PTD Establishes Procedures on House Bill 3211 Mandate
During the last legislative session, the Texas Legislature passed House Bill (H. B.) 3211 requiring the Comptroller to ensure "that different levels of appraisal on sold and unsold property do not adversely affect the accuracy of the study."Special committee
Any ratio study that relies on property sales faces the question of whether ratios of appraised value to market value on sold properties accurately reflect the ratios on unsold properties. The Property Tax Division (PTD) faces this issue when it performs the Comptroller's Property Value Study (PVS) to determine the total taxable wealth of each independent school district (ISD) for state funding purposes. The PTD also reviews the work of county appraisal districts (CADs) to determine the level and uniformity of their appraisal work.
In the February STATEMENT, PTD reviewed the general issues with selective appraisal of property. PTD met with appraisal districts, taxpayers and other affected parties in an effort to implement this legislative mandate.
While the February article discussed what selective appraisal is, the PTD is concerned with the PVS methodology for having representative samples. Whether a county appraisal district chooses to appraise selectively or do any other type of treatment of a particular class of
property is not the issue of H. B. 3211.
Comptroller Carole Keeton Rylander formed a H. B. 3211 Implementation Committee to assist with the issue of selective appraisal. The chart on lists the committee members and the association represented.Committee endorsementThe implementation committee met Feb. 17 for an initial meeting and then again March 7 with two facilitators. Based on the meeting's discussion, the committee issued a final consensus report in May.
The H. B. 3211 Implementation Committee reviewed and discussed the original Comptroller proposal on selective appraisal. The following is a synopsis of the proposal endorsed by the Committee:Other items reviewed
- PTD would conduct a "threshold" test to determine if there was a statistical probability that selective appraisal was occurring in an appraisal district. The Comptroller will vary the range of ratios used in the test to ensure that districts are treated equitably regardless of the percentage of market value used locally for sold property.
- If the test revealed that the use of "late" sales or appraisals was required to produce a representative sample, the district would be informed and given an opportunity to submit data for an alternate test that compared average value changes in an appraisal district. "Late" sales would be sales that occur late enough in the property value study year that their inclusion in samples would create a more representative sample. (Normally, these sales would be ones occurring after June following the appraisal date.)
- If the district did not submit the data necessary to run the alternate test or the alternate test confirmed the threshold test's findings, PTD would use "late" sales or appraisals in its sample for each school district participating in that appraisal district.
- For the tax year 2000 Property Value Study, 25 percent of the sample for school districts participating in appraisal districts that may be selectively appraising property would consist of "late" sales or appraisals. For the 2001 study, the percentage of "late" sales would increase to 50 percent. For the 2002 study, the "late" sales would increase to 75 percent. For the 2003 study, "late" sales would represent 100 percent of the sales used. For any study for years following the 2003 study, 100 percent of the sample would be replaced with "late" sales or appraisals if the appraisal district is selectively appraising property.
The Committee reviewed a proposal on how the alternative International Association of Assessing Officers (IAAO) test works. IAAO's test compares the percentage change in appraised values of sold properties to the percentage change for unsold properties. The PTD ran this test in the 1999 PVS if a CAD provided the data. The Committee discussed whether the test should be run by neighborhood and discussed data requirements. The Committee decided to recommend that dialogue between PTD staff and appraisal districts continue. The Committee members expressed that considerable time, possibly as much as a year or longer, may be required to work out the details for this type of alternate test.Final proceduresTo assist appraisal districts in researching any "late" sales used by the Comptroller, PTD staff would endeavor to provide districts with information on such sales as promptly as possible, consistent with legal and resource constraints.
The Committee addressed whether the Comptroller should implement two changes discussed at the initial committee meeting: (1) exclusion of cases of reappraisal to catch properties while the "cap" is not in force and (2) use of "late" sales for all appraisal districts.
The Committee also heard how PTD staff would improve and refine its use of "late" sales as it acquires experience with this PVS change. To do so, the PTD staff would continue to be available to consult with the districts on appraisal issues and to explain to any appraisal or school district why local values were not used.
The Comptroller would send letters to school district superintendents (with copies to business managers, chief appraisers and associations) to define and explain the H. B. 3211 selective reappraisal issue.
Based on the Committee's findings, the Comptroller adopted the procedures endorsed by the committee for implementing H. B. 3211.H. B. 3211 Implementation Committee:For more information about the new procedures, contact Tim Wooten, Property Tax Division Executive Assistant, by e-mail at tim.wooten@cpa.state.tx.us or call 1-800-252-9121, ext. 5-9838. In Austin, call 512/305-9838.
Committee Member Position Association City Sue Glover Federal-State Analyst Texas Association of Counties Austin Monte Akers Attorney Texas Municipal League Austin Dick Lavine Attorney Center for Public Policy Priorities Austin Craig Foster Director The Equity Center Austin David Dunn Director Texas Association of School Boards Austin Mike Jolly Business Manager, Round Rock ISD Texas Association of School Boards Austin George Scott Christian Texas Association of Taxpayers and Research Association Austin Dick Gueringer Director, Property Tax, Southwestern Bell Texas Association of Taxpayers and Research Association San Antonio Breck Bostwick Deloitte & Touche, LLP Texas Association of Property Tax Professionals Austin Drew Scheberle Director, Community Outreach Center for Business and Education Coalition Austin Troy Sloan Chief Appraiser, Stephens CAD Rural Chief Appraisers Association Breckenridge Jim Robinson Chief Appraiser, Harris CAD Metropolitan Council of Appraisal Districts Houston Louis Stoerner Associate Superintendent for Business Services, Alief ISD Texas Association of School Boards Alief