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The Senate Committee on Property Tax met on March 19 to take up a number of bills related to ad valorem taxation on property damaged by disaster, agriculture land exemptions, and uniform election dates.

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.

 

SB 812 (Lucio) Relating to the application of the limit on appraised value of a residence homestead for ad valorem tax purposes to an improvement that is a replacement structure for a structure that was rendered uninhabitable or unusable by a casualty or by wind or water damage.

  • Lucio – Bill expands coverage to include Harvey victims; modernizes the statute by providing general language not tied to a specific budget resolution.
  • Committee Substitute:
    • Provides immediate effect cause and includes language that it can become applicable this 2019 tax year.
    • Allows protection to federally funding disaster programs to political subdivisions.
  • Bettencourt – SB 492 is similar to SB 812; we will lay that bill out and then take public testimony.

 

SB 492 (Alvarado) Relating to the application of the limit on appraised value of a residence homestead for ad valorem tax purposes to an improvement that is a replacement structure for a structure that was rendered uninhabitable or unusable by a casualty or by wind or water damage.

  • Alvarado – Needs to make a change so that individuals who have received funding can take that into the account as a home repair, not home improvement.
  • Committee substitute:
    • Removes language of community block grants.

 

Marya Crigler, Texas Association of Appraisal Districts

  • For the bills.

 

Madison Sloan, Disaster Recovery and Fair Housing Project

  • For SB 812.
  • Bill is critical for survivors who are struggling to recover from hurricane Harvey.
  • Bettencourt – What got our attention was that there were a very short list of disasters that were covered. Do you have any stories that you can cover?
    • We do not do a lot of direct representation, but if you would like stories, we can talk to our community partners.

 

Dan Coleman, City of Houston Grants Analyst

  • Supports SB 492.

 

Charlie Duncan, Texas Housers

  • For SB 812
  • Great to see that those impacted by hurricane Harvey and future disasters will not suffer huge property tax hikes.
  • Bettencourt – I can remember being out of my home during hurricane Ike. If that storm had been 20 miles to the west, then the damage would have been $86 billion dollars. This is a great idea, Sen. Lucio, and I’m glad we are trying to get this passed again. Thanks, Sen. Alvarado, for coming onto the train.
  • Lucio – Thanks Sen. Alvarado. Is Houston a sub-recipient of the GLO?
    • Heather Lagrone, GLO – City of Houston is a recipient.

 

SB 812 and SB 492 left pending.

 

SB 555 (Schwertner) Relating to liability for the additional tax imposed on land appraised for ad valorem tax purposes as agricultural land if the use of the land changes as a result of a condemnation.

  • Schwertner – This is a refile of SB 1979 that passed the committee last session. Ensures that if a private property owner’s land is taken by eminent domain, and an agriculture exemption is lost, the condemning agency is responsible for rollback taxes.

 

James Mann, Texas Pipeline Association

  • On the bill.
  • Concerned that there may be some appraisal districts might start redefining pipeline districts, believes there is a simple fix. Will be in contact with Sen. Schwertner.

 

SB 555 left pending.

 

SB 1048 (Fallon) Relating to an independent school district holding elections on the November uniform election date.

  • Fallon – In Texas, we have uniform election dates in May and November. Most people vote in November, yet elections for school districts are in May. Voter turnout for issues such as bonds and property tax use is low.
  • Bettencourt – Really happy that this bill is filed. This is a passion of mine, everything you have seen in SB 2 talks about an election in November.
  • Fallon – I just want to mention that there is no fiscal impact on the state.
  • Bettencourt – There is also minimal impact to the jurisdictions.

 

Shelby Sterling, Texas Public Policy Foundation

  • For the bill.
  • Government should ensure that citizens have the maximum potential to get their voices heard.
  • A uniform election in November will maximize voter turnout.
  • Hancock – Have you ever voted in a school board election?
    • I believe so, it might have been a long time ago.
  • Bettencourt – Directs the witness to analyze the pattern in the Houston Pension Bill.

 

Michael Openshaw, Self

  • For the bill.
  • November elections will be very effective at getting more votes.
  • There might be unintended consequences, such as long lines, but they are minor.

 

SB 1048 left pending.

 

SB 474 (Hancock) Relating to the eligibility of land secured by a home equity loan to be designated for agricultural use for ad valorem tax purposes.

  • Hancock – SB 474 is a clean-up of last session’s SJR 60 to comply with the constitution.

 

SB 474 left pending.

 

SB 443 (Hancock) Relating to the period for which a property owner may receive a residence homestead exemption from ad valorem taxation for property that is rendered uninhabitable or unusable as a result of a disaster.

  • Hancock – Currently, the Texas tax code only allows homeowners to continue to claim homestead exemption for residential structure rendered uninhabitable or unusable by casualty for two years post disaster. Homeowners must also begin construction or physical preparation on sight by the first anniversary of the disaster. SB 443 would extend the two-year limit on claiming homestead exemptions to five years for property located within a disaster area declared by the governor.
  • Bettencourt – So you think the solution is to move from two years to five years?
    • Yes, homeowners still have to begin construction within the first year and it also has to be declared a disaster by the governor.

