Texas Bills Filed For 2017

Bills Filed for the 2017 Regular Session of the 85th Texas Legislature March 30, 2017

By Robert Mott, Chris Jackson, Adam Walker & Debbie Wheeler Perdue Brandon Fielder Collins & Mott, LLP

Perdue Brandon tracks legislation filed during the 85th Texas Legislature, Regular Session. Pre-filing of bills began November 14, 2016. The last day of the session is May 29, 2017. Filing deadline was Friday, March 10.

Organized by subject matter, each bill includes a short summary, proposed effective date and current bill status.

All references to section numbers are to the Texas Property Tax Code, unless otherwise indicated. Some bills are listed several times because they address multiple subjects. Check Perdue Brandon’s website at www.pbfcm.com for updates. Updates from the last issue are highlighted in gray.

Table of Contents

Page Appraisal District (CAD) Administration 1 Appraisal …………………………………

9 Renditions …………………………….….. 13 Exemptions ………………………………. 13 Special Valuation ………………………... 25 Appraisal Review Board (ARB) ………… 30 Appraisal District Litigation ……………. 37 Assessment & Truth-in-Taxation ………. 42 Tax Collections …………………………… 53 Delinquent Tax Litigation ………………. 56 County Tax Assessor-Collectors …….….. 60 School Finance …………………………... 61 Special & Miscellaneous ……………….... 66 Open Meetings, Chapter 551 ……………. 72 Open Records, Chapter 552 ………….…. 73 Other Codes and Statutes …………….…. 76

Appraisal District Administration CAD BOARD MEMBERS MUST BE ELECTED OFFICIALS OF LOCAL GOVERNMENTS; ADVISORY BOARD CREATED AT COMPTROLLER’S OFFICE; APPRAISAL NOTICES SENT EARLIER The Property Tax Reform and Relief Act of 2017 SB 2 Bettencourt; similar HB 934 Zerwas Adds 5.01; amends 5.05, 5.102, 5.13, 6.03, 6.035, 6.15, 25.19; amends Government Code 403.302 CAD Board of Directors The substitute bill retains the current law on members of the appraisal district’s board of directors. The 2017 Legislative Update; Page 1

substitute removes the change in the original filed bill that a director be an elected county officer, member of the governing body or an elected official of a local government located in all or part of the CAD. An individual who has been engaged in appraising property for compensation for property tax matters or representing property owners for property tax matters may not serve on the CAD Board at any time during the preceding three years. Current law is preceding five years.

A CAD director may transmit to the chief appraiser without comment a complaint by a property owner or taxing unit about the appraisal of a specific property, provided that the transmission is in writing, and will not be considered an ex parte communication subject to penalty.

State Administration A minimum six-member Property Tax Administration Advisory Board will be created to improve the effectiveness and efficiency of the property tax system, best practices and complaint resolution. The Advisory Board will consist of representatives of property owners, appraisal districts, school districts and a person who has knowledge or experience with ratio studies. The Comptroller appoints the members. Any advice to the Comptroller provided by a member of the Board must be provided at a meeting called by the Comptroller.

Government Code Chapter 2110 does not apply to the Advisory Board.

Notices of Appraised Value Appraisal districts would send all notices of appraised value by April 15, rather than April 1 or May 1. The distinction between homestead notices and other notices is eliminated. In counties of 120,000 population or more, the notices for commercial, utility, industrial and multifamily properties must include a notice that the owner may request a hearing before a special panel for that category of property.

For more analysis of these bills, see also Appraisal, Rendition, Exemption, Appraisal Review Board, Appraisal District Litigation, Assessment and Truth in Taxation sections.

Proposed Effective: 1/1/2018; however, a board member who is not an elected official may complete his or her term on the board of directors. SB 2 has notices with required language relating to protests before a special panel will become effective 1/1/2019.

HB 934 has the effective date for the notices as 9/1/2018.

Status: SB 2 substitute passed Senate 3/21/17, with four floor amendments, and received in House 3/22/17. HB 934 referred to House Ways & Means 2/21/17.

CHIEF APPRAISER ELECTED BY COUNTY VOTERS HB 85 Keough Amends 1.15, 5.041, 5.042, 6.035, 6.05, 6.41, 6.411, 22.28, 42.21; adds 6.0502; repeals 5.042(c) and 6.0501; amends Election Code 52.092; amends Local Government Code 87.041; amends Occupations Code 1151.164 The bill provides that the chief appraiser be elected at the general election for state and county officers by county voters. The chief appraiser would serve a twoyear term beginning January 1 of odd-numbered years. The chief appraiser must be a resident of the county and have resided in the county for at least four years preceding taking office. The requirement for a person to hold certain designation(s), such as the Registered Professional Appraiser (RPA), is removed. The filing fee would be $1,250 for a county with a population of 200,000 or more and $750 for a county with a population less than 200,000. The candidate’s name appears as an independent. The newly-elected chief appraiser must complete the chief appraiser training course required by the Texas Department of Licensing and Regulation (TDLR).

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The chief appraiser may be removed for “incompetency” for failing to complete the required training within one year of election. Prior to the bill’s effective date, the CAD board appoints the chief appraiser to serve until the elected person takes office for the term that begins January 1, 2019. The CAD board of directors may contract with another CAD to perform the duties of the appraisal office but not with a taxing unit. After the bill’s effective date, the commissioners court fills a vacancy in this position.

Proposed Effective: 9/1/2017.

Status: Referred to House Ways & Means 2/13/17.

OPERATOR OF MINERAL LEASE MAY NOT BE REQUIRED TO PROVIDE LISTING OF OWNERSHIP OF INTERESTS IN LEASE HB 119 Craddick; SB 676 Seliger Amends 25.12 The bills state that chief appraisers are to determine the ownership of mineral interests from duly filed and recorded instruments of title. A chief appraiser may not require the operator of a lease to provide ownership information by listing the property in the name of the operator if the information is not provided.

Proposed Effective: 9/1/2017.

Status: HB 119 referred to House Ways & Means 2/13/17. SB 676 referred to Senate Finance 2/15/17.

SPOUSES AND CHILDREN OF PEACE OFFICER EXEMPT FROM DISCLOSING HOME ADDRESS HB 457 Holland Amends 25.025 The bill adds the spouse or surviving spouse and the adult child of a peace officer to those who are exempt from disclosure of their home address.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, 9/1/2017.

Status: Substitute reported from House Ways & Means 3/20/17 and recommended for Local/Consent Calendar.

APPRAISAL DISTRICT DIRECTORS ELECTED ALONG WITH MORE CHANGES HB 495 Phelan; HB 2265 Munoz Amends 5.12, 6.03, 6.051, 6.06, 6.061, 6.063, 6.15 Appraisal district directors are to be elected in each commissioner’s precinct. If the county tax assessor-

collector collects taxes, he or she will remain a director. If county tax assessor-collector does not, a county-wide position is elected. Candidates must reside in the appraisal district at least two years prior to taking office. Elections will be during the general election for state and county officers. The director will serve two-year terms beginning on January 1 of odd-numbered years.

Three-fourths of the taxing units consisting of the county, school districts, cities and junior college districts must approve the purchase of a building by the appraisal district. This same group of entities also exercises the veto of the CAD budget, changes the fiscal year, changes the methods of financing or changes the allocation of appraisal district costs. The presiding officers of these same groups are also entitled to reports of district audits.

Either a majority of all taxing units or a majority of the group of school districts, cities, junior colleges and the county may request an audit of the appraisal district.

Proposed Effective: 1/1/2018.

Status: HB 495 referred to House Ways & Means 2/16/17. HB 2265 referred to House Ways & Means 3/15/17.

CHILD PROTECTIVE CASEWORKER OR INVESTIGATOR MAY REQUEST HOME ADDRESS EXEMPT FROM DISCLOSURE HB 39 Wu; similar HB 703 Wu Amends 25.025 The bills add a current or former child protective services caseworker or investigator for the Department of Family and Protective Services to the list that may request their home address be exempt from disclosure. HB 39 also adds a department contractor performing these functions on behalf of the Department.

Proposed Effective: HB 703 immediately if passed by two-thirds of both houses; otherwise, 9/1/2017. HB 39 effective 9/1/2017.

Status: HB 703 referred to House Human Services 2/20/17. HB 39 filed 3/10/17, referred to House Human Services 3/15/17 and left pending 3/20/17.

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CURRENT AND FORMER PROSECUTORS REQUEST HOME ADDRESS CONFIDENTIAL HB 1278 Dutton Amends 25.025; amends Government Code 552.117, 552.1175 The bill adds a current or former district attorney, criminal district attorney or a county or municipal attorney whose jurisdiction includes any criminal law or child protective service matters to the list that may request their home address be exempt from disclosure.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, 9/1/2017.

Status: Scheduled for hearing in House Government Transparency & Operation 4/3/17.

FIREFIGHTERS AND EMS PERSONNEL ADDED TO LIST WHO MAY REQUEST HOME ADDRESS CONFIDENTIAL HB 1919 Raymond Amends 25.025 and amends other codes The bill provides that the home address information of a current or former firefighter or current or former EMS personnel may be exempt from disclosure in the appraisal records at the written request of the homeowner.

Proposed Effective: 9/1/2017.

Status: Referred to House Criminal Jurisprudence 3/13/17.

COMPTROLLER PROHIBITED FROM POSTING ON WEBSITE HOTEL OCCUPANCY TAX INFORMATION BY HOTEL HB 1924 Elkins Adds 156.155 The bill adds that a state agency (Comptroller) may not post on a public website information that identifies the taxable receipts of an individual business contained in a document required to be provided to the agency. Information that is collected or maintained by a state agency is public information under Government Code Section 552.002 and provide access in the manner provided by Chapter 552, Open Records Act. Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, 9/1/2017.

Status: Re-referred to House Government Transportation & Operations 3/30/17.

CAD BUDGET REQUIRES VOTING TAXING UNIT APPROVAL ACTION HB 2868 Hefner Amends 6.037, 6.06, 6.062 The bill changes the CAD budget process to require that the CAD board of directors approve a proposed budget before September 15 and submit to each taxing unit entitled to vote on director appointments for final approval. Not later than 30 days after the CAD board submits the proposed budget to the voting units, the governing body of each unit shall vote to approve or disapprove the proposed budget. The budget does not take effect unless a majority of the voting taxing units approve by that date. If the budget is not approved by that date, the CAD board shall adopt a new proposed budget to submit to each voting unit within 30 days.

The public notice of the proposed budget includes language about this new approval process.

Proposed Effective: 9/1/2017; if proposed budget hearing is held before this date, the former law continues.

Status: Referred to House Ways & Means 3/29/17.

ARB REQUIREMENTS AND PROTEST PROCEDURES CHANGES; OFFICE OF LOCAL PROPERTY TAX OMBUDSMAN CREATED HB 3168 Geren Designates Secs. 5.03 through 5.16 as Subchapter A and adds Subchapter B to Ch. 5, adds 6.425; amends 5.041, 6.41, 6.412, 6.42, 25.19, 25.25(d), 41.03, 41.11, 41.44, 41.45, 41.66, 41.71, 41A.01, 41A.03, 41A.06, 42.01, 42.21, 42.29 ARB EDUCATION This bill requires the Comptroller to consult with property owners, tax agents and chief appraisers in drafting the ARB Manual and adds requirements regarding content of ARB education. Further, it requires the ARB to comply with procedural requirements in the ARB Manual.

OFFICE OF LOCAL PROPERTY TAX OMBUDSMAN This bill creates the Office of Local Property Tax Ombudsman (LPTO) in the Comptroller’s office. The LPTO’s duty is to hear complaints involving alleged violations of procedural requirements regarding activities of an appraisal district, ARB, chief appraiser 2017 Legislative Update; Page 4

or an ARB member. The bill sets forth the LPTO’s qualifications, duties and procedural requirements.

ARB SELECTION AND OPERATION The bill changes the minimum population threshold whereby the administrative district judge is required to appoint ARB members from 120,000 to 75,000. It changes the population requirement from 100,000 to 120,000 regarding the eligibility to serve on an ARB found in Section 6.412 and disallows service if the person has served all or part of three previous terms; requires the ARB rather than the appraisal district board to select the ARB chair and secretary; requires the Comptroller to determine and pay ARB members a per diem, from funds assessed to the CAD; establishes a special ARB panel, with specific qualifications of those on the panel, to hear five types of complex appraisal protests.

APPRAISAL NOTICES The date of mailing all appraisal notices changes to April 1, or a soon thereafter as practicable. The chief appraiser in a county of 120,000 or more includes on the appraisal notice if the property is one of the five types of complex properties eligible for review by the special ARB panel.

PROTESTS AND CHALLENGES The bill clarifies a property owner’s ability to file a 25.25(d) motion regarding unequal appraisal in addition to excessive appraisal; removes a taxing unit’s ability to challenge the level of appraisals of any category of property in the CAD; changes the protest deadline from May 1 to before June 1; requires an ARB to provide for hearings on Saturdays and after 5 p.m. on weekdays and prohibits a first hearing on a weekday after 7 p.m. or on Sundays.

BINDING ARBITRATION The bill allows for a property owner to request binding arbitration on a denial of a 25.25 motion and extends the deadline to file from 45 to 60 days. For the arbitration of non-residential homestead property valued at more than $3,000,000 but less than $5,000,000, the arbitration fee is $1,250.

APPRAISAL DISTRICT LITIGATION The bill allows for the appeal of an ARB determination on a procedural issue involving Section 25.25 of a Chapter 41 protest. The property owner

recovers attorney’s fees if the owner prevails on the merits of appealing the procedural issue.

See also Appraisal Review Board and Appraisal District Litigation.

Proposed Effective: 1/1/2018, with some sections effective 9/1/2018.

Status: Referred to House Ways & Means 3/30/17.

FEDERAL OR STATE JUDGE’S HOME ADDRESS AUTOMATICALLY EXEMPT FROM DISCLOSURE SB 42 Zaffirini; HB 1487 Smithee Amends 25.025 These bills provide that the home address information of a federal or state judge, or their spouses, is automatically confidential and exempt from disclosure in the appraisal records, beginning on the date that the judge qualifies for office. The judge or spouse no longer must request the exemption from disclosure by form. SB 42 substitute requires the Office of Court Administration to notify the appraisal district of the judge’s qualification for the judge’s office.

Proposed Effective: 9/1/2017.

Status: SB 42 substitute reported from Senate State Affairs 3/30/17 and placed on Senate Intent Calendar 4/3/17. HB 1487 left pending in House Judiciary & Civil Jurisprudence 3/14/17.

MORE INDIVIDUALS MAY REQUEST HOME ADDRESS EXEMPT FROM DISCLOSURE SB 256 Taylor; HB 2222 Hunter Amends 25.025 These bills revise the procedures for keeping the home address confidential and not open to public disclosure for an individual, the individual’s child or another person in the household who is a victim of family violence, if the individual provides a copy of a protective order, magistrate’s order for emergency protection or other independent document that shows they are a victim of family violence. The bills add two other types of individuals that may request their home address be kept confidential: a person who is a victim of sexual abuse or victim of assault, stalking or trafficking by providing these same type of documents, or a participant in the address confidentiality program by attorney general’s office.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, 9/1/2017.

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Status: SB 256, with one floor amendment, passed Senate 3/29/17 and received in House 3/30/17. HB 2222 referred to House Criminal Jurisprudence 3/21/17.

HOME ADDRESS OF CURRENT OR FORMER EMPLOYEE OF STATE JUDGE EXEMPT FROM DISCLOSURE SB 510 Zaffirini; HB 2106 Smithee Amends 25.025 SB 510 substitute provides that the home address information of a current or former employee of a federal judge or state judge may be exempt from disclosure in the appraisal records at the written request of the homeowner. SB 2106 only addresses a state judge.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, 9/1/2017.

Status: SB 510 substitute placed on Senate Local Calendar 4/3/17. HB 2106 referred to House Ways & Means 3/13/17.

STATE ELECTED OFFICIAL OR MEMBER OF LEGISLATURE REQUESTS HOME ADDRESS CONFIDENTIAL SB 659 Campbell Amends 25.025; amends Government Code 552.117, 552.1175 The bill adds a statewide elected official or a member of the Legislature to the list that may request their home address be exempt from disclosure.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, 9/1/2017.

Status: Left pending in Senate Business & Commerce 3/30/17.

CONVEYING PROCEEDS FROM CAD REAL PROPERTY SALE CHANGED SB 348 Watson Amends 6.051 The bill provides that any proceeds from the conveyance of real property owned by the CAD shall be apportioned by an amendment to the annual CAD budget.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, 9/1/2017.

Status: Referred to Senate Finance 1/30/17.

CHIEF APPRAISER ELECTED BY COUNTY VOTERS SB 447 Burton Amends 1.15, 5.041, 5.042, 5.103, 6.035, 6.05, 6.052, 6.41, 6.411, 6.412, 6.42, 22.28, 41.66, 42.21; repeals 6.0501; amends Election Code 52.092; amends Local Government Code 87.041; amends Occupations Code 1151.164 The bill provides that county voters elect the chief appraiser to a two-year term beginning January 1 of each odd-numbered year. The chief appraiser must be a resident of the county for the two years preceding taking office. The bill removes the requirements for any special professional designations. The chief appraiser may be removed for “incompetency,” including failure of the chief appraiser to complete the TDLR-required chief appraiser training within the required time. The bill removes the provision that a taxing unit’s tax office may serve as the appraisal office. The chief appraiser appoints the ARB members and selects the ARB chair and secretary.

The commissioners court shall fill a chief appraiser vacancy.

Proposed Effective: 9/1/2017, with the first term of office for chief appraiser beginning January 1, 2019 and the terms of existing ARB members expiring on January 1, 2019 so that the newly-elected chief appraiser appoints the next ARB. Status: Referred to Senate Finance 2/6/17.

PROPERTY TAXATION ABOLISHED IN 2022 HB 1050 Swanson Repeals Tax Code, Title 1 The bill prohibits a state or local property tax, effective January 1, 2022. Any tax liability accrued before that date is not affected. The bill provides that the Legislature has an obligation to ensure that local government entities provide essential services in a manner that is fair and fiscally responsible and should encourage the use of the sales tax to fund services.

Proposed Effective: 9/1/2017, with Title 1, Tax Code, repealed 1/1/2022.

Status: Referred to House Ways & Means 3/6/17.

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SOME GROUPS MAY AND OTHERS MAY NOT LAWFULLY TAKE AND USE DRONE IMAGES SB 838, SB 839, SB 840 Zaffirini; HB 106 Martinez Amends Government Code 423.002 These bills address when it is lawful to capture an image using an unmanned aircraft in Texas. To the group allowed such images, SB 838 adds a person who is in compliance with Federal Aviation Administration registrations or exemptions and the images are reasonably related to a commercial purpose (including navigation or public safety). The bill, however, removes from the list a Texas licensed real estate broker in connection with marketing, sale or financing of real property; the owner or operator of an oil, gas, water or other pipeline for inspecting, maintaining or repairing pipelines and without the intent to conduct surveillance; a registered professional land surveyor in connection with surveying; a professional engineer in connection with engineering. SB 839 adds a journalist for reporting of substantial public interest, potentially affects public safety (such as weather) and occurs under circumstances in which individuals whose images are captured do not have a reasonable expectation of privacy (mass gathering). SB 840 and HB 106 remove from the list images of real property or a person on real property that is within 25 miles of the U.S. border.

Proposed Effective: 9/1/2017.

Status: HB 106 substitute reported from House Homeland Security and Public Safety 3/28/17. SB 839 referred to Senate Business & Commerce 2/27/17. SB 838 not heard in Senate Business & Commerce 3/28/17. SB 840 left pending in Senate Veteran Affairs & Border Security 3/15/17.

CHIEF APPRAISER GIVEN AUTHORITY TO CORRECT ERRONEOUS DENIAL OR CANCELLATION OF EXEMPTION SB 945 Bettencourt; HB 2227 Murphy Amends 25.25 These bills expand the authority of the chief appraiser to correct the appraisal roll after certification to include correcting an erroneous denial or cancellation of a homestead exemption for the disabled or elderly or an exemption for a disabled veteran.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, 9/1/2017.

Status: SB 945 passed the Senate 3/28/17 and received in House 3/28/17. HB 2227 referred to House Ways & Means 3/20/17.

APPRAISAL DEADLINES CHANGED SB 946 Bettencourt; HB 2228 Murphy Amends 11.4391, 21.09, 22.23, 41.11, 41.44 These bills change several deadlines: the late deadline for filing for the freeport goods is changed to not later than June 1 (current law is before the ARB approves the records); a request for allocation of value must be filed before April 1 (current law is before May 1), with the provision for extending the deadline can be for 30 days (current is 45 days) and that the chief appraiser may add an additional 30 days (current law is 60 days); rendition statements for property regulated by the Public Utility Commission, Railroad Commission, Federal Surface Transportation Board or Federal Energy Regulatory Commission must be delivered to chief appraiser by April 30, and the chief appraiser may extend by 15 days for good cause on written request of the owner. The bills also address some changes to protesting in Tax Code Section 41.44, making the deadline to do so later, May 15 rather than May 1 or 30-days after receipt of notice for all property (not simply residence homesteads).

However, it also limits the extensions of time to file protests currently in the Code (after deadline but before ARB approves records and before June 1).

Proposed Effective: 1/1/2018.

Status: SB 946 placed on Senate Intent Calendar 3/30/17. HB 2228 referred to House Ways & Means 3/20/17.

STATE AGENCY PROPOSED RULES APPROVED BY LEGISLATURE HB 2926, HJR 94 Roberts; HJR 84 Swanson; SJR 32 Taylor Adds Government Code 2001.0321; adds Tex. Const.

Art. 2, Sec. 2 The bill and constitutional amendments require that a state agency’s proposed rule, other than an emergency rule, shall be referred to the standing committee as bills are referred (for example, property tax rule to House Ways & Means and Senate Finance). Proposed rules also are filed at that time with the Secretary of State for the Texas Register. Within 30 days, the committee(s) shall consider and vote on the rule, requiring unanimous vote of the committee’s full 2017 Legislative Update; Page 7

membership. If not approved, the proposed rule is suspended. The committee notifies the state agency within three days and files the notice of suspension with the Secretary of State to publish in the Texas Register. If a rule is suspended, the committee chair shall notify the Speaker or Lt. Governor, depending on the committee.

Within 35 days, the full membership of the House or Senate shall vote to approve or suspend the proposed rule. If the Legislature is not in session, these actions will occur during the first 10 to 30 days of the next regular session.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: SJR 32 referred to Senate Business & Commerce 2/13/17. HJR 84 and HJR 94 referred to House State Affairs 3/20/17. HB 2926 referred to House State Affairs 3/23/17.

TAX INFORMATION INCLUDED ON NOTICES AND TAX BILLS TO CERTAIN PROPERTY OWNERS SB 1360 Watson Adds 25.191 and amends 1.085, 25.19, 31.01 The bill addresses specific statements of tax information be added to a property owner’s notice of appraised value for property in certain school districts. These notices are for property that is in a school district that must equalize its wealth by purchasing student credits from the state. The notices include these statements: “Your local school district property taxes are estimated on the tax rate for the preceding year to be $___. Of those estimated taxes, it is estimated that: "$____ will be used by the school district to fund maintenance and operations of the school district; "$____ will be used by the school district to pay for facilities; and "$____ will be paid by the school district to the state.

