Senate Committee Considers Bill by Sen. Wendy Davis to Require Corporations to Pay Their Fair Share to Texas Education
AUSTIN — Huge corporations that are using their power to manipulate their property values to cheat Texas school children would be stopped by legislation offered by Sen. Wendy Davis today. A Senate Finance Committee panel this morning considered Senate Bill 1342, to ensure that Texas schools are not continually shortchanged by corporations that use a loophole in the law to avoid paying their fair share in school taxes.
Sen. Davis issued the following statement concerning Senate Bill 1342:
"Some corporations are using a loophole in state law to change the value used to appraise corporate property and escape from paying their fair share in school taxes," said Sen. Davis. "Texas students should not be subsidizing corporate profits while our schools are forced to cope.
"Each year, corporations avoid paying millions of dollars for public education by dragging school districts to court. Senate Bill 1342 will put a stop to that by requiring appraisals of corporate property to be relative to true market value.
"We expect our working families to pay their property taxes and their fair share to educate the children of Texas. It's important that we hold our corporations to the same level of responsibility."
Senate Bill 1342 Fact Sheet
Senate Bill 1342 would require that owners of commercial property valued at more than $1 million present evidence that the property is appraised at a percentage of its true market value based on a sample of comparable properties.
Senate Bill 1342 also brings the state's tax law into conformity with the Texas Constitution. Section 8 of the Texas Constitution states that "taxation shall be equal and uniform," and that "[a]ll real property and tangible personal property in this State, unless exempt as required or permitted by this Constitution, whether owned by natural persons or corporations, other than municipal, shall be taxed in proportion to its value."
Current law creates problems because it doesn't allow for property to be measured with reference to market value. This creates problems for appraisal districts and local taxing units by producing unpredictable appeals results, shifting of tax burdens to small business owners and homeowners, and allowing tax attorneys to game the system by filing law suits.
In February, a court ordered the Texas City school district to pay $2.45 million back to Valero after that company successfully challenged the tax appraisal on its Texas City oil refinery. Texas City schools were previously forced to pay $2.38 million in 2009. In 2011, the Port Arthur school district paid back $14.6 million in property taxes to Valero. Valero had two other suits pending, as of February.
The market itself has exposed the flaw in the tax appraisal law. Recently, the BP refinery in Galveston sold for $2.5 billion but was only taxed at a value of $1.5 billion.