APPRAISAL REFORM BILL FILED IN THE TEXAS SENATE
Sen. Patrick continues to work to provide relief to Texas homeowners
AUSTIN – This morning, Senator Dan Patrick (R- Houston), filed legislation seeking to provide new protections to Texas homeowners. Senator Patrick has long been an advocate of lowering property taxes as well as advocating for additional appraisal protections. This legislation, SB 700, would put into place numerous new property taxpayer protections.
"During these hard economic times, taxpayers are screaming out for relief more than ever. You can lose your job in a layoff, lose your house in a hurricane, but you can’t ever shake the property taxman," Senator Patrick remarked. The legislature cut the tax rate in 2006, but appraisal increases erased any real relief. This year everyone knows values are down, but few have faith their appraisal will reflect our down real estate market," said Patrick. "If appraisals do not go down across Texas this spring, homeowners will be outraged," added Patrick.
The legislation as drafted would provide protections and arm taxpayers with valuable knowledge they can use to demand action from their local taxing entities. The bill:
- Allows homestead exemptions to be applied as far as five years in cases where a homestead exemption was available but the homeowner did not apply;
- Prohibits the use of "highest and best use" analysis in the appraisal process;
- Requires appraisal notices to clearly outline the increase in appraisal for the last five years as well as the percentage of increase;
- Lowers the roll back rate from 8% to 5% and requires increases above this limit to be approved by the voters. Citizens no longer will be required to petition for a property tax rollback election;
- Requires counties with at least 500,000 people to provide electronic protest and settlement processes, and
- Allows appraisal protests to be heard in JP Courts if the amount of taxes in dispute does not exceed $5,000.
The 'highest and best use' provision has taken on greater significance over the past few years as urban areas have transitioned from traditional low to moderate income communities to more high end condominiums or “McMansions”.
'Highest and best use' requires the tax roles to recognize a property’s value based on how it could be used instead of how it currently functions. “I am saddened to see low to middle income families being taxed out of their homes, homes they have lived in for generations. These families are faced with the real possibility of having to relocate simply because a much more expensive home was built next door and now they can’t afford the taxes,” Senator Patrick reflected.
This significant change in the appraisal process is matched with dramatic changes in the appraisal dispute process. Senator Patrick's legislation will require large counties to adopt electronic appraisal protests and settlement systems. This convenient service is already available and is widely popular in Harris County. Senate Bill 700 also allows appraisal protests to be heard in Justice of the Peace Courts. "It is time we in the Texas Legislature fix these inequities in the appraisal process. This is not just a Harris County issue; it’s a statewide issue," Senator Patrick concluded.