HBA-RBT H.B. 3357 76(R)    BILL ANALYSIS


Office of House Bill AnalysisH.B. 3357
By: Staples
Ways & Means
4/14/1999
Introduced



BACKGROUND AND PURPOSE 

The purpose of this bill is to insure taxpayer equality and uniformity of
taxation by protecting against taxable values being raised in a trial above
that value determined by the appraisal review board at the administrative
level. 

Section 42.24 of the Property Tax Code provides that the district court in
a trial involving the market value of a property may fix the appraised
value of property in accordance with the requirements of law.  The supreme
court in Cherokee Water Company v. Gregg CAD  held that the court may
increase the value above that set originally at the administrative level. 

This bill corrects that ruling because the result of the supreme court's
decision is to permit an implied and unintended violation of the
constitution's requirements of equality and uniformity in taxation.
Moreover, the court's holding allows the appraisal district two
opportunities to determine the appraised value of a property, i.e., one
value at the administrative level and another higher value, if the taxpayer
appeals to district court.  The natural and unavoidable result of this
situation has been a chilling effect on taxpayers appealing determinations
of values by appraisal review boards and seeking relief from the judicial
system. 

Appraisal districts value property on a mass appraisal basis.  They
determine a valuation model which is applied to categories of similar
properties and then adjusted for individual characteristics. This process
gives emphasis to equality and uniformity by valuing similar properties on
a similar basis. 

Assuming that the first value set by the district and the appraisal review
board conforms with the requirements of equality and uniformity, the second
value resulting from an increase by the court must by definition violate
the same equality and uniformity requirements. 

This bill will allow, in the trial of a value dispute, each side to present
independent appraisal testimony as to the market value of the property,
however, if the court or a jury determine that the market value is greater
than the appraised value, the court is required to fix the taxable value at
the appraised value. 

The primary benefit of this bill is that it allows a taxpayer to challenge
what he considers an erroneous determination of the value of the property
while at the same time maintaining the protection of equality and
uniformity in comparison to similarly situated property. 

H.B. 3357 amends Section 42.24 of the Property Tax Code to provide in a
trial of the value of a property for property tax purposes that the court
may not fix the appraised value of a property in excess of that already
determined by the ARB order from which the appeal is taken. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 



 SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 42.24, Tax Code, to prohibit the district court,
in determining an appeal, from fixing the appraised value greater than the
appraised value set out in the order from which the appeal is taken.  Makes
a conforming change. 

SECTION 2.  Makes application of this Act retroactive.

SECTION 3.  Emergency clause.
 Effective date: upon passage.