Senate Property Tax – February 11, 2019

The committee met to take up SB 2 (Bettencourt), Texas Property Tax Reform and Relief Act, adopted 15 amendments, rolled them into the committee substitute and voted out CSSB 2 as amended with 4 ayes and 1 present not voting.

This report is intended to give you an overview and highlight of the discussions on the various topics the committee took up. It is not a verbatim transcript of the hearing but is based upon what was audible or understandable to the observer and the desire to get details out as quickly as possible with few errors or omissions.

 

Bettencourt Opening Remarks:

• Covers amount of testimony in last hearing
• There will be a few technical amendments offered
• Creighton will provide an Opt in amendment – ability for those to be covered in small rural areas
• Points to Sen. Flores mortgage bill going up because his property taxes are going up

 

SB 2 Laid out as substituted

• Amendment 1 – clarifies that chair of ARB may assign to a special panel, not used for residential unless taxpayer request
  • ADOPTED
• Amendment 2 – ARB determining value to land and improvements, would require EVERYONE to have order value broken into land and improvements
  • ADOPTED
• Amendment 3 – district court of arbitrator may not determine amount greater unless property owner agrees, owners feel like there is an unsubstantiated increase so this confirms it in judicial field (already in bill for regular hearings)
  • ADOPTED
• Amendment 4 – different manuals being used from one appraisal district to the next and differences can caused angst, attempt to standardized techniques
  • Creighton – wants to check on income limit on a method, will follow up during process
  • Bettencourt – one of most important in the bill to have standardization with manual
  • ADOPTED
• Amendment 5 – entity not required to be filed in order to appeal, Texas is non-disclosure state so this clarified this but judge can render that as part of discovery
  • ADOPTED
• Amendment 6 – timeline on property tax calendar, if get to certain point of July 25 and if appraisal cannot make that date, then allow for a certified statement of chief appraiser which is similar to what is done for schools; addresses freeport timeline, and a few other dates
  • ADOPTED
• Amendment 7 – tax database, requires chief appraiser to inform property tax owners about information that can be found on tax database; right now in Spring there is a complicated notice and there is a separation between value and rate discussion so this codifies that
  • ADOPTED
• Amendment 8 – extends deadline for filing an appeal from 45 days to 60 day, prohibits rejection for appeal unless taxpayer is notified and has opportunity to correct application is needed
  • ADOTPED
• Amendment 9 (Creighton) – opt-in amendment which requires a vote to be held in jurisdictions that are under the $15 million threshold
  • Hinojosa – will allow voters to opt-in, can others opt-out?
  • Creighton – that could be a discussion on the floor but today its about opt-in
  • Hancock – the bill is an opt-out, the bill allows repeatedly for this, it is designed as an opt-out
  • Hinojosa – not every time, the opt-in is just for once?
  • Hancock – no because it would be an opt-out at every election
  • Hancock – this is part of the reason why a uniform election date is needed so no additional cost incurred for the election
  • Bettencourt – bill designed to bring in voters in the rate process at 2.5%, but that may change here in a bit
  • Hinojosa – would vote be held county wide or by various taxing entities?
  • Bettencourt – would be done by county and by individual districts within it?, haven’t specified the method of it yet
  • ADOPTED
• Amendment 10 – concerns of contract language of pay being tied to SB 2, this amendment prohibits municipalities from reducing first responder pay as a result of SB 2 passing; this should be a priority discussion and not tied to the passage of SB 2
  • Hinojosa – biggest part of budget for municipality is first responder and most of those are contracts being negotiated, does the amendment mean compensation can never be reduced?
  • Bettencourt – reject entire premise and concept of trying to put a poison pill in contract, shocked to hear this would already be part of a municipality ordinance
  • Bettencourt – they can reduce it but cannot reduce it as a result of this bill passing, don’t want the bill to be the excuse, slowing rate of growth and not cutting in this bill
  • Bettencourt – Austin is the City he is using as an example having this language, reject concept that existing pay can be cut due to bill passing today, BUT the municipality can set their own priorities
  • Hinojosa – first responders are fire fighters, police officers, etc so don’t want to see it impact their ability to budget in the future
  • Hancock – reference is what they were entitled to, cannot change what they are entitle to, does not prohibit them from next negotiation to negotiate
  • ADOPTED
• Amendment 11 – someone that is appealing the suit has the ability to pay the uncontested portion of the bill, but some are under belief taxpayer would still be subject to fees, liens, foreclosures, etc so this would not have taxpayer subject to those fees,etc BUT if they do appeal and come in short they would have to pay in a few short months
  • ADOPTED
• Amendment 12 – one of needed reforms is double of training hours to 16 hours and tripling hours on special panels
  • ADOPTED
• Amendment 13 – online portal in Travis County, adopt as best practice for others
  • Hinojosa – what about notice by mail
  • Bettencourt –will already have that
  • ADOPTED
• Amendment 14 – technical correction on bill taking out an 8 and cleaning it up for 2.5
  • ADOPTED
• Amendment 15 (Hancock) – wordsmithing it so its easier for constituents – rollback tax rate to “voter approved tax rate”
  • Bettencourt – also a product of hearing discussions
  • ADOPTED
• Amendments 1-15 will be rolled into body of committee substitute
• Committee substitute adopted as amended – before roll call Hinojosa wanted to make a statement
• Hinojosa – paychecks not able to keep up with property tax increases, and really like 97.5% of the bill
  • Bettencourt – says he likes the joke that it is 2.5%
  • Hinojosa – state used to pay more for public schools, need to consider funding schools at a level that will lower property taxes and unfunded mandates concern him
  • Hinojosa – would like to have a more balanced approach, some may not like to pay fair share but need to pay to support the democracy, don’t like punishing a few for some of those who have overreached
  • Hinojosa – property taxes also impact community colleges so have some reservations and concerns
  • Hinojosa – will vote PNV
• Committee substitute adopted as amended –roll call
  • 4 ayes and 1 PNV the committee substitute is adopted
• Hancock – all of the new growth is not applying to any numbers in SB 2, that new growth is not included in 2.5 because they recognize fast growing state
• Hancock – this also allows state portion to public education to increase, it does not do it overnight but will allow state slowly over a period of time to regain its portion but only if rates can be compressed
• Hinojosa – have yet to identify a source of revenue for public schools, where is money coming from and may be putting the cart before the horse
• Hancock – thinks it’s the state intent to make up the difference, will put billions of additional revenue into public school funding
• Hinojosa – don’t disagree with concerns on property tax but most of funding concern is on public school funding side
• Hanock – are you ready to give us a number you can support?
• Hinojosa – yes, its not 2.5 and less than 8
• Creighton – points to subprime crash impacting state ratio in 2011, and this bill is simply recalibrating from 1981
• Paxton – appreciate comments from colleagues, and agrees this bill is not the total solution, bill is much about reform and relief will come in other pieces and school finance reform will be the other piece in that
• Bettencourt – bill does provide real property tax relief, we are going to tackle school finance reform and have to reduce reliance on robin hood and reduce rate of recapture
• Bettencourt – notes just reform on manuals is huge change and that is just one item
• Bettencourt – makes concluding remarks, recaps and thanks State leaders
• SB 2 reported out to Senate – 4 ayes and 1 PNV