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Texas Property Tax Updates

Updated JUNE 2019

The 86th Texas Legislature Has Adjourned Providing Long-Awaited Property Tax and School Finance Reform

In the words of Governor Greg Abbott, “This was an extremely successful session.”  The Texas Legislature’s primary focus, as widely reported in the press, was on property tax and school finance. These same issues were debated in the 2017 legislative session, but were left unresolved, much to the frustration of school districts and taxpayers. Lawmakers had a clear mandate this session – deliver reform. They succeeded by passing SB 2 and HB 3.

HB 3 (Huberty) addresses school finance. The new law provides $4.5 billion in additional state funding, $2 billion in additional teacher pay, and $5 billion in property tax relief.  This tax relief reduces school district tax rates by 7 cents in 2019 and 13 cents in 2020, which essentially limits the increase in local school district revenue to 2.5% per year.

SB 2 (Bettencourt) is the omnibus property tax bill designed to provide reform at several levels of our ad valorem tax system. As dollars go, the new law limits revenue increases for cities and counties to 3.5% per year. Any increase above that must be approved by voters. Other provisions apply for small taxing units.

SB 2 also:

  • Increases transparency for taxpayers by requiring taxing units and appraisal districts to create and maintain websites concerning tax information
  • Creates a Comptroller Property Tax Administration Advisory Board
  • Requires appraisal districts to appraise property in compliance with appraisal manuals to be issued by the Texas Comptroller; manuals must comply with generally accepted appraisal techniques
  • Provides for special Appraisal Review Board panels, comprised of highly qualified individuals, to hear protests concerning properties with appraised values over $50 million located in counties with populations over 1 million
  • Codifies that the following publications are considered generally accepted appraisal methods and techniques as a matter of law: The Appraisal of Real Estate, The Dictionary of Real Estate Appraisal, USPAP, and publications including information related to mass appraisal
  • Eliminates taxing unit power to challenge the level of appraisal of a category of property
  • Prohibits Appraisal Review Boards from increasing appraised values above the values certified by appraisal districts

There were other important property tax bills. For instance:

HB 380 (Geren) allows a taxpayer to correct procedural flaws in a protest or lawsuit.

HB 1743 (King) reduces the rollback on ag use from 5 to 3 years and the interest rate from 7 to 5 percent.

HB 3143 (Murphy) extends the tax abatement program featured in Chapter 312 of the Texas Tax Code to September 1, 2029.

The session was successful not only for passing helpful legislation, but also for quashing dangerous proposals. Two are most notable: a bill seeking to eliminate the equal and uniform remedy did not receive a public hearing and a sales disclosure bill was not reported from committee. Passage of these bills would have caused serious turmoil for taxpayers, as key protections for confidentiality and against unfair taxation would vanish. 

Many thanks to our hardworking legislative affairs team who fought tirelessly this session on behalf of taxpayers. Jim Popp along with Vilma Luna and Clint Smith of Hillco Partners are to be commended for their watchful eyes, keen observations, and effective legislative strategies. Additionally, special thanks goes to Daniel Gonzalez and the Texas Association of Realtors for their continued support and ongoing efforts to defend our property tax system. Experience has shown me that, in representing taxpayers from start to finish, the start is always at the Texas Capitol.

For a more detailed analysis of legislation please click here:

 Danny Smith
 Popp Hutcheson
American Property Tax Counsel (APTC)

Tennessee Property Tax Updates
Utah Property Tax Updates

American Property Tax Counsel

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