Bills Passed in the 2013 Regular Session of the Texas Legislature

Transcription

1 Bills Passed in the 2013 Regular Session of the Texas Legislature Update as of November 6, 2013 By Robert Mott & Debbie Wheeler Perdue Brandon Fielder Collins & Mott, LLP The 83 rd Texas Legislature, Regular Session, passed about 50 property tax bills and related bills. These bills are organized by subject matter, and some bills are listed several times because they address multiple subjects. Each bill summary includes the bill s effective date. By June 16, the Governor signed bills or let them become law without his signature; he vetoed two bills, HB 3063 and SB On November 5, Texas voters passed three constitutional amendments on property taxes. All references to section numbers are to the Texas Property Tax Code, unless otherwise indicated. Check Perdue Brandon s website at pbfcm.com for updates. Table of Contents Page Appraisal District (CAD) Administration 1 Appraisal 4 Renditions.. 5 Exemptions. 5 Special Valuation... 9 Appraisal Review Board (ARB).. 9 Appraisal District Litigation 12 Assessment & Tax Rates.. 14 Tax Collections. 15 Delinquent Tax Litigation 17 County Tax Assessor-Collectors. 19 School Finance.. 20 Special & Miscellaneous Open Meetings, Chapter Open Records, Chapter Other Codes and Statutes. 24 Fines and Fees 26 Appraisal District Administration CAD PUBLICATION NOTICE ABOUT ELECTRONIC COMMUNICATION CLARIFIED HB 241 Otto Amends This bill clarifies the provision that the chief appraiser publishes a newspaper notice about accepting electronic communication only if the appraisal district has implemented a system to allow such communication or if the appraisal district is required to allow such communications because it has a property owner whose property is included in 25 or more accounts in the CAD. CERTAIN CAD NOTICES TO BE DELIVERED BY CERTIFIED MAIL HB 242 Otto Amends 1.07(d) This bill adds to the list of notices that the appraisal district is required to deliver by certified mail to include a notice to reapply for open-space agriculture appraisal, imposition of a penalty for late application for open-space agriculture land appraisal and a determination of agricultural, openspace agriculture or timber land rollback. OMNIBUS BILL CHANGES CHIEF APPRAISER QUALIFICATIONS AND EDUCATION, ALLOWS COMPTROLLER TO APPOINT CHIEF APPRAISER IN NONCOMPLIANT COUNTIES, CHANGES DUTIES AND QUALIFICATIONS OF TAXPAYER LIAISON OFFICER HB 585 Villarreal Adds 5.103, , 21.09, 21.10; amends 5.041, 6.035, 6.05, 6.052, 6.41, 6.411, 22.01, 22.24, 23.02, 23.23, , 31.11, 33.48, 33.49, 41.43, 41.45, 41.66, 41A.03, 42.08, 42.21, 42.23, 42.29; repeals 41A.031; amends Occupations Code This bill requires that at least ½ of the continuing education credits required of a chief appraiser must cover understanding TDLR, the duties of the CAD, 2013 Legislative Update; Page 1

2 financing of CAD, courtesy to the public, open meetings, open records, etc., and two hours of ethics for the chief appraiser must be regarding ethical issues confronting the chief appraiser, including maintaining independence from political pressure. Effective Persons who appraise property for compensation for use in property tax proceedings or tax agents who represent owners for compensation are ineligible to serve on the CAD board of directors until the expiration of five years after such activity. Effective on Governor s signature. To be appointed to serve as chief appraiser, a person must hold a RPA, MAI, CAE, AAS or RES designation. If the person appointed chief appraiser does not hold the RPA, that person must obtain an RPA within five years. Any chief appraiser who does not comply with this requirement may not perform the duties of chief appraiser. Each year, the chief appraiser must notify the Comptroller of eligibility for the office by January 1 of each year. A person in a county of 100,000 population or less who is serving as chief appraiser on the effective date of this act and is registered with TDLR with a Class III appraiser designation may continue to serve until 1/1/2016. Effective If a chief appraiser does not hold the required designations, then the Comptroller appoints a chief appraiser and determines that person s compensation. The Comptroller-appointed chief appraiser determines the budget for that CAD, subject to the Comptroller s approval. The board of directors shall amend the CAD budget to pay the salary of the Comptroller s chief appraiser and the budget that chief appraiser establishes. The Comptroller s chief appraiser will serve for one year or until the board of directors appoints an eligible chief appraiser, contracts with another CAD to run the district or contracts with a taxing unit to run the CAD. If the CAD board of directors has not exercised one of these three options by the expiration of the one-year term, then the CAD board must contract with another CAD or a taxing unit at that time subject to the Comptroller s approval. Effective This bill requires a taxpayer liaison officer be appointed in counties with more than 120,000 (current law is 125,000) population. The liaison officer is responsible for receiving and compiling comments and suggestions filed by the chief appraiser, property owner or owner s agent concerning the fairness and efficiency of the ARB process. The liaison officer shall provide the public with the procedures on how to file comments and suggestions. The chief appraiser or any other CAD person who performs appraisal or legal services is not eligible to be the liaison officer. The liaison officer provides a list of comments and suggestions to the Comptroller in the Comptroller s prescribed manner and to the CAD board. The liaison officer also provides clerical assistance to the local administrative district judge in those CADs that have the judge appoint the ARB members and may not influence the process for selecting ARB members. Effective (For this bill, see also Renditions, ARB, Appraisal, Appraisal District Litigation, Tax Collections and Delinquent Tax Litigation sections about this bill.) Status: Signed by Governor 6/14/13. TDLR CAN DISMISS COMPLAINTS FOR SPECIFIC REASONS SB 464 Deuell Amends Occupations Code This bill revises the dismissal of complaints by the Texas Department of Licensing and Regulation without conducting a hearing. TDLR shall dismiss a complaint without a hearing if (1) the complaint challenges only the imposition of or failure to waive penalties and interest under Sections and , the property s appraised value, appraisal methodology, the grant/denial of an exemption or any matter subject to ARB determination and (2) the disagreement has not been resolved in the complainant s favor by settlement or waiver or by an ARB, governing body, arbitrator, SOAH or court. DELIVERY BY COMMON OR CONTRACT CARRIERS CAN BE USED FOR SENDING TIMELY TAX ACTION SB 1224 Taylor Amends Legislative Update; Page 2

3 This bill provides that timeliness of action by mail for a tax payment, tax report, application, statement or document to a taxing unit or official can also be delivered by common or contract carrier. The item must bear a receipt mark indicating the date earlier than or on the specified due date and within the specified period when sent by common or contract carrier. Or, the property owner furnishes proof it was timely deposited with the carrier. (See also Tax Collections section.) MEDICAL EXAMINER S HOME ADDRESS MAY BE HELD CONFIDENTIAL HB 2267 Larson Amends This bill allows that a medical examiner or person who performs forensic analysis or testing for the state or a political subdivision may request that the CAD keep the home address confidential. immediately on 6/14/2013. ADDITIONAL TYPES OF JUDGES ADDED TO CONFIDENTIAL HOME ADDRESSES IN CAD RECORDS SB 1896 Garcia Amends This bill adds to the list of judges whose home addresses are confidential information in property tax records to include a judge, former judge or retired judge of a statutory probate court or constitutional county court; an associate judge appointed under Gov t Code Chapter 54A, Subchapter C; a master, magistrate, referee, hearing officer or associate judge appointed under Gov t Code Chapter 54; or a municipal court judge. Status: Signed by Governor 5/25/13; Effective immediately 5/25/2013. CERTAIN CURRENT OR FORMER MEMBERS OF U.S. ARMED FORCES HAVE HOME ADDRESS CONFIDENTIAL HB 2676 Davis Amends current or former member of the U. S. armed forces who has served in an area that the President has designated for 26 U.S.C. Section 112 as an area in which armed forces are or have engaged in combat. DESIGNATED AGENT CAN REVOKE AGENT DESIGNATION WITH CERTIFIED NOTICE TO OWNER HB 3439 Otto Amends 1.11 and This bill provides that an agent designation remains in effect until revoked in writing by the owner or by the owner s designated agent (law had stated only owner revokes). The agent revoking the designation must send notice by certified mail to the property owner at the owner s last known address. JUNIOR COLLEGE DISTRICT ADDED AS A VOTING MEMBER OF THE APPRAISAL DISTRICT FOR SELECTING CAD DIRECTORS SB 359 Hinojosa Amends 6.03 and This bill adds a junior college district as a voting member to select directors to serve on the appraisal district board. The chief appraiser delivers notice of the number of votes based on tax levy for the junior college district to the presiding officer of the governing body and to the president, chancellor or other chief executive officer of the junior college district. If a CAD increases the number of directors or changes the selection method, the CAD board by resolution shall provide for the junior college districts in the CAD to collectively participate in selecting directors in the same manner as the school district that imposes the lowest dollar amount in the CAD. That CAD board resolution is not subject to rejection by taxing units opposing it. The bill applies to the selection of directors for terms beginning on or after January 1, This bill provides that the home address information is confidential in tax records for a 2013 Legislative Update; Page 3

