Property Tax

H.B. 97 (Perry/Van de Putte) – Property Tax Exemption: this bill provides, among other things: (1) that a disabled veteran who has a disability rating of less than 100 percent is entitled to an exemption from taxation of a percentage of the appraised value of the disabled veteran’s residence homestead equal to the disabled veteran’s disability rating if the residence homestead was donated to the disabled veteran by a charitable organization at no cost to the disabled veteran; and (2) that the exemption in (1), above, continues for the surviving spouse of the veteran if: (a) the surviving spouse has not remarried; (b) the property was the residence homestead of the surviving spouse when the disabled veteran died; and (c) the property remains the residence homestead of the surviving spouse. (Effective January 1, 2014, but only if H.J.R. 24, summarized below, is approved by the voters.)

H.B. 242 (Otto/Hegar) – Property Tax Notice: requires a chief appraiser to provide certain property tax notices relating to agricultural land by certified mail. (Effective January 1, 2014.)

H.B. 315 (Otto/Estes) – Property Tax Appraisal: amends the definition of “dealer” to relieve certain motor vehicle dealers from monthly vehicle inventory tax reporting requirements if the dealer: (1) does not sell motor vehicles that are self-propelled and designed to transport persons or property on a public highway; (2) meets either of the following requirements: (a) total annual sales from the dealer’s motor vehicle inventory, less sales to dealers, fleet transactions, and subsequent sales, are 25 percent or less of the total revenue from all sources during the 12-month period corresponding to the preceding tax year; or (b) the dealer did not sell a motor vehicle to a person other than another dealer during the 12-month period corresponding to the preceding tax year and the dealer estimates that the total annual sales will be 25 percent or less of the dealer’s total revenue from all sources during that period; (3) files with the chief appraiser and comptroller a declaration stating that the dealer elected not to be treated as a dealer under state law; and (4) renders the dealer’s motor vehicle inventory in the current tax year by filing a rendition with the chief appraiser. (Effective January 1, 2014.)

H.B. 316 (Otto/Williams) – Property Tax: allows taxpayer appeals from appraisal review board determinations to be heard by the State Office of Administrative Hearings if the property is located in the following cities: Amarillo, Austin, Beaumont, Corpus Christi, El Paso, Fort Worth, Houston, Lubbock, Lufkin, McAllen, Midland, San Antonio, Tyler, and Wichita Falls. (Effective January 1, 2014.)

H.B. 326 (Dutton/Huffman) – Appraisal Review Board: allows a person who served all or part of three consecutive terms as a member of an appraisal review board to serve another term, so long as the person did not serve a consecutive fourth term. (Effective immediately.) 

H.B. 561 (Workman/Seliger) – Property Tax Exemption: provides that no additional property tax is imposed on land owned by an organization that qualifies as a school if the organization converts the land to a use for which the land is eligible for a property tax exemption. (Effective immediately.)

H.B. 585 (Villarreal/Eltife) – Appraisal Process: this bill, among other things, modifies the procedural requirements relating to the appraisal of property taxes by:

