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S.B. No. 1652

S.B. No. 1652

 

AN ACT relating to the administration of ad valorem taxation and to
certain measures involving school district property values.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subsection (b), Section 403.303, Government
Code, is amended to read as follows:
(b) After receipt of a petition, the comptroller shall hold
a hearing. The comptroller has the burden to prove the accuracy of
the findings. Until a final decision is made by the comptroller,
the taxable value of property in the district is determined, with
respect to property subject to the protest, according to the value
claimed by the school district or property owner, except that the
value to be used while a final decision is pending may not be less
than the appraisal roll value for the year of the study. If after a
hearing the comptroller concludes that the findings should be
changed, the comptroller shall order the appropriate changes and
shall certify [the changes] to the commissioner of education the
changes in the values of the school district that brought the
protest, the values of the school district named by the property
owner who brought the protest, or, if the comptroller by rule allows
an appraisal district to bring a protest, the values of the school
district named by the appraisal district that brought the protest.
The comptroller may not order a change in the values of a school
district as a result of a protest brought by another school
district, a property owner in the other school district, or an
appraisal district that appraises property for the other school
district. The comptroller shall complete all protest hearings and
certify all changes as necessary to comply with Chapter 42,
Education Code. A hearing conducted under this subsection is not a
contested case for purposes of Section 2001.003.
SECTION 2. Section 1.08, Tax Code, is amended to read as
follows:
Sec. 1.08. TIMELINESS OF ACTION BY MAIL. When a property
owner is required by this title to make a payment or to file or
deliver a report, application, statement, or other document or
paper by [before] a specified due date, his action is timely if:
(1) it is sent by regular first-class mail, properly
addressed with postage prepaid; and
(2) it bears a post office cancellation mark of a date
earlier than or on the specified due date and within the specified
period or the property owner furnishes satisfactory proof that it
was deposited in the mail on or before the specified due date and
within the specified period.
SECTION 3. Subsection (b), Section 1.085, Tax Code, as
amended by Chapters 984 and 1173, Acts of the 78th Legislature,
Regular Session, 2003, is reenacted to read as follows:
(b) An agreement between a chief appraiser and a property
owner must:
(1) be in writing;
(2) be signed by the chief appraiser and the property
owner; and
(3) specify:
(A) the medium of communication;
(B) the type of communication covered;
(C) the means for protecting the security of a
communication;
(D) the means for confirming delivery of a
communication; and
(E) the electronic mail address of the property
owner or person designated to represent the property owner under
Section 1.111, as applicable.
SECTION 4. Subsections (a) and (b), Section 5.05, Tax Code,
are amended to read as follows:
(a) The comptroller may [shall] prepare and issue
publications relating to the appraisal of property and the
administration of taxes, or may approve other publications relating
to those matters, including materials published by The Appraisal
Foundation, the International Association of Assessing Officers,
or other professionally recognized organizations, for use in the
administration of property taxes, including:
(1) a general appraisal manual;
(2) special appraisal manuals as authorized by law;
(3) cost, price, and depreciation schedules as
authorized by law[, with provision for inserting local market index
factors and with a standard procedure for determining local market
index factors];
(4) periodic news and reference bulletins;
(5) an annotated version of this title and Title 3
[digests of all laws relating to property taxation]; and
(6) a handbook containing selected laws and [of] all
rules promulgated by the comptroller relating to the property tax
and its administration.
(b) The comptroller shall revise or supplement all
materials issued by the comptroller or approve other publications
periodically as necessary to keep them current.
SECTION 5. Section 6.05, Tax Code, is amended by adding
Subsection (i) to read as follows:
(i) To ensure adherence with generally accepted appraisal
practices, the board of directors of an appraisal district shall
develop biennially a written plan for the periodic reappraisal of
all property within the boundaries of the district according to the
requirements of Section 25.18 and shall hold a public hearing to
consider the proposed plan. Not later than the 10th day before the
date of the hearing, the secretary of the board shall deliver to the
presiding officer of the governing body of each taxing unit
participating in the district a written notice of the date, time,
and place for the hearing. Not later than September 15 of each
even-numbered year, the board shall complete its hearings, make any
amendments, and by resolution finally approve the plan. Copies of
the approved plan shall be distributed to the presiding officer of
the governing body of each taxing unit participating in the
district and to the comptroller within 60 days of the approval date.
SECTION 6. Section 11.161, Tax Code, is amended to read as
follows:
Sec. 11.161. IMPLEMENTS OF HUSBANDRY. Machinery and
equipment items [Implements of husbandry] that are used in the
production of farm or ranch products or of timber, regardless of
their primary design, are considered to be implements of husbandry
and are exempt from ad valorem taxation.
SECTION 7. Subsection (a), Section 11.439, Tax Code, is
amended to read as follows:
(a) The chief appraiser shall accept and approve or deny an
application for an exemption under Section 11.22 after the filing
deadline provided by Section 11.43 if the application is filed not