"For the preceding year: "$____ was used by the school district to fund maintenance and operations of the school district; "$____ was used by the school district to pay for facilities; and "$____ was paid by the school district to the state.

"For the year preceding the preceding year: "$____ was used by the school district to fund maintenance and operations of the school district; "$____ was used by the school district to pay for facilities; and

"$____ was paid by the school district to the state."

The bill states how the chief appraiser estimates the taxes for these items. As an alternative to including this statements on the notice of appraised value, the CAD may do new Section 25.191, for which the Comptroller adopts by rule the format and form. The alternative Notice of Taxes Actually Imposed on Property by Taxing Units provides these statements on a notice sent after the taxing units have adopted their current tax rates. The statements are modified for adopted rates. Tax collectors also include these statements on the owner’s tax bills for these properties in these school districts. See also Tax Collections.

Proposed Effective: 1/1/2018.

Status: Referred to Senate Finance 3/16/17.

CAD MAY NOT USE PUBLIC FUNDS TO LOBBY ON LEGISLATION SB 1812 Taylor Amends Government Code 305.026 The bill provides that a CAD may not use public money to directly or indirectly influence or attempt to influence the passage or defeat of legislation before the Legislature. A CAD employee is not prevented from providing information for a member of the Legislature or appearing before a legislative committee at the request of the committee or a member of the Legislature.

Proposed Effective: 9/1/2017.

Status: Referred to Senate State Affairs 3/23/17.

TEXAS CIVIL COMMITMENT OFFICE’S EMPLOYEES MAY REQUEST HOME ADDRESS CONFIDENTIAL SB 1576 Perry; HB 4103 King Amends 25.025; amends various other sections of codes The bills add a current or former employee of the Texas Civil Commitment Office (or its predecessor in function or division) to the list that may request their home address be exempt from disclosure. These employees deal with individuals who are sexually violent predators.

Proposed Effective: 9/1/2017.

Status: SB 1576 substitute voted from Senate Criminal Justice 3/28/17.

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HOMEOWNER MAY REQUEST ADDRESS BE HELD CONFIDENTIAL HB 4001 Tinderholt Amends 25.025

HOME

The bill provides that any homeowner may choose his or her home address be exempt from disclosure by filing the Comptroller form with the CAD. Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Filed.

INTEREST RATE CHANGED IN TAX CODE SB 2198 Campbell Adds 1.13 and 1.14 and amends 11.135, 11.181, 11.185, 11.201, 23.46, 23.55, 23.76, 23.86, 23.96, 23.9807, 26.09, 31.12, 33.01, 33.06, 33.065, 42.42, The bill changes the interest rate used to accrued on various provisions of the Tax Code, including special valuation rollback taxes, omitted property, delinquent taxes, tax refunds, tax deferrals and others. The annual interest rate is the lesser of 12% or the sum of 2% and the prime rate published by the Federal Reserve Board on the first business day of the calendar year for which simple interest is calculated.

The Comptroller posts the interest rate on the Comptroller’s website, beginning with the 2018 calendar year. The parties to a motion, effort or appeal may agree to waive or reduce the interest that accrues on a tax, penalty or refund that is subject to a 25.25 error correction; on a delinquent tax or a delinquent tax lawsuit to collect; or for an appeal to district court.

The written agreement is required before the court issues the order for the delinquent tax lawsuit or pending appeal. A district court may waive or reduce interest that has accrued as part of the final judgment to the extent the interest is waived or reduced by agreement. See also Appraisal District Litigation and Delinquent Tax Collections.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Finance 3/29/17.

REGULATING PROPERTY TAX PROFESSIONALS TRANSFERRED FROM TDLR TO COMPTROLLER SB 2208 Hancock Amends 5.04, 5.102; amends Occupations Code Chapter 1151 and adds 1151.201, 11.51.203, 1151.207, 1151.208 and 1151.209 and repeals 1151.1015; amends Occupations Code 1152.103

The bill transfers the regulation of property tax professionals from the Texas Department of Licensing and Regulation (TDLR) to the Comptroller.

Currently registered with TDLR, the registrants include appraisers, tax assessors and tax collectors.

The Comptroller mails to a person’s last known address a renewal notice no later than 30 days before a person’s registration expires. The Comptroller may conduct inspections or investigations as necessary.

The Comptroller may place a registrant on probation whose registration is suspended. The Comptroller will set up hearings and administrative procedure for registration denials and disciplinary actions using the State Office of Administrative Hearings (SOAH). For complaints filed against a registrant, the Comptroller will notify the registrant and the local governmental entity that employs the registrant. The Comptroller shall issue cease and desist orders for violations, impose an administrative penalty and seek injunctive relief and civil penalty through the Attorney General or the Comptroller. The Comptroller shall adopt rules

by March 1, 2018.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Business and Commerce 3/29/17.

BILLS ON DOUBLE TAXATION FILED AFTER THE MARCH 10 DEADLINE SB 2241 Hinojosa; similar SB 2242 Hinojosa Adds 21.056 and 31.112 and amends 31.12, 42.41; adds Education Code 42.2532 The bills were filed March 13, after the filing deadline, and address double taxation of properties by like taxing units. The bills apply only to Nueces and San Patricio Counties. SB 2241 states, as a result of disputed, overlapping or erroneously applied geographic boundaries of multiple like taxing units, the tax amount due on the property is the average of the tax amounts imposed by each of the like taxing units. Taxes are deposited into an escrow account in the district court of Refugio County. The district court applies the escrow amount to the taxing unit on resolution of the dispute or error. SB 2241 begins with the 2018 tax year. SB 2242 provides that the property owner may file suit with the Supreme Court challenging the double taxation by like taxing units.

The Supreme Court shall rule within 90 days. Both bills address a refund process and the Education 2017 Legislative Update; Page 9

Commissioner adjusting the school district values for the correction of the double taxation.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Filed 3/13/17. Received by the Secretary of State for filing after deadline.

Appraisal APPRAISAL DISTRICTS MUST USE COMPTROLLER’S APPRAISAL MANUALS The Property Tax Reform and Relief Act of 2017 SB 2 Bettencourt; similar HB 934 Zerwas Amends 5.05, 5.102, 5.13, 23.01 Appraisal districts must use the Comptroller’s generated appraisal manuals in appraising property for property taxation. Both MAP reviews and taxing unit-requested audits of appraisal districts must include the district’s compliance with these manuals issued by the Comptroller. Generally accepted appraisal methods and techniques will also include those included in the Comptroller’s appraisal manual.

For more analysis of these bills, see also Appraisal District Administration, Rendition, Exemption, Appraisal Review Board, Appraisal District Litigation, Assessment and Truth in Taxation sections.

Proposed Effective: 1/1/2018.

Status: SB 2 substitute, with four floor amendments, passed Senate 3/21/17 and received in House 3/22/17. HB 934 referred to House Ways & Means 2/21/17.

COMPARABLE PROPERTY DEFINED ADDRESS DARK STORE APPRAISALS HB 27 Springer Amends 23.01

TO

The bill clarifies that a property must have the highest and best use as the subject property to be considered as a comparable property. A use restriction on a property that prohibits the continuation of the current property use or prohibits competitive use by a subsequent owner may not be considered in determining the property’s highest and best use.

Determining market value must include consideration of whether the highest and best use is the continuation of the property’s current use.

Proposed Effective: 1/1/2018.

Status: Left pending in House Ways & Means 3/15/17.

A 5% CAP SET FOR RESIDENCES HB 376, HJR 33 Metcalf; HB 586, HJR 43 Bohac Amends 23.23; amends Tex. Const. Art. 8, Sec. 1

A 5% APPRAISAL CAP SET FOR REAL PROPERTY HB 44, HJR 17 Keough; HB 167, HJR 26 Bell Amends 1.12, 23.23 and 42.26; amends Government Code 403.302; amends Tex. Const. Art. 8, Sec. 1

These bills and constitutional amendment lower the 10% cap on residence homesteads to 5% per year.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: HB 376, HJR 33 referred to House Ways and Means 2/16/17. HB 586, HJR 43 referred to House Ways & Means 2/20/17.

These bills and constitutional amendment would change the 10% appraisal cap for residence homesteads to an appraisal cap for all real property and would set the appraisal cap at 5% above the preceding year. The appraisal cap would apply the first year after the owner acquires the property and would expire when the owner no longer owns the property. In the case of residential homesteads, the cap would expire when the spouse who inherits a homestead property ceases to own the property. In the case of non-homestead property subject to multiple ownership, the cap expires when at least 50% of the ownership transfers in a given year. The cap will first be effective on the tax year beginning in 2018 (so the applicable base year will be 2017). The state will need to address value losses for school districts through the state aid formula.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: HB 44, HJR 17 referred to House Ways & Means 2/13/17. HB 167, HJR 26 referred to House Ways & Means 2/14/17.

COMPTROLLER STUDIES IMPACT OF SALES PRICE DISCLOSURE HB 182 Bernal The bill orders the Comptroller to initiate a study of the impact of mandatory sales price disclosure and report to the Legislature next session.

The Comptroller appoints and is advised by a committee of local government representatives and the real estate professionals. The committee is to study the impact on distribution of the tax burden and school finance.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, 9/1/2017.

Status: Referred to House Ways & Means 2/14/17.

2017 Legislative Update; Page 10

PROPERTY SET BY AGREEMENT OR APPEAL LIMITED TO 5% INCREASE IN SUBSEQUENT YEAR HB 301, HJR 30 Larson Amends 23.01; adds Tex. Const. Art. 8, Sec. k The bill and constitutional amendment add that a property whose value in the previous year was determined by an agreement between the chief appraiser and the property owner after a protest or appeal cannot be increased more than 5% the next year. Exceptions remain for those properties that lose their open-space qualification or whose limitations under Section 23.23 expire.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: Referred to House Ways and Means 2/15/17.

MANDATORY SALES PRICE DISCLOSURE REQUIRED ON RECORDED INSTUMENTS HB 379 Bernal Adds Property Code 12.0013 The bill requires that an instrument filed in the county clerk’s office conveying real property under a contract for sale must disclose the property’s sales price. If not disclosed, the property’s purchaser is liable to the state for a civil penalty equal to 5% of the property’s sales price. The Attorney General or the county or district attorney may bring suit to recover the penalty. The disclosure does not apply to an instrument conveying only a mineral interest.

Proposed Effective: 9/1/2017.

Status: Referred to House Business & Industry 2/23/17.

REAPPRAISAL FOR DISASTER AREA AUTOMATIC HB 513 Davis of Harris; SB 717 Taylor Amends 23.02

IS

DEFINITION OF REPLACEMENT STRUCTURE VERSUS NEW IMPROVEMENT CHANGED HB 2241 Lozano Amends 11.26, 11.261, 23.23

SB 717 substitute and HB 513 substitute require the CAD to automatically reappraise an area declared a disaster area that the Federal Emergency Management Agency (FEMA) estimates to have sustained 5% or greater damage to market value as a result of the disaster. A property owner may refuse to have the owner’s property reappraised. The chief appraiser completes the reappraisal by 45 days after the governor declares the area a disaster area. If FEMA does not complete the damage estimate before that deadline, the chief appraiser shall complete the reappraisal as soon as possible. The Comptroller may adopt rules to implement and administer this provision. Appraisal costs are apportioned to all taxing units for which the properties are reappraised.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, 9/1/2017.

Status: HB 513 substitute voted from House Ways and Means 3/29/17. SB 717 substitute passed Senate 3/27/17 and received in House 3/28/17.

The bill revises the definition of what constitutes a replacement structure versus a new improvement for the appraisal cap and for increasing the tax limitation for a property owner when a homestead is damaged by a casualty or by wind or water damage. The replacement structure is considered to be a new improvement if the square footage exceeds the replaced structure. The bill removes language about the exterior of the replacement structure is of higher qualify and composition than the damaged one.

Proposed Effective: 9/1/2017.

Status: Referred to House Ways & Means 3/16/17.

MANUFACTURED HOUSING REGULATIONS CHANGED HB 2019 King Amends 23.127 and various sections of Occupations Code Chapter 1201 The bill revises the regulation of manufactured housing. For the inventory of retail manufactured housing, the retailer files the statement of declaration indicating those units considered to be retail inventory. The chief appraiser imposes the retail inventory tax only on the retail inventory and may not include any personal property homes declared as retail manufactured housing inventory. The Statement of Ownership and Location is changed to Statement of Ownership. The Texas Department of Housing and Community Affairs sets up a website with searchable and downloadable information on manufactured housing ownership, liens, installation, license holder records, shipment reports and enforcement actions.

Proposed Effective: 9/1/2018.

Status: Left pending in House Licensing and Administrative Procedures 3/20/17.

2017 Legislative Update; Page 11

LOW-INCOME OR MODERATE HOUSING APPRAISAL REFINED HB 2532 Anderson; similar SB 1275 Taylor; HB 3752 Johnson Amends 23.215; SB 1275 also amends 1.07 The bills revise the appraisal of nonexempt property used for low-income or moderate housing to require the chief appraiser to use the income approach to value the property, based on the most recent annual owner’s compliance report filed with the Texas Department of Housing and Community Affairs (TDHCA), to estimate the gross income and operating expenses, to project future income and expenses and to project future rent or income potential using the maximum amount of permitted rent. The chief appraiser uses this method regardless if the property is no longer under active construction and occupancy has stabilized. Operating expenses include standard property maintenance, debt service, employee compensation, government fees, lender expenses insurance and other justifiable expenses for maintenance and operation.

SB 1275 and HB 3752 require a certified letter from the appraisal district to the property owner if the chief appraiser determines that the property is no longer eligible for this appraisal. The property will be subject to a rollback tax for the three preceding years based on the difference between the property’s sales price and the special appraised value in each year. The owner has a right to protest the determination to the ARB. A tax lien attaches to the property. Taxes are

due and become delinquent if not paid before the next February 1 that is at least 20 days after the date the bill is delivered. SB 1275 provides that a property owner may not protest the property’s special value, which has been adjusted by the percentage change in net income. This type of property is not considered a comparable property for any other properties. The change in net income is based on the organization’s audit by an independent auditor or most recent compliance report with TDHCA, which is delivered to the chief appraiser no later than May 1.

Proposed Effective: 1/1/2018.

Status: SB 1275 scheduled for hearing in Senate Finance 4/3/17. HB 2532 referred to House Ways & Means 3/23/17.

INTANGIBLE PERSONAL DEFINITION REVISED HB 3138 Gutierrez Amends 1.04

PROPERTY

The bill adds to definition of intangible personal property to include the value of a brand name, business service or business and income derived from the operation of a business other than income from the property’s use.

Proposed Effective: 9/1/2017.

Status: Referred to House Ways & Means 3/29/17.

APPRAISAL STIPULATIONS PLACED ON CERTAIN AFFORDABLE HOUSING PROPERTY SOLD TO LOW OR MODERATE INCOME INDIVIDUAL OR FAMILY HB 3999 Isaac Amends 23.21 The bill addresses the appraisal of real property previously owned by a charitable organization meeting Section 11.18 requirements and is sold to a low-income to moderate-income individual or family.

If the property was sold pursuant to a shared or fixed appreciation affordable housing program by the organization that has a fixed period of time, the chief appraiser may not take into account the appreciation in value that the organization would be entitled if the property were sold on January 1 of the tax year and shall take into account the extent of any regulation, resale restrictions or conditions to the property to reduce the property’s value.

Proposed Effective: 1/1/2018.

Status: Filed.

2017 Legislative Update; Page 12

A HOMESTEAD VALUE CAP OF 5% SET MAYBE SB 172, SJR 19 Nichols Amends 23.23, 42.26; adds Tex. Const. Art. 8, Sec. 1 (i-1) and (i-2) The bill and constitutional amendment imposes a 5% cap on residential homesteads, unless the commissioners court authorizes an election to determine a specified cap between 5% and 10%.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: Referred to Senate Finance 1/25/17.

HOMESTEAD VALUE CAP BASED ON HOME’S VALUE SB 376, SJR 28 Creighton Amends 23.23 The bill and constitutional amendment changes the 10% cap to 3% if the home’s appraised value is $1 million or less and 5% if the home’s value is more than $1 million.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: Referred to Senate Finance 2/1/17.

PROPERTY OWNER REQUESTS REAPPRAISAL FOLLOWING DESTRUCTION BY CASUALTY SB 972 Zaffirini Adds 23.025 The substitute bill adds that a property owner of a residence homestead owned and occupied by the owner may request the chief appraiser to reappraise the residence if a building on the property is completely destroyed by a casualty. The written request must be no later than 180 days after the casualty date. The chief appraiser reappraises unless a taxing unit has requested a reappraisal for other properties for the same casualty. The chief appraiser includes in the appraisal records the date of the casualty, appraised value before and after and any other information. The taxes on the property are adjusted for the number of days before and after the casualty. If the tax bill has already been mailed, the tax collector sends a corrected tax bill. If the tax has been paid, the tax collection shall refund the excess amount. The Comptroller adopts guidelines, including whether the property is completely

destroyed and for calculating the appropriate value of any exemption and appraisal homestead cap on the home during or after the tax year.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, 9/1/2017.

Status: Substitute reported from Senate Finance 3/20/17, passed Senate 3/22/17 and received in House 3/23/17.

Renditions RENDITION DEADLINES MOVED TO EARLIER DATES The Property Tax Reform and Relief Act of 2017 SB 2 Bettencourt Amends 21.09, 22.23 Renditions would be due April 1, instead of April 15.

The automatic written-extension rendition deadline also would be earlier, a date not later than May 1, rather than May 15. SB 2 substitute adds that rendition statements and property reports for property regulated by the Public Utility Commission, Railroad Commission, Federal Surface Transportation Board or Federal Energy Regulatory Commission must be to the chief appraiser no later than April 30. The chief appraiser may extend the April 30 filing deadline for 15 days for good cause on written request of the property owner.

SB 2 substitute also changes the dates for filing the request for allocation of value for property that travels between states. The allocation application is changed to April 1, rather than May 1, and the deadline may be extended 30 days, not 45 days, after the date of receiving the 25.19 notice of appraised value. The chief appraiser for good cause shall extend the deadline for 30, not 60, days.

For more analysis of SB 2, see also Appraisal District Administration, Appraisal, Exemption, Appraisal Review Board, Appraisal District Litigation, Assessment and Truth in Taxation Sections.

Proposed Effective: 1/1/2018.

Status: SB 2 substitute, with four floor amendments, passed Senate 3/21/17, and received in House 3/22/17.

2017 Legislative Update; Page 13

Exemptions INCOME-PRODUCING PERSONAL PROPERTY EXEMPTION CAP INCREASED TO $2,500 The Property Tax Reform and Relief Act of 2017 SB 2 Bettencourt; SB 730 Bettencourt; HB 1330 Kuempel Amends 11.145; SB 2 substitute amends 11.4391 These bills exempt income-producing tangible personal property with a taxable value of less than $2,500. Current law sets the value at less than $500.

SB 2 substitute, however, removes the change to this exemption amount.

SB 2 substitute also changes the deadline for the freeport exemption application to not later than June 1. Current law is before the date the ARB approves the appraisal records.

For more analysis of SB 2, see also Appraisal District Administration, Appraisal, Exemption, Appraisal Review Board, Appraisal District Litigation, Assessment and Truth in Taxation Sections.

Proposed Effective: 1/1/2018.

Status: SB 2 substitute, with four floor amendments, passed Senate 3/21/17, and received in House 3/22/17. SB 730 passed Senate 3/27/17 and received in House 3/28/17. HB 1330 referred to House Ways & Means 2/27/17.

A 10-YEAR EXEMPTION GRANTED FOR NEW BUSINESSES IN SMALL COUNTIES HB 102; HJR 18 Guillen Adds 11.36; amends 11.42, 26.1125; adds Tex. Const.

Art. 8, Sec. 1-s The bill and constitutional amendment provides for a local-option exemption from property taxes for new businesses located in a county with a population of 250,000 or less. A new business for purposes of this bill is one that begins business in this state on or after January 1, 2018; is not substantially similar in ownership or operation to any business in this state in the preceding five years; is engaged in certain manufacturing (categories 2011-3999 of the 1987 Standard Industrial Classification Manual) or certain forms of research determined by Section 41 of the Internal Revenue Code; and creates at least one fulltime, permanent job. The Comptroller administers the determination of an eligible new business. A taxing

unit may revoke its local-option exemption at any time, but revocation will not affect those that have already qualified for exemption. The exemption may be applied for within one year after the business initially qualified for the exemption. The bill also includes state tax exemptions.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: HB 102, HJR 18 referred to House Ways & Means 2/13/17.

PARTIAL EXEMPTION APPLIED TO DISABLED VETERAN’S HOMESTEAD HB 150, HJR 21 Bell; SB 240, SJR 23 Creighton Amends 11.132, amends Tex. Const. Art. 8, Sec. 1(b)(1) These bills and constitutional amendment amend the partial homestead exemption for disabled veterans to include housing donated to a disabled veteran for less than 50% of the estimate of market value by the charitable organization that donates the housing.

Presently, this exemption is available only to those homes donated at no cost to the veteran.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: SB 240 referred to Senate Veteran Affairs & Border Security 1/30/17. HB 150, HJR 21 referred to House Ways & Means 2/13/17.

MINERAL INTEREST EXEMPTION INCREASES TO VALUE OF LESS THAN $2,000 HB 302 Goldman Amends 11.146 The bill increases the value of mineral interests exempt from taxation to those accounts whose value is less than $2,000. The present exemption cap is less than $500.

Proposed Effective: 1/1/2018.

Status: Referred to House Ways and Means 2/15/17.

PROPERTY EXEMPTED IF LEASED TO CERTAIN CHARTER SCHOOLS HB 382, HJR 34 Murphy; SB 1030, SJR 42 Taylor Adds 11.211; amends Tex. Const. Art. 8, Sec. 2 These bills and constitutional amendment exempts property leased to a charter school if the property owner’s reduced taxes are passed along to the tenant 2017 Legislative Update; Page 14

charter school. The leasehold does not become taxable pursuant to Section 25.07.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: HB 382, HJR 34 left pending House Ways and Means 3/22/17. SB 1030, SJR 42 referred to Senate Finance 3/6/17 and 3/7/17.

RETAIL INVENTORY EXEMPT FROM SCHOOL TAXES HB 425, HJR 35 Button Adds 11.35; amends Tex. Const. Art. 8, Sec. 1(d) The bill and constitutional amendment exempts retail inventory from taxation by school districts. The constitutional amendment authorizes the Legislature to exempt retail inventory.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: Referred to House Ways & Means 2/20/17 and 3/9/17.

LATE APPLICATION DEADLINE EXTENDED FOR HOMESTEAD AND DISABLED VETERAN’S EXEMPTIONS HB 626 Workham Amends 11.431, 11.429 The bill extends the deadline for the late application for a homestead exemption to two years after the delinquency date for the home taxes. Current law requires filing the application no later than one year after the delinquency date. The chief appraiser notifies each taxing unit’s collector within 30 days after the date the application is approved. The collector is required to issue any refund not later than 60 days after the chief appraiser notifies the collector.