 

Marya Crigler, Texas Association of Appraisal Districts

  • For the bill.
  • Suggest that the requirement for construction be moved from the first anniversary to the fifth because there is a lack of availability and affordability of contractors after a disaster.

 

Kevin Kieschnick, Nueces County Tax Assessor-Collector

  • For the bill.
  • Getting these projects started within a year is almost impossible. Believes the time requirement for on-sight construction should be pushed back.

 

SB 433 left pending.

 

SB 453 (Creighton) Relating to the reappraisal for ad valorem tax purposes of property damaged in a disaster.

  • Creighton – In current law, the governing body of a taxing entity may authorize a reappraisal of property damaged in a disaster if that area was declared a disaster by the governor. Following Harvey, there was a lack of consistency of reappraisals depending on the taxing entity. SB 433 requires the chief appraiser that appraises property located partly or entirely inside an area declared by the governor to be a disaster to reappraise all property damage in that area. The reappraisal shall be complete no late than the 45th day after the governor has declared a disaster. The property owner can refuse to have their property reappraised. Bill calls on the Comptroller to adopt rules to administer this policy.
  • Hancock – This was one of those things that appalled us during the interim. Thank you for taking these findings and putting it into legislation.
  • Bettencourt – Anecdote on disaster reappraisal problems in his district.

 

Cheryl Johnson, Galveston County Tax Assessor-Collector

  • For the bill.
  • Listed previous natural disasters in Texas.
  • There has been very little guidance for appraisal districts on how to conduct reappraisals.
  • Suggest changing may to shall to ensure that the Comptroller puts something into place.

 

SB 453 left pending.

 

SB 540 (Kolkhorst) Relating to the period for which a property owner may receive a residence homestead exemption from ad valorem taxation for property that is rendered uninhabitable or unusable as a result of a disaster.

  • Bettencourt – SB 443 is near identical to SB 540.
  • Kolkhorst –Bill is designed to allow a homeowner to retain their homestead while they wait to rebuild in order to allow people to remain in their hometown. Two years is not long enough. SB 540 would only apply to a home destroyed by a disaster and located in an area declared to be a disaster by the governor.

 

SB 540 left pending.

 

Chair Lays out SB 1772, SJR 57, and SB 1332, and SJR 49 and calls on Sen. Bettencourt to explain the proposed committee substitutes to SB 1322 and SJR 49.

 

SB 1772 (Bettencourt) Relating to a temporary exemption from ad valorem taxation of a portion of the appraised value of certain property damaged by a disaster.

 

SJR 57 (Bettencourt) Proposing a constitutional amendment authorizing the legislature to provide for a temporary exemption from ad valorem taxation of a portion of the appraised value of certain property damaged by a disaster.

 

SB 1322 (Taylor) Relating to a temporary local option exemption from ad valorem taxation of a portion of the appraised value of certain property damaged by a disaster.

 

SJR 49 (Taylor) Proposing a constitutional amendment authorizing the legislature to provide for a temporary local option exemption from ad valorem taxation of a portion of the appraised value of certain property damaged by a disaster.

  • Bettencourt – SB 1772, as well as the now identical version of SB 1332 (CS), seeks to help relieve some of the burdens taken on after disaster. Both bills, along with their SJRs, are corresponding constitutional amendments that allow for an exemption of property appraisal value on property damaged by at least 15% in a governor declared disaster area. It also requires the chief appraiser to determine whether the properties are at least 15% damaged and assign to each such property a damage estimate rating (Lvl 1: 15% damage; Lvl 2: 30%; Lvl 3: 60%; Lvl 4 100%).
  • Bettencourt – SB 1772 allows people qualifying for this exemption to apply for it up to the 105th day after the date the governor declares the disaster. Also requires the chief appraiser, if they approve, deny, or modify the application, to deliver a written notice of the status of that application.

 

Marya Crigler, Texas Association of Appraisal Districts

  • For the bills.
  • Believes that the bill will be easier for property owners.
  • Exemption is a lot easier and less expensive to administer than a reappraisal.

 

Roland Altinger, Chief Appraiser for the Harris County Appraisal District

  • On the bills.
  • Local exemption would minimize the cost to local tax units and tax payers.
  • Presented historical data on reappraisal costs procured from Harvey.
  • Bottom line, exemption is cheaper at about 6-8$ per parcel versus 38$ per parcel for reappraisal.
  • Chair – How many homes do you think were affected in Harris County?
    • Roughly 70,000.
  • Chair – You and a county OEM might have different figures, correct?
  • Chair – This methodology would help get the actual figures because the homeowners have to apply.

 

Glen Whitehead, Chief Appraiser for Fort Bend Central Appraisal District

  • For the bill.
  • Process would set deadlines that are strongly needed.

 

SB 1772, SJR 57, SB 1322, and SJR 49 left pending.

 

Committee stands in recess subject to call of the chair.