  1. imposing additional training requirements on the chief appraiser of an appraisal district;
  2. requiring the comptroller to prepare model hearing procedures for appraisal review boards;
  3. providing that an individual is ineligible to serve on an appraisal district board if the individual has engaged in the business of appraising property for compensation or representing property owners in appraisal review board proceedings in the preceding five years;
  4. requiring a person to be certified as a registered professional appraiser, to possess a professional designation from the Appraisal Institute, or to possess a professional designation from the International Association of Assessing officers in order to be eligible to serve as a chief appraiser;
  5. requiring the comptroller to appoint a person eligible to be a chief appraiser for an appraisal district whose chief appraiser is ineligible to serve;
  6. requiring the taxpayer liaison officer for an appraisal district to be responsible for providing clerical assistance to the local administrative district judge in the selection of appraisal review board members;
  7. providing that a chief appraiser or another employee or agent of an appraisal district commits a Class A misdemeanor if the person communicates with a member of the appraisal review board for the appraisal district, a member of the board of directors of the appraisal district, or  (in county with a  population of more than 120,000) the local administrative district judge regarding a ranking, scoring, or reporting of the percentage by which the appraisal review board or a panel of the board reduces the appraised value of property;
  8. requiring a property owner who wishes to receive an allocation of value to reflect the use of certain types of personal property in Texas to submit an application with the chief appraiser in the appropriate appraisal district;
  9. providing that a property owner who submits a late application for allocation under (8), above, is liable to each taxing unit for a penalty in an amount equal to ten percent of the difference between the amount of tax imposed by the taxing unit on the property without the allocation and the amount of tax imposed on the property with the allocation;
  10. allowing a city council of a city located inside an area declared to be a disaster area (as opposed to a “natural disaster” area) to authorize the reappraisal of all property damaged in the disaster at its market value immediately after the disaster;
  11. providing that a replacement structure is not considered to be a new improvement for property tax appraisal cap purposes if, to satisfy the requirements of an authorized disaster recovery program, it was necessary that: (a) the square footage of the replacement structure exceed that of the replaced structure; or (b) the exterior of the replacement structure be of higher quality construction and composition than that of the replaced structure;
  12. authorizing a taxpayer to sue a taxing unit in district court to compel payment of a tax refund, and be awarded the costs of court and reasonable attorney’s fees in an amount not to exceed $1500 or 30 percent of the total amount of the refund as determined by the court;
  13. for property valued at more than $1 million, placing the burden on the appraisal district to establish the value of property by clear and convincing evidence presented at a hearing for protests of the determination of the appraised value of property or the unequal appraisal of property, provided that the appraised value was lowered in the preceding tax year and the property owner delivers sufficient information to the appraisal review board and appraisal district to allow for a determination of market value;
  14. eliminating the expedited arbitration process for a property owner to appeal a decision of the appraisal review board;
  15. allowing a property owner to pay the amount of taxes imposed on the property in the preceding tax year before the delinquency date when appealing an appraisal if that amount is less than: (a) the amount of taxes due on the portion of the taxable value of the property that is not in dispute; and (b) the amount of taxes due on the property under the order from which an appeal is taken;
  16. allowing evidence, argument, or other testimony offered at an appraisal review board hearing to be admissible in an appeal only if: (a) the evidence, argument, or other testimony is offered to demonstrate that there is sufficient evidence to deny a no-evidence motion for summary judgment or is necessary to determine the merits of a motion for summary judgment on another ground; (b) the property owner or agent is designated as a witness for purposes of trial and the testimony offered at the appraisal review board hearing is offered for impeachment purposes; or (c) the evidence is the plaintiff’s testimony at the appraisal review board hearing as to the value of the property; and
  17. authorizing attorney’s fees for a property owner who prevails in an appeal to the court of a determination of an appraisal review board of a protest of the denial of an exemption relating to cemeteries, disabled veterans, nonprofit community business organizations, historic sites, and other miscellaneous exemptions.

(Portions of the bill are effective immediately and others are effective September 1, 2014.)

H.B. 709 (Isaac/Deuell) – Property Tax Payment Process: this bill: (1) allows a city to apply property tax overpayments to delinquent amounts from a tax year other than the year from which a tax refund arises if the delinquent taxpayer was the sole owner of the property in both years; and (2) allows disabled veterans, rather than just the surviving spouses of disabled veterans, to pay property taxes in four installments. (Effective January 1, 2014.)

H.B. 826 (Harless/Eltife) – Property Tax Appraisal: this bill provides that: (1) banks, savings banks, savings and loan associations, credit unions, and other finance companies do not qualify as heavy equipment inventory dealers for purposes of the property taxes imposed on heavy equipment inventory; (2) the term “dealer” does not include a person who renders the person’s inventory of heavy equipment for taxation in that tax year by filing a rendition statement or property report in accordance with state law; and (3) a “dealer’s heavy equipment inventory” means all items of heavy equipment that a dealer holds for sale, lease, or rent in this state during a 12-month period. (Effective January 1, 2014.)

H.B. 1287 (Hilderbran/Estes) – Property Tax Exemption: this bill: (1) provides that an application for a residence homestead exemption need not include a copy of the applicant’s driver’s license or personal identification certificate if the applicant: (a) is a resident of a facility that provides services related to health, infirmity, or aging; or (b) is certified for participation in the address confidentiality program; and (2) allows a chief appraiser to waive the requirement that an address of the property for which the exemption is claimed correspond to the address listed on the applicant’s driver’s license or personal identification certificate if the applicant: (a) is an active duty member of the armed services or the spouse of an active duty member and the application includes a copy of the military identification card and a copy of the utility bill for the property subject to the claimed exemption; or (b) holds a license issued to a federal judge, state judge, spouse of the judge, or peace officer that omits the residence address if the application for that license to the Department of Transportation is included in the application for the exemption. (Effective September 1, 2013.)