For the disabled veteran’s exemption, the application deadline is extended to no later than five years (from one year) after the delinquency date.

Proposed Effective: 9/1/2017.

Status: Referred to House Ways & Means 2/22/17.

SCHOOL TAXES ON TANGIBLE PERSONAL PROPERTY PHASED OUT BY 2027 HB 734, HJR 48 Workman Adds 11.35; adds Education Code 42.2512; adds Tex. Const. Art. 8, Sec. 1-q The bill and constitutional amendment exempts tangible personal property that consists of inventory

from taxation by school districts. The exemption begins as a 10% exemption in tax year 2018, and the exemption increases by 10% each tax year for a 100% exemption by tax year 2027. The school district receives additional state aid for the tax revenue lost for the exemption.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: Referred to House Ways & Means 2/20/17.

PHYSICAN HOMESTEAD OFFERED EXEMPTION BY COUNTY HB 820, HJR 50 Shaheen; SB 1543, SJR 52 West Amends 11.13; adds Tex. Const. Art. 8, Sec. 1-b(n) The bills and constitutional amendment provide that the county may offer a homestead exemption to a physician residing in the county who provides health care services to qualifying county residents that are indigent or on Medicaid for which the physician does not receive reimbursement for those services from any source. The exemption is based on a percentage of the home’s value, not to exceed 50%. The county may express the percentage of the physician’s total practice that is for qualifying county residents. The county commissioners provide the appraisal district with the exemption information, and the chief appraiser may require the physician to provide additional information.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: HB 820, HJR 50 referred to House Ways & Means 2/21/17. SB 1543, SJR 52 scheduled for hearing in Senate Finance 4/3/17.

LOCAL TAXING UNIT MAY EXEMPT MINERAL INTERESTS OWNED BY NONPROFIT ORGANIZATION HB 845, HJR 51 Lozano Adds 11.186; amends 11.43; amends Government Code 403.302; adds Tex. Const. Art. 8, Sec. 1-r The bill and constitutional amendment allow a taxing unit to grant an exemption to mineral interests owned by a nonprofit organization that is organized exclusively to generate income from ownership, lease and management of real property, including buildings, land and interests; exclusively organized for religious and charitable purposes; engages in housing, counseling, training, spiritual aid and related services for children and family in need; does not 2017 Legislative Update; Page 15

charge a fee for services; and does not accept or receive money from a governmental entity. The exemption applies in the tax year that the taxing unit’s governing body adopts before April 15 or the next year if adopted on or after that date. The nonprofit organization applies for the exemption at the appraisal district; annual application is not required. The Comptroller adjusts for this in Property Value Study.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: Referred to House Ways & Means 2/21/17.

OWNER OF GROUP HOME OR INTERMEDIATE CARE FACILITY RECEIVES EXEMPTION BASED ON 12-MONTHS OF OPERATING COSTS HB 850, HJR 52 Turner Adds 11.35; adds Tex. Const. Art. 8, Sec. 1-p The bill and constitutional amendment provide the owner of a group home or an intermediate care facility to a property tax exemption equal to the amount of the costs incurred by the owner in maintaining, operating and improving the property during the preceding 12month period. A group home is one that is primarily for individuals with intellectual disabilities. An intermediate care facility has individuals with development, physical or intellectual disabilities if at least 95% of the residents are on medical assistance under Human Resources Code Chapter 32. The Comptroller-adopted exemption application includes an affidavit stating the costs and any relevant information or documentation.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: Substitute HB 850 and HJR 52 left pending in House Ways & Means 3/22/17.

UNIVERSITY RESEARCH TECHNOLOGY CORPORATION GRANTED EXEMPTION HB 906, HJR 54 Elkins Adds 11.232; amends 11.42, 26.113; amends Education Code Chapter 157; amends Tax Code Chapter 151 and 171adds Tex. Const. Art. 8, Sec. 1-t The bill and constitutional amendment provide for the exemption of real and tangible personal property owned by or leased to a university research technology corporation. This special-purpose corporation is owned wholly or partly by a university or by a nonprofit medical center development corporation with members that are universities. The

exemption also applies to the leasehold interest in real and tangible personal property leased from the corporation. The bill provides for prorating the taxes upon acquiring a property by the corporation.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: Referred to Government Transparency & Operation 3/9/17 and HJR 54 on 3/20/17.

CHIEF APPRAISER LIMITED ON REAPPLICATION BY TOTALLY DISABLED VETERAN HB 1101 Pickett Amends 11.43 The bill prevents the chief appraiser from requesting a new homestead exemption application to confirm current qualifications from a totally disabled veteran who has a permanent total disability determined by the Veterans Administration.

Proposed Effective: 1/1/2018.

Status: Reported favorably from House Ways & Means 3/27/17 and recommended for House Local & Consent Calendar.

TANGIBLE PERSONAL PROPERTY EXEMPT IF FOOD PRODUCTS HELD FOR SALE HB 1182, HJR 60 Button Adds 11.35; adds Tex. Const. Art. 8, Sec. 1-p The bill and constitutional amendment would exempt tangible personal property consisting of food products that are exempt from the sales and use tax to also receive a property tax exemption if the owner holds the property for sale at retail.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: Referred to House Ways & Means 2/21/17.

TAXING UNITS DECIDES TO EXEMPT RAINWATER HARVESTING EQUIPMENT HB 1334 Isaac Adds 11.325 The bill provides a local-option exemption that a taxing unit’s governing body may adopt to exempt a portion of a property’s appraised value that is attributable to installation of a rainwater harvesting system. At this time, no HJR has been filed for a constitutional amendment for this exemption.

Proposed Effective: 1/1/2018.

2017 Legislative Update; Page 16

Status: Referred to House Ways & Means 2/27/17.

TOTAL EXEMPTION GRANTED TO HOMESTEAD OF VERY ELDERLY AND SURVIVING SPOUSE HB 1473, HJR 64 Bohac; similar HB 1772, HJR 71 Swanson; similar HB 2081, HJR 76 Phelan Amends 11.13, 11.42, 11.43, 26.10, 26.112, 33.01; adds Education Code 41.0012 and amends 42.2518, 42.252, 42.302, 44.004, 46.003, 46.032, 46.071; amends Government Code 403.302; adds Tex. Const.

Art. 8, Sec. 1-b(n) HB 1473 provides for the total exemption from property taxes of the homestead of an elderly homeowner who is 80 years or older and has received homestead exemptions on the homestead for at least the preceding 10 years. The surviving spouse continues to receive the total exemption if the deceased spouse died qualified for the exemption in the year of death, the surviving spouse was 55 years of age or older at spouse’s death and the property was also the residence homestead of the surviving spouse and remains the homestead. The total exemption is effective on January 1 of the year qualified. The homeowner may apply up to one year late after qualification. If the exemption terminates during the year because the homeowner claims another homestead, the taxes are prorated for the time the homestead did not qualify. The Comptroller adjusts the school district’s taxable wealth for state funds for this exemption. The school notice for proposed budget and tax rate includes a statement that a person 80 years of age or older or surviving spouse is exempt from taxes.

With many of the same provisions as HB 1473, HB 1772 provides for a total exemption of the homestead taxes for a homeowner 75 years of age or older, but with no requirement on years of ownership. It also has all the other requirements, including for the surviving spouse 55 years of age or older, for state aid to school districts and for the school notice for proposed budget and tax rate (with 75 years of age).

With many of the same provisions as HB 1473 and HB 1772, HB 2081 provides for a local-option total exemption of the school homestead taxes for a homeowner disabled or who is 70 years of age or older, but with no requirement on years of ownership.

The school board would adopt the exemption before

July 1. It also has all the other requirements, including for the surviving spouse 55 years of age or older, for state aid to school districts and for the school notice for proposed budget and tax rate (with 70 years of age).

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: HB 1473, HJR 64 left pending in House Ways & Means 3/22/17. HB 1772 referred to House Ways & Means 3/14/17 and HJR 71 on 3/20/17. HB 2081, HJR 76 referred to House Ways & Means 3/16/17.

LOW-INCOME HOUSING EXEMPTION EXTENDED FOR 10 YEARS FROM ACQUISITION HB 1513 Isaac Amends 11.181 The bill extends the property tax exemption for a charitable organization providing low-income housing for 10 years from the anniversary date the transferring organization acquired the property.

Current law is for five years.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, 9/1/2017.

Status: Referred to House Ways & Means 3/9/17.

SCHOOL DISTRICT EXEMPTS LOW AND MODERATE-INCOME HOUSING PROJECTS NEAR A PUBLIC SCHOOL HB 1548, HJR 66 Dutton Adds 11.1828 and amends 11.436, 26.111; adds Tex. Const. Art. 8, Section 1-v The bill and constitutional amendment grants a person an exemption from school property taxes of improved or unimproved real property within a one-mile radius of a school campus if the property is built and used for low or moderate-income housing. In an urban area, the property must be 25 or more new single-family dwellings sold or leased to families or a new multifamily housing project of 150 or more rental units. In a rural area, the property must be 10 or more single-family dwellings sold or leased or a multifamily housing project of 60 or more rental units. The dwellings/units in either area must be for families earning nor more than 60 percent of the area’s median income. The exemption is for three years. If any part of the property is sold, leased or rented to a person that does not meet the eligibility 2017 Legislative Update; Page 17

requirements, a penalty is imposed for each year that the property was exempt, plus 7% interest from date taxes are due. The person who received the exemption and the purchaser are jointly and severally liable for the penalty and interest. A tax lien attaches to the property. The chief appraiser notes the penalty in the appraisal records and delivers notice to both parties.

The constitutional amendment gives the Legislature the authority to allow a property tax exemption by one or more political subdivisions of a property near a public school that is owned by a person for building low-income or moderate-income housing.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: Referred to House Ways & Means 3/9/17 and HJR 66 on 3/20/17.

PURPLE HEART RECIPIENT AND SURVIVING SPOUSE ENTITLED TO TOTAL HOMESTEAD EXEMPTION HB 1591, HJR 67 Bohac Adds 11.134 and amends 11.42, 11.43, 11.431, 26.10, 26.1125; amends Government Code 403.302; amends Local Government Code 140.011; amends Tex. Const. Art. 8, Section 1-b The bill and constitutional amendment provide for a total homestead exemption from property taxes for a Purple Heart recipient and to the surviving spouse.

The surviving spouse is entitled to the total exemption on the same property to which the Purple Heart recipient’s exemption applied if the spouse has not remarried since the death and the property was the residence homestead of the surviving spouse at the time of the recipient’s death and remains the residence homestead. The surviving spouse may port the dollar amount of exemption to another homestead. If the Purple Heart recipient qualifies after January 1, the exemption applies only for a portion of the tax year.

The homestead application is a one-time application and may be filed up to one-year after the delinquency date. The Comptroller adjusts the school property values for this exemption. Local taxing units may include the impact of this exemption in requesting state financial assistance from the Comptroller.

Committee testimony was to have the State hold harmless the taxing units impacted by more exemptions for veterans, particularly if legislation requires these local units to hold rollback elections to raise the tax rate to recoup the lost taxes.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: HB 1591 left pending in House Ways & Means 3/22/17. HJR 67 referred to House Ways & Means 3/20/17.

TIME THAT DELINQUENT TAX PROPERTY IS HELD BETWEEN JUDGMENT AND SALE IS EXEMPT FROM TAXES HB 1833, no filed HJR Dutton Adds 11.281 and amends 11.43, 33.52, 34.01, 34.05

SCHOOL HOMESTEAD EXEMPTION IS GREATER OF $25,000 OR 13% OF HOME VALUE HB 1679, HJR 69 Schofield Amends 11.13, 11.26; amends Education Code 41.0011, 42.2518, 42.252, 42.302, 46.003, 46.032, 46.071; amends

The bill and constitutional amendment (not filed as of this date) provides for exempting real property held during the period between issuance of a judgement foreclosing a tax lien on the property and the sale of the property at a tax sale or the payment of the taxes before the sale. If the owner pays the amount of the judgment before the sale or redeems the property, a penalty is imposed equal to the taxes that would have been imposed during the exempt period, plus interest at 7% from the date on which taxes would have become due. A tax lien attaches to secure payment of the penalty and interest. For the property to be exempt, a person must file an exemption application.

No post-judgement taxes, penalties and interest may be enforced. A sale by the taxing unit holding the property discharges and extinguishes all liens foreclosed by the judgement. See also Delinquent Tax Collections.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: Referred to House Ways & Means 3/9/17.

The bill and constitutional amendment provides that the school homestead exemption is $25,000 or 13% of the market value of the homestead, whichever is greater. Homeowners with a school tax limitation and a homestead with a 2018 market value of more than $192,308 shall have their limitations reduced by subtracting $25,000 from 13% of the 2018 market value and multiplying by the 2018 school tax rate.

State funding to school districts is adjusted for the exemption change.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: Referred to House Ways & Means 3/6/17.

DISABLED VETERAN’S EXEMPTION CHANGED FROM DOLLAR AMOUNT TO PERCENTAGE EXEMPTION OF PROPERTY’S VALUE HB 1696, HJR 70 Blanco Amends 11.22, 11.26; amends Tex. Const. Article 8, Section 2(b) The bill and constitutional amendment change the dollar amounts of exemptions for a disabled veteran and the veteran’s surviving spouse and children to percentages of the property’s value: disability rating of 10 to less than 30% is an exemption of 7.91% of the property’s value; disability rating of 30 to less than 50% is exemption of 11.86% of value; disability rating of 50 to less than 70% is 15.82% of value; and disability rating of 70% or more is 18.98% of value.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: HB 1696 referred to House Ways & Means 3/9/17 and HJR 70 on 3/20/17.

CONTIGOUS TRACT OF LAND BY PLACE OF RELIGIOUS WORSHIP IS NOT ENTITLED UP TO SIX-YEAR EXEMPTION HB 2133 Anderson Amends 11.20 The bill remove the current land that a tract of land contiguous to an actual place of religious worship receives an exemption for up to six years.

Proposed Effective: 1/1/2018.

Status: Referred to House Ways & Means 3/13/17.

SCHOOL HOMESTEAD EXEMPTIONS INCREASED FOR ONE YEAR, USING MONEY FROM ECONOMIC STABLIZATION FUND HB 2268, HJR 75 Raymond Amends 11.13, 11.26; adds Education Code 41.0011 and amends 42.2518, 42.252, 42.302, 46.003, 46.032, 46.071; amends Tex. Const. Art. 3, Sec. 49-g and Art. 8, Sec. 1-b The bill and constitutional amendment increases the current school homestead exemption to $71,000 from

2017 Legislative Update; Page 18

$25,000 for the 2018 taxes only. The over-65 or disabled homeowners are increased to $46,000 from $10,000, and those homeowners with limitations are adjusted for the $46,000 times the 2018 tax rate. The state adjusts the taxable wealth of school districts as if the exemption existed for the 2017 tax year, and adjustments are made in state funding for the additional exemption. The constitutional amendment also appropriates $3.05 billion of the economic stabilization fund to the foundation school program to finance the temporary increase in the school homestead exemptions.

Proposed Effective: 1/1/2018, if constitutional amendment to appropriate money from the economic stabilization fund is passed by Texas voters November 7, 2017.

Status: HB 2268 referred to House Ways & Means 3/15/17 and HJR 75 on 3/20/17.

MORE LOCAL GOVERNMENTS AFFECTED BY DISABLED VETERANS EXEMPTIONS MAY APPLY FOR STATE AID HB 2356 Cosper; similar HB 3524 Sheffield Amends Local Government Code 140.011; amends Transportation Code 201.996 HB 2356 revises which local governments may apply for state aid for being disproportionately affected by disabled veterans’ exemptions and the resulting revenue loss. Added to the local governments are the cities in a county in which a U.S. military installation is wholly or partly located and not just those that are adjacent to it and to a county that is adjacent to a county with a military base. HB 3524 adds that the formula for allocating state funds for congestion mitigation and air quality improvement projects prioritize those regions with a military installation and have granted tax relief to disabled veterans disproportionately.

Proposed Effective: 9/1/2017.

Status: HB 2356 referred to House Ways & Means 3/16/17.

NAVIGATION DISTRICT PROPERTY EXEMPT FROM TAXES HB 2591 Herrero, SB 1133 Hinojosa Adds Water Code 60.005 These bills provide that navigation district property is public property used for essential public and governmental purposes and exempt from all taxes and 2017 Legislative Update; Page 19

special assessments by the state or a political subdivision.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, 9/1/2017.

Status: SB 1133 referred to Senate Transportation 3/7/17. HB 2951 referred to House Ways & Means 3/27/17.

VEHICLE LEASED TO STATE, PUBLIC ENTITY OR CHARITY EXEMPT FROM PROPERTY TAX HB 2714 Bohac Amends 11.252 The bill adds to the leased motor vehicle exemption for a use other than production of income to include a motor vehicle leased to the state, a political subdivision of the state or a 501(c)(3) charitable organization. The Comptroller’s form shall require a lessee to provide the name, address and federal tax ID number.

Proposed Effective: 9/1/2017.

Status: Referred to House Ways & Means 3/28/17.

DISABLED VETERAN’S EXEMPTION AMOUNT INCREASED HB 2877, HJR 92 Sanford Amends 11.22; amends Tex. Const. Art. 8, Sec. 2(b) and repeals Sec. 2(d) The bill and constitutional amendment increase the amounts for the disabled veteran’s exemption based on disability rating as follows: $10,000 for disability rating between 10% but less than 30%; $15,000 for 30% but less than 50%; $20,000 for 50% but less than 70%; or $24,000 for at least 70%. A disabled veteran who is 65 with at least 10% disability, or is totally blind or has lost use of one or more limbs gets $24,000. The veteran’s surviving spouse exemption and eligible children increases to $10,000.

Proposed Effective: 1/1/2018, if constitutional amendment is passed by Texas voters November 7, 2017.

Status: HJR 92 referred to House Ways & Means 3/20/17. HB 2877 referred to House Ways & Means 3/29/17.

U. S. VETERAN RECEIVES ADDITIONAL $5,000 HOMESTEAD EXEMPTION HB 2887, HJR 93 Thierry Amends 11.13; amends Government Code 403.302; amends Tex. Const. Art. 8, Section 1-b

The bill and constitutional amendment add an additional homestead exemption of $5,000 for a veteran of the U.S. armed services who served in the armed services for at least three years. The Comptroller adjusts the Property Value Study for this new exemption for school funding.

Proposed Effective: 1/1/2018, if constitutional amendment is passed by Texas voters November 7, 2017.

Status: HJR 93 referred to House Ways & Means 3/20/17. HB 2887 referred to House Ways & Means 3/29/17.

COUNTY COMMISSIONERS COURT MAY EXEMPT RETAIL INVENTORY FOR LIMITED TIME HB 2973, HJR 96 Button Adds 11.37; adds Tex. Const. Art. 8, Sec. 1-u The bill and constitutional amendment add that the county commissioners court may adopt an exemption for county taxes for a person’s inventory held for sale at retail. The exemption applies to the current tax year if the official action was adopted before April 15 or to the following tax year if adopted on or after April 15.

The exemption continues for only the four tax years following that tax year. It does not apply to real property, a car dealer’s inventory, a boat dealer’s inventory, a heavy equipment dealer’s inventory or a dealer’s manufactured housing inventory.

Proposed Effective: 1/1/2018, if constitutional amendment is passed by Texas voters November 7, 2017.

Status: HJR 96 referred to House Ways & Means 3/20/17 and HB 2973 referred to House Ways & Means 3/22/17.

NON-PROFIT MEDICAL CENTER PROPERTY IS EXEMPT IN HARRIS COUNTY HB 2999 Bonnen; SB 1809 Huffman Amends 11.23 The bills add that in a county with a population of 3.3 million or more (Harris County), all real and personal property owned by a nonprofit corporation organized exclusively for benevolent, charitable and educational purposes is exempt. The property uses add research and auxiliary uses to support the organization, such as invention, development and dissemination of materials, tools, technologies, etc.

2017 Legislative Update; Page 20

Proposed Effective: 1/1/2018.

Status: HB 2999 left pending in House Ways & Means 3/29/17. SB 1809 referred to Senate Finance 3/23/17.

DISABLED VETERAN AND SURVIVING SPOUSE GRANTED ADDITIONAL PERCENTAGE HOMESTEAD EXEMPTION HB 3002, HJR 97 Miller Adds 11.134, 11.42, 11.43, 11.431, 26.1127, 31.031; adds Tex. Const. Art. 8, Sec. 1-b(o) The bill and constitutional amendment add a new homestead exemption for a disabled veteran with a disability rating of at least 80% but less than 100%.

The veteran receives the same percentage exemption as the disabled veteran’s disability rating. The surviving spouse receives that same percentage homestead exemption if the spouse has not remarried and the spouse resided in that home and continues to reside in that home. The surviving spouse may transfer the dollar amount of the exemption from that home to a subsequent homestead if the surviving spouse remains unmarried. The chief appraiser provides a written certificate for the surviving spouse to use to claim the exemption on the subsequent homestead. The exemption applies on January 1 as if the home qualified for the entire year.

Proposed Effective: 1/1/2018, if amendment is passed

by Texas voters November 7, 2017.

Status: HJR 97 referred to House Ways & Means 3/20/17. HB 3002 referred to House Ways & Means 3/27/17.

USE REQUIREMENT DEFINED FOR TANGIBLE PERSONAL PROPERTY MOVING IN AND OUT OF TEXAS HB 3103 Darby Amends 11.01 The bill addresses tangible personal property used in Texas and outside of Texas to determine its situs for taxation. The property is considered to be used continually in Texas, whether regularly or irregularly, if the property is used in Texas three or more times on regular routes or for three or more completed assignments occurring in close succession throughout the year. A series of events in close succession are if they occur in sequence within a short period of intervals from the beginning to the end of the year.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, 9/1/2017.

Status: Referred to House Ways & Means 3/29/17.

CHIEF APPRAISER LIMITED IN REQUESTING IDENTIFICATION FOR HOMESTEAD EXEMPTION; TAX COLLECTOR SENDS REFUND TO ADDRESS STATED BY OWNER HB 3446 Yvonne Davis Amends 11.43, 25.027, 26.15, 31.12 The bill provides that the chief appraiser may not require an applicant for a homestead exemption to provide any other identification, except current law on driver’s license or state ID, to determine homestead address, unless the chief appraiser possesses reasonable evidence that the address is not the applicant’s homestead. A chief appraiser may not require both spouses of a married couple to sign the residence homestead exemption application. A chief appraiser may not require proof of marriage. The chief appraiser may not deny or cancel an exemption for an expired state ID or because the individual has a temporary license or limited term license. The bill changes Section 25.027, which provides that the CAD may not post on its website a property owner’s age or information that the owner is 65 years of age or older, to state that this age information does not apply to a non-searchable appraisal or tax roll dataset available for download only. For a refund on a residence homestead, the owner may request that the tax collector send the refund to a particular address. If no written request is made, the tax collector sends the refund to the owner’s most recent mailing address in the records of the tax collector. See also Tax Collections.

Proposed Effective: 9/1/2017.

Status: Filed.