4 Appraisal OMNIBUS BILL ADDS INTERSTATE ALLOCATION PROCEDURE, ALLOWS PROPERTY REAPPRAISAL FOR INDUSTRIAL DISASTERS, MODIFIES RESIDENTIAL APPRAISAL CAP FOR DISASTER DAMAGE HB 585 Villarreal Adds 5.103, , 21.09, 21.10; amends 5.041, 6.035, 6.05, 6.052, 6.41, 6.411, 22.01, 22.24, 23.02, 23.23, , 31.11, 33.48, 33.49, 41.43, 41.45, 41.66, 41A.03, 42.08, 42.21, 42.23, 42.29; repeals 41A.031; amends Occupations Code This bill adds a specific application for allocating value for vessels, interstate allocation and commercial or business aircraft. The Comptrollerprescribed application is required to be filed annually before May 1, which the chief appraiser may extend up to 60 days for good cause. If the property was not on the appraisal roll in the preceding year, the deadline is extended 45 days after receipt of the notice for the new property. Late applications can be filed after the deadline but before the ARB approves the appraisal records, but the property owner is liable for a 10- percent penalty based on the difference in taxes imposed by a taxing unit without and with the allocation. The chief appraiser includes the penalty in the property records and sends a written notice to the owner. The taxing unit s assessor adds the penalty to the owner s tax bill. If the chief appraiser learns that an allocation should be cancelled, the appraiser delivers written notice within five days and the person may protest the cancellation. Rendition filing is not a condition of qualification for allocation. Effective on Governor s signature 6/14/2013. This bill also amends Section to permit taxing units to provide for the appraisal of property located in a disaster area that is not a natural disaster to provide for relief by having the property reappraised after the disaster and taxes prorated, if the Governor declares that the area is a disaster. This section affects any property appraised as of January 1, 2013, thus permitting the reappraisal of property damaged by the fertilizer plant explosion in West, Texas to be reappraised. The bill also provides that the chief appraiser and tax collector may waive reporting penalties for dealers of motor vehicle, heavy equipment and retail manufactured housing inventory because the disaster made it effectively impossible for the taxpayer to comply or the disaster destroyed the dealer s property or records. Effective on Governor s signature 6/14/2013. This bill addresses a replacement structure rendered uninhabitable for purposes of the homestead cap and adds a definition for disaster recovery program to be one administered by the Texas General Land Office and funded with community development block grant disaster recover money. A replacement structure under the disaster recovery program is not a new improvement if, to satisfy the program, the square footage exceeds the replaced structure or the exterior is of higher quality construction and composition. The bill applies only to the appraisal of a residence homestead for a tax year that begins on or after January 1, Effective (For this bill, see also Appraisal District Administration, Renditions, ARB, Appraisal District Litigation, Tax Collections and Delinquent Tax Litigation sections about this bill.) Status: Signed by Governor 6/14/13. CAD APPRAISES COMMERCIAL SOLAR ENERGY PROPERTY USING COST APPROACH HB 2500 Bohac Adds This bill requires the chief appraiser to use the cost approach to determine the market value of solar energy property used for commercial purposes, which includes commercial storage devices, power conditioning equipment, transfer equipment and necessary parts. In determining the property s market value, the chief appraiser shall use generally accepted cost data sources, adjust for obsolescence and depreciate the value by using a useful life that does not exceed 10 years. In determining the value in any tax year, the chief appraiser may not find the depreciated value to be less than 20% of the value computed after appropriate adjustments for obsolescence and other justifiable factors. This new provision applies to solar energy property installed or instructed on or after January 1, Legislative Update; Page 4

5 COMPARABLE SALES USED IN HOME APPRAISAL ARE WITHIN 36 MONTHS OF APPRAISAL DATE IN CERTAIN COUNTIES SB 1256 Patrick Amends The bill requires that an appraisal district in a county with a population greater than 150,000 only uses comparable sales that occurred within 36 months of the appraisal date for residential properties, regardless of the number of homes that sold. Rendition OMNIBUS BILL ADDS SECURED PARTY TO RENDER PROPERTY HB 585 Villarreal Adds 5.103, , 21.09, 21.10; amends 5.041, 6.035, 6.05, 6.052, 6.41, 6.411, 22.01, 22.24, 23.02, 23.23, , 31.11, 33.48, 33.49, 41.43, 41.45, 41.66, 41A.03, 42.08, 42.21, 42.23, 42.29; repeals 41A.031; amends Occupations Code This bill defines secured party and provides that a secured party, with the owner s consent, may render property in which the secured party has a security interest on January 1, if the property has a historical cost when new of more than $50,000. A secured party owns a secured interest in personal property or fixtures pursuant to the Uniform Commercial Code. Examples include financiers of personal property purchases, consignors and holders of agricultural liens. A secured party on the rendition indicates status as a secured party and states the name and address of the property owner. The secured party is not liable for inaccurate information on the rendition if the owner supplied the information or for failure to timely file the rendition if the owner failed to promptly cooperate with the secured party. A secured party relies on information provided by the owner for accuracy, the CAD in which to file the rendition and compliance with any request to supply additional information. This provision is the same as SB 1508 by Hegar (next). Effective (For this bill, see also Appraisal District Administration, Appraisal, ARB, Appraisal District Litigation, Tax Collections and Delinquent Tax Litigation sections about this bill.) Status: Signed by Governor 6/14/13. SECURED PARTY MAY RENDER PROPERTY WITH OWNER S CONSENT SB 1508 Hegar Amends and This bill defines secured party and provides that a secured party, with the owner s consent, may render property in which the secured party has a security interest on January 1, if the property has a historical cost when new of more than $50,000. A secured party owns a secured interest in personal property or fixtures pursuant to the Uniform Commercial Code. Examples include financiers of personal property purchases, consignors and holders of agricultural liens. A secured party on the rendition indicates status as a secured party and states the name and address of the property owner. The secured party is not liable for inaccurate information on the rendition if the owner supplied the information or for failure to timely file the rendition if the owner failed to promptly cooperate with the secured party. A secured party relies on information provided by the owner for accuracy, the CAD in which to file the rendition and compliance with any request to supply additional information. Exemptions PARTIAL EXEMPTION OF HOMESTEAD OF PARTIALLY DISABLED VETERAN OR SURVIVING SPOUSE FOR DONATED HOME HB 97, HJR 24 Perry Adds and ; amends 11.42, 11.43, , and ; amends Tex. Const. Art. 8, Sec. 1-b This bill and constitutional amendment exempts a percentage of the residence homestead of a partially disabled veteran by the percentage of his or her 2013 Legislative Update; Page 5