H.B. 1597 (N. Gonzalez/Hinojosa) – Property Tax Delinquency: this bill: (1) allows an individual who is disabled or at least 65 years of age and qualifies for a residence homestead exemption or a disabled veteran to make four installment payments of property taxes without penalty or interest if the first installment is paid before the delinquency date and is accompanied by proper notice that the remaining taxes will be paid in three equal installments; (2) requires the tax collector for a taxing unit to enter into an installment agreement for the payment of property taxes, penalties, and interest on a residence homestead if requested by a person who is delinquent in the payment of property taxes and who has not entered into an installment agreement with the taxing unit in the previous 24 months; (3) requires the installment agreement to provide for installment payments in equal amounts and a period of at least 12 months; (4) provides that a delinquency penalty does not accrue on the unpaid balance of property taxes during the period of the agreement if the property is a residence homestead, unless the property owner fails to make a payment as required by the agreement; (5) requires a notice of delinquency sent by a taxing unit to contain specific language regarding the ability to enter into an installment agreement; (6) requires a tax collector for a taxing unit to deliver notice of delinquency to a person who is in breach of an installment agreement and to any other owner of an interest in the property before the collector may seize and sell the property or file a suit to collect a delinquent tax subject to the agreement; and (7) provides that a debtor is not in default under a deed of trust or other contract lien on real property used as the debtor’s residence for the delinquent payment of property taxes if the debtor has given notice of the installment agreement to the mortgage servicer and the property is protected from seizure and sale and a suit may not be filed to collect a delinquent tax. (Effective September 1, 2013.)

H.B. 1712 (Lozano/Zaffirini) – Property Tax Exemption: this bill provides both a property tax exemption and a sales and use tax exemption for personal property that a person owns or leases and that is used, constructed, acquired, stored, or installed solely as part of an offshore spill response containment system and personal property used solely for the development, improvement, storage, development, repair, maintenance, or testing of such a system if the system is being stored while not in use in a county bordering on the Gulf of Mexico, a bay, or other body of water immediately adjacent to the Gulf of Mexico. (Effective immediately.)

H.B. 1897 (Eiland/Carona) – Property Tax Exemption: provides that, for purposes of the “Prop 2” property tax exemption for pollution control property: (1) the executive director of the Texas Commission on Environmental Quality (TCEQ) must issue a determination letter to a person seeking an exemption and the TCEQ shall take final action on the initial appeal of an exemption not later than the first anniversary of the date the executive director declares the application to be administratively complete; (2) a property owner is not entitled to a refund resulting from the final determination of an appeal of the denial of an exemption unless: (a) the property owner pays the taxes before the final determination of an appeal that ultimately decreases the property owner’s tax liability; or (b) has entered into a written agreement with the chief appraiser that authorizes the refund pending a final determination by the TCEQ; (3) not later than the 10th day after the date a property owner and the chief appraiser into a written agreement under (2), above, the chief appraiser shall provide to each taxing unit that taxes the property a copy of the agreement, and the agreement is void if a taxing unit objects in writing to the agreement within 60 days after the date the taxing unit receives a copy; and (4) a person is entitled to a property tax exemption for pollution control equipment through December 31, 2015, for landfill-generated gas conversion facilities. (Effective September 1, 2013.)

H.B. 1913 (Bohac/Williams) – Delinquent Taxes: this bill: (1) allows a city council to waive penalties and interest on a delinquent tax that relates to a date preceding the date on which the property owner acquired the property if: (a) the owner or another person liable for the tax pays the tax not later than 181 days after the date the property owner receives notice of the delinquent tax; and (b) the delinquency is the result of taxes imposed on omitted property entered into the appraisal records, erroneously exempted property or appraised value added to the appraisal roll, or property added to the appraisal roll under a different account number or parcel when the property was owned by a prior owner; and (2) authorizes a city to waive penalties and interest on a delinquent tax if the taxpayer submits evidence sufficient to show that the taxpayer delivered payment for the tax before the delinquency date. (Effective September 1, 2013.) 