SURVIVING SPOUSE OF TOTALLY DISABLED VETERAN RECEIVES TOTAL HOMESTEAD EXEMPTION HB 3498, HJR 105 White Amends 11.131; amends Tex. Const. Art. 8, Sec. 1-b The bill removes the current requirement that the residence homestead of the totally disabled veteran was also the same homestead of the surviving spouse on the date that the veteran died. The only requirement is that the surviving spouse has not remarried since the death of the disabled veteran.

2017 Legislative Update; Page 21

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: HJR 105 referred to House Ways & Means 3/20/17.

TAX LIMITATION APPLIES TO HOMESTEAD RENDERED UNINHABITABLE BY NATURAL DISASTER HB 3584, HJR 108 Neave Adds 11.262 and amends 23.19, 26.012; amends Education Code 44.004; amends Government Code 403.302; The bill and constitutional amendment add a tax limitation on homesteads damaged in disaster area declared by the governor following a natural disaster and rendered uninhabitable or unusable. A taxing unit may not increase during the limitation that takes effect on January 1 of the first tax year following the disaster and expires on January 1 of the earlier of first tax year following fifth year after the disaster or the first tax year that the homeowner or surviving spouse no longer claims the limitation. The homeowner submits a limitation application to the chief appraiser no later than the first anniversary of the date the home was rendered uninhabitable or unusable. The limitation is the taxes imposed on the homestead in the tax year it was rendered uninhabitable or unusable. The chief appraiser certifies the taxable value loss for a school district to the Comptroller. Current total value in Truth-in-Taxation calculation excludes the total value of homesteads that qualify for the tax limitation. The school district notice of proposed budget and tax rate includes a statement on the limitation.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: HJR 108 re-referred to House Ways & Means 3/30/17. HB 3584 referred to House Ways & Means 3/30/17.

INCOME APPROACH USED AND EXEMPTION CHANGES MADE TO COMMUNITY LAND TRUSTS HB 3447 Rodriquez; SB 1931 West Amends 11.182, 11.1827, 11.436, 23.21; amends Local Government Code 373B.003 The bills revise the exemption qualifications for a community land trust to remove the requirement to meet the strict Tax Code Section 11.18 provisions for exclusively used. The community land trust is

organized as a nonprofit corporation, a limited partnership with a nonprofit corporation controlling 100% of the general partner interest or a limited liability company with the nonprofit as the only member. Once the governing body of a taxing unit grants the exemption, the property continues to receive the exemption until the governing body rescinds by official action. In appraising for lowincome housing, the chief appraiser is directed to use the income approach, taking into account the limitation in computing actual rental income and projecting future rental income and using the same capitalization rate used to appraise other rentrestricted properties. If the sale of a housing unit is subject to an eligible land use restriction, the chief appraiser may not appraise the housing unit in a tax year that exceeds the price for which the housing unit may be sold under the restriction for that tax year.

Eligible land use restriction is an agreement recorded in the real property records, has a term of at least 40 years, restricts sales price that may be less than market value and restricts sale of unit to a family meeting income-eligibility standards.

Proposed Effective: 9/1/2017.

Status: SB 1931 referred to Senate Intergovernmental Relations 3/27/17.

PEACE OFFICER IN HIGH CRIME AREA GRANTED TOTAL HOMESTEAD EXEMPTION HB 3908, HJR 115 D Bonnen Adds 11.137; adds Tex. Const. Art. 9, Sec. 1-b(u) The bill and constitutional amendment provide for a total homestead exemption for a peace officer, employed by Texas or by a political subdivision of Texas, if the officer’s homestead is in a qualified high crime area. Qualified crime area is a census tract in the most recent decennial census that is one of the 100 census tracts in Texas with the highest per capita rate of arrests made for offenses under Penal Code Title 5.

The Texas Department of Public Safety (DPS) performs an analysis of crime statistics for the preceding tax year to identify the 100 census tracts.

DPS publishes the list in the Texas Register. The exemption would begin January 1, 2019.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: HJR 115 referred to House Ways & Means 3/20/17. HB 3908 referred to House Ways & Means 3/29/17.

2017 Legislative Update; Page 22

LOWER-INCOME HOMEOWNER GRANTED TAX LIMITATION IF HOME IS IN HOMESTEAD PRESERVATION DISTRICT HB 3920, HJR 116 Thierry Adds 11.263 and amends 23.19, 26.012; amends Education Code 44.004; amends Government Code 403.302; adds Tex. Const. Art. 8, Sec. 1-b(s) The bill and constitutional amendment grant a tax limitation to a lower-income person whose homestead is in a homestead preservation district, as defined by Local Government Code Section 373A.002. A lowerincome homeowner has a household income not greater than 60% of the area’s annual median family income, adjusted for household size, for the metro statistical area in which the homestead is located. The governing body of a taxing unit by official action adopts a limitation on the total annual taxes imposed on a lower-income homeowner in a preservation district. If adopted, the taxing unit may not increase the total annual taxes on the homestead the greater of (1) the taxes in the first tax year in which the limitation was in effect and the lower-income homeowner received the residence homestead exemption or (2) the taxes plus taxes on any new improvements to the homestead, other than normal repairs or government requirements. An improvement that is a replacement structure for one rendered uninhabitable or unusable is not considered a new improvement. If the tax limitation is erroneously allowed, the positive difference in any tax is imposed for each year and back taxes are due. The surviving spouse of a qualified individual receives the tax limitation if the homestead was and remains the surviving spouse’s home. If a school district grants the limitation, the chief appraiser determines the value loss and certifies it to the Comptroller. The Comptroller adjusts the Property Value Study for the value loss. The TNT values do not include the total value of the homesteads with a tax limitation for this provision. The school notice of proposed budget and tax rate includes a statement about this limitation.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: HJR 116 referred to House Ways & Means 3/20/17.

LEGISLATURE AUTHORIZED TO EXEMPT PRECIOUS METALS FROM TAXATION HJR 113 Capriglione Adds Tex. Const. Art. 8 Sec. 1-p The constitutional amendment would authorize the Legislature to exempt bullion, special and precious metals held by the Texas Bullion Depository from taxation. Precious metals include gold, silver, platinum, palladium and rhodium.

Proposed Effective: If voters approve constitutional amendment November 7, 2017.

Status: HJR 113 referred to House Ways & Means 3/20/17.

FIRST RESPONDER’S SURVIVING SPOUSE HOMESTEAD EXEMPTED SB 15 Huffines, SJR 1 Campbell; HB 570, HJR 86 Button; HB 2524, HJR 88 Fallon Adds 11.134; amends 11.42, 11.43, 11.431, 26.10, 26.112; amends Government Code 403.302; adds Tex. Const. Art. 8, Sec. 1-b(o) and (p) These bills and constitutional provisions provide a 100% homestead exemption to the surviving spouse of a first responder killed while on duty. The exemption is transferrable in its dollar amount to a new homestead. The exemption is effective if the surviving spouse is an eligible survivor for purposes of Government Code Chapter 615, as determined by the Employees Retirement System, and has not remarried since the death of the first responder. The exemption applies regardless of the date of the first responder’s death if the surviving spouse meets the qualifications. A one-time application is required. The application must be made within one year of qualification to be timely for the first year. The exemption applies for the whole first year but is prorated off if property ceases to qualify. The Comptroller adjusts the property values for school districts for state aid adjustments to compensate schools for the loss.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: SB 15, SJR 1 passed Senate, with one floor amendment, and received in House 3/14/17. HB 570 referred to House Ways & Means 2/20/17.

HJR 86 referred to House Ways & Means 3/9/17.

HJR 88 referred to House Ways & Means 3/20/17 and HB 2524 3/23/17.

2017 Legislative Update; Page 23

FIRST RESPONDER RECEIVES ADDITIONAL HOMESTEAD EXEMPTION HB 3264, HJR 102 Anderson Adds 11.136 and amends 11.13, 11.42, 11.43, 11.431, 26.10, 26.1125; amends Government Code 403.302; adds Tex. Const. Art. 8, Sec. 1-b(q), (r), (s) and (t) The bill and constitutional amendment provides for an additional $10,000 homestead exemption by a taxing unit to a first responder, if the residence homestead is located in the political subdivision that employs the first responder. If the first responder is employed by the state, the exemption is granted regardless of the location of the residence homestead. A disabled first responder who sustained the injury during official duties and the injury is a total disability resulting in permanent incapacity that has been for more than 12 months has the total homestead value exempted. The surviving spouse of the disabled first responder continues the total exemption if the surviving spouse has not remarried and surviving spouse lived in that home and remains in that home. If the disabled first responder is unmarried, any surviving children are entitled to the exemption of the same property if one or more are younger than 18 years of age and unmarried and live in the home and continue living in the home. A one-time application is required. The application must be made within one year of qualification to be timely for the first year. The exemption applies for whole first year but is prorated off if property ceases to qualify. The Comptroller adjusts the property values for school districts for state aid adjustments to compensate schools for the loss.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: HJR 102 referred to House Ways & Means 3/20/17. HB 3264 referred to House Ways & Means 3/28/17.

DISABLED VETERAN HOMESTEAD EXEMPTION HAS LATE APPLICATION SB 97 Hall Amends 11.431; adds 11.4311 The bill authorizes the acceptance of the application of a disabled veteran’s homestead exemption within one year after the date the Veteran’s Administration approves the veteran for 100% disability.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Finance 1/24/17.

Amends 11.43; amends Tex. Const. Art. 8, Sec. 15 LOCAL EXEMPTION BY CERTAIN TAXING UNITS GRANTED IN DOLLAR AMOUNT, WITH REDUCING OR REPEALING PERCENTAGE HOMESTEAD EXEMPTION AND ADJUSTING IN TRUTH-IN-TAXATION RATES SB 418, SJR 29 Watson Amends 11.13, 25.23, 26.012; amends Tex. Const.

Art. 8, Sec. 1-b The bill and constitutional amendment provide that a municipality or county that adopted a percentage homestead exemption in 2014 may repeal that exemption if it adopts a dollar amount of homestead exemption of at least $5,000 by December 31, 2019.

The exemption is adopted before July 1. If the average homestead appraised value in the unit exceeds $25,000, based on the appraisal records, then the governing body may authorize a larger dollar amount not to exceed an amount equal to 20% of the average homestead’s value in the year that the exemption is adopted. A homeowner who received the percentage homestead exemption is entitled to continue to receive that percentage exemption if it is higher than the dollar amount exemption. This choice ends when the home’s ownership changes or there is a change in the trustor or beneficiary of the trust if the homestead is in a qualifying trust. The amount of the dollar exemptions is excluded from the current total value in the truth-in-taxation calculations.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: Referred to Senate Finance 2/1/17.

CHARITY THAT DOES TAX RETURNS EXEMPT FROM PROPERTY TAXES SB 1345 Watson Amends 11.18 The bill exempts a charitable organization’s property used to provide tax return preparation and other financial services without the beneficiaries’ ability to pay.

Proposed Effective: 1/1/2018.

Status: Scheduled for hearing in Senate Finance 4/3/17.

TAX LIEN ON ERRONEOUS EXEMPTION ADDED TO APPRAISAL ROLL IS NOT ENFORCED AGAINST NEW OWNER SB 1745, SJR 55 Hinojosa 2017 Legislative Update; Page 24

The bill and constitutional amendment provide that if the chief appraiser adds property or appraised value that was erroneously exempted in a prior year to the appraisal roll, a tax lien may not be enforced against the property for payment of taxes, penalties or interest as a result of adding the property if at any time after January 1 of that year the property was sold in an arm’s length transaction to a person who was not related to the seller within the first degree by blood or marriage. See also Delinquent Tax Litigation.

Proposed Effective: 9/1/2017. Not contingent on voter approval of constitutional amendment November 7, 2017.

Status: SJR 55 referred to Senate Finance 3/21/17 and SB 1745 3/23/17.

COUNTY FAIRS ASSOCIATION EXEMPTION CHANGED TO REFER TO TEXAS RACING ACT SB 1969 Kolkhorst Amends 11.23 and various sections of Occupations Code Title 13 The bill changes the cite for the county fairs association exemption from Article 179e, Vernon’s Texas Civil Statutes to Subtitle A-1, Title 13, Occupations Code, Texas Racing Act. Proposed Effective: 4/1/2019.

Status: Referred to Senate Committee on Administration 3/27/17.

PROCEDURES CHANGED FOR POLLUTION CONTROL EXEMPTION SB 2028 Rodriquez; HB 4219 Perez Amends 11.31 and 11.43

THE

The bill requires the Texas Commission on Environmental Quality (TCEQ) to adopt by rule a list of property that is used wholly as a facility, device or method for controlling pollution. The TCEQ executive director can use previously determined property to compile the list. TCEQ reviews the list every five years. The fact that a property is on the list and TCEQ determined previously it was pollution control property does not preclude the chief appraiser from cancelling the exemption if the chief appraiser determines the property is no longer installed or no longer used. An exemption expires at the end of five years. To continue to receive the exemption, the person must file a new permit application or

exemption request with TCEQ executive director and a new application with the chief appraiser by September 1 in the year the exemption expires.

Exemptions granted before 1998 tax year expire the end of 2018 tax year unless the person uses the renewal process. Exemptions granted before 2003 but not before 1998 expire at the end of 2019 tax year.

Exemptions granted before 2009 but not before 2003 expire at the end of the 2020 tax year. Exemptions granted before 2011 but not before 2009 expire at the end of the 2021 tax year. Exemptions granted before 2018 but not before 2011 expires at the end of the 2022 tax year. The exception for these expirations is that the property is on the TCEQ list of properties. The pollution control exemption returns to being an annual application process.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Referred to Senate Finance 3/27/17.

FREEPORT PROPERTY EXEMPTION EXTENDED TO FULL YEAR AND OTHER CHANGES SB 2043 Bettencourt Amends 11.251 The bill extends the current exemption for freeport property from 175 days to 365 days to be transported out of Texas. No SJR was filed for the constitutional amendment.

Proposed Effective: 1/1/2018, if approve the constitutional amendment. No SJR filed to call for amendment at election November 7, 2017.

Status: Referred to Senate Finance 3/28/17.

Special Valuation UNCOMMON AGRICULTURAL USES ADDED FOR OPEN-SPACE LAND APPRAISAL ON SMALL LAND TRACTS HB 231 Rodriguez; similar SB 700 Zaffirini Adds 23.5215; amends 23.51 These bills add guidelines for uncommon agricultural uses, particularly for small-scale producers on land under 10 acres. In consultation with the Texas A&M AgriLife Extension Service, appraisal districts and producers, the Comptroller shall develop these guidelines and may consider financial investment, 2017 Legislative Update; Page 25

degree of active management and percentage of land tract used for ag uses. The chief appraiser shall distinguish between the degree of intensity required for various agricultural methods, including organic, sustainable, pastured poultry, rotational grazing and other uncommon methods. Producing fruits and vegetables is added to the definition of agricultural use. Land under 10 acres that qualified under these guidelines may not subsequently qualify for wildlife management use.

Proposed Effective: 9/1/2017, and applies to appraisal of land for 2019 tax year and after.

Status: SB 700 referred to Senate Finance 2/15/17.

HB 231 referred to House Agriculture & Livestock 2/21/17.

OPEN SPACE AG ROLLBACK SHORTENED TO TWO YEARS HB 320 Canales Amends 23.55 The bill changes the length of the rollback of taxes for changing land from agricultural use from the preceding five years to the preceding two years.

Proposed Effective: 9/1/2017.

Status: Scheduled for hearing in House Agriculture and Livestock 3/22/17 but not heard.

WILDLIFE MANAGEMENT VALUE IS AT NATIVE PASTURE CATEGORY, WITH NO REQUIREMENT FOR PRIOR YEAR OPENSPACE LAND QUALIFICATION HB 643 Phillips Amends 23.51, 23.52 The bill changes the definition of wildlife management to remove the requirement that the land was qualified open-space land or qualified timber land at the time it was changed to wildlife management. The wildlife management value is based on the native pasture category value.

Proposed Effective: 1/1/2018.

Status: Referred to House Ways & Means 2/22/17.

OPEN-SPACE AG ROLLBACK TAX REPEALED HB 801 Murphy; HB 1880 Hefner Repeals 23.55; amends 1.07, 23.20, 23.52, 23.551, 23.58, 31.01, 41.41, 41.44; amends Agriculture Code 60.022; amends Property Code 21.0421

These bills repeal the rollback tax assessed when a landowner changes the agricultural use of qualified open-space land to a nonagricultural use.

Proposed Effective: 9/1/2017.

Status: HB 801 referred to House Agriculture & Livestock 2/21/17. HB 1880 referred to House Agriculture & Livestock 3/13/17.

OPEN-SPACE AG AND TIMBER ROLLBACK TAX REPEALED HB 1662, HJR 68 Phelan Repeals 23.46, 23.55, 23.76, 23.9807; amends 1.07, 23.20, 23.47, 23.52, 23.551, 23.58, 23.73, 31.01, 41.41, 41.44; amends Agriculture Code 60.022; amends Property Code 21.0421; repeals Art. 8, Section 1-d(f) The bill repeals the rollback tax assessed when a landowner changes the agricultural use of qualified open-space land to a nonagricultural use or changes land qualified for timberland appraisal to a nonqualifying use.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017. If not, then all the changes apply 1/1/2018, except the old aguse rollback tax in Section 23.46 remains.

Status: Referred to House Ways & Means 3/22/17.

INTEREST RATE LOWERED ROLLBACK TAX BILL HB 1211 Phillips Amends 23.55

FOR

AG

The bill lowers the interest rate imposed on a rollback tax bill for changing land to a non-agricultural use from 7% to 5%.

Proposed Effective: 9/1/2017.

Status: Referred to House Ways & Means 2/22/17.

OWNER OF HEAVY EQUIPMENT INVENTORY GETS 10 EXTRA DAYS TO PREPAY TAX HB 1346 Button; SB 711 Taylor Amends 23.1242 The bills give the owner/dealer of heavy equipment inventory 20 days after the first of each month to file the required form and prepay the inventory tax.

Current law requires the owner/dealer to file and pay by the 10th day of the month.

Proposed Effective: 9/1/2017.

2017 Legislative Update; Page 26

Status: SB 711 left pending in Senate Finance 3/27/17. HB 1346 reported from House Ways & Means 3/20/17 and recommended for House Local/Consent Calendar.

PREDATOR CONTROL MANAGEMENT ADDED FOR WILDLIFE MANAGEMENT USE HB 1471 Murr; SB 1209 Uresti Amends 23.51, 23.521 These bills add predator control activities on an owner’s land as a qualifying wildlife management use. The landowner must be a member in good standing of the local predation management organization, current on membership dues and allow the organization or Texas Wildlife Services reasonable access to the land to conduct predation management activities.

The local predation management organization must expend at least 70 percent of its annual budget conducting these activities or contributing to the Texas Wildlife Services. The Texas Parks and Wildlife Department, with assistance from the Texas A&M AgriLife Extension Service, shall develop what those activities include and a membership form with certification by the local organization. The landowner presents the membership form to the CAD to prove membership.

The Comptroller by rule adopts the membership form and distributes to CADs. Proposed Effective: 9/1/2017.

Status: SB 1209 referred to Senate Finance 3/9/17.

HB 1471 referred to House Ways & Means 3/20/17.

STATE AGRICULTURAL AND TIMBER ADVISORY COMMITTEES ABOLISHED HB 1712 Shaheen Amends 23.52(d) and 23.73(b) The substitute bill abolishes numerous advisory committees for various state laws, including the state committees for the approval of the manuals for agricultural land and timber land valuation. The Comptroller seeks the review and counsel of the Texas Department of Agriculture before approving a rule change to the agricultural land manual. The Comptroller seeks the review and counsel of the Texas A&M Forest Service before approving a rule change to the timber land manual.

Proposed Effective: 9/1/2017.

Status: Substitute reported from House Government Transparency & Operations 3/23/17 and sent to House Calendars 3/24/17.

HEAVY EQUIPMENT INVENTORY DEFINITION AND PROCEDURES CHANGED HB 2560 King Repeals 21.1241(b-1) and amends 23.1241, 23.1242 The bill revises the inventory tax provision for heavy equipment dealers.

The definition of heavy equipment inventory is to be inventory held for sale at retail, including leased or rented but subject to a purchase option by the lessee or renter. The sales price for a leased or rented item with option to purchase is the total amount of the lease or rental payments plus any final consideration, excluding interest. A sale is considered to have occurred when possession of an item of heavy equipment is transferred from the dealer to the purchaser. The bill removes language and provisions about a leased or rented item only (no option to purchase), including a line item for the inventory tax on the invoice of a rental item and the repeal of Section 23.1241(b-1).

Proposed Effective: 9/1/2017.

Status: Referred to House Ways & Means 3/27/17.

RETAL INVENTORY APPRAISED BASED ON PAST YEAR’S AVERAGE MONTHLY SALES HB 2589 Button Adds 23.1244 and amends 23.12, The bill adds retail inventory to the special inventory appraisal process, excluding those that render their retail inventory. Retail inventory is all tangible personal property that the retailer holds for sale during a 12-month period and which is not tax exempt. Sales price of the inventory is what the retailer paid for the purchase of the inventory. The inventory’s market value on January 1 is the total annual sales, less inventory shrinkage, sales at wholesale and sales to retailers, for the preceding tax year 12-month period, divided by 12. For the nine-year period of January 1, 2018 to December 31, 2026, the market value is the greater of the average monthly sales from the preceding year or the following percentages, based on the regular inventory appraisal under Section 23.12: 90% for 2018, 80% for 2019, 70% for 2020, 60% for 2021, 50% for 2022, 40% for 2023, 30% for 2024, 20% for 2025, 10% for 2026. The chief appraiser shall estimate the retailer’s inventory market value if not a 2017 Legislative Update; Page 27

retailer on January 1. The Comptroller develops a declaration form to be filed by the retailer by April 15 annually, or within 30 days of business commencement. There is no pre-payment of VIT taxes to the county tax assessor-collector.

Proposed Effective: 1/1/2018.

Status: Referred to House Ways & Means 3/27/17.

FAMILY TRANSFER OF QUALIFIED AG VALUE LAND DOES NOT REQUIRE A NEW AG APPLICATION; ARB CORRECTS LAND NOT GRANTED AG VALUE IN PAST YEAR HB 3137 Hefner; similar to HB 3928 Schaefer Amends 23.54, 25.25 The bills add that a person is not required to file a new agricultural valuation application because of an ownership change in qualified land if the former owner and new owner are related within the second degree by marriage or third degree by blood. The new owner must notify the appraisal office of the ownership transfer in writing within 180 days of the transfer date. The ARB may correct the appraisal record for qualified land in either of the two preceding tax years if the chief appraiser or property owner demonstrates by clear and convincing evidence that the land was appraised for three of the five preceding tax years as qualified agricultural land, the land was determined ineligible for ag value because the owner failed to file a new application after ownership change, the change of ownership was to a relative within the second degree by marriage or third degree by blood and the land continued to be used for ag during that year. If the ARB approves the correction, the owner pays 10% penalty in the difference of taxes.

The ARB may not change the record if the land was subject to a protest by the owner for which a formal hearing was held or the appraised value was established by a written agreement with CAD. Proposed Effective: 1/1/2018.

Status: HB 3137 referred to House Ways & Means 3/29/17.