6 disability rating if a charitable organization donated the home to the veteran. A surviving spouse can inherit this exemption if still unmarried and residing in the residence. The dollar amount of the surviving spouse exemption is portable to a subsequent residence if the surviving spouse is still unmarried. The chief appraiser provides a certificate providing the former home s exemption information to determine the exemption amount for the subsequently qualified home. The exemption is effective on qualification and does not require an annual application. The deadline for the initial application is one year from the date taxes go delinquent. If the homeowner qualifies after the taxes have been assessed, the tax assessor-collector recalculates the taxes due, mails a corrected bill and refunds any paid amount above the corrected amount to the homeowner. The exemption is prorated off when the homeowner no longer qualifies for the exemption. Taxes are subject to installment payments by the disabled veteran or the veteran s unmarried surviving spouse. Status: Signed by Governor 5/27/13; Effective 1/1/2014 with Texas voters approving constitutional amendment November 5, TOTAL HOMESTEAD EXEMPTION FOR SURVIVING SPOUSE OF MEMBER OF ARMED SERVICES WHO DIES ON ACTIVE DUTY SB 163 Van de Putte; HJR 62 Chris Turner Adds ; amends 11.42, 11.43, , and ; amends Gov t Code ; amends Tex. Const. Art. 8, Sec. 1-b This bill and constitutional amendment grants a surviving spouse of a member of the armed services who dies in action a total homestead exemption if the spouse has not remarried and the home was the residence of the member of the armed services who died. The surviving spouse may port the dollar exemption amount from this home to a subsequently qualified home if the spouse has not remarried. The chief appraiser issues a certificate with the necessary information to port the exemption. The exemption is effective on qualification and does not require an annual application. The deadline for the initial application is one year from the date taxes go delinquent. If the homeowner qualifies after the taxes have been assessed, the tax assessor-collector recalculates the taxes due, mails a corrected bill and refunds any paid amount above the corrected amount to the homeowner. The exemption is prorated off when the homeowner no longer qualifies for the exemption. The Texas Comptroller adjusts the school property value study to account for this exempted value. The exemption applies to a tax year beginning on or after January 1, Status: Signed by Governor 5/27/13; Effective 1/1/2014 with Texas voters approving constitutional amendment November 5, OMNIBUS WATER DISTRICT BILL INCLUDES OPTION TO TAX RESIDENTIAL PROPERTY, AND OTHER TAX PROVISIONS SB 902 Fraser Amends Local Gov t Code ; Water Code , This bill allows municipal management districts to tax single family residences, duplexes, triplexes and four-plexes if the district voters approve the tax for the providing services, such as water and sewer (Local Gov t Code ). The bill also expressly authorizes the employment of tax collectors who are individuals or are private companies for all water districts (Water Code ). These provisions are part of a large omnibus water district bill. (See also Tax Collections.) Status: Signed by Governor 5/18/13; Effective EXEMPTION FOR AUSTIN CHARITY FOR HOMELESS CAN APPLY TO LAND HB 294 Eddie Rodriguez Amends This bill changes the word improvements to property in authorizing the exemption for a charitable organization that has been existence for at least 12 years and provides housing to the homeless. The effect is to permit the exemption of vacant land and other property not considered improvements. The exemption applies to a charitable organization in a municipality with a population between 750,000 to 850,000 (Austin) Legislative Update; Page 6

7 DOCUMENTS REQUIRED WITH HOMESTEAD EXEMPTION APPLICATION REVISED HB 1287 Hilderbran Amends This bill refines what documents are required to be filed with the homestead exemption application. A copy of the homeowner s driver s license is not required if the homeowner is a resident of a facility that provides services related to health, infirmity or aging or is certificated for participation in the address confidentiality program administered by the Texas Attorney General. The bill removes the requirement to include a copy of the applicant s vehicle registration receipt or utility bill with the homestead application. The bill also provides that the chief appraiser may waive the requirement that the homeowner have the same property address listed on owner s driver license if the homeowner is an active duty member (or spouse) of the armed services and has a military ID card and a copy of a utility bill for the claimed home in the applicant s or spouse s name or the homeowner holds a specific driver s license that does not list the home address and provides a copy of the license application. COMMERCIAL AIRCRAFT AND TANGIBLE PERSONAL PROPERTY EXEMPT INSIDE A DEFENSE BASE DEVELOPMENT AUTHORITY HB 1348 Menendez Amends Local Gov t Code 379B.011 VETO HB 3063 Menendez Adds Local Gov t Code 379B.0091; amends Local Gov t Code 379B.011; amends Gov t Code ; HB 1348 provides that a commercial aircraft and tangible personal property to be incorporated into the aircraft located inside a defense base development authority are presumed to be in interstate, international or foreign commerce and not located in this state for longer than a temporary period for taxation under Tax Code Sections and For the tangible personal property, the owner demonstrates to the chief appraiser that the owner intends to incorporate the property into the commercial aircraft. The commercial aircraft is the type described in Tax Code Section as one that is to be operated by a certificated air carrier. VETO. The Governor vetoed HB 3063, containing similar provisions to HB 1348 but also allowing the designation of an enterprise zone in a defense base development in San Antonio. Status: HB 1348 became law without the Governor s signature 6/14/13; Effective HB 3063 vetoed by Governor 6/14/13. POLLUTION CONTROL TAX EXEMPTION GRANTED TO OFFSHORE SPILL RESPONSE AND WELL CONTAINMENT PROPERTY HB 1712 Lozano Amends11.271, 11.43, This bill grants property tax and sales tax exemptions to offshore spill response and well containment property that is used for pollution control. The exemption applies to personal property owned or leased and that is used, constructed, acquired, stored or installed primarily as part of an offshore spill response containment system. The property is stored while not in use in a county bordering on the Gulf of Mexico or on a bay adjacent to the Gulf. The exemption does not apply to personal property used for exploration or production, or to a person who provides services for an offshore spill response containment system that the person does not own or lease. The exemption applies to personal property acquired on or after January 1, TCEQ DETERMINATION FOR POLLUTION CONTROL EXEMPTION HAS ONE-YEAR DEADLINE; TAX EXEMPTION GRANTED FOR LANDFILL-GENERATED GAS CONVERSION FACILITY FOR 2014 HB 1897 Eiland Adds ; amends and 42.43; amends Gov t Code This bill requires the Texas Commission on Environmental Quality (TCEQ) Executive Director to issue a determination letter that a facility, device or method is used for pollution control and subject to exemption not later than the first anniversary that 2013 Legislative Update; Page 7

8 the Director declares the application request to be administratively complete. A property owner is not entitled to a refund resulting from the final determination of a district court appeal of the denial of this exemption unless 1) the owner prevails or 2) the owner has entered into a written agreement with the chief appraiser that authorizes the refund as part of an agreement pending the TCEQ s final determination. Within 10 days of such agreement, the chief appraiser shall provide a copy of the agreement to each taxing unit that taxes the property. The agreement is void if a taxing unit objects in writing within 60 days after receiving the agreement. The agreement provision seems to be ineffective since the property owner is not entitled to a refund unless it prevails anyway. The bill also adds a temporary exemption for real and personal property used as a landfill-generated gas conversion facility for tax year 2014 only. TCEQ has indicated that one company would likely qualify for a $10 million exemption. The bill states the intent of the Texas Legislature regarding the pollution control exemption, including that the current market forces are a deterrent to landfill methane capture but this exemption helps to retain such facilities that reduce pollution in Texas. The Texas Comptroller does not adjust the school property value study for this exemption. CHIEF APPRAISER MAY EXTEND AUDIT DELIVERY DEADLINE FOR LOW-INCOME AND MODERATE HOUSING EXEMPTION SB 193 West Amends and This bill provides that the chief appraiser may extend the deadline for good cause for delivery of the independent audit prepared by the owner of property receiving the low-income and moderate housing exemption. DEFINITIONS FOR TRUSTOR AND QUALIFYING TRUST REVISED FOR RESIDENCE HOMESTEAD EXEMPTION HB 2913 Thompson Amends and ; amends Property Code , , , and adds Subchapter D to Chapter 112 This bill revises the definition of trustor to mean a person who transfers an interest in real or personal property (not just residential) whether during the person s lifetime or at death (rather than by deed or by will). Qualifying trust adds an instrument transferring property to the trust or any other agreement that is binding on the trustee and removes the clause addressing the case of a trust that is not created by court order. EXEMPTION GRANTED TO AN ENERGY STORAGE IN PASADENA HB 2712 Perez Adds ; amends and This bill grants an optional exemption to property that is used, constructed, acquired or installed to meet or exceed rules on the environment for energy storage system. The property has a capacity of at least 10 megawatts, is installed on or after January 1, 2014, is located in an area designated nonattainment for the Federal Clean Air Act and is located in a city with a population of at least 100,000 (Pasadena) adjacent to a city with a population of more than 2 million. The local governing body of a taxing unit must take official action to adopt (and later to repeal) this exemption. Once granted, the owner is not required to apply annually for the exemption. The property is treated the same as pollution control property in the truthin-taxation calculations of the effective and rollback tax rates Legislative Update; Page 8