H.B. 2500 (Bohac/Carona) – Property Tax Exemption: requires the chief appraiser to use the cost method of appraisal to determine the market value of solar energy property constructed or installed on or after January 1, 2014. (Effective January 1, 2014.)

H.B. 3121 (Harper-Brown/Deuell) – Freeport Property Tax Exemption: for purposes of the Freeport property tax exemption, authorizes a city council to extend the date by which Freeport goods (that are aircraft parts) must be transported outside the state to a date not later than 730 days after the date the person acquired or imported the property in the state.  (Effective January 1, 2014, but only if H.J.R. 133, summarized below, is approved by the voters.)

H.B. 3438 (Otto/Lucio) – Appraisal Review Board: prohibits a person from serving on an appraisal review board of an appraisal district established for a county having a population of more than 100,000 if the person appeared before the appraisal review board for compensation during the two-year period preceding the date the person is appointed.  (Effective September 1, 2013.)

H.J.R. 24 (Perry/Van de Putte) – Property Tax Exemption: would amend the Texas Constitution to provide that the legislature by general law may provide that a partially disabled veteran is entitled to an exemption from ad valorem taxation of a percentage of the market value of the disabled veteran’s residence homestead that is equal to the percentage of disability of the disabled veteran if the residence homestead was donated to the disabled veteran by a charitable organization at no cost to the disabled veteran. (Election to be held on November 5, 2013.)

H.J.R. 62 (Turner/Van de Putte) – Property Tax Exemption: would amend the Texas Constitution to authorize the legislature by general law to: (1) provide that the surviving spouse of a member of the armed services of the United States who is killed in action is entitled to a property tax exemption of the total appraised value of the surviving spouse’s residence homestead if the surviving spouse has not remarried since the death of the member of the armed services; and (2) a surviving spouse who qualifies for an exemption that subsequently qualifies a different property as the surviving spouse’s residence homestead is entitled to a property tax exemption of the subsequently qualified homestead in an amount equal to the dollar amount of the exemption for the former homestead if the surviving spouse has not remarried. (Election to be held on November 5, 2013.)

H.J.R. 133 (Harper-Brown/Deuell) – Freeport Property Tax Exemption: for purposes of the Freeport property tax exemption, would amend the Texas Constitution to authorize a city council to extend the date by which Freeport goods (that are aircraft parts) must be transported outside the state to a date not later than 730 days after the date the person acquired or imported the property in the state. (Election to be held on November 5, 2013.)

S.B. 163 (Van de Putte/C. Turner) – Property Tax Exemption: provides that: (1) the surviving spouse of a member of the armed services of the United States who is killed in action is entitled to a property tax exemption for the total appraised value of the surviving spouse’s residence homestead if the surviving spouse has not remarried since the death of the member of the armed services; and (2) a surviving spouse who qualifies for an exemption that subsequently qualifies a different property as the surviving spouse’s residence homestead is entitled to a property tax exemption of the subsequently qualified homestead in an amount equal to the dollar amount of the exemption for the former homestead if the surviving spouse has not remarried. (Effective January 1, 2014, but only if H.J.R. 62, summarized above, is approved by the voters.)

S.B. 193 (West/Otto) – Property Tax Exemption: provides that: (1) a community housing development organization must deliver a copy of its audit to the Texas Department of Housing and Community Affairs and the chief appraiser to qualify for a property tax exemption; and (2) a chief appraiser may extend the deadline for submission of an audit for good cause shown. (Effective January 1, 2014.)

S.B. 247 (Carona/Villarreal) – Property Tax Lending: this bill, among other things: (1) prohibits a property owner from waiving or limiting a requirement imposed on a property tax lender by state law; (2) provides certain requirements for any solicitation or advertisement provided by a property tax lender; (3) prohibits a person from selling, transferring, assigning, or releasing rights to a property tax loan to a person who is not licensed by the state; (4) requires the Finance Commission of Texas to create a form for a lender with an existing recorded lien on the property to use to request a payoff statement; (5) provides that a contract between a transferee of a tax lien and a property owner that purports to authorize payment of taxes that are not delinquent at the time of payment, or that lacks the proper authorization from the property owner, is void; (6) prohibits the transfer of a tax lien if: (a) the real property has been financed, wholly or partly, with a grant or below market rate loan provided by a governmental program or nonprofit organization and is subject to the covenants of the grant or loan; or (b) the real property is encumbered by a substandard building lien; and (7) provides that that the only method a transferee of a tax lien may use to foreclose the lien is the judicial foreclosure process. (Effective immediately.)