AG ROLLBACK TAX DOES NOT APPLY TO CHANGE FOR OIL AND GAS LEASE HB 3198 Darby Amends 23.55 The bill adds that the rollback tax for change of use for qualified agricultural land does not apply to land changed as a result of a lessee conducting oil and gas

operations under a lease for which the Texas Railroad Commission has jurisdiction.

Proposed Effective: 9/1/2017.

Status: Referred to House Ways & Means 3/30/17.

HEAVY EQUIPMENT DEALER USES AVERAGE MONTHLY SUM OF MARKET VALUE OF ITEMS FOR VALUE AND TO PREPAY TAXES HB 3466 King Amends 23.1241, 23.1242, 41.44, 41.47, 42.01; repeals 23.1243 The bill changes the inventory appraisal of a heavy equipment dealer to use the market value of all inventory based on the last day of each month of the preceding year and dividing by 12. The market value of an item of heavy equipment that was in the inventory for only a portion of the month is determined by multiplying the market value of the item by a fraction, the numerator is the number of days the item was part of the inventory and the denominator is the number of days in the month. For a dealer who began after January 1 of the preceding year, the sum is divided by the number of months in the preceding year that the person was a dealer. The bill adds that the dealer files in the appraisal district in which the heavy equipment inventory has situs. If the chief appraiser determines that the values as reported by the dealer are inaccurate, the chief appraiser appraises the heavy equipment, places the value on the appraisal roll and gives notice for which the owner may protest to the ARB. For the monthly prepayment, the owner assigns a unit property tax to each item of the dealer’s heavy equipment that is in the inventory on the last day of the preceding month. The unit property tax is based on the equipment’s market value. The owner may not withdraw funds from the escrow account (current exception in law is removed).

Proposed Effective: 1/1/2018.

Status: Filed.

LEASED OR RENTED EQUIPMENT REMOVED FROM THE SPECIAL INVENTORY PROVISIONS FOR HEAVY EQUIPMENT DEALERS HB 3850 Zerwas Amends 23.1241; amends various other Codes with state fiscal matters The bill removes leasing and renting heavy equipment from the special inventory provisions for heavy equipment dealers. A heavy equipment dealer is one 2017 Legislative Update; Page 28

who sells heavy equipment, including items that are for purchase pursuant to a lease with option to purchase. Sales price is the total amount paid during the tax year in which the purchase occurs plus any final consideration paid or to be paid to the dealer for the purchase, excluding interest. An item of heavy equipment is not considered to be in a dealer’s inventory if the item was included on the dealer’s heavy equipment inventory on January 1 of the preceding tax year and was not sold by the dealer in that tax year and for 30 days or more during the preceding tax year the item was either leased or rented by the dealer to one or more other persons or used not related to demonstrating or testing the equipment for sale, lease or rent.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Referred to House Appropriations 3/30/17.

QUALIFIED CITRUS PRODUCING LAND CONTINUES TO RECEIVE AG PRODUCTIVITY VALUE WHEN PEST CONTROL MANAGEMENT IS REQUIRED HB 3013 Martinez; SB 1459 Hinojosa Adds 23.524 The bills provide for temporary cessation of agricultural use to manage the spread of certain pests.

Qualified agricultural land does not end because the land ceases to be devoted principally to ag use to the degree of intensity generally accepted if the land is in a pest management zone and appraised primarily for producing citrus. The owner has an agreement to destroy, remove or treat all citrus trees located on the land and infested with pests. The agreement, per Agriculture Code Section 80.003, is with the Texas Citrus Pest and Disease Management Corporation, the Agriculture Commissioner or the U. S. Department of Agriculture. The temporary cessation is for five years.

The owner is required to notify the chief appraiser in writing within 30 days of the agreement about the temporary cessation and include a copy of the agreement. A change of use occurs if the owner does not fully comply with the terms of the agreement.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: SB 1459 referred to Senate Agriculture, Water & Rural Affairs 3/20/17, reported favorably 3/27/17 and recommended for Local/Uncontested Calendar 3/29/17. HB 3013

referred to House Agriculture and Livestock 3/27/17.

LAND DEFINED FOR TIMBER APPRAISAL HB 3975 Ashby Amends 23.72 The bill adds to the timberland appraisal provision the definition that “land” include roads, rights-of-way, buffer areas, fire breaks, property taken from eminent domain and other real property associated with producing timber or forest products.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Filed.

MEMBER IN MILITARY SERVICE DOES NOT LOSE AG VALUE DUE TO CESSATION OF AG ACTIVITY DURING SERVICE OUT-OF-STATE SB 175 Nichols; HB 777 Ashby Adds 23.253 These bills address a member of the armed services who is deployed out-of-state and who has land that qualifies for productivity valuation. The service member notifies the chief appraiser within 30 days of receiving the notice of deployment that the member intends to resume ag production to the requisite degree of intensity within 180 days of returning to Texas. The land’s productivity value may not be removed due to cessation of agricultural activity.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, 9/1/2017.

Status: SB 175 referred to Senate Finance 1/25/17.

HB 777 reported from House Ways & Means 3/20/17 and recommended for House Local/Consent Calendar.

AG-USE QUALIFICATONS ADDED FOR U. S. VETERAN OR A YOUNG FARMER/RANCHER SB 330 Rodriguez; HB 950 Rodriguez Amends 23.51 These bills provide that land qualifies for open-space land appraisal if currently devoted principally to degree of intensity generally accepted in the area, was devoted to agricultural use or timber production in the preceding year and is owned or managed by a veteran of the U. S. armed services or by an individual who was less than 35 years of age and had not served as the principal operator of a farm or ranch for any 2017 Legislative Update; Page 29

period of more than 10 consecutive years. The Senate floor amendment to SB 330 removes “managed” by a veteran, so the veteran owns the land.

Proposed Effective: 1/1/2018.

Status: SB 330, with one floor amendment, passed Senate 3/29/17 and received in House 3/30/17. HB 950 left pending in House Agriculture & Livestock 3/22/17.

STATE LEADERS REMOVED FROM APPROVAL OF COMPTROLLER’S AG AND TIMBER MANUALS SB 594 Creighton; HB 1299 Springer Amends 23.52 and 23.73 These bills remove the five-member state committee of Governor, Comptroller, Attorney General, Agriculture Commissioner and General Land Office Commissioner to approve the Comptroller’s rule on the manuals for the appraisal of open-space land (ag) and of timber land. The bill requires the Comptroller, with the review and counsel of the Department of Agriculture, to approve the rules for these two manuals.

Proposed Effective: 1/1/2018.

Status: SB 594 passed Senate 3/27/17 and received in House 3/28/17. HB 1299 referred to House Ways & Means 3/21/17.

NO INTEREST ADDED TO AG ROLLBACK BILL SB 629 Schwertner; HB 2314 Murphy Amends 23.46, 23.47, 23.55, 23.58 The bills remove the interest added to an agricultural rollback tax bill, for land qualified under 1-d and 1-d1. Current law has an annual 7% interest rate calculated for each year on the ag rollback bill for 1d-1. For an ag rollback tax bill that goes delinquent, penalty and interest is added.

Proposed Effective: 9/1/2017.

Status: SB 629 passed Senate 3/27/17 and received in House 3/28/17. HB 2314 referred to House Ways & Means 3/22/17.

LAND USED AS ECO-LAB MUST HAVE QUALIFED IN 2017 TO CONTINUE THAT APPRAISAL SB 1006 Nichols Amends 23.51

The bill adds that land used principally as an eco-lab by a public or private university does not qualify for appraisal as open-space land unless the land was appraised as open-space land for that use for the 2017 tax year.

Proposed Effective: 1/1/2018.

Status: Left pending in Senate Finance 3/27/17.

QUALIFIED AG LAND IN SMALLER COUNTY HAS NO ROLLBACK TAX FOR CHANGE OF USE SB 1379 Zaffirini Amends 23.55 The bill removes the agricultural rollback tax for a change of use for land qualified for productivity appraisal in a county with a population of less than 25,000.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Finance 3/16/17.

OIL AND GAS PRODUCTION DOES NOT END AG VALUATION SB 1514, SJR 51 Estes Adds 23.524; amends Tex. Const. Art. 8, Sec. 1-d-1 The bill adds that the eligibility of land for agricultural productivity appraisal does not end because a lessee begins conducting oil and gas operations under a lease for which the Texas Railroad Commission has jurisdiction.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: Referred to Senate Finance 3/20/17.

OLD 1-D AG ROLLBACK TAXES FOR CONDEMNATION BECOME OBLIGATION OF CONDEMNING ENTITY SB 1979 Schwertner Amends 23.46 The bill adds to the provisions of the old 1-d ag use that the rollback taxes due because land was diverted to a nonagricultural use as a result of condemnation are the personal obligation of the condemning entity and not the property owner from whom the property was taken.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Finance 3/27/17.

2017 Legislative Update; Page 30

Appraisal Review Board (ARB) SPECIALIZED ARB PANELS REQUIRED IN LARGE DISTRICTS The Property Tax Reform and Relief Act of 2017 SB 2 Bettencourt; similar HB 934 Zerwas Adds 6.425; amends 6.41, 6.414, 6.42, 25.22, 41.03, 41.11, 41.12, 41.44, 41.45, 41.66, 41.71 Submission of Records SB 2 provides that the chief appraiser shall submit the appraisal records to the ARB for review by May 1, instead of May 15, or as soon thereafter as practicable.

ARB Panels The appraisal district board of directors in a county with a population of 120,000 or more shall increase the size of the ARB to manage duties and to provide for specialized panels for complex properties. Four such panels, consisting of three members appointed by the ARB chair, are commercial, utilities, industrial and multi-family. The ARB chair may create more than one special panel for each category. In selecting individuals, the local administrative district judge shall select an adequate number of qualified individuals to permit the ARB chair to fill the special panel positions. To be eligible to serve on these panels, a person must hold a law degree, an MBA, be a certified public accountant, a senior appraiser certified by ASA, an MAI, hold a CAE, have 20-plus years of experience in property tax appraisal or consulting or be licensed as a real estate broker or sales agent under Occupations Code Chapter 1101. If an insufficient number of members possess these qualifications, the ARB chair may appoint a member with a bachelor’s degree in any field.

A property owner in the specialized category may request that the protest be heard by the specialized property panel for that property category. If multiple panels exist and the protest is moved to another specialized panel, the property owner may consent to be heard the same day or may request a postponement.

(This is the same for non-specialized property hearings.)

The concurrence of the majority of a panel or of the ARB is sufficient to decide a matter and a greater majority may not be required.

Taxing Unit Challenge SB 2 provides that taxing units may no longer challenge the level of appraisals in a category or a territory before the ARB. Other grounds for challenge remain.

ARB deadline to Approve Appraisal Records Earlier SB 2 sets out the ARB shall substantially complete hearings and approve the appraisal records by July 5, instead of July 20.

Protest Deadline May 15 SB 2 substitute changes the protest deadline to not later than the later date of May 15, instead of May 1, for all protests or the 30th day after the date the chief appraiser delivers the 25.19 notice to property owner.

Protest Form for Specialized Properties The protest form for properties in the commercial, utility, industrial and multifamily categories must permit the owner to request a hearing before a specialized panel. If the owner fails to request a specialized panel, any panel may hear the protest of that owner.

Disapproved Panel Recommendations If the whole ARB disapproves a recommendation by a specialized panel for commercial, utility, industrial or multifamily properties, the whole ARB shall conduct the rehearing. If the ARB disapproves the recommendation for any other panel, the ARB must still provide a hearing before another panel. Notices of the rehearing are still required.

Weekend and Evening Hearings SB 2 provides that the ARB may schedule weekend hearings on a Saturday, but not a Sunday. Evening hearings may be scheduled after 5 p.m. on the weekday, but the first hearing for that evening may not be scheduled to begin after 7 p.m.

For more analysis of these bills, see also Appraisal District Administration, Appraisal, Exemption, Appraisal Review Board, Appraisal District Litigation, Assessment and Truth in Taxation Sections.

Proposed Effective: 1/1/2018 for the concurrence of a majority of panel or board, barring of taxing unit challenges regarding levels of value and all other matters. 1/1/2019 for appointment of specialized panel members by the district judge, creation of 2017 Legislative Update; Page 31

specialized panels, inclusion of the right to request a specialized panel in the 25.19 notice and all other provisions with specialized panels.

Status: SB 2 substitute, with four floor amendments, passed Senate 3/21/17, and received in House 3/22/17. HB 934 referred to House Ways & Means 2/21/17.

TAXING UNIT CHALLENGE LIMITED SB 1906 Bettencourt Amends The bill provides that taxing units may no longer challenge the level of appraisals in a category or a territory before the ARB. Other grounds for challenges remain. This is also in SB 2 above.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Referred to Senate Finance 3/23/17.

ARB SELECTS ITS SECRETARY SB 1907 Bettencourt Amends 6.42

CHAIRMAN

AND

The bill returns the authority of selecting the ARB officers of chairman and secretary to the ARB rather than the CAD board of directors.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Finance 3/23/17.

NOTICE OF PROTEST HEARING DELIVERED

BY CERTIFIED MAIL IF REQUESTED HB 139 Bell Amends 41.46 The bill requires that the ARB deliver the notice of hearing for protests filed under Section 41.44 by certified mail if the owner requests such notice with the protest. The ARB may provide that the property owner pay the costs of postage.

Proposed Effective: 9/1/2017.

Status: Referred to House Ways & Means 2/13/17.

PROPERTY OWNER HEARD BY TELEPHONE AT ARB HEARING HB 455 Metcalf Amends 41.45 The substitute bill authorizes a property owner who gives advance notice at least 10 days before the ARB

hearing or in the protest to appear by telephone conference call to offer argument. Or, the ARB proposes that the hearing be conducted by telephone conference call and the property owner agrees.

Evidence must be submitted in advance by affidavit.

The ARB shall provide a telephone number for the owner to call to participate in the hearing and hold the hearing in a location equipped with telephone equipment that allows each ARB member and other parties to hear the owner’s argument. The owner may still appear in person. If the owner doesn’t show, the evidence in the affidavit is to be submitted as appearance.

Proposed Effective: 9/1/2017.

Status: Substitute reported favorably from House Ways & Means 3/27/17 and recommend for House Local & Consent Calendar.

FIVE ARB MEMBERS ELECTED BY COUNTY VOTERS HB 566 Keough Adds 6.4010; amends 5.103, 6.41, 6.411, 6.413, 6.414, 6.42, 41.66; repeals various subsections of Tax Code; amends Election Code 52.092 The bill provides that county voters shall elect five ARB members at the general election for state and county officers. The application and filing fee of $250 is filed with the county judge to be listed on the ballot as an independent candidate. The elected ARB members shall serve two-year terms that begin on January 1 of odd-numbered years. The county commissioners shall appoint a person to fill a vacancy on the ARB. Grounds for removal are the same as current law, plus adding the removal for failure to compete the Comptroller’s training course. The bill removes the application for ARB membership from the Comptroller’s model guidelines. The elected ARB members may appoint auxiliary ARB members to one-year terms. Auxiliary ARB members may not serve more than two consecutive terms. The ARB selects its chair and secretary.

Proposed Effective: 1/1/2019, with some changes effective 9/1/2018 and first election in November 2018.

Status: Referred to House Ways & Means 2/20/17.

PROPERTY OWNER SENDS LESSEE COPY OF NOTICE OF APPRAISED VALUE HB 804 Dale Amends 41.413 2017 Legislative Update; Page 32

The bill requires an owner to send the person leasing the owner’s property under contract a copy of the notice of appraised value. The owner must send the notice not later than the 10th day after receiving it. A lessee who is entitled to protest before the ARB may file a protest not later than 30 days after the protest deadline if the property owner did not send a copy of the notice.

Proposed Effective: 9/1/2017.

Status: Left pending in House Ways & Means 3/15/17. A substitute bill is being drafted.

LOCAL ADMINISTRATIVE JUDGE APPOINTS ARB MEMBERS IN FEWER COUNTIES HB 1582 Tracy King Amends 6.41 The bill increases the county population from 120,000 to 350,000 where the administrative law judge appoints the ARB members.

Proposed Effective: 9/1/2017.

Status: Referred to House Ways & Means 3/9/17.

ARB CORRECTION REQUIRED IF HOME SELLS FOR LESS THAN APPRAISED VALUE HB 1660 Phelan; SB 987 Buckingham Amends 25.25 These bills add that on the motion of a property owner or chief appraiser, the ARB may direct that a homestead value be reduced for the current tax year and either of the two preceding tax years to the sales price of the homestead in the current tax year. The value change applies to a property that qualifies as the owner’s residence homestead, the sales price is at least 10 percent less than the property’s appraised value and the ARB finds that the sales price reflects the property’s market value.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, 9/1/2017.

Status: HB 1660 referred to House Ways & Means 3/6/17. SB 987 referred to Senate Finance 3/6/17.

ARB MAY CORRECT APPROVED VALUE FOR ERROR OR INACCURACY ON BUSINESS PROPERTY RENDITION/REPORT HB 2906 Raymond; similar SB 1847 Bettencourt Amends 25.25

The bills add to correcting appraisal records to provide that the ARB, on motion of a property owner, may order changes in the approved appraisal records for the current tax year and for the two preceding tax years to correct an inaccuracy in personal property’s appraised value. SB 1847 has the motion from the chief appraiser or the property owner. The correction is to correct an error or omission in the rendition statement or property report filed by the owner. The ARB may not change the property’s value if the owner failed to timely file the rendition or property report and was assessed the filing penalty; the ARB held a hearing and issued a determination on the property from a timely filed protest; or the property’s value was the result of a written agreement between the owner or owner’s agent and the CAD. SB 1847 also adds that no correction if the property was the subject of a previous correction on motion of the property owner.

Proposed Effective: 9/1/2017.

Status: HB 2906 referred to House Ways & Means 3/22/17. SB 1847 referred to Senate Finance 3/23/17.

ARB MAY CORRECT APPROVED RECORD FOR ERROR IN PROPERTY’S SQUARE FOOTAGE HB 2946 Sanford Amends 25.25 The bill adds to the list of items that the ARB may correct in the approved appraisal records to include an error in the square footage of a property described in the appraisal roll.

Proposed Effective: 9/1/2017.

Status: Referred to House Ways & Means 3/23/17.

ARB REQUIREMENTS AND PROTEST PROCEDURES CHANGES; OFFICE OF LOCAL PROPERTY TAX OMBUDSMAN CREATED HB 3168 Geren Designates Secs. 5.03 through 5.16 as Subchapter A and adds Subchapter B to Ch. 5, adds 6.425; amends 5.041, 6.41, 6.412, 6.42, 25.19, 25.25(d), 41.03, 41.11, 41.44, 41.45, 41.66, 41.71, 41A.01, 41A.03, 41A.06, 42.01, 42.21, 42.29 ARB Education This bill requires the Comptroller to consult with property owners, tax agents and chief appraisers in drafting the ARB Manual and adds requirements regarding content of ARB education. Further, it 2017 Legislative Update; Page 33

requires the ARB to comply with procedural requirements in the ARB Manual.

Local Property Tax Ombudsman This bill creates the Office of Local Property Tax Ombudsman (LPTO) in the Comptroller’s office. The LPTO’s duty is to hear complaints involving alleged violations of procedural requirements regarding activities of an appraisal district, ARB, chief appraiser or an ARB member. The bill sets forth the LPTO’s qualifications, duties and procedural requirements.

ARB Selection and Operation The bill changes the minimum population threshold whereby the administrative district judge is required to appoint ARB members from 120,000 to 75,000. It changes the population requirement from 100,000 to 120,000 regarding the eligibility to serve on an ARB found in Section 6.412 and disallows service if the person has served all or part of three previous terms; requires the ARB rather than the appraisal district board to select the ARB chair and secretary; requires the Comptroller to determine and pay ARB members a per diem, from funds assessed to the CAD; establishes a special ARB panel, with specific qualifications of those on the panel, to hear five types of complex appraisal protests.

Appraisal Notices The date of mailing all appraisal notices changes to April 1, or a soon thereafter as practicable. The chief appraiser in a county of 120,000 or more includes on the appraisal notice if the property is one of the five types of complex properties eligible for review by the special ARB panel.

Protests and Challenges The bill clarifies a property owner’s ability to file a 25.25(d) motion regarding unequal appraisal in addition to excessive appraisal; removes a taxing unit’s ability to challenge the level of appraisals of any category of property in the CAD; changes the protest deadline from May 1 to before June 1; requires an ARB to provide for hearings on Saturdays and after 5 p.m. on weekdays and prohibits a first hearing on a weekday after 7 p.m. or on Sundays.

Binding Arbitration The bill allows for a property owner to request binding arbitration on a denial of a 25.25 motion and extends the deadline to file from 45 to 60 days. For

the arbitration of non-residential homestead property valued at more than $3,000,000 but less than $5,000,000, the arbitration fee is $1,250.

CAD Litigation The bill allows for the appeal of an ARB determination on a procedural issue involving Section 25.25 of a Chapter 41 protest. The property owner recovers attorney’s fees if the owner prevails on the merits of appealing the procedural issue.

See also CAD Administration and Appraisal District Litigation.

Proposed Effective: 1/1/2018, with some sections effective 9/1/2018.

Status: Referred to House Ways & Means 3/30/17.

UNEQUAL APPRAISAL WAIVED PROPERTY WITH TAX ABATEMENT OR SUBJECT TO TAX RECAPTURE HB 3230 Phelan Amends 312.205, 313.027

FOR

The bill provides that a Chapter 312 tax abatement agreement or Chapter 313 agreement include either a waiver of the owner’s right to protest before the ARB and to contest in court the unequal appraisal of the property subject to the agreement or provisions to recapture all or part of the property tax revenue abated that does not attain a value specified in the agreement for the year covered, along with paying penalty or interest, or both, on the recaptured taxes. See also Special & Miscellaneous Section.

Proposed Effective: 9/1/2017.

Status: Referred to House Ways & Means 3/30/17.

CAD HAS BURDEN TO PROVE VALUE WHEN OWNER PROVIDES FEE APPRAISAL HB 3758 Bell Amends 41.43 The bill removes the restriction to a property with a market or appraised value of $1 million or less from Section 41.43(a-1). This section places the burden of establishing the value by clear and convincing evidence at the ARB hearing when the property owner has provided a copy of a property appraisal performed by a fee appraiser not later than 14 days before the hearing. The change would allow any property owner to do this for any value of property.

Proposed Effective: 9/1/2017.

Status: Filed.

2017 Legislative Update; Page 34

ARB SHOWS CLEAR AND CONVINCING EVIDENCE THAT REQUIRED ARB NOTICE WAS DELIVERED HB 3760 Bell Amends 41.411 The bill adds that a rebuttable presumption for a failure to deliver a required notice by the ARB exists if the owner alleges that the owner did not receive the notice. The ARB may rebut the presumption by presenting clear and convincing evidence that the notice was sent to the owner at the correct address.

“Clear and convincing evidence” is defined as the measure or degree of proof that will produce in the mind of the trier of fact a firm belief or conviction as to the truth of the allegations sought to be established.

Proposed Effective: 9/1/2017.

Status: Filed.