9 TEMPORARY PERIOD TO EXEMPT AIRCRAFT PARTS IN TEXAS EXTENDED HB 3121, HJR 133 Harper-Brown Amends ; amends Tex. Const. Art. 8, Sec. 1-j This bill and constitutional amendment address the Freeport exemption of aircraft parts located in Texas for a temporary period. The bill provides that a taxing unit may extend the date by which freeport goods that are aircraft parts must be transported outside of Texas to a date not later than 730 days from acquisition or imported into Texas. An extension is adopted by taxing unit official action and applies to current tax year if adopted before June 1 or to next tax year if adopted on or after June 1, and applies to each following year. 1/1/2014 with Texas voters approving constitutional amendment November 5, Special Valuation MOTOR VEHICLE DEALER OPT OUT OF SPECIAL INVENTORY APPRAISAL HB 315 Otto Amends This bill allows a motor vehicle dealer to opt out of special inventory appraisal and be appraised as regular inventory if the dealer does not sell selfpropelled vehicles designed to transport persons or property on a public highway or the dealer s total annual vehicle sales in the preceding year were 25 percent or less of the dealer s total revenue from all sources during that year. The annual sales exclude dealer sales, fleet transactions and subsequent sales. The dealer also can opt out for sales only to other dealers in the preceding year and estimates that the current year will be regular sales of 25 percent or less of the dealer s total revenue from all sources. The dealer files a Comptroller-prescribed declaration form by August 31 of the preceding tax year that the dealer elects not to be treated as special inventory and then files a regular rendition of the dealer s motor vehicle inventory for the following tax year. Status: Sent to Governor 5/27/13; Effective NO AG ROLLBACK TAX FOR SCHOOL THAT CONVERTS AG LAND S USE HB 561 Workman Amends This bill provides that no rollback tax applies to a tax exempt school that converts qualified openspace land to an eligible use under Section 11.21, the school tax exemption, within five years. DEFINITIONS REVISED FOR HEAVY EQUIPMENT DEALER AND INVENTORY HB 826 Harless Amends This bill adds to the current definition of heavy equipment dealer to state that the term does not include a bank, savings bank, savings and loan association, credit union or other finance company; and the term does not include a person who renders the person's inventory of heavy equipment for taxation in that tax year by filing a rendition or Tax Code Chapter 22 property report. The bill clarifies that a heavy equipment dealer applies to a dealer in Texas. The bill further states this change is not intended to affect any pending litigation. Appraisal Review Board (ARB) RESTRICTIONS ON SERVING AS ARB MEMBERS REVISED HB 326 Dutton Amends This bill allows ARB members who have served in counties with population of more than 100,000 to be reappointed after sitting out a year. For all counties, an ARB member who has served three consecutive terms may not be reappointed on the next January 1 following the third consecutive term. The reference to auxiliary ARB members is repealed. Other restrictions remain for ARB members in counties with a population of more than 100, Legislative Update; Page 9

10 OMNIBUS BILL PROVIDES FOR MORE ARB MEMBERS APPOINTED BY DISTRICT JUDGE, ADDS TO ARB EDUCATION REQUIREMENTS HB 585 Villarreal Adds 5.103, , 21.09, 21.10; amends 5.041, 6.035, 6.05, 6.052, 6.41, 6.411, 22.01, 22.24, 23.02, 23.23, , 31.11, 33.48, 33.49, 41.43, 41.45, 41.66, 41A.03, 42.08, 42.21, 42.23, 42.29; repeals 41A.031; amends Occupations Code Comptroller s ARB Training: This bill addresses the Comptroller s required ARB training, Comptroller advice and model ARB procedures. ARB members are required to sign a statement at the end of course attendance that the ARB member will abide by the Tax Code requirements in conducting ARB hearings. ARB members are required to take the Comptroller training annually. ARB members may not participate in a hearing and may not vote on any protest determination until the member completes the training and has received a certificate of completion. An ARB member who fails to complete the training may not be reappointed to an additional term. ARB members must complete the advanced training in the second year of their term and for each reappointment term. Effective Comptroller s ARB Oversight and Model Hearing Rules: The bill provides that the Comptroller may provide advice to an ARB member about technical questions about the ARB s duties and responsibilities or property appraisal issues. The Comptroller may communicate with the ARB Chair and taxpayer liaison officer about filed complaints. The Comptroller, however, may not advise the chief appraiser or CAD employee about a matter the Comptroller knows is the subject of a protest. The bill also gives the Comptroller ARB oversight to prepare model hearing procedures that address statutory duties, hearing process, scheduling of hearings, postponements, notices, determination of good cause under Secs and 41.45, evidence and argument, cross examination, agent representation, prohibition against considering information not provided at a hearing, ex parte communication, exclusion of evidence, postponement for failure to comply with Sec , conflicts of interest, administration of applications to serve on ARB and other matters for fair and efficient hearings. The Comptroller may categorize CADs by size, number of protests filed or similar characteristics and develop different model hearing procedures. An ARB shall follow the Comptroller s model. The Comptroller shall prescribe a survey for the public to offer comments and suggestions concerning the ARB. The survey must permit a person to address any matter related to the ARB s fairness and efficiency. At or before each ARB hearing, the property owner shall be given the survey form with instructions. The appraisal office may provide clerical assistance to the Comptroller, such as providing and collecting the survey forms, including electronically. The Comptroller shall issue an annual report summarizing the survey complaints and suggestions. The person making the complaint is not identified. Effective Appointment of ARB Members by Judge in More Counties, Removal and Ex Parte Communication Changes: The bill adds more counties (with a population of 120,000 or more) in which the ARB members are appointed by the administrative district judge. Current law has only the ARBs in Harris and Fort Bend Counties appointed this way. The bill adds that the CAD board of directors or the judge that appointed the ARB member may remove the member for clear and convincing evidence of repeated bias or misconduct. A chief appraiser, CAD employee, CAD agent, ARB member, CAD director, a tax consultant or an agent of a property owner commits a Class A misdemeanor offense if the person communicates with the local district judge about the appointment of ARB members, except for communication between a sitting review board member and the judge about reappointment to the ARB; communication between the taxpayer liaison officer and judge about the officer s clerical duties; or communication with the judge regarding a person s criminal history information. The chief appraiser or CAD employee commits a Class A misdemeanor offense if the person communicates with an ARB member, CAD director or local district judge that appoints ARB members about the ranking, scoring or reports of percentage that an ARB or an ARB panel reduces the appraised value of property. Effective 2013 Legislative Update; Page 10