later than one year after the delinquency date for the taxes on the
property [the first anniversary of the earlier of:
[(1) the date the taxes on the property were paid; or
[(2) the date the taxes became delinquent].
SECTION 8. Section 21.02, Tax Code, is amended by adding
Subsection (d) to read as follows:
(d) A motor vehicle does not have taxable situs in a taxing
unit under Subsection (a)(1) if, on January 1, the vehicle:
(1) has been located for less than 60 days at a place
of business of a person who holds a wholesale motor vehicle auction
general distinguishing number issued by the Texas Department of
Transportation under Chapter 503, Transportation Code, for that
place of business; and
(2) is offered for resale.
SECTION 9. Section 22.04, Tax Code, is amended by adding
Subsection (d) to read as follows:
(d) This section does not apply to a motor vehicle that on
January 1 is located at a place of business of a person who holds a
wholesale motor vehicle auction general distinguishing number
issued by the Texas Department of Transportation under Chapter 503,
Transportation Code, for that place of business, and that:
(1) has not acquired taxable situs under Section
21.02(a)(1) in a taxing unit that participates in the appraisal
district because the vehicle is described by Section 21.02(d);
(2) is offered for sale by a dealer who holds a
dealer’s general distinguishing number issued by the Texas
Department of Transportation under Chapter 503, Transportation
Code, and whose inventory of motor vehicles is subject to taxation
in the manner provided by Sections 23.121 and 23.122; or
(3) is collateral possessed by a lienholder and
offered for sale in foreclosure of a security interest.
SECTION 10. Subsections (a) and (b), Section 25.18, Tax
Code, are amended to read as follows:
(a) Each appraisal office shall implement the [a] plan for
periodic reappraisal of property approved by the board of directors
under Section 6.05(i) [to update appraised values].
(b) The plan shall provide for the following reappraisal
activities for [of] all real and personal property in the district
at least once every three years:
(1) identifying properties to be appraised through
physical inspection or by other reliable means of identification,
including deeds or other legal documentation, aerial photographs,
land-based photographs, surveys, maps, and property sketches;
(2) identifying and updating relevant characteristics
of each property in the appraisal records;
(3) defining market areas in the district;
(4) identifying property characteristics that affect
property value in each market area, including:
(A) the location and market area of property;
(B) physical attributes of property, such as
size, age, and condition;
(C) legal and economic attributes; and
(D) easements, covenants, leases, reservations,
contracts, declarations, special assessments, ordinances, or legal
restrictions;
(5) developing an appraisal model that reflects the
relationship among the property characteristics affecting value in
each market area and determines the contribution of individual
property characteristics;
(6) applying the conclusions reflected in the model to
the characteristics of the properties being appraised; and
(7) reviewing the appraisal results to determine
value.
SECTION 11. Subsection (b), Section 25.19, Tax Code, as
amended by Chapters 1358 and 1517, Acts of the 76th Legislature,
Regular Session, 1999, is reenacted to read as follows:
(b) The chief appraiser shall separate real from personal
property and include in the notice for each:
(1) a list of the taxing units in which the property is
taxable;
(2) the appraised value of the property in the
preceding year;
(3) the taxable value of the property in the preceding
year for each taxing unit taxing the property;
(4) the appraised value of the property for the
current year and the kind and amount of each partial exemption, if
any, approved for the current year;
(5) if the appraised value is greater than it was in
the preceding year, the amount of tax that would be imposed on the
property on the basis of the tax rate for the preceding year;
(6) in italic typeface, the following statement: “The
Texas Legislature does not set the amount of your local taxes. Your
property tax burden is decided by your locally elected officials,
and all inquiries concerning your taxes should be directed to those
officials”;
(7) a detailed explanation of the time and procedure
for protesting the value;
(8) the date and place the appraisal review board will
begin hearing protests; and
(9) a brief explanation that the governing body of
each taxing unit decides whether or not taxes on the property will
increase and the appraisal district only determines the value of
the property.
SECTION 12. Subsection (c), Section 25.19, Tax Code, is
amended to read as follows:
(c) In the case of the residence homestead of a person 65
years of age or older or disabled that is subject to the limitation
on a tax increase over the preceding year for school tax purposes,
the chief appraiser shall indicate on the notice that the preceding
year’s taxes may not be increased.
SECTION 13. Subsection (a), Section 26.05, Tax Code, is
amended to read as follows:
(a) The governing body of each taxing unit, before the later
of September 30 or the 60th day after the date the certified
appraisal roll is received by the taxing unit, shall adopt a tax
rate for the current tax year and shall notify the assessor for the
unit of the rate adopted. The tax rate consists of two components,
each of which must be approved separately. The components are:
(1) for a taxing unit other than a school district, the
rate that, if applied to the total taxable value, will impose the
total amount published under Section 26.04(e)(3)(C), less any
amount of additional sales and use tax revenue that will be used to
pay debt service, or, for a school district, the rate published
under Section 44.004(c)(2)(A)(ii)(b), Education Code; and
(2) the rate that, if applied to the total taxable
value, will impose the amount of taxes needed to fund maintenance
and operation expenditures of the unit for the next year.
SECTION 14. Subsection (a), Section 111.301, Tax Code, is
amended to read as follows:
(a) An eligible person is entitled to a refund of state
sales and use taxes imposed under Chapter 151 and state franchise
taxes imposed under Chapter 171 paid in a calendar year for which
the person paid ad valorem taxes to a school district on property
that in that year is:
(1) located in a reinvestment zone established under
Chapter 312;
(2) exempt in whole or in part from the payment of ad
valorem taxes imposed by a municipality or a county under a tax
abatement agreement entered into with the municipality or county
under Chapter 312; and
(3) not subject to a tax abatement agreement or an
agreement to limit the appraised value of property under Chapter
313 entered into by the school district.
SECTION 15. Section 111.304, Tax Code, is amended to read as
follows:
Sec. 111.304. EVALUATION; BIENNIAL [ANNUAL] REPORT. Not
later than December 31 [1] of each even-numbered year, the
comptroller shall submit a [an annual] report to the legislature.
The report:
(1) must document the applications for refunds filed
with the comptroller under this subchapter;
(2) must document the refunds paid by the comptroller
under this chapter; and
(3) may include any other relevant information that
the comptroller determines is applicable to this subchapter or to
Chapter 312.
SECTION 16. Subsection (a), Section 312.204, Tax Code, as
amended by Chapters 560, 640, and 1258, Acts of the 77th
Legislature, Regular Session, 2001, is reenacted to read as
follows:
(a) The governing body of a municipality eligible to enter
into tax abatement agreements under Section 312.002 may agree in
writing with the owner of taxable real property that is located in a
reinvestment zone, but that is not in an improvement project
financed by tax increment bonds, to exempt from taxation a portion
of the value of the real property or of tangible personal property
located on the real property, or both, for a period not to exceed 10
years, on the condition that the owner of the property make specific
improvements or repairs to the property. The governing body of an
eligible municipality may agree in writing with the owner of a
leasehold interest in tax-exempt real property that is located in a
reinvestment zone, but that is not in an improvement project
financed by tax increment bonds, to exempt a portion of the value of
property subject to ad valorem taxation, including the leasehold
interest, improvements, or tangible personal property located on
the real property, for a period not to exceed 10 years, on the
condition that the owner of the leasehold interest make specific
improvements or repairs to the real property. A tax abatement
agreement under this section is subject to the rights of holders of
outstanding bonds of the municipality. An agreement exempting
taxable real property or leasehold interests or improvements on
tax-exempt real property may provide for the exemption of such
taxable interests in each year covered by the agreement only to the
extent its value for that year exceeds its value for the year in
which the agreement is executed. An agreement exempting tangible
personal property located on taxable or tax-exempt real property
may provide for the exemption of tangible personal property located
on the real property in each year covered by the agreement other
than tangible personal property that was located on the real
property at any time before the period covered by the agreement with
the municipality, including inventory and supplies. In a
municipality that has a comprehensive zoning ordinance, an
improvement, repair, development, or redevelopment taking place
under an agreement under this section must conform to the
comprehensive zoning ordinance.
SECTION 17. Subsection (e), Section 39.903, Utilities Code,
as amended by Chapters 1394, 1451, and 1466, Acts of the 77th
Legislature, Regular Session, 2001, is reenacted and amended to
read as follows:
(e) Money in the system benefit fund may be appropriated to
provide funding solely for the following regulatory purposes, [and]
in the following order of priority:
(1) programs to assist low-income electric customers
by providing the 10 percent reduced rate prescribed by Subsection
(h);
(2) customer education programs, administrative
expenses incurred by the commission in implementing and
administering this chapter, and expenses incurred by the office
under this chapter;
(3) programs to assist low-income electric customers
by providing the targeted energy efficiency programs described by
Subsection (f)(2);
(4) [the school funding loss mechanism provided by
Section 39.901;
[(5)] programs to assist low-income electric
customers by providing the 20 percent reduced rate prescribed by
Subsection (h); and
(5) [(6)] reimbursement to the commission and the
Health and Human Services Commission [Texas Department of Human
Services] for expenses incurred in the implementation and
administration of an integrated eligibility process created under
Section 17.007 for customer service discounts relating to retail
electric service, including outreach expenses the commission
determines are reasonable and necessary.
SECTION 18. The following statutes are repealed:
(1) Subsections (e) and (f), Section 1.085, Tax Code,
as added by Chapter 984, Acts of the 78th Legislature, Regular
Session, 2003; and
(2) Section 39.901, Utilities Code.
SECTION 19. (a) Except as provided by Subsection (b) of
this section, this Act takes effect September 1, 2005.
(b) Section 6 of this Act takes effect January 1, 2006.

 

 

______________________________ ______________________________
President of the Senate Speaker of the House

I hereby certify that S.B. No. 1652 passed the Senate on
May 17, 2005, by the following vote: Yeas 30, Nays 0; and that the
Senate concurred in House amendment on May 27, 2005, by the
following vote: Yeas 29, Nays 0.

 

______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1652 passed the House, with
amendment, on May 25, 2005, by a non-record vote.

 

______________________________
Chief Clerk of the House

 

Approved:

______________________________
Date

 

______________________________
Governor

Property Tax Protection Program™ Benefits

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