PROPERTY OWNER MAY ELECT WHEN TO PRESENT EVIDENCE AT THE ARB HEARING HB 3774 Darby, SB 1767 Buckingham Amends 25.25, 41.47, 41.66 The bill adds that the property owner may elect to present the owner’s evidence and argument at the ARB hearing before, after or between cases presented by the chief appraiser and each taxing unit (for a challenge hearing). The ARB’s hearing procedures should state that the property owner may elect to present the owner’s case at the ARB hearing before or after the CAD presents the CAD’s case. The ARB may not determine the property’s appraised value at an ARB hearing to be greater than the appraised value submitted by the chief appraiser, unless agreed to by the parties to the protest.

Proposed Effective: 1/1/2018.

Status: SB 1767 scheduled for hearing in Senate Finance 4/3/17.

CAD REQUIRED TO PRESENT CERTAIN EVIDENCE FOR TWO YEARS DURING A PROTEST HEARING HB 4152 Gutierrez Amends 41.43 The bill requires the CAD to present as evidence the appraisal method used to appraise the property in the current tax year and previous tax year and identify the factors considered when applying that method. For

the cost approach, the CAD presents cost data and adjustments for physical, functional or economic obsolescence for both yeas. For the income approach, the CAD presents the comparable rental income and operating expense data and the capitalization rate for both years. For the market data (sales) approach, the CAD presents comparable sales data and any adjustments for both years. If the CAD fails to provide the evidence, the protest shall be determined in favor of the property owner.

Proposed Effective: 9/1/2017.

Status: Filed.

PROPERTY VALUE LIMITED FOR TWO YEARS AFTER REDUCTION IN VALUE BY ARB OR APPEAL SB 403 Kolkhorst Adds 23.04 The bill prohibits the increase in the market value of real property in the first two years following the tax year in which the market value was reduced by at least 15% by the ARB, or as a result of the final determination of an appeal of an ARB order. The property’s appraisal of a commercial or residential real property may increase for an improvement (other than normal repair or maintenance) made after the preceding year’s appraisal. The property’s restricted value is used for the Comptroller’s Property Value Study but may not be used as a comparable property or in a ratio study sample for determination of an unequal appraisal.

Proposed Effective: 1/1/2018.

Status: Referred to Senate Finance 2/1/17.

CHANGES MADE TO COMPTROLLER TRAINING PROGRAM FOR ARB MEMBERS, SURVEYS AND NEW TRAINING PROGRAM FOR ARBITRATORS, ALONG WITH ADDITIONAL ARB CHANGES SB 669 Nelson Adds 5.043, 5.104, 41.462; amends 5.041, 5.103, 6.412, 6.42, 25.25, 41.45, 41.46, 41.461, 41.47, 41.66, 41.67, 41A.06, 41A.061, 41A.09 The substitute bill requires the beginning ARB training class by the Comptroller to be at least eight hours of classroom training and education. The advanced ARB training class must be at least four hours.

2017 Legislative Update; Page 35

The Comptroller shall provide an arbitration manual and other materials in training arbitrators and approved unanimously by a committee selected by the Comptroller of taxpayers and chief appraisers. A revision to the manual must be approved by unanimous agreement; the person requesting the revision must pay the costs of medication if the Comptroller determines that mediation is required.

The Comptroller shall supervise a four-hour training program for arbitrators on property tax law, including equal and uniform appraisal. The Comptroller may contract with a service provider for the arbitrator training, but not with a CAD, chief appraiser, CAD employee, CAD director, ARB member or a taxing unit. The Comptroller fee may not exceed $50 per person. A person may not serve as an arbitrator or be renewed until completing the Comptroller training.

The training may be online and the Comptroller rule shall prescribe the verification that the training program was taken online and completed.

The Comptroller shall prepare a survey that allows property owners or agents who file a protest under Chapter 41 or a motion under 25.25 to the ARB or a designated representative of the CAD to submit comments and suggestions and comments on a fairness and efficiency. The survey is provided at or before each protest hearing or delivered by the ARB for 25.25 (corrections) or Chapter 41 protests. The person may submit the survey to the Comptroller in person, by mail, by email or through the Comptroller’s website and may do so no later than the 45th day after sent to the owner or agent. The designated CAD representative has 45 days from the date the form is sent to the owner or agent. The CAD may not require a property owner or agent to complete the survey form at the appraisal office to be permitted to submit the form to the Comptroller. The Comptroller issues an annual report summarizing the surveys, but not disclosing the identity the person submitting the form.

In addition to other restrictions, a person may not serve on the ARB who is related within the 3rd degree by blood or 2nd degree by marriage to a member of the CAD board of directors or ARB. A person appointed to the ARB by an administrative law judge may not be reappointed after serving all or part of three previous terms as an ARB member or auxiliary ARB member. The bill has the administrative law judge in each county selecting the ARB chair and

secretary, rather than the CAD board in less populated counties.

In a 25.25 panel hearing on correcting a value for an error or overappraisal, the ARB panel shall provide the owner or agent with the panel’s recommendation.

The ARB notice for a protest hearing shall also include the subject matter of the hearing. The bill clarifies that the chief appraiser sends the owner/agent at least 14 days before the first scheduled hearing certain information, so that same information is not required to be sent for re-scheduled hearing dates.

New Section 41.462 provides that if requested by a property owner or agent, the CAD shall make any evidence to be sued in the protest hearing available to the property owner or agent at least 14 days before the hearing date. The CAD provides the evidence at no charge to the requestor, regardless of the means of delivery. An ARB panel shall make a written order of the panel’s decision. The ARB may not determine the appraised value of a protested property to an amount greater than the value submitted by the chief appraiser. The ARB determination sent by certified mail is delivered not later than the 15th day after the protest and is sent to either the owner or the designated agent, along with a copy of the Comptroller’s ARB survey and instructions. The ARB may also postpone a hearing at the request of the agent (not just the owner). The ARB may schedule hearings on all protests filed by an owner or agent to be held consecutively, with the hearing notice stating the date and time of first hearing, state the date the last hearing will end and list the order of the hearings to be held. The hearing order may not be changed without agreement of the owner/agent, the chief appraiser and the ARB. A re-scheduled hearing may not be held before seven days after the last hearing unless there is agreement by the owner/agent, chief appraiser and ARB. Unless agreed by the parties, the ARB must provide written notice of the date and time of the rescheduled hearing to the owner or agent no later than seven days before the hearing date. At the end of a protest hearing, the ARB shall provide the owner/agent with one or more documents that the ARB members signed the ex-parte communications affidavit and the panel’s recommendation on the property’s value. Information not delivered at least 14 days before the first scheduled hearing may not be used or offered in a form as evidence, including as a document or through argument or testimony.

2017 Legislative Update; Page 36

Proposed Effective: 1/1/2018.

Status: Substitute reported from Senate Finance 3/20/17 and recommended for Local/Uncontested Calendar.

PERSON IS INELIGIBLE TO SERVE ON ARB IF CLOSE RELATIVE OF ANOTHER ARB MEMBER SB 804 Taylor Amends 6.412 The bill adds another restriction to be appointed an ARB member that a person is ineligible to serve if related within the first degree by blood or marriage to a member of the ARB, including an auxiliary ARB member.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Finance 2/22/17.

ARB HEARING MAY NOT BE ON A SUNDAY SB 870 Bettencourt Amends 41.71 The bill changes the provision for evening and weekend hearings to state that an ARB may not schedule a protest hearing on a Sunday.

Proposed Effective: 9/1/2017.

Status: Placed on Senate Intent Calendar 3/30/17.

ARB TERM LIMITS REVISED FOR COUNTY UNDER 100,000 POPULATION SB 971 Zaffirini Amends 6.412 The bill revises the limitation on consecutive terms by an ARB member of all or part of three consecutive terms. The bill adds that the limitation does not apply to an ARB member in a county with a population of less than 100,000 if, at the time the ARB member’s term expires, there is no person seeking appointment to the ARB who is eligible to serve and who could fill that position on the ARB. Proposed Effective: 9/1/2017.

Status: Referred to Senate Finance 3/1/17.

COMPTROLLER BY RULE SETS OUT FORM AND MANNER FOR PROPERTY OWNER’S EVIDENCE FOR ARB HEARING RECORD; COMPTROLLER SELECTION AND REMOVAL OF ARBITRATORS SB 1286 Bettencourt; similar HB 3557 Murphy

Amends 41.45, 41A.061, 41A.07

Appraisal District Litigation

The bills add that the Comptroller by rule shall set out the manner and form, including security requirements, for a person to provide a copy of written evidence or other material for the ARB to retain as part of the ARB’s hearing record and to include specifications for the audiovisual equipment provided by the CAD for use by the property owner or owner’s agent. For the Comptroller’s registry of arbitrators, the bill requires the Comptroller to select the arbitrator, rather than the property owner and CAD. To be appointed an arbitrator for a particular case, the arbitrator must be a resident of the county where the property is located or not be farther than 50 miles from any part of that county if no one is available in the county. A person may not serve as an arbitrator in that county if, during the preceding five years, the person was a paid tax agent, CAD officer, CAD employee or ARB member in the CAD in which the property is located. The Comptroller shall remove from the registry a person who shows repeated bias or misconduct while acting as an arbitrator. See also Appraisal District Litigation.

Proposed Effective: 9/1/2017, with the Comptroller rules adopted by January 1, 2018.

Status: SB 1286 referred to Senate Finance 3/13/17. HB 3557 referred to House Ways & Means 3/23/17.

ARBITRATION CATEGORY EXPANDED TO PROPERTIES $5 MILLION OR LESS The Property Tax Reform and Relief Act of 2017 SB 2 Bettencourt Amends 41A.01, 41A.03, 41A.06

CORRECTING APPRAISAL ROLL CHANGED FROM ONE-THIRD VALUE ERROR TO CORRECT MARKET OR MEDIAN VALUE OF COMPARABLE PROPERTIES SB 2061 Kolkhorst Amends 25.25 The bill changes the current provision for a late appraisal roll change when the appraised value exceeds by more than one-third the correct appraised value. The new language is the error may be corrected if the appraised value exceeds the market value of the property or the median appraised value of a reasonable number of comparable properties appropriately adjusted.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Finance 3/28/17.

2017 Legislative Update; Page 37

The property value ceiling increases from $3 million (or less) to $5 million (or less) in the ARB order to appeal through binding arbitration as an alternative to district court.

For non-homestead residential properties that are more than $3 million but less than $5 million in value, the filing fee is $1,250, with the arbitrator’s fee not more than $1,200 for such properties. It also clarifies sales agents, instead of salespersons, may serve as arbitrators.

For more analysis of SB 2, see also Appraisal District Administration, Appraisal, Exemption, Appraisal Review Board, Appraisal District Litigation, Assessment and Truth in Taxation Sections.

Proposed Effective: 1/1/2018.

Status: SB 2 substitute, with four floor amendments, passed Senate 3/21/17, and received in House 3/22/17.

NO LIMIT ON ATTORNEY’S FEES PROVIDED IN CERTAIN CIRCUMSTANCES HB 540 Metcalf Amends 42.29 The bill provides that a property owner may recover reasonable attorney’s fees without the limits in Section 42.29 if the property is the owner’s residence homestead and the owner has prevailed in the prior two years on the appraisal or unequal appraisal of the same property.

Proposed Effective: 9/1/2017.

Status: Referred to House Ways & Means 2/16/17.

ALTERNATIVE DISPUTE RESOLUTION ADDED TO EXPEDITE PROPERTY TAX CASES HB 1248 Lucio Amends 42.228 The bill allows a property owner to elect alternative dispute resolution procedures to expedite the resolution of property tax appeals. Such election will limit discovery. The parties will not serve or answer

interrogatories, requests for admissions depositions on written question or discovery on non-parties.

Requests for production will be severely curtailed.

For real property under excessive appraisal (Section 42.25), the property owner will provide a rent roll, operating statement for the prior year, any appraisal or valuation analysis made within the last three years and documents supporting the owner’s value. The CAD will provide the appraisal records, ARB evidence, any appraisal analysis made within the last three years and the information identified in the cost, income and sales comparison methods of Sections 23.011 to 23.014. For real property under unequal appraisal, the property owner will submit 10 or fewer comparable properties and the CAD must provide the info for Section 42.25 production above of each comparable. For personal property, under excessive or unequal appraisal (Section 42.25 or 42.26) production is limited to 10 requests. The timing and length of oral depositions will be limited, with owner (or representative) depositions allowed by phone and in the county of residence. Requests for disclosure will continue but will require the disclosure of experts within 30 days of retention. A party may seek additional discovery upon motion to the court and prove that the discovery is necessary to form a reliable opinion. If the party does not prevail, the court shall award attorney’s fees for the motion.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, 9/1/2017.

Status: Substitute left pending in House Ways & Means 3/29/17.

FEES LOWERED FOR BINDING ARBITRATION HB 1783 Faircloth Amends 41A.03, 41A.06 The bill reduces some fees required to be paid to take an ARB order to binding arbitration: $200 if the homestead property is valued at $250,000 or less; $300 if the homestead property is more than $250,000 up to $500,000; $450 if the homestead property exceeds $500,000; $450 if not a homestead with value of $1 million or less; $750 if not a homestead and value more than $1 million up to $2 million; $1,000 if not a homestead and value of more than $2 million up to $3 million.

Proposed Effective: 9/1/2017.

Status: Referred to House Ways & Means 3/14/17.

2017 Legislative Update; Page 38

SETTLEMENT AGREEMENT MAY INCLUDE WAIVING PENALTY AND INTEREST ON ADDITIONAL TAX DUE HB 1830 Anchia; SB 931 Seliger Amends 42.42, 42.43 These bills provide that, for a settlement agreement filed with the court, the property owner and chief appraiser may agree to waive the penalties and interest on the additional tax due each taxing unit as a term of the agreement.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, 9/1/2017.

Status: SB 931 left pending in Senate Finance 3/27/17. HB 1830 left pending in House Ways & Means 3/29/17.

CAD EMPLOYEE MUST HAVE CERTIFICATION TO TESTIFY ON VALUE AT COURT HEARING SB 521 Creighton Amends 42.29 The bill provides that a CAD employee may not testify at a court hearing on the value of a property unless the employee is authorized to perform real estate appraisals under Occupations Code Chapter 1103, which is the registration and certification of property tax professionals by TDLR. Proposed Effective: 9/1/2017.

Status: Referred to Senate Finance 2/6/17.

CAD EMPLOYEE MUST HAVE CERTIFICATION TO TESTIFY ON VALUE AT COURT HEARING HB 2043 Springer Amends 42.23 The bill adds to current language about CAD testifying at a court hearing on the value of a property for the court to give preference to an employee who is registered under Occupations Code 1103 if the appraised or market value of the property is less than $1 million, as provided in the ARB order. The bill adds that for a property whose market value or appraised value is $1 million or more the employee must be registered under Occupations Code Chapter 1103 to testify on the property’s value.

Proposed Effective: 9/1/2017.

Status: Referred to House Ways & Means 3/13/17.

PROPERTY VALUE INCREASED APPEALING THROUGH ARBITRATION SB 731 Bettencourt Amends 41A.01, 41A.03, 41A.06

FOR

with instructions to allow the owner to cure the owner’s failure, in lieu of dismissing the appeal.

Proposed Effective: 9/1/2017.

Status: Referred to House Ways & Means 3/23/17.

The bill increases the value of a property that an owner may appeal the ARB decision to binding arbitration from $3 million to $5 million or less. The bill adds a fee of $1,550 for a property that is not an owner’s residence homestead and the appraised value of the property is more than $3 million but not more than $5 million.

Proposed Effective: 9/1/2017.

Status: Reported from Senate Finance 3/16/17, passed Senate 3/22/17 and received in House 3/23/17.

COMPTROLLER BY RULE SETS OUT FORM AND MANNER FOR PROPERTY OWNER’S EVIDENCE FOR ARB HEARING RECORD; COMPTROLLER SELECTION AND REMOVAL OF ARBITRATORS SB 1286 Bettencourt; similar HB 3557 Murphy Amends 41.45, 41A.061, 41A.07

COURT DETERMINES INTEREST PAID ON TAX REFUNDS FROM COURT APPEALS HB 2253 Darby; SB 1749 Hinojosa Amends 42.43 The bills provide that the court determines the amount of interest is to be calculated on a tax refund from an appeal from the ARB to district court.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, 9/1/2017.

Status: HB 2253 left pending in House Ways & Means 3/29/17. SB 1749 referred to Senate Finance 3/23/17.

DISTRICT COURT GRANTED MORE AUTHORITY TO DETERMINE TAX APPEALS HB 2653 Geren Adds 42.231 and amends 42.01 The bill adds that the property owner may appeal to district court a motion filed under Section 25.25 for a correction or for Section 41.411 no-notice appeal or for a refund under Section 23.1243 without being one that required the ARB’s determination. The bill adds that the owner may appeal the decision that the ARB lacks jurisdiction to determine a protest or a motion filed by an owner under Section 25.25 because the owner failed to comply with a requirement of Section 25.25 or Chapter 41C. If the court determines that the ARB did have jurisdiction, the court determines the final determination of the protest. If the property owner failed to exhaust the owner’s administrative remedies, the court may remand the action to the ARB 2017 Legislative Update; Page 39

The bills add that the Comptroller by rule shall set out the manner and form, including security requirements, for a person to provide a copy of written evidence or other material for the ARB to retain as part of the ARB’s hearing record and to include specifications for the audiovisual equipment provided by the CAD for use by the property owner or owner’s agent. For the Comptroller’s registry of arbitrators, the bill requires the Comptroller to select the arbitrator, rather than the property owner and CAD. To be appointed an arbitrator for a particular case, the arbitrator must be a resident of the county where the property is located or not be farther than 50 miles from any part of that county if no one is available in the county. A person may not serve as an arbitrator in that county if, during the preceding five years, the person was a paid tax agent, CAD officer, CAD employee or ARB member in the CAD in which the property is located. The Comptroller shall remove from the registry a person who shows repeated bias or misconduct while acting as an arbitrator. See also Appraisal Review Board.

Proposed Effective: 9/1/2017, with the Comptroller rules adopted by January 1, 2018.

Status: SB 1286 referred to Senate Finance 3/13/17. HB 3557 referred to House Ways & Means 3/23/17.

ARB REQUIREMENTS AND PROTEST PROCEDURES CHANGES; OFFICE OF LOCAL PROPERTY TAX OMBUDSMAN CREATED HB 3168 Geren Designates Secs. 5.03 through 5.16 as Subchapter A and adds Subchapter B to Ch. 5, adds 6.425; amends 5.041, 6.41, 6.412, 6.42, 25.19, 25.25(d), 41.03, 41.11, 41.44, 41.45, 41.66, 41.71, 41A.01, 41A.03, 41A.06, 42.01, 42.21, 42.29

ARB Education This bill requires the Comptroller to consult with property owners, tax agents and chief appraisers in drafting the ARB Manual and adds requirements regarding content of ARB education. Further, it requires the ARB to comply with procedural requirements in the ARB Manual.

Local Property Tax Ombudsman This bill creates the Office of Local Property Tax Ombudsman (LPTO) in the Comptroller’s office. The LPTO’s duty is to hear complaints involving alleged violations of procedural requirements regarding activities of an appraisal district, ARB, chief appraiser or an ARB member. The bill sets forth the LPTO’s qualifications, duties and procedural requirements.

ARB Selection and Operation The bill changes the minimum population threshold whereby the administrative district judge is required to appoint ARB members from 120,000 to 75,000. It changes the population requirement from 100,000 to 120,000 regarding the eligibility to serve on an ARB found in Section 6.412 and disallows service if the person has served all or part of three previous terms; requires the ARB rather than the appraisal district board to select the ARB chair and secretary; requires the Comptroller to determine and pay ARB members a per diem, from funds assessed to the CAD; establishes a special ARB panel, with specific qualifications of those on the panel, to hear five types of complex appraisal protests.

Appraisal Notices The date of mailing all appraisal notices changes to April 1, or a soon thereafter as practicable. The chief appraiser in a county of 120,000 or more includes on the appraisal notice if the property is one of the five types of complex properties eligible for review by the special ARB panel.

Protests and Challenges The bill clarifies a property owner’s ability to file a 25.25(d) motion regarding unequal appraisal in addition to excessive appraisal; removes a taxing unit’s ability to challenge the level of appraisals of any category of property in the CAD; changes the protest deadline from May 1 to before June 1; requires an ARB to provide for hearings on Saturdays and after 5 p.m. on weekdays and prohibits a first hearing on a weekday after 7 p.m. or on Sundays.

2017 Legislative Update; Page 40

Binding Arbitration The bill allows for a property owner to request binding arbitration on a denial of a 25.25 motion and extends the deadline to file from 45 to 60 days. For the arbitration of non-residential homestead property valued at more than $3,000,000 but less than $5,000,000, the arbitration fee is $1,250.

CAD Litigation The bill allows for the appeal of an ARB determination on a procedural issue involving Section 25.25 of a Chapter 41 protest. The property owner recovers attorney’s fees if the owner prevails on the merits of appealing the procedural issue.

See also CAD Administration and Appraisal Review Board.

Proposed Effective: 1/1/2018, with some sections effective 9/1/2018.

Status: Referred to House Ways & Means 3/30/17.

BINDING ARBITRATION REVISED APPEAL OF ARB ORDER HB 3191 Uresti Amends 41A.04, 41A.06, 41A.07, 41A.08

FOR

The bill adds that the Comptroller form allow a property owner requesting binding arbitration to elect that the arbitrator be selected only from those arbitrators listed in the Comptroller’s registry who reside in the county where the property is located. The Comptroller form allows that a property owner may request that the arbitration be conducted in person.

The Comptroller shall maintain the registry by county of residence of the arbitrators. An arbitration hearing may not be conducted at a CAD office.

Proposed Effective: 9/1/2017.

Status: Referred to House Ways & Means 3/30/17.

COURT APPEAL PLACES BURDEN OF PROOF ON CAD HB 3918 Burrows Amends 42.23 The bill changes the burden of proof for an appeal to district court. The review is still trial de novo. The CAD has the burden of establishing the property’s value by a preponderance of the evidence presented at the hearing. If the CAD fails to meet that standard, the protest shall be determined in favor of the property owner.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Filed.

ATTORNEY FEES FOR SUCCESSFUL COURT APPEALS CHANGED SB 1848 Bettencourt Adds 42.291 and amends 42.29 The bill sets the award of attorney fees for a successful appeal by a property owner in certain appeals to the greater of (1) $27,000 or the adjusted amount under Section 42.291 or (2) an amount equal to 20% of the total amount by which the owner’s tax liability is reduced as a result of the appeal but not to exceed $153,000, or the adjusted amount determined under Section 42.291. These appeals include under Section 42.25 or 42.26, for a 25.25 appeal and for the denial of an exemption under certain provisions. New Section 42.291 ties the attorney’s fees to the cost of living adjustment indicated by the consumer price index. The index is set on January 1 of each oddnumbered year, using the period from September 1, 2017 and ending on September 1 preceding the date of the determination. The Comptroller shall make the required determination and publish in the Texas Register.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Finance 3/23/17.