11 The bill clarifies that ex parte communications with an ARB member do not apply for any party during a hearing on a protest or other proceeding before the ARB, for social communications or for the other exceptions listed in Section Effective on Governor s Signature 6/14/2013. Affidavits for Hearings: The bill addresses the ARB hearing process by adding that a property owner does not waive the right to appear in person by filing an affidavit. The ARB uses the affidavit only in the event that the property owner does not appear in person. For scheduling purposes, the property owner shall indicate on the affidavit if the owner does not intend to appear or if the affidavit should be used only in event of a no-show. If the property owner does not state such in the affidavit, the board shall consider the submission of the affidavit as an indication that the property owner does not intend to appear at the hearing. Effective ARB Hearing Scheduling: The bill sets out new provisions on scheduling ARB hearings. It requires that a protest hearing shall be set for a certain date and time. A hearing for an owner who is not represented by an agent that does not commence within two hours of the set time shall be postponed upon the owner s request. On the request of a property owner or agent, the ARB shall schedule hearings on protests concerning up to 20 properties on the same day. The designated properties must be identified in the same notice of protest, and the notice must contain in boldfaced type request for same-day protest hearings. A property owner or agent may not file more than one request with the ARB in the same tax year. The ARB may schedule hearings on protests concerning more than 20 properties filed by the same owner or agent and may use different panels to conduct the hearings, using its customary scheduling. Protests shall be assigned randomly to panels, except that the ARB may consider the type of property or the protest grounds to use the expertise of a particular panel. If scheduled to be heard by one panel, a protest may not be reassigned to another panel without the owner or agent s consent. The owner or agent may agree or request a postponement, which the ARB shall grant. A change of ARB panel members because of a conflict of interest, illness or inability to continue a hearing for the remainder of the day does not constitute reassignment of a protest to another panel. Effective ARB Evidence and Postponement: The bill adds that evidence and argument provided by the property owner, attorney or agent is not subject to Chapter 1103, Occupations Code, (real estate appraiser) unless the person is a licensed or certified real estate appraiser and states that he or she is testifying in that capacity. ARBs may not decide on panel membership or panel chair based on a member s voting record in previous cases. Effective The ARB shall respond in writing to a request for a hearing postponement within seven days of request receipt. The ARB chair or designee may decide on hearing scheduling and postponements. The chief appraiser or designee may agree to a hearing postponement. Effective This bill addresses the burden of establishing the value in ARB protests on over or unequal appraisal. The CAD has the burden of establishing the value by clear and convincing evidence if the ARB, a court or an arbitrator lowered the value last tax year, the value was not set by settlement agreement and the property owner or agent provides certain information 14 days before the protest hearing. The owner or agent files with the ARB and delivers to the chief appraiser income and expense statements or comparable sales to allow for a determination of the market value or information to determine that the property was unequally appraised. If the CAD fails to meet its standard of burden, then the protest is determined in the favor of the property owner. This provision does not impose a duty on a property owner to provide any information in a protest for over or unequal appraisal, but is merely a condition to apply the standard of evidence of proof. Effective (For this bill, see also Appraisal District Administration, Renditions, Appraisal, Appraisal District Litigation, Tax Collections and Delinquent Tax Litigation sections about this bill.) Status: Signed by Governor 6/14/ Legislative Update; Page 11

12 ARB ELIGIBILITY REVISED TO INCLUDE TAX AGENTS AFTER TWO YEARS HB 3438 Otto Amends This bill revises the ARB member eligibility in counties with more than 100,000 population to state that the person is ineligible to serve if the person appeared before the ARB for compensation (tax agent, lawyer, accountant, etc.) during the two-year period preceding the date the person is appointed. Current law states that the person cannot serve if ever paid as a tax agent. ARB MAY CONDUCT A CLOSED MEETING HB 2792 Elkins Amends This bill provides that the ARB shall conduct a closed hearing if the property owner or chief appraiser intends to disclose proprietary or confidential information at the hearing and if the chief appraiser and the property owner make a joint motion for a closed session. Confidential information is considered information obtained under Tax Code Section 22.27, meaning that information remains confidential in the records of the ARB and appraisal district. Appraisal District Litigation OWNERS OF PROPERTY VALUED AT MORE THAN $1 MILLION MAY APPEAL ARB DETERMINATIONS TO SOAH HB 316 Otto Amends Gov t Code , , , , and repeals Gov t Code and This bill provides in all counties that a property owner with a property valued more than $1 million has the alternative to file an appeal of an ARB determination to the State Office of Administrative Hearings (SOAH) rather than district court. The pilot project for such alternative appeals that begin in 2010 for certain metropolitan counties is eliminated. SOAH shall hear appeals in 14 cities, including Amarillo, Austin, Beaumont, Corpus Christi, El Paso, Fort Worth, Houston, Lubbock, Lufkin, McAllen, Midland, San Antonio, Tyler and Wichita Falls. The SOAH administrative law judge shall set the hearing in the city nearest the subject property. Appeals are limited to a determination of the appraised or market value of the real or personal property, other than industrial property. Appeals of mineral properties may use this appeal alternative. Each county ARB shall include a notice of the property owner s right to appeal to SOAH, along with the SOAH notice of appeal form, with its determination order. The bill also repeals the requirement for a legislative report. OMNIBUS BILL ELIMINATES ABBREVIATED ARBITRATION AND REVISES TAX PAYMENT DURING COURT APPEAL, COURT PETITION AND EVIDENCE AND ATTORNEY FEES HB 585 Villarreal Adds 5.103, , 21.09, 21.10; amends 5.041, 6.035, 6.05, 6.052, 6.41, 6.411, 22.01, 22.24, 23.02, 23.23, , 31.11, 33.48, 33.49, 41.43, 41.45, 41.66, 41A.03, 42.08, 42.21, 42.23, 42.29; repeals 41A.031; amends Occupations Code This bill repeals the expedited arbitration process, with the reduced fee of $250, in appealing an ARB determination to an arbitrator. Any arbitration has a $500 fee. Effective on Governor s Signature 6/14/2013. The bill adds a third item to determine the Section tax payment to continue the appeal process; the payment is the lesser of (1) the amount of taxes not in dispute, (2) the amount of taxes due under the ARB order being appealed or (3) the amount of taxes imposed on the property in the preceding year. The bill also provides that the failure of a property owner to provide a statement of the amount of taxes the property owner intends to pay when the property owner files suit is not jurisdictional. It also provides that the property owner who pays less than the full amount of taxes when appealing to a district court may pay the additional amount of taxes at any time. If the taxes are subject to a split pay option, a property owner 2013 Legislative Update; Page 12

13 suing the CAD may pay ½ the amount of the tender amount by December 1 and the other ½ on July 1 of the following year. Effective on Governor s Signature 6/14/2013. The bill provides that a district court petition may include multiple properties owned or leased by the same person and are of a similar type or are part of the same economic unit and would typically sell as a single property. The court on motion and showing of good cause can sever plaintiffs or properties where there are multiple plaintiffs, the properties are not of the same type, properties not part of the same economic unit or, if properties are part of the same economic unit, would not typically sell together. Effective on Governor s Signature 6/14/2013. A petition filed by an owner or property lessee may be amended to include additional properties in the same county owned or leased by the person or meeting the above conditions and are the subject of an ARB order issued in the same year as the order subject to the original appeal. The court has jurisdiction if the property was subject to an ARB hearing for the current year, the court petition timely filed and petition provides sufficient information to identify the property. An improper party or property shall be subject to special exception or correction through amendment. Effective on Governor s Signature 6/14/2013. The bill adds that evidence, argument and other testimony at the ARB hearing by a property owner or agent is not admissible, unless the evidence, argument or testimony is offered to demonstrate that there is sufficient evidence to deny a noevidence motion for summary judgment by a party to the appeal or is necessary to determine the merits of a motion for summary judgment on another ground; the owner or agent is designated as a witness for purposes of trial and the testimony at the ARB hearing is offered for impeachment purposes; or the evidence is the plaintiff s testimony at the ARB hearing as to the property s value. Effective on Governor s Signature 6/14/2013. The bill makes the recovery of attorney s fees available in the denial in whole or in part of an exemption for cemeteries, the disabled veteran s exemption in Sec , the miscellaneous exemptions found in Sec , the chamber of commerce/realtors exemption found in Sec or local-option historic sites in Sec Effective on Governor s Signature 6/14/2013. (See also the Appraisal District Administration, Renditions, Appraisal, ARB, Tax Collections and Delinquent Tax Litigation sections.) Status: Signed by Governor 6/14/13. PROPERTY OWNER MAY REQUEST BINDING ARBITRATION FOR AN ARB ORDER DETERMINING UNEQUAL APPRAISAL SB 1255 Patrick Amends 41A.01 and 41A.06 This bill adds that a property owner is entitled to binding arbitration of an ARB order determining a protest of an unequal appraisal of the owner s property. Current law provides for binding arbitration for a protest of an over-appraisal. The bill also adds that an arbitrator is required to complete a Comptroller-provided property tax law training program of at least four hours before conducting an arbitration hearing. The training program is to emphasize equal and uniform property appraisal. EXPEDITED BINDING ARBITRATION PROCESS REPEALED SB 1662 Eltife Amends 41A.03; repeals 41A.031 This bill repeals the expedited arbitration process, along with its reduced fee of $250, in appealing an ARB determination to an arbitrator. Any arbitration requires paying a $500 fee. STATEWIDE ELECTRONIC FILING FEE AND FILING COSTS SET HB 2302 Hunter Amends and 33.49; adds Gov t Code Chapter 51, Subchapter I-1 and amends Chapter 101 This bill sets a $20 electronic filing fee and an additional $10 fee for courts cases on any civil action or proceeding. Taxing units are not liable for 2013 Legislative Update; Page 13

