ultimately decide what issues become law based on what they believe is best for their constituents that they hear. Many proposals require constitutional amendments that must be on a ballot for popular vote before they could be applied. Our job, as your appraisal district, is to implement the new legislation, once it becomes law in an efficient and timely manner. I believe it is also our job to keep you informed about potential legislation regarding the property tax process that could affect you either positively or negatively so that you are able to make good decisions..

For any questions you have regarding proposed legislation or appraisal district operations, please call us at 254-965-5434 or visit our office at 1195 West South Loop. You can also visit our website at www.isouthwestdata.com for information regarding the appraisal process.