COMPTROLLER DETERMINES ARBITRATOR IS QUALIFED IF COMPLAINT IS FILED SB 1908 Bettencourt Amends 41A.07

IF CAD

The bill provides that if the property owner proposed an arbitrator, the CAD may not reject the arbitrator unless the CAD files a complaint with the Comptroller objecting that the arbitrator is not qualified. The Comptroller investigates. No later than seven days, the Comptroller determines whether the arbitrator is qualified or not. If the Comptroller rules qualified, the complaint is dismissed and the CAD must agree to that arbitrator. If not qualified, the arbitrator is removed from the Comptroller’s registry and the parties select a different arbitrator. The deadlines are extended.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Finance 3/23/17.

2017 Legislative Update; Page 41

INTEREST RATE CHANGED IN TAX CODE SB 2198 Campbell Adds 1.13 and 1.14 and amends 11.135, 11.181, 11.185, 11.201, 23.46, 23.55, 23.76, 23.86, 23.96, 23.9807, 26.09, 31.12, 33.01, 33.06, 33.065, 42.42, The bill changes the interest rate used to accrued on various provisions of the Tax Code, including special valuation rollback taxes, omitted property, delinquent taxes, tax refunds, tax deferrals and others. The annual interest rate is the lesser of 12% or the sum of 2% and the prime rate published by the Federal Reserve Board on the first business day of the calendar year for which simple interest is calculated.

The Comptroller posts the interest rate on the Comptroller’s website, beginning with the 2018 calendar year. The parties to a motion, effort or appeal may agree to waive or reduce the interest that accrues on a tax, penalty or refund that is subject to a 25.25 error correction; on a delinquent tax or a delinquent tax lawsuit to collect; or for an appeal to district court.

The written agreement is required before the court issues the order for the delinquent tax lawsuit or pending appeal. A district court may waive or reduce interest that has accrued as part of the final judgment to the extent the interest is waived or reduced by agreement.

See also Appraisal District Administration and Delinquent Tax Collections.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Finance 3/29/17.

PROPERTY OWNER MAY APPEAL INCREASE IF VALUE WAS LOWERED IN PRECEDING TAX YEAR SB 2207 Hancock Adds 42.27 and amends 42.01 The bill provides that a property owner may appeal an increase in appraised value if the appraised value was lowered in the preceding tax year under circumstances in Section 23.01(e). That subsection provides that the chief appraiser must have substantial evidence to increase a property owner’s value that was lowered in the preceding tax year by the ARB, by the arbitration process or by the court. For this appeal, new Section 42.27 is for the limited purpose of determining whether the chief appraiser met the burden of proof required to increase the value. If the chief appraiser did meet the burden of proof, the court dismisses the appeal. If the chief appraiser failed to meet the burden of proof, the court fixes the value and

orders the chief appraiser to correct the appraisal roll.

Neither party may conduct discovery. The court may award court costs and reasonable attorney’s fees. A property owner may protest to the ARB an action relating to the property’s value that, in the same tax year, was the subject of a 42.27 appeal.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Finance 3/29/17.

Assessment & Truth-in-Taxation INCREASE IN TAX RATE IS LIMITED TO 4% ABOVE EFFECTIVE TAX RATE; ROLLBACK ELECTIONS BECOME RATIFICATION ELECTIONS FOR ALL TAXING UNITS; MAJOR DEADLINES IN ASSESSMENT PROCESS CHANGED The Property Tax Reform and Relief Act of 2017 SB 2 Bettencourt Adds 26.061 and 26.062 and amends 26.01, 26.012, 26.04, 26.041, 26.043, 26.044, 26.0441, 26.05, 26.052, 26.06, 26.08, 26.16, 31.12, 33.08; repeals 26.07; amends Local Government Code 102.007, 111.008, 111.039, 111.068 and repeals 140.010; amends Education Code 45.105 and 130.016; amends Health and Safety Code 281.124; amends Special District Local Laws Code 1101.254, 1122.2522, 3828.157, 8876.152 and repeals 1063.255; amends Water Code 49.107 and 49.108, 49.236 and repeals 49.236 (2003) and 49.2361; amends Government Code 403.302(o) and repeals (m-1) and (n) This omnibus tax bill limits the increase in the rollback tax rates for all taxing units (except school districts) to an increase of 5% (SB 2 substitute changed the original 4% to 5%, current law is 8%). If the taxing unit is located in a disaster area, as declared by the governor or President, then the governing body may instruct that 8% be used for the current year. All rollback tax elections are converted to ratification tax elections with no requirement of a citizen petition to initiate a vote to retain the rate.

The chief appraiser certifies appraisal rolls to each taxing unit by July 10, rather than July 25. The chief appraiser has until May 15, rather than April 30, to provide certified estimates of the amount of tax rolls for each city, county and school district.

2017 Legislative Update; Page 42

The “No-new-taxes” rate replaces the effective rate.

By July 15 (rather than August 1), the taxing unit’s assessor submits the appraisal roll to the governing body and the tax collector certifies the anticipated collection rate. The governing body’s designated officer or employee calculates the “no-new-taxes” rate and rollback rate and submits the calculations to the county tax assessor-collector. The county tax assessor-collector or designee certifies in writing that the values used are the same as shown on the appraisal roll and that the tax rates are calculated correctly. The county tax assessor-collector or designee executes a written certification to that effect, attaches the certification to each worksheet and submits them to the governing body of the unit and notifies the designated officer or employee about the submission.

The designated officer or employee of the unit may not submit the rates’ calculations and the taxing unit’s governing body may not adopt until the county tax assessor-collector does the certification. The designated officer submits the rates to the governing body by July 22, rather than by August 1. By July 27, the designated officer or employee publishes the TNT information in the newspaper or mails to the property owners in the taxing unit. The “no-new-taxes” rate and notice requirement do not apply to a school district. The assessor may not certify an anticipated collection rate that is lower than the lowest actual collection rate in the preceding three years (note: the substitute states assessor at one point and collector at another for this duty). A taxing unit that imposes an additional sales tax to reduce property tax may not adopt the tax rate until the chief financial officer or auditor submits to the governing body a written certification that the amount of additional sales and use tax revenue used to pay debt service has been deducted from the total amount published. The Comptroller adopts rules governing the certification forms required with the new law.

The taxing units’ governing body must adopt its tax rate before September 30 or 60 days after the roll is received, unless the governing body votes to increase the rate above the rollback rate, which must be done

by August 15. The vote on the tax rate must be before the 7th day after the second notice is published under the Tax Code (instead of the 14th. The language for the Notice of Public Hearing on Tax Increase is changed, based on if the proposed rate exceeds the “no-new-taxes” rate and the rollback rate; exceeds the

“no-new-taxes” rate but not the rollback rate; does not exceed the “no-new-taxes” rate but does exceed the rollback rate (lower of the two rates). The Notice of Tax Revenue Increase changes to the new terms. For a taxing unit, other than a school district, a new notice, Notice of Meeting to Vote on Tax Rate, is for a proposed rate that does not exceed lower of “no-newtaxes” rate or rollback tax rate.

For all of these notices, a statement that the tax assessor maintains a website with tax calculations available or, if no website, how to contact the tax assessor. For all of the notices, the bill requires a specific table, consisting of five row and four columns, formatted in a specific way, with total rate, preceding year’s adopted rate, proposed rate, nominal and percentage difference of rate; average homestead value, average taxable value for preceding year and current year and percentage difference, tax on average homestead preceding year and current year and nominal and percentage differences; and total tax levy last year and levy with the proposed rate and the nominal and percentage differences. Water districts have changes to their notice and specific requirements about the petition and election process for a ratification election. Counties and cities move back to following the TNT notices in the Tax Code and not the Local Government Code.

A ratification election, if necessary, must be held on the November general election date by any taxing unit that exceeds the rollback rate. The order calling the election may not be issued later than August 15.

Each county is required to maintain an Internet website. The county assessor-collector shall post the five years of rate information, with the “no-newtaxes” tax rate and “no-new-taxes” M&O rate. In addition, the county tax assessor-collector shall post on the county’s website the worksheets used by the designated officer or employee for each taxing unit for the most recent five years beginning with the 2018 tax year and as certified by the county tax assessorcollector, along with the name and contract information for each member of the taxing unit’s governing body. The county tax assessor-collector shall post the worksheets for the current tax year not later than August 1.

For more analysis of SB 2, see also Appraisal District Administration, Appraisal, Exemption, Appraisal 2017 Legislative Update; Page 43

Review Board, Appraisal District Litigation, Assessment and Truth in Taxation Sections.

Proposed Effective: 1/1/2018, for the 2018 tax rates.

Status: SB 2 substitute, with four floor amendments, passed Senate 3/21/17, and received in House 3/22/17.

ANOTHER VERSION FILED FOR REVISIONS TO TRUTH-IN-TAXATION SB 2239 Bettencourt Adds 5.092, 26.031 and 26.17, and amends 5.07, 5.091, 25.19, 26.012, 26.04, 26.041, 26.044, 26.0441, 26.05, 26.065; repeals 26.03, 26.045 The bill has some items in SB 2 dealing with Truthin-Taxation, but with revised language.

Comptroller duties The Comptroller prescribes the worksheets used by the designated officer or employee to calculate the “no-new-taxes” rate and rollback rate and be completed electronically with data entered by the officer/employee, certified as complete and electronically submitted to Comptroller. The statewide list of tax rates will add the school districts (currently not required) and be organized alphabetically by county or counties in which each taxing unit is located rather than descending order by rate. The Comptroller shall maintain a searchable property tax database, continuously updated as preliminary and revised data is available, of each property listed on an appraisal roll, including property ID, market value, taxable value, taxing unit names and rate information. For a unit, other than a school district, the rates are the no-new-taxes rate, rollback tax rate and proposed rate. For school districts, the rates are the rate to maintain same state and local revenue per student from the preceding tax year, rollback rate and proposed rate. The databased includes taxes imposed based on the no-new-taxes rate and proposed rate; for a school, taxes imposed with same level per student and proposed rate, along with the differences between the taxes. The database includes the date and location of each public hearing and meeting to adopt the rate. The data base links to the taxing unit’s website.

Truth-in-Taxation rates Definition of debt adds that it has been approved at an election. For taxing units, other than a school district, the rates calculated are for a “no-new-taxes” rate and

rollback rate. The rollback rate adds 4% to the nonew-taxes M&O rate and continues the additional rates for criminal justice mandate and indigent health care and deducts for the additional sales tax. A school district follows the current Section 26.04 requirements. The chief appraiser is required to review the rates and certify in writing that the values used are the same as the certified appraisal roll and the chief financial officer/auditor for the unit certifies in writing that the rollback rate is correctly calculated.

Tax assessor notice

By August 7 or thereafter, the tax assessor delivers by mail or email to each property owner in the county and posts on the assessor’s webpage a notice of estimated taxes to be imposed on the owner’s property by each taxing unit and found in the Comptroller’s database. The notice must include the address of the website, a statement that the owner may request a written copy of information for each taxing unit and the address and phone number of the assessor.

Taxing unit action The taxing unit’s governing body may not hold a public hearing or adopt the tax rate until 14 days after the TNT rates are calculated and submitted to the Comptroller. Other than a school district, the governing body may not adopt a tax rate until the Comptroller has included the current year information in the database and the chief appraiser (? earlier said by tax assessor?) has delivered the notice to each property owner. If the unit has the additional sales tax, the unit may not adopt the tax rate until the chief financial officer or auditor has certified that the amounts used and published are correct. If the additional sales tax revenue exceeds the amount published, the M&O expenses are reduced by the additional amount.

Each taxing unit shall maintain a website and posts tax rate and budget information. The Comptroller prescribed the format of information, including contact information of each elected official; taxing unit’s mailing address, email address and telephone number; two preceding years budget; proposed / adopted budget; change in budget amounts and percentages; M&O rate and debt rate for two preceding years and current year; recent financial audit and the following for units other than a school district: tax revenue for M&O for two preceding years 2017 Legislative Update; Page 44

and current year; debt service for two preceding years and current year.

Notice of appraised value For appraisal issues, the reappraisal notice removes the estimated tax amounts.

Comptroller appoints advisory committee by September 1, 2019 to assist with database. The Comptroller has the database by June 1, 2020.

Proposed Effective: 1/1/2018, with some sections 9/1/2017 and others 1/1/2020.

Status: Referred to Senate Finance 3/29/17.

ROLLBACK TAX RATE ALLOWS 4% INCREASE WITHOUT AN ELECTION; ALL TAXING UNITS HAVE AUTOMATIC RATIFICATION ELECTIONS INSTEAD OF PETITION INITIATED ELECTIONS HB 15 Bonnen Adds 5.092, repeals 26.07 and amends 5.07, 5.091, 25.19, 26.12, 26.04, 26.041, 26.043, 26.044, 26.0441, 26.05, 26.052, 26.06, 26.065, 26.08, 26.16, 26.17, 32.12, 33.08; amends Education Code 45.105, 130.016; amends Health and Safety Code 281.124; amends Local Government Code 102.017, 111.018, 111.039, 111.068; amends Special Districts Local Laws Code 1101.254, 1122.2522, 3828.157, 8876.152 and repeals 1063.255; amends Water Code 49.107, 49.108, 49.236 and repeals 49.236.

This bill renames the effective tax rate to be the “no new taxes rate” on all notices and calculations for all taxing units. The bill lowers the percentage increase allowed for taxing units in the calculation of the rollback tax rate from 8% to 4%, unless the taxing unit experienced a declared disaster. The debt rate definition for these calculations shall include only those debts approved by the voters. The person designated by the governing body to perform the rate calculations shall submit them for approval to the chief appraiser to confirm the value total used and to the auditor or CFO for the taxing unit to certify that the calculation is correct. The Comptroller will provide the worksheets used by all taxing units to calculate the “no new taxes rate” and the rollback tax rate.

The Comptroller’s existing statewide listing of tax rates will be reorganized by county and listed alphabetically instead of in descending order. The

Comptroller will create a new database of property tax information, constantly updated and searchable by property address, containing for each account: account number, market value, taxable value and name of each taxing unit on the account. For each taxing units, it will contain the “no new taxes rate” and rollback rate. For school districts, it will include the rate to maintain the same state and local revenue per weighted student in the preceding school year and the rollback rate. For each taxing unit, it will also include the differences between the “no new taxes rate” and the proposed rate or for schools the same total revenue rate and the proposed rate, and the differences between the “no new taxes rate” and the rollback rate and for schools the differences between the same total revenue rate and the rollback rate.

The 25.19 notice will no longer contain the taxes on the difference between the proposed value and the previous year’s value. By August 7 or as soon as possible, the chief appraiser shall notify each property owner by mail or email that the estimate of taxes on each property may be found on the Comptroller’s database and include the web site, a statement that a hard copy may be obtained from the tax assessor and the address and telephone number of each assessor.

A taxing unit governing body may not hold a public hearing on a tax rate until 14 days after the person calculating the “no new taxes rate” and the rollback rate has transmitted the calculations to the Comptroller. A rate may not be adopted until after the chief appraiser has sent the notice on August 7 and the Comptroller has uploaded the taxing unit’s rate information to the website. A property owner who files an injunction action to halt the rate setting process must file within 15 days after the rate adoption and need not pay taxes until the injunction action is pending and is entitled to reasonable attorney fees if he or she prevails.

Each taxing unit shall maintain a website. The site must contain the names of governing body members and their official contact information; the unit’s mailing address, email address and phone number; the unit’s budget for the previous two years, the proposed or adopted budget for the current year, the difference between the current year budget and the preceding year’s budget in dollars and percentage; maintenance and operations and debt budget amounts for current year and previous two years; the M&O tax rates and 2017 Legislative Update; Page 45

budget rates for current and preceding two years; and the most recent financial audit.

Proposed Effective: Effective: 1/1/2018; with some parts on different date. Tax rate database changes, posting on the taxing units’ websites and advisory committee effective 9/1/17; Comptroller’s truth-intaxation (TNT) forms, posting of statewide database with TNT information, review of TNT calculations by chief appraiser and auditor/CFO of each taxing unit, delivery of new notice in August by chief appraiser to taxpayers, postponement of the hearing and rate adoptions until chief appraiser and auditor/CFO check rate calculations, and changes to the taxpayers action for injunction effective 1/1/2019.

Status: Referred to House Ways & Means 3/6/17.

INCREASE IN TAX RATE IS LIMITED TO 5% UNLESS INFLATION EXCEEDS FIVE PERCENT HB 345 Canales Amends 26.012, 26.04, 26.041; amends Special District Local Laws Code 8876.152(b); amends Water Code 49.236 and repeals 49.236 and 49.2361 The bill limits the increase in the rollback tax rate that a taxing unit may enact to five percent instead of the current 8%. The Comptroller will estimate and publish a price index of his choosing. If that price index exceeds 5%, then the person calculating the rollback rate will use the inflation rate instead of 5%, but not to exceed 8%.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective the 91st day after the session ends. Applies to the 2017 tax rate unless that rate was adopted before the effective date of this act.

Status: Referred to House Ways and Means 2/15/17.

SCHOOL DISTRICTS WHERE VOTERS HAVE APPROVED HIGHER RATE GET A HIGHER ROLLBACK TAX RATE HB 390 Howard; HB 486 VanDeaver; SB 1267 Taylor Amends 26.08 These bills permit school districts whose local voters have approved higher M&O tax rates in elections held since 2006 to use the higher of the current rollback tax rate calculation or the highest M&O tax rate adopted since 2007 by that school district, plus its current debt

rate. The Comptroller shall study and report to the legislature the impact of this law.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Applies to the 2017 tax rate unless that rate was adopted before the effective date of this act.

Status: HB 390 left pending in House Ways and Means 3/22/17. HB 486 voted from House Ways and Means 3/29/17. SB 1267 referred to Senate Education 3/13/17.

BOND ELECTION BALLOT INCUDES MORE INFORMATION HB 739 Shaheen; similar to SB 1821 Burton Adds Government Code Chapter 1251, Subchapter A The bills require a county, municipality or school district to include more information on bond election ballots. The ballot must contain the total amount and as a per capita amount of the combined current debt obligations of the entity, the estimated principal and interest required to pay and the annual increase in property taxes on the average-priced home. HB 739 provides that the entity must post a sample online ballot on its website as soon as the official ballot is prepared. The Secretary of State shall develop a ballot form. SB 1821 requires stating the projected tax impact on property taxes from the date the bonds are issued until they mature with a Comptroller rule to prescribe the manner of projecting the tax impact.

Proposed Effective: 9/1/2017, with some parts effective 1/1/2018. SB 1821 effective 9/1/2017.

Status: HB 739 referred to House Elections 2/20/17.

SB 1821 referred to Senate Intergovernmental Relations 3/23/17.

MUNICIPALITY MAY DECIDE TO FOLLOW CURRENT ROLLBACK TAX RATE CALCULATION IF LAW CHANGED FOR FUTURE TAX YEAR HB 1017 Perez Amends 26.04, 26.041 The bill provides that if the 85th Legislature amends the rollback tax rate calculation to reduce that rate, the governing body of a municipality may direct the employee calculating the rollback tax rate to follow the law as it existed on January 1, 2016. This bill applies to a tax rate beginning with the 2017 tax year.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

2017 Legislative Update; Page 46

Status: Referred to House Ways & Means 3/6/17.

MANDATORY ELECTION REQUIRED FOR TAX RATE ADOPTED ABOVE ROLLBACK RATE HB 1144 Davis Amends 26.08, 26.16, 31.12, 33.08; repeals 26.07; amends Local Government Code 140.010; amends Education Code 130.016; amends Local Government Code 140.010; amends Special District Local Laws Code 1101.254, 1122.2522, 3828.157, 8876.152 and repeals 1063.255; amends Water Code 49.107 and 49.108 and repeals 49.236 and 49.2361; repeals Government Code 403.302(m-1) and (n) The bill provides that all rollback tax elections are converted to ratification tax elections with no requirement of a citizen petition to initiate a vote to retain the rate.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Referred to House Ways & Means 2/22/17.

INCREASE IN CALCULATING ROLLBACK TAX RATE IS LIMITED TO INFLATION RATE; MANDATORY ELECTION REQUIRED FOR TAX RATE ADOPTED ABOVE ROLLBACK RATE HB 1146 Davis Amends 26.01, 26.04, 26.08, 26.16, 31.12, 33.08; repeals 26.07; amends Local Government Code 140.010; amends Education Code 130.016; amends Health and Safety Code 281.124; amends Special District Local Laws Code 1101.254, 1122.2522, 3828.157, 8876.152 and repeals 1063.255; amends Water Code 49.107 and 49.108 and repeals 49.236 and 49.2361 The bill combines the changes proposed in HB 1144 and HB 1147 by Davis. This bill limits the increase allowed in the rollback tax rate to the inflation rate.

The Comptroller will estimate and publish the inflation rate. All rollback tax elections are converted to ratification tax elections with no requirement of a citizen petition to initiate a vote to retain the rate.

Proposed Effective: 1/1/2018.

Status: Referred to House Ways & Means 2/22/17.

INCREASE IN CALCULATING ROLLBACK TAX RATE IS LIMITED TO INFLATION RATE HB 1147 Davis Amends 26.012, 26.04, 26.041; amends Special District Local Laws Code 8876.152; amends Water Code 49.236 and repeals 49.236 and 49.2361

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 90 days after sessions on 8/31/2017.

Status: Substitute reported favorably from House Ways & Means 3/27/17 and recommended for House General Calendar.

The bill limits the increase allowed in the rollback tax rate to the inflation rate. The Comptroller will estimate and publish the inflation rate.

Proposed Effective: 1/1/2018.

Status: Referred to House Ways & Means 2/22/17.

PUBLIC NOTICE PUBLISHED IN A MEDIA OTHER THAN NEWSPAPER HB 1530 Workman; similar HB 1541 Shaheen; similar HB 3896 Gutierrez Adds Government Code 2051.151

INCREASE IN CALCULATING ROLLBACK TAX RATE IS LIMITED TO SIX PERCENT; MANDATORY ELECTION REQUIRED FOR TAX RATE ADOPTED ABOVE ROLLBACK RATE HB 1165 Paul Amends 26.04, 26.041, 26.08, 26.16, 31.12, 33.08; repeals 26.07; amends Local Government Code 140.010; amends Education Code 130.016; amends Health and Safety Code 281.124; amends Special District Local Laws Code 1101.254, 1122.2522, 3828.157, 8876.152 and repeals 1063.255; amends Water Code 49.107 and 49.108 and repeals 49.236 and 49.2361

These bills allow a political subdivision to use another media to publish a notice required by law to be published in a newspaper. The political subdivision determines the form that will provide sufficient public notice, including its website or an Internet newspaper (HB 1530) or social media website that the political subdivision controls the content and is easily found by Internet search (HB 1541). The notice must be published for the period of time as required for publishing in a newspaper. HB 3896 addresses a municipality with a population of less than 25,000 and in which no newspaper is published.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: HB 1530 and HB 1541 referred to Government Transparency & Operations 3/9/17.

The bill reduces the current 8% to 6% for the increase allowed in the rollback tax rate, except a taxing unit uses 8% if responding to a disaster declared in its boundaries. All rollback tax elections are converted to ratification tax elections with no requirement of a citizen petition to initiate a vote to retain the rate.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 90 days after sessions on 8/31/2017.

Status: Referred to House Ways & Means 2/21/17.

SCHOOL TAX RATE RATIFICATION ELECTION HELD ON FIRST UNIFORM ELECTION DATE HB 1496 G. Bonnen Amends 26.08 The substitute bill provides that a school tax rate ratification election be held on the first uniform election date prescribed by Election Code 41.001 that allows sufficient time to comply with all other requirements of law. Current law requires the election be held 30 to 90 days after adopting the tax rate.

2017 Legislative Update; Page 47

PUBLIC NOTICE PUBLISHED IN A MEDIA OTHER THAN NEWSPAPER HB 2073 Johnson Amends Government Code 2051.044, 2051.049 The bill changes the requirements for a legal newspaper for publishing a required notice to remove the requirement that the newspaper be entered as second-class postal matter in the county where published. The bill also adds that, to encourage development of minority-owned businesses, a government entity shall consider selecting a minorityowned business if a substantial percentage of individuals residing in the area are members of one or more minority and a newspaper in the area where the notice is to be published is a minority-owned business and is widely circulated in that area.

Proposed Effective: 9/1/2017.

Status: Referred to House Government Transparency & Operation 3/16/17.

TAXING UNIT ADOPTS DEBT RATE CALCULATED FOR DEBT; WATER DISTRICTS DO NOT FOLLOW SOME TAX CODE PROVISIONS, CHANGES TO ROLLBACK RATE HB 1728 Faircloth Amends 26.05; amends Water Code 49.107, 49.108, 49.236 and repeals 49.236 and 49.2361; amends Special District Local Laws Code 8876.152 The bill changes the word published to calculated as the rate required to be adopted for the debt service (I&S) rate. The bill changes that water districts are required to follow Section 26.04(a), receipt of the appraisal roll, and (b), certified collection rate for debt service by the tax collector. Water districts also would follow Section 26.05(a) on the deadline for tax rate adoption for the M&O and debt rate. The other subsections of 26.04 and 25.06 do not apply to a water district. A water district’s Notice of Public Hearing on Tax Rate would include a description of the purpose of an increase if the proposed total rate exceeds the rollback rate. The rollback rate for the water district is the current year’s debt rate, current year’s contract tax rate and the M&O rate that would impose 1.08 times the amount of M&O tax imposed in the preceding year on an average appraised residence homestead, disregarding homestead exemptions to disabled or over-65 homeowners.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Referred to House Ways & Means 3/13/17.

VOTER PERCENT REQUIRED FOR SUCCESSFUL BOND OR TAX INCREASE ELECTION HB 1773 Swanson; similar SB 2091 Hall Adds Election Code 2.101, 41.0051, 271.015 and amends 85.062; amends Government Code 1251.001, 1251.003, 1251.004 and repeals 1251.006 The bills provide that an election to authorize the issuance of bonds or a tax increase has no effect unless more than 25% of the registered voters of the political subdivision vote in the elections. HB 1773 also provides that such elections must be held on the November uniform election date. The bills add that an election authorizing bonds or a tax increase shall be held as a joint election. The bills require all types of political subdivisions (not just county or city) to have voter approval to issue bonds. A temporary branch polling place must remain at the same location for the entire period during early voting and allow for the 2017 Legislative Update; Page 48

same days and hours as voting at the main early voting polling place.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: HB 1773 referred to House Elections 3/14/17. SB 2091 referred to Senate State Affairs 3/28/17.

SCHOOL BOND ELECTION HAS ONE PROJECT HB 1910 Sanford; similar HB 2811 Swanson Amends Education Code 45.003 The bills provide that a school bond election may not include more than one project in any proposition.

Proposed Effective: 9/1/2017.

Status: HB 1910 scheduled for hearing in House Elections 4/3/17. HB 2811 referred to House Public Education 3/30/17.

SCHOOL VOTERS MAY APPROVE A HIGHER DEBT RATE ABOVE CURRENT LIMIT HB 2108 Huberty Amends Education Code 45.003, 45.0031 The bill provides that a school district may exceed the $0.50 debt rate limit with voter approval while the M&O rate remains in compliance with the M&O tax rate limit. The debt rate is increased while the M&O rate is reduced.

Proposed Effective: 9/1/2017.

Status: Referred to House Public Education 3/13/17.

VOTERS MAY APPROVE A NEW CITY OR REGIONAL LOCAL GOVERNMENT WITH INITIAL TAX RATE HB 2110 Keough; SB 1015 Creighton Adds Local Government Code 43.0755 These bills provide for establishing a new municipality or another regional form of government by voter election as a Type A, B or C municipality, with an initial tax rate stated in the ballot proposition.

The initial tax rate is not considered for calculating an effective or rollback tax rate for Section 26.04.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: SB 1015 referred to Senate Intergovernmental Relations 3/6/17. HB 2110 referred to House Urban Affairs 3/22/17.

COMPTROLLER EVALUATE STANDARDS AND BEST PRACTICES FOR REPORTING COUNTY BUDGET INFORMATION HB 2384 Frank None The bill requires the Comptroller to identify and evaluate uniform standards for reporting county budget information. The Comptroller shall identify best practices and methods for making the information publicly accessible, with a report to the Governor, Lt. Governor and Speaker of the House by June 1, 2018.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Referred to House Ways & Means 3/22/17.

ELECTIONS HELD ON ONE OF TWO GENERAL ELECTION DATES HB 2485 Elkins Amends Election Code 41.001, 41.0052 The bill provides that each general or special election in this state shall be held on the first Saturday of May in an odd-numbered year or the first Tuesday after the first Monday in November. The governing body of a political subdivision, other than a county or municipal utility district, that holds its general election for officers on a date other than the November uniform date may, not later than January 1, 2018, change the date to the November uniform election date.

Proposed Effective: 9/1/2017.

Status: Scheduled for hearing in House Public Elections 4/3/17.

CERTAIN INFORMATION RQUIRED FOR PROPOSED BOND ISSUE HB 2642 Sanford Adds Education Code 45.114 and Local Government Code 140.013 The bill requires certain information by school districts, counties and cities on the issuance of bonds.

Any publicly distributed materials for the proposed bonds shall include the bonds’ purpose, amount and likely interest rate and maximum estimated cost to repay the bonds, including principal and interest. The information shall be posted on the entity’s website.

Proposed Effective: 9/1/2017.

Status: Referred to House Public Education 3/21/17.

2017 Legislative Update; Page 49

NEW PROPERTY DEFINITION CHANGED IN TRUTH-IN-TAXATION CALCULATION HB 3614 Morrison Amends 26.012 The bill changes the definition of new property for TNT calculations to include, for purposes of a county, the increase in total taxable value of real property interests in oil or gas in place listed on the appraisal roll in the current year for production of oil or gas wells completed after January 1 of the preceding year.

Proposed Effective: 1/1/2018.

Status: Referred to House Ways & Means 3/30/17.

TAXING UNIT SENDS NOTICE TO PROPERTY OWNERS ABOUT PROPOSED TAX INCREASE HB 3831 Guiterrez Adds 26.053 and amends 26.05, 26.052; amends Local Government Code 140.010; amends Special District Local Laws Code 8876.152 The bill requires the governing body of a taxing unit that proposes to adopt a tax rate that exceeds the lower of the effective tax rate or rollback rate to adopt a resolution before its first public hearing on the proposed tax increase. The resolution indicates each member in favor of the proposed tax rate and each member opposed and provides written notice to each property owner in the taxing unit of the total amount of tax revenue in the preceding tax year, total amount proposed for the current year at the proposed rate, percentage change in revenue and name of each governing body member in favor and opposed to the proposed rate. This provision does not apply to a school district and to a small taxing unit (50 cent rate or lower generating $500,000 or less in taxes). The taxing unit is responsible for mailing the notice to property owners, or the unit may request the appraisal district mail the notice. If more than one taxing unit requests the CAD handle the notice, the CAD may include property owners in more than one taxing unit in the notice. The Comptroller adopts rules on the form and timing of the notice.

Proposed Effective: 1/1/2018.

Status: Filed.

CERTAIN NAVIGATION DISTRICT’S RATE REINSTATED UPON REQUEST HB 3909 Lucio Amends Water Code 62.160

TAX

The bill addresses a suspended tax rate for a navigation district in a county with a population of less than 400,000 and not than 4 million that borders the Gulf of Mexico, or a county that borders the Gulf of Mexico and is adjacent to such a county. The tax may be reinstated upon request by the district to the county tax assessor-collector.

Proposed Effective: 9/1/2017.

Status: Filed.

LEGISLATURE RESTRICTED ON POWER TO MANDATE REQUIREMENTS ON A COUNTY OR CITY HJR 73 Burns Adds Tex. Const. Art. 3, Sec. 68 The constitutional amendment would provide that a law passed by the Legislature is not effective if it requires a county or city to establish, expand or modify a duty or activity and the Legislature does not appropriate reimbursement of the costs, from a source other than the revenue of the county or city.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: Referred to House State Affairs 3/22/17.

SPECIAL TRUST FUNDS’ LANGUAGE REMOVED FROM TAX CODE SECTION 26.041 SB 105 Hall Amends 26.041; repeals Local Government Code 335.087 The bill repeals Section 26.041(j) that the additional sales tax component does not include sales tax retained by the Comptroller for special events funds.

The bill abolishes these event funds: Pan American Games trust fund, Olympic Games trust fund, Major Events reimbursement program fund, Motor Sports Racing trust fund and Events trust fund.

Proposed Effective: 9/1/2017.

Status: Left pending in Senate Natural Resources and Economic Development 3/14/17.

2017 Legislative Update; Page 50

BOND BALLOT LANGUAGE CHANGED SB 461 Lucio; HB 3335 Murphy Amends Election Code 52.072; adds Government Code Chapter 1251B and repeals 1251.002; amends Local Government Code 271.049 The bills change the ballot language for bond elections to require more information about the taxing unit’s taxes, maturity date of bonds, outstanding debt secured by property taxes, taxes on $100,000 home value to repay current debt for the increase to repay new debt if approved. The taxing unit includes this information on its website for at least 45 days before the order issuing the bonds.

Proposed Effective: 9/1/2017.

Status: SB 461 left pending in Senate Intergovernmental Relations 3/27/17.

PETITION AND BALLOT PROVISIONS CHANGED FOR CITIES SB 488 Bettencourt; HB 3332 Kuempel Add Election Code Chapter 273, Subchapter F, and 233.0115 and amends Election Code 52.072, 253.094, Chapter 277; amends Local Government Code 9.004, These bills change requirements on petition and ballots for cities and home-rule cities. A proposition must substantially state the ballot with such definiteness and certainty that the voters are not misled. A city voter may submit the ballot language to the Secretary of State for review at least seven days before the election. The Secretary of State has mandamus action to have the city cure defects. The bills set out provisions for a home-rule city on petition signatures and language. SB 488 substitute adds, if a court orders a new election, a person may seek from the court a writ of mandamus to compel the city’s governing body to comply with the ballot proposition requirements regarding definiteness and certainty that the voters are not mislead.

Proposed Effective: 9/1/2017.

Status: SB 488 substitute reported from Senate Intergovernmental Relations 3/30/17.

SPECIAL DISTRICTS REQUIRED TO GIVE ACCESS TO FINANCES AND TAX RATE INFORMATION SB 625 Kolkhurst; HB 1343 Stephenson Adds Government Code 403.0241, 403.0242; adds Local Government Code Chapter 203, Subchapter D

The bill requires the Comptroller to create a website known as Special Purpose District Public Information Database to include all active special purpose districts that impose an ad valorem tax or a sales and use tax or charge a fee. A special purpose district is not a county, municipality, school district, junior college district or statewide district. Each district’s information includes name, each board member or employee, attorney that represents district, contact information for main office, special district’s website, reports under Local Government Code Section 140.008, total annual revenue, unencumbered fund balance at end of last fiscal year, rate of any sales and use tax and table of property tax rates as required by Tax Code Section 26.16. The Comptroller updates the database annually, with no fee to access database.

The Comptroller sets how to transmit the information and shall maintain a list of special districts that do not comply. The Attorney General shall not approve a public security submitted by the special district on the noncompliance list.

Proposed Effective: 9/1/2017, with the website by the Comptroller by January 1, 2018.

Status: SB 625 referred to Senate Intergovernmental Relations 2/13/17. HB 1343 referred to House Special Purpose Districts 2/27/17.

BALLOT PROVISIONS CHANGED FOR TAX RATE OR BOND ELECTION SB 642 Bettencourt; similar HB 1658 Phelan Amends Election Code 52.072; amends Government Code Chapter 1251 These bills change requirements on the ballot of a political subdivision, including a city, county, school district or special taxing district, for the voters to approve imposing, increasing or reducing a tax. The ballot language includes the estimated additional tax burden to be imposed on a median homestead value and a detailed description of the purpose of the tax imposed or increased. For reducing the tax rate, the ballot includes the estimated tax reduction on a median homestead value. The bills provide for specific information to be included on the ballot for a bond election, including total amount of debt secured by property taxes, total amount of current property tax debt payments, taxes to be imposed on the median homestead value to repay current debt and estimated taxes if approved. SB 642 adds that the ballot language for a bond election may not exceed 5,000 2017 Legislative Update; Page 51

characters or a different limit prescribed by the Secretary of State to ensure the bond language does not exceed one page or one screen on electronic voting machine.

Proposed Effective: 9/1/2017.

Status: SB 642 referred to Senate Intergovernmental Relations 2/13/17. HB 1658 scheduled for hearing in House Elections 4/3/17.

ALL BOND ELECTIONS HELD ON NOVEMBER GENERAL ELECTION DATE SB 701 Huffines Adds Election Code 41.0051 The bill provides that bond elections shall be held on the November uniform election date.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Intergovernmental Relations 2/21/17.

INCREASING MUNICIPAL FEE ADDS TO CITY’S BUDGET NOTICE SB 737 Hancock; HB 1557 Parker Adds Local Government Code 102.0001 and Chapter 109; amend Local Government Code 102.005, 102.006, 102.0065, 102.007, 102.008 These bills provide that a proposed budget that includes estimated revenue from a new fee or increase in an existing fee must contain a cover page with a statutory statement in 18-point or larger type about the fee. The governing body must ratify the use of that revenue in the budget by a separate vote from the budget or to adopt or increase the fee. The cover page of the adopted budget must also include the information. The municipality must maintain an email notification service for any person to subscribe to receive information about new or increased municipal fees.

Proposed Effective: 9/1/2017.

Status: SB 737 reported from Senate Intergovernmental Relations 3/27/17 and placed on Senate Intent Calendar 3/29/17. HB 1557 referred to House Urban Affairs 3/9/17.

LOCAL BALLOT LANGUAGE REVISED SB 1150 Buckingham; HB 273 Gonzales Amends Election Code 52.095 These bills require that each proposition on a ballot must identify the name of the authority ordering the

election and assign a number that corresponds to the order in which it is placed on the ballot. The Secretary of State prescribes procedures.

Proposed Effective: 9/1/2017.

Status: HB 273 referred to House Elections 2/13/17. SB 1150 referred to Senate State Affairs 3/7/17.

PANEL OF JUDGES APPROVES LANGUAGE IN SOME COUNTIES SB 1296 Huffman Adds Election Code 52.0721

BALLOT

The bill applies to an election by a political subdivision located primarily in a county with a population of more than 120,000, but not if a statute sets out ballot proposition language. The political subdivision submits to the regional presiding administrative law judge the ballot proposition language and purpose of the election. The judge appoints a panel of three judges to review the ballot proposition language before the election is held. If the language is not clear and understandable to the average voter or the panel does not make a ruling by the 31st day of appointment, the language is disapproved. The panel may provide rewritten ballot language.

Proposed Effective: 9/1/2017.

Status: Left pending in Senate State Affairs 3/30/17.

ADJUSTED EFFECTIVE AND ROLLBACK TAX RATES ADDED TO TNT RATES SB 1426 Hancock Amends 26.012, 26.04; amends Local Government Code 140.010 The bill adds two additional rates to Truth-inTaxation: “adjusted effective tax rate” and “adjusted rollback tax rate” which do not have new property value deducted from the current total value. The “adjusted rollback tax rate” does not deducted new property value in calculating the effective M&O rate.

These two new rates are added to the required notices published by a county or municipality.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Referred to Senate Finance 3/20/17.

2017 Legislative Update; Page 52

ROLLBACK TAX RATE FOR CHAPTER 41 SCHOOL DISTRICT ADJUSTED FOR PURCHASING ATTENDANCE CREDITS SB 1810 Taylor Amends 26.04, 26.08; amends Education Code 41.093 The bill addresses a Chapter 41 wealthy school district in calculating its rollback tax rate. The officer or employee designated by the school board shall calculate the positive percentage difference, if any, between the rollback tax rate and the adopted tax rate for the preceding tax year. The rollback tax rate is the effective M&O rate using Section 26.08(i). The percentage rate is provided by August 7 or as soon as possible to the school board and the Education Commissioner. The Commissioner may not require the Chapter 41 district to purchase necessary attendance credits during the preceding year by a percentage greater that the percentage calculated for the district and reported to the Commissioner. The Commissioner certifies the necessary amount to the school board for calculating the rollback tax rate.

Proposed Effective: 1/1/2018.

Status: Referred to Senate Education 3/23/17.

DISASTER MAY EXTEND DEADLINE RELATING TO BUDGET OR PROPERTY TAX RATE SB 1897 Perry; HB 3906 Frullo Amends Government Code 418.108 The bill provides that, if the presiding officer of a political subdivision finds that a disaster has occurred or is imminent, the officer may declare a local state of disaster by order or proclamation. The order or proclamation must include a description of the nature of the disaster, a designation of the area threatened and conditions that have brought the local state of disaster about or made it possible. A copy of the order/proclamation is placed on the political subdivision’s website. The presiding officer may request the Governor waive or suspend a deadline imposed by a statute or rules of a state agency, including one for a budget or ad valorem tax, if the waiver is reasonably necessary to cope with the disaster.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: HB 1897 referred to Senate Agriculture, Water & Rural Affairs 3/23/17.

SECRETARY OF STATE CERTIFIES THAT REGISTERED VOTERS SIGNED A PETITION SB 2010 Taylor Adds election Code 277.006 and 277.006 The bill authorizes the Secretary of State to adopt a petition form that may be used for elections outside of the Election Code. The authority to which a petition is submitted shall provide the petition to the Secretary of State for certification. The Secretary of State shall certify the signers are registered voters of the applicable territory and deliver the results to the authority. An authority may not invalidate a petition signature if the Secretary of State certified the signer.

Proposed Effective: 9/1/2017.

Status: Referred to Senate State Affairs 3/27/17.

NAVIGATION DISTRICT MAY REQUEST THAT THE COUNTY OR THE CITIES IN THE DISTRICT LEVY THE PROPERTY TAX FOR THE DISTRICT SB 2199 Lucio Amends Water Code 62.160 The bill adds that the navigation district may request that the commissioners court of the county levy assess and collect the property taxes for the district, not to exceed the 10 cents per $100 limit. Or, upon the navigation district’s request, the governing bodies of the municipalities in the district levy, assess and collect the taxes for the district. The navigation district pays for the costs of levying, assessing and collecting the tax.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Referred to Senate Transportation 3/29/17.

Tax Collections INSTALLMENT PAYMENT OF CURRENT TAXES EXTENDED TO ALL RESIDENCE HOMESTEADS HB 198 Bernal Amends 31.031 The bill makes the right to pay current taxes in four equal installments available to all homeowners who 2017 Legislative Update; Page 53

qualify for the residence homestead exemptions. The right to make installment payments is presently limited to the homeowners age 65 or older, to disabled homeowners and to disabled veteran homeowners.

Proposed Effective: 1/1/2018.

Status: Referred to House Ways & Means 2/14/17.

RELIGIOUS ORGANIZATION REQUESTS TAX REFUND ON LEASED PLACE OF WORSHIP HB 758, HJR 49 Keough Adds 31.112; amends 31.12; adds Tex. Const. Art. 3, Section 521 The bill and constitutional amendment provides that a religious organization that leases property for use as an actual place of religious worship receives a refund from each taxing unit of the taxes imposed on the property and collected from the property owner. The religious organization must apply for the refund no later than the third anniversary of the date the taxes were paid; otherwise, the organization waives the right to the refund. The Comptroller prescribes the refund application. The tax collector has 90 days to respond to a refund request, or the request is denied.

The organization may file suit against the taxing unit not later than 60 days after a refund denial. The organization may be awarded court costs and attorney fees.

Proposed Effective: 1/1/2018, if Texas voters approve constitutional amendment November 7, 2017.

Status: Referred to House Ways & Means 2/20/17.

MUD BILLS INCLUDE BOND OR DIRECTOR ELECTION NOTICE HB 1272 Schofield; similar HB 1607 Schofield Adds Water Code 54.104 HB 1272 provides that a municipal utility district (MUD) shall print a notice of a director or bond election to include with a bill or invoice that the MUD sends to residents. The notice for a bond election includes the amount of bonds to be issued, interest rate and time and place of election. The notice for a director election includes the names of candidates and time and place of the election. HB 1607 includes more details. For director elections, the notice with the bill or invoice is sent two to three months before the board elections and includes the procedure for becoming a director, qualifications, filing process, application form and deadline for filing. For bond elections, the bill or invoice is sent one to two months before the

election and includes the amount of bonds to be issued, interest rate, bond’s purpose and time and place of election.

Proposed Effective: 9/1/2017.

Referred: HB 1272 referred to House Special Purpose Districts 2/28/17. HB 1607 referred to House Elections 3/14/17.

TAX BILL INCLUDES NOTICE OF UPCOMING SCHOOL TAX RATE RATIFICATION ELECTION HB 1454 Rinaldi Amends 31.01 The bill requires that the tax bill must provide notice that registered school district voters will have an opportunity to approve the adopted school tax rate if the school board adopted a tax rate above the rollback tax rate and the ratification election has not been held by the date the tax bill is mailed. The notice must include the election date and the maximum amount of taxes the school district may impose on the property if the voters do not approve the adopted tax rate.

Proposed Effective: 9/1/2017.

Status: Reported favorably from House Ways & Means 3/27/17 and recommended for House General Calendar.

INSTALLMENT PAYMENT OF CURRENT TAXES REVISED FOR PROPERTY IN DISASTER AREA HB 1782 Faircloth; SB 1047 Creighton Amends 31.032 These bills revise the language for four equal installment payments by certain property owners in a disaster area. It adds to current law that the first installment may be paid in the first month of delinquency, with the owner providing a notice that the payment is the first installment.

Proposed Effective: 1/1/2018.

Status: SB 1047 referred to Senate Finance 3/6/17.

HB 1782 referred to House Ways & Means 3/14/17.

SCHOOL TAX BILLS CONTAIN PERCENTAGES OF M&O TAXES FOR ROBIN HOOD AND STATE FUNDS HB 1890 Capriglione; SB 1407 Taylor Amends 31.01

2017 Legislative Update; Page 54

The bills require that a school tax bill includes additional information for a Chapter 41 (wealthy) school district, which equalizes its wealth by purchasing average daily attendance credits from TEA, shall include or separately state the percentage of M&O taxes imposed for the current tax year that the school district is required to purchase the credits and the percentage imposed not for that purpose. For other districts, the school tax bill states the percentage of M&O revenue that is derived from M&O taxes for the current tax year, the percentage of M&O taxes in the beginning of