14 such fees in delinquent tax litigation, but may recover such costs from defendants. Assessment & Tax Rates JUNIOR COLLEGE DISTRICT BRANCH CAMPUS USE OF ITS MAINTENANCE TAXES HB 2474 Phil King Adds Education Code and amends This bill provides that a junior college district branch campus maintenance tax may be used only to operate and maintain that campus and to make lease payments for facilities used exclusively by the branch campus. It also addresses the security of bonds issued to finance land purchase or building construction for the branch campus. COUNTY AND CITY HAVE DIFFERENT NOTICE AND HEARING PROCESS TO ADOPT PROPERTY TAX RATE SB 1510 Hinojosa Adds Local Gov t Code This bill provides that counties and municipalities follow a different notice process in adopting their property tax rates, beginning with the 2014 tax rate. A county or municipality is exempt from the requirements in Tax Code Section 26.04(e) for publication of the effective and rollback tax rates with schedules, Section for the simplified small unit notice (with the option to still use this notice) and Section for the Notices of Public Hearing and Notice of Tax Revenue Increase. The county or municipality is not subject to an injunction for failure to comply with the Tax Code notice-and-hearing process. The effective and rollback tax rates are calculated as provided under Chapter 26, Tax Code. The county or municipality publishes one notice in the newspaper (or mails to each property owner) and posts the notice on the Internet website by September 1 and throughout the tax rate adoption process. Required notices outlined in the Local Gov t Code are as follows: If the proposed tax rate does not exceed the lower of the effective or rollback rate, then the county or municipality uses this notice: "NOTICE OF (INSERT CURRENT TAX YEAR) TAX YEAR PROPOSED PROPERTY TAX RATE FOR (INSERT NAME OF COUNTY OR MUNICIPALITY) "A tax rate of $ per $100 valuation has been proposed by the governing body of (insert name of county or municipality). PROPOSED TAX RATE $ per $100 PRECEDING YEAR'S TAX RATE $ per $100 EFFECTIVE TAX RATE $ per $100 "The effective tax rate is the total tax rate needed to raise the same amount of property tax revenue for (insert name of county or municipality) from the same properties in both the (insert preceding tax year) tax year and the (insert current tax year) tax year. "YOUR TAXES OWED UNDER ANY OF THE ABOVE RATES CAN BE CALCULATED AS FOLLOWS: property tax amount = (rate) x (taxable value of your property) / 100 "For assistance or detailed information about tax calculations, please contact: (insert name of county or municipal tax assessorcollector) (insert name of county or municipality) tax assessor-collector (insert address) (insert telephone number) (insert address) (insert Internet website address, if applicable)" If the proposed tax rate exceeds the effective or rollback rate, whichever is lower, then the county or municipality uses this notice: "NOTICE OF (INSERT CURRENT TAX YEAR) TAX YEAR PROPOSED PROPERTY TAX RATE FOR (INSERT NAME OF COUNTY OR MUNICIPALITY) "A tax rate of $ per $100 valuation has been proposed for adoption by the governing body of (insert name of county or municipality). This rate exceeds the lower of the effective or rollback tax rate, and state law requires that two public hearings be held by the governing body before adopting the proposed tax rate. PROPOSED TAX RATE $ per $100 PRECEDING YEAR'S TAX RATE $ per $ Legislative Update; Page 14

15 EFFECTIVE TAX RATE $ per $100 ROLLBACK TAX RATE $ per $100 "The effective tax rate is the total tax rate needed to raise the same amount of property tax revenue for (insert name of county or municipality) from the same properties in both the (insert preceding tax year) tax year and the (insert current tax year) tax year. "The rollback tax rate is the highest tax rate that (insert name of county or municipality) may adopt before voters are entitled to petition for an election to limit the rate that may be approved to the rollback rate. "YOUR TAXES OWED UNDER ANY OF THE ABOVE RATES CAN BE CALCULATED AS FOLLOWS: property tax amount = (rate) x (taxable value of your property) / 100 "For assistance or detailed information about tax calculations, please contact: (insert name of county or municipal tax assessorcollector) (insert name of county or municipality) tax assessor-collector (insert address) (insert telephone number) (insert address) (insert Internet website address, if applicable) "You are urged to attend and express your views at the following public hearings on the proposed tax rate: First Hearing: (insert date and time) at (insert location of meeting). Second Hearing: (insert date and time) at (insert location of meeting)." The county or city holds two public hearings with this second notice. BALLOT LANGUAGE CHANGE FOR ELECTION TO TAX FOR MUNICIPAL OR COUNTY PROJECT SB 169 Hegar Amends Local Gov t Code This bill changes the ballot language for an election to impose a new tax or to use an existing tax to finance a municipal or county venue project. Status: Signed by Governor 5/25/13; Effective ADDITIONAL NOTICE AND BALLOT LANGUAGE REQUIRED FOR LOCAL BOND ELECTIONS SB 637 Paxton Adds Election Code and amends This bill requires additional information for bond propositions secured by ad valorem taxes, including the estimated tax rate or the maximum interest rate to be imposed for the bonds, the aggregate amount of outstanding bonds and other debt obligations of the entity and the ad valorem debt tax rate for the taxing unit at the time the election is ordered. The taxing unit must post bond election information on its website ADDITIONAL INFORMATION POSTED ON INTERNET AND WITH BUDGET BY COUNTY AND CITY WHEN ADOPTING BUDGET SB 656 Paxton Amends Local Gov t Code , , , , , , and This bill requires additional information for transparency about the adopted budget and tax rate by cities and counties. It requires that adoption of the budget must be a record vote. An adopted budget must contain a cover page stating the total dollar and percentage increase, decrease or same revenue; the amount raised by new property added to the tax roll; the record vote on the budget; the tax rates (adopted, effective, effective M&O, rollback and debt) in the preceding and current year; and the total bond and debt amounts. This information is also posted on the website until one year from the date the budget is adopted. Tax Collections OMNIBUS BILL AUTHORIZES SUIT TO COMPEL REFUNDS FOR OVERPAYMENTS OR ERRONEOUS PAYMENTS HB 585 Villarreal Adds 5.103, , 21.09, 21.10; amends 5.041, 6.035, 6.05, 6.052, 6.41, 6.411, 22.01, 22.24, 23.02, 2013 Legislative Update; Page 15