S.B. 359 (Hinojosa/Eiland) – Appraisal Districts:  authorizes junior college districts to participate in the selection of members to serve on the board of directors of an appraisal district. (Effective immediately.)

S.B. 1224 (Taylor/G. Bonnen) – Property Tax Payment Process: allows a property owner to make a payment or to file or deliver a report, application, statement, or other document by sending the document by common or contract carrier that bears a receipt mark indicating a date earlier than or on the specified due date or the owner otherwise furnishes satisfactory proof that it was deposited with the common or contract carrier on time. (Effective immediately.)

S.B. 1255 (Patrick/Murphy) – Appraisal Process: this bill: (1) authorizes a property owner to appeal through binding arbitration an appraisal review board order if the property is the owner’s residence homestead and is valued at $1 million or less; and (2) requires an arbitrator to complete a training program on property tax law before conducting a hearing on an arbitration relating to the appeal of an appraisal review board order determining a protest under (1), above. (Effective immediately.)

S.B. 1256 (Patrick/Bohac) – Appraisal Process: for a residential property in a county with a population of more than 150,000, provides that a sale is not considered to be a comparable sale for property tax purposes unless the sale occurred within 36 months of the date as of which the market value of the property is to be determined, regardless of the number of comparable properties sold during that period. (Effective January 1, 2014.)

S.B. 1508 (Hegar/Workman) – Appraisal Process: authorizes a secured party, with the consent of the property owner, to render for property taxation any property of the property owner in which the secured party has a security interest on January 1. (Note: This provision applies only to property that has a historical cost, when new, of  more than $50,000.) (Effective January 1, 2014.)

S.B. 1510 (Hinojosa/Hilderbran) – Truth-in-Taxation: this bill: (1) provides a new and simplified method of publishing notice of property tax rates to replace the method in current law, except that a city that is considered to have a low tax levy (total property tax rate of 50 cents per $100 or less and total tax levy of less than $500,000) may continue to provide notice in the current manner provided in the Tax Code; (2) requires that the notice to be provided by a city that does not adopt a property tax rate that exceeds the lower of the effective tax rate or the rollback rate contain specific language relating to: (a) the proposed rate, preceding year’s rate, and effective tax rate; (b) the amount of taxes owed by each individual taxpayer; and (c) contact information for the tax assessor-collector; (3) requires that the notice to be provided by a city that adopts a property tax rate that exceeds the lower of the effective tax rate or the rollback rate contain specific language relating to: (a) the proposed rate, preceding tax year’s rate, effective tax rate, and rollback rate; (b) the amount of taxes owed by each individual taxpayer; (c) contact information for the tax assessor-collector; and (d) notice of two public hearings on the tax rate; (4) provides that a city must either: (a) publish notice under (2) or (3), above, not later than September 1 in a newspaper having general circulation in the county in which the city is located that may not be smaller than one-quarter page of a standard-size or tabloid-size newspaper with a headline that must be in 24-point or larger type; or (b) mail the notice to each property owner in the city; (5) requires a city to post notice under (2) or (3), above, on the city’s website, if applicable, beginning not later than September 1 and continuing until the city adopts a tax rate; and (6) requires a city that to provide certain tax rate information required by the Tax Code upon request. (Effective January 1, 2014.)

VETOED S.B. 1606 (Zaffirini/Strama) – Property Tax Liens: provides that a tax lien on inventory, furniture, equipment, or other personal property attaches to all such property that is owned on January 1 of the year the lien attaches, irrespective of whether the personal property is located within the boundaries of the taxing unit in whose favor the lien attaches. (Effective immediately.)

S.B. 1662 (Eltife/Otto) – Appraisal Process: would eliminate the expedited arbitration process for a property owner to appeal a decision of the appraisal review board. (Effective January 1, 2014.)

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No other person or entity may reproduce, duplicate, or distribute any part
of this document without the written authorization of the 
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