TTARA Insights – Property Tax Reform Bills Introduced

Property Tax Reform Bills Introduced

 

This morning, Governor Abbott, Lt. Governor Patrick, House Speaker Bonnen, and Committee Chairmen Senator Paul Bettencourt and Representative Dustin Burrows held a press conference to announce the filings of identical property tax reform bills—HB 2 by Burrows and SB 2 by Bettencourt.

The bills include many, but not all, of the elements, Governor Abbott proposed a year ago, as well as a number of elements of the House and Senate bills which failed in 2017.

TTARA will have a more detailed analysis available soon. Based on the very preliminary review, the main elements of HB 2 and SB 2 provide:

·     A 2.5% rollback limit for cities, counties, and special districts that levy more than $15 million in total property taxes (all others remain under the current 8% limit),

·     School districts may adopt a tax rate that increases their total maintenance and operations revenue per student (state aid and property tax combined) by 2.5% without an election, regardless of their current tax rate (this essentially allows districts to adopt a tax rate above $1.04 without an election and is less restrictive than current law),

·     A city, county, special district or school district tax rate above the rollback rate must be approved by a majority of voters in a mandatory election to be held on the November general election date (currently, election dates are not specified; the Governor had previously proposed a two-thirds supermajority vote be required for approval),

·     Revenue from voter-approved tax increases is not limited and may be used as a jurisdiction chooses (the Governor’s earlier proposal limited the revenue increase to no more than the combined rate of population and inflation and had to be used for first responders and infrastructure),

·     The current property tax estimate on the Notice of Appraisal is eliminated and replaced with the “real time” tax notice advocated by TTARA—which includes the “no new revenue” tax rate, the proposed tax rate, and the rollback tax rate and the impact on the property owner’s bill,

·     Calculations of a taxing unit’s “no new revenue tax rate” (a term which replaces “effective rate”), and rollback rate must be on uniform worksheets promulgated by the Comptroller, with figures certified as accurate by a locally-designated official, and made publicly available,

·     Certain appraisal deadlines are moved earlier, along with the submission of the tax roll, to facilitate mandatory November tax ratification elections,

·     Taxing units may not adopt a tax rate until they comply with the bill’s new notice and certification requirements,

·     Taxing units are required to maintain a webpage with basic contact and financial information, and

·     The bill includes a number of Appraisal Review Board reforms, including the creation of special panels for appeals of more complex, high-value properties (at the taxpayer’s option).