16 23.23, , 31.11, 33.48, 33.49, 41.43, 41.45, 41.66, 41A.03, 42.08, 42.21, 42.23, 42.29; repeals 41A.031; amends Occupations Code The bill provides that if the tax collector does not respond to a tax refund application on or before the 90th day after the application is filed with the collector, the application is presumed to have been denied. This provision is applicable to refunds pursuant to Sec , which applies only to refunds of overpayments or erroneous payments. At any time after the collector denies a tax refund application, the taxpayer may file suit in district court to compel the tax refund payment. If the taxpayer prevails in the suit, the taxpayer may be awarded court costs and reasonable attorney s fees. Attorney fees may not exceed the greater of $1,500 or 30 percent of the refund. If the tax collector collects for more than one entity, the property owner must join each taxing unit for which the collector denied the refund. Effective on Governor s signature 6/14/2013. (See also the Appraisal District Administration, Renditions, Appraisal, ARB, Appraisal District Litigation and Delinquent Tax Litigation sections.) Status: Signed by Governor 6/14/13. TAX REFUNDS APPLIED TO ANOTHER DELINQUENT TAX YEAR; DISABLED VETERAN CAN PAY HOME TAXES IN INSTALLMENTS HB 709 Isaac Amends 26.15, and This bill provides that a taxing unit may also apply a property owner s tax refund to another delinquent tax year for the property that receives a tax refund. Current law allows the taxing unit to apply an owner s tax refund to another delinquent property. The bill also provides that a person who receives the Section disabled veteran s exemption can pay homestead taxes in installments. This does not mean that the exemption needs to be claimed on the disabled veteran s homestead nor does it mean that quarterly payments may be made on any property that is not the veteran s homestead. Current law only provided for the unmarried surviving spouse (and not the disabled veteran) to pay in installments. DELIVERY BY COMMON OR CONTRACT CARRIERS CAN BE USED FOR SENDING TIMELY TAX ACTION SB 1224 Taylor Amends 1.08 This bill provides that timeliness of action by mail for a tax payment, tax report, application, statement or document to a taxing unit or official can also be delivered by common or contract carrier. The item must bear a receipt mark indicating the date earlier than or on the specified due date and within the specified period when sent by common or contract carrier. Or, the property owner furnishes proof it was timely deposited with the carrier. (See also Appraisal District Administration section.) immediately on 6/14/2013. PERSONAL PROPERTY TAX LIEN ATTACHES EVEN IF PROPERTY NOT LOCATED IN TAXING UNIT S BOUNDARIES VETO SB 1606 Zaffirini Amends This bill provides that a tax lien on taxable personal property attaches irrespective of whether the personal property is located within the taxing jurisdiction in whose favor the lien attaches. Status: VETOED by Governor 6/14/13. PROPERTY TAX LENDER RESTRICTED ON TAX LIEN TRANSFERS SB 247 Carona Repeals 32.06(c-1); amends and ; amends numerous sections of Finance Code Chapter 351 This bill provides that a property tax lender may not sell, transfer, assign or release rights related to a property tax loan to a person who is not licensed as a Texas property tax lender by the Texas Finance Commission. The Finance Commission will adopt rules dealing with lenders. Anyone who succeeded in holding a property tax lender s interest would abide by these rules. A lender who solicits property tax loans by print or electronic media must include on the first page of all materials a prescribed notice 2013 Legislative Update; Page 16

17 that a tax office may offer delinquent tax plans at a lesser cost. A property tax lender may not make a false, misleading, or deceptive statement about a property tax loan rate, term or condition. A property tax lender s rate or charge in an advertisement would have to state the rate or charge fully and clearly. An advertisement includes the annual percentage rate for a finance charge and if the rate was subject to change. An advertisement may only refer to the annual percentage rate except the ad may state a simple annual rate applied to the unpaid balance of a property tax loan in addition to the annual percentage rate. A property tax lender could only foreclose a lien in the manner provided for such a foreclosure by law. A lender with an existing recorded lien on a property may request a payoff statement before a tax loan became delinquent by giving a seven-day notice with delivery of a payoff statement. The Finance Commission has the authority to assess penalty and fines on tax lenders. The bill prohibits tax lien transfers for those over 65 eligible to claim a homestead property tax exemption. The bill voids any contract between a property tax lender and a property owner that claimed to authorize a payment of taxes that were not delinquent or due at the time of the agreement, or any contract without a properly executed agreement from the property owner. It also repeals language allowing a tax lien to be transferred for taxes that were not delinquent if a property owner consented to a tax lien transfer that was executed and recorded for one or more prior years on the property. A property owner could not transfer a tax to a property tax lender if the property was financed with a grant or below market rate loan provided by a governmental program or nonprofit organization or was subject to a city lien for incurred expenses to secure, vacate, remove or demolish a dangerous building. Status: Signed by Governor 5/29/13; Effective immediately on 5/29/13. OMNIBUS WATER DISTRICT BILL INCLUDES OPTION TO TAX RESIDENTIAL PROPERTY, AND OTHER TAX PROVISIONS SB 902 Fraser Amends Local Gov t Code ; Water Code , This bill allows municipal management districts to tax single family residences, duplexes, triplexes and four-plexes if the district voters approve the tax for the providing services, such as water and sewer (Local Gov t Code ). The bill also expressly authorizes the employment of tax collectors who are individuals or are private companies for all water districts (Water Code ). These provisions are part of a large omnibus water district bill. (See also Exemptions.) Status: Signed by Governor 5/18/13; Effective Delinquent Tax Litigation OMNIBUS BILL ADDS RECOVERY OF ELECTRONIC FILING FEES BY TAXING UNIT HB 585 Villarreal Adds 5.103, , 21.09, 21.10; amends 5.041, 6.035, 6.05, 6.052, 6.41, 6.411, 22.01, 22.24, 23.02, 23.23, , 31.11, 33.48, 33.49, 41.43, 41.45, 41.66, 41A.03, 42.08, 42.21, 42.23, 42.29; repeals 41A.031; amends Occupations Code The bill provides that a taxing unit is not liable for electronic filing fees in delinquent tax litigation. The taxing unit may recover the electronic filing fees along with other court costs in the delinquent tax suit. Effective on Governor s signature 6/14/2013. (See also the Appraisal District Administration, Renditions, Appraisal, ARB, Appraisal District Litigation and Tax Collections sections.) Status: Signed by Governor 6/14/13. COMMISSIONERS COURT MAY DESIGNATE AN AREA FOR PUBLIC SALES OF REAL PROPERTY OTHER THAN AT COURTHOUSE HB 699 John Davis Amends 34.01; amends Civil Practice & Remedies ; amends Property Code This bill adds that the commissioners court may designate an area other than at the county courthouse where public sales of real property may take place, including those for delinquent tax foreclosures. The area must be a public place within a reasonable proximity of the courthouse and in a location accessible to the public. The court 2013 Legislative Update; Page 17

18 shall record that designation in the real property records. The sale may not be held before the 90th day after the designated area is recorded. 10/1/2013. GOVERNING BODY CAN WAIVE PENALTY AND INTEREST ON CERTAIN DELINQUENT TAXES HB 1913 Bohac Amends and This bill provides that the governing body of a taxing unit may waive penalties and interest on a delinquent tax for any tax year preceding the year a property owner acquired the property if the owner or another person liable for the tax pays the tax no later than the 181 st day after the owner receives the delinquent tax notice. For this waiver, the delinquency is the result of taxes imposed on omitted property, erroneously exempted property or property added under a different account number owned by a previous owner. The new owner s request for waiver must be made within 180 days of receiving the delinquent tax notice. For these types of delinquencies, the delinquent tax notice includes a statement in 14-point boldfaced type or uppercase letters that reads as follows: "THE TAXES ON THIS PROPERTY ARE DELINQUENT. THE PROPERTY IS SUBJECT TO A LIEN FOR THE DELINQUENT TAXES. IF THE DELINQUENT TAXES ARE NOT PAID, THE LIEN MAY BE FORECLOSED ON. A taxing unit s governing body may waive penalty and interest if the taxpayer submits evidence to show the taxpayer delivered payment before the delinquency date to either (1) the U. S. Post office that postmarked it after that date or (2) a private delivery service that delivered it to the taxing unit after the due date. DELINQUENT TAX LIENS RELEASED ON MANUFACTURED HOMES HB 3613 Elkins Amends ; amends Occupations Code This bill provides that the tax lien on a manufactured home is extinguished and canceled and removed from the home s title record when the tax certificate shows no taxes due or when no suit to collect a personal property tax lien has been filed and the lien has been delinquent more than four years. The tax lien may be released by the tax collector filing a tax lien release or by the Texas Department of Housing and Community Affairs (TDHCA). TDHCA may request electronically that a tax collector confirm that no tax suit has been timely filed. TDHCA removes the lien after the 60 th day following two requests sent not fewer than 15 days apart with no response from the tax collector. DISABLED VETERAN MAY PAY IN INSTALLMENTS; DELINQUENT HOMESTEAD TAXES MUST BE SET UP FOR INSTALLMENT AGREEMENTS IF REQUESTED, ALONG WITH NEW REQUIRED NOTICES HB 1597 Gonzalez Amends , and 33.04; adds Property Code This bill provides that a disabled veteran may pay taxes in installments. This bill also adds a second deadline to pay taxes in installments. A disabled homeowner, an over-65 homeowner or a disabled veteran or their surviving spouses may still pay in four equal installments after the February 1 delinquency date if the first installment is paid before March 1, accompanied with a notice that the person will pay the remaining amount in three equal installments. The remaining three payments are due before April 1, June 1 and August 1. If the person fails to make a payment, including the first payment, before the required deadlines, the unpaid amount does incur delinquent penalty and interest. The bill provides that, at the request of the delinquent owner of a residence homestead, the tax collector shall enter into an installment agreement if the owner has not had an installment agreement with the collector in the preceding 24 months. The installment agreement is in writing, made of equal monthly payments and be for a period of at least 12 months but not more than 36 months. A penalty does not accrue on the unpaid balance during the agreement for that residence homestead, unless the homeowner fails to make a payment. The tax collector s annual notice of delinquency must 2013 Legislative Update; Page 18

19 contain this statement in capital letters: "IF THE PROPERTY DESCRIBED IN THIS DOCUMENT IS YOUR RESIDENCE HOMESTEAD, YOU SHOULD CONTACT THE (NAME OF TAXING UNIT) REGARDING A RIGHT YOU MAY HAVE TO ENTER INTO AN INSTALLMENT AGREEMENT DIRECTLY WITH THE (NAME OF TAXING UNIT) FOR THE PAYMENT OF THESE TAXES." The tax collector must deliver a notice of delinquency to a person who is in breach of an installment agreement and to any other owner with an interest in the home whose name appears on the delinquent tax roll before the collector may seize and sell the property or file a suit to collect a delinquent tax subject to the agreement. The bill also provides that the debtor is not in default under a deed of trust or other contract lien on the debtor s residence if the debtor is in substantial compliance with the installment agreement and the debtor has given notice to the mortgage servicer. A mortgage servicer who receives a notice and gives the debtor notice that the mortgage servicer intends to accelerate the note securing the deed of trust or other contract lien as a result of the delinquency must rescind the notice if the debtor enters into the agreement not later than the 30th day after the date the debtor delivers the notice. County Tax Assessor-Collectors COUNTY AUTHORIZES SELF INSURANCE RATHER THAN PERFORMANCE BOND SB 265 Huffman Adds Local Gov t Code ; amends Gov t Code and This bill provides that the commissioners court may authorize the county to self-insure against losses rather than execute a performance bond for county officers and employees, notwithstanding any other law requiring a county officer or employee to execute a bond as a condition of office or employment. Status: Signed by Governor 5/18/13; Effective immediately 5/18/2013. COUNTY TAC EXEMPT FROM TDLR REGISTRATION & CERTIFICATION, WITH CONTINUING EDUCATION REQUIRED BY TAX CODE SB 546 Williams Adds 6.231; adds Occupations Code ; amends Occupations Code and This bill provides that TDLR s registration and certification for property tax professionals does not apply to a county tax assessor-collector (TAC) or an employee of the county TAC. A county TAC who holds office on January 1, 2014 is required to complete 20 continuing education hours set out in the Tax Code no later than January 1, The TAC must complete 20 hours before each anniversary of the date on which the county TAC takes office. At least 10 of the 20 hours must be on laws relating to tax assessment and collection for a county TAC who assesses and collects property taxes. The county TAC must also complete courses on ethics and constitutional and statutory duties within 90 days of first taking office. Continuing education courses must be those approved by a state agency or an institution of higher education (or associated with one, such as V. G. Young Institute of County Government). The county TAC files a certificate of completion with the commissioners court. The county TAC may carry forward 10 hours from one year into the next year. Removal from office can include the failure to complete continuing education requirements. Any pending TDLR complaint on a county TAC or TAC s employee is dismissed. immediately 6/14/2013 with Section 1 of bill effective COUNTY OFFICE ADMINISTERS RENEWAL OR DUPLICATE DRIVER S LICENSES SB 1729 Nichols Adds Transportation Code and This bill sets up a pilot program that the DMV has the authority to enter into an agreement with a county to train county employees to handle issuing driver s licenses, election ID certificates and personal ID certificates, including issuing renewals or duplicates; taking photographs; administering vision tests; updating name, address or photo 2013 Legislative Update; Page 19

20 information; collecting donation information; collecting fees; and performing other basic administrative functions. The county would not administer an examination for driver s license applicants. The pilot project will be with no more than three counties with a population of 50,000 or less, three counties with a population of between 50,000 and 1 million and two counties with more than 1 million in population, along with any county that currently has a scheduled or mobile county DPS office. It provides that the county may collect an additional $5 fee for each driver s license and personal ID renewals. COUNTY APPLIES COUNTY PAYMENT TO OFFICER TO DEBT OWED BY THAT OFFICER SB 382 Carona Amends Local Gov t Code and This bill authorizes a county warrant for compensation payment to a district, county or precinct officer to be applied to a debt owed the county by that officer, including for delinquent property taxes whether reduced to judgment or not. School Finance CERTAIN TANGIBLE PERSONAL PROPERTY GRANTED SALES TAX EXEMPTION EXCLUDED FROM SCHOOL S ECONOMIC DEVELOPMENT AGREEMENT HB 1133 Otto Amends ; adds This bill addresses tangible personal property used in cable television, internet access or telecommunications services receiving a sales and use tax exemption, which would exclude that property from receiving a Chapter 313 economic development agreement granted by a school district. CERTAIN DATA CENTERS QUALIFIED FOR SALES TAX INCENTIVES NOT ELIGIBLE FOR CHAPTER 313 AGREEMENT HB 1223 Hilderbran Adds ; adds ; amends , , and This bill addresses sales tax incentives for certain data centers. A data center that is issued a registration number for the sales tax incentives is not eligible as a project for a Chapter 313 economic development agreement granted by a school district. TEXAS ECONOMIC DEVELOPMENT ACT EXTENDED AND REVISED HB 3390 Hilderbran Amends numerous sections of Chapter 313; repeals , , (5) and Subchapter D This bill revises the Texas Economic Development Act that involves school district taxes. It extends the Act from 2014 to December 31, The provision for school tax credits is repealed. The state auditor is required to review three major agreements each year and to recommend any changes to increase efficiency and effectiveness. It requires that school districts should approve only those applications that enhance the local community, improve the local public education system, create high-paying jobs and advance the state s economic development goals. The Texas Comptroller should strictly interpret the criteria and selection guidelines and issue certificates for limitation on appraised value only for those applications that create high-paying jobs; provide a long-term, net benefit to Texas; and advance the state economic goals. A qualified investment includes the expansion of an existing building, along with tangible personal property placed in service in the building. It adds that a property may be used for a Texas priority project that is an investment of more than $1 billion. Qualifying jobs and wages are redefined. The Governor s Office of Texas Economic Development and Tourism, with rule-making authority, could determine that two or more projects in different school districts, covered by more than 2013 Legislative Update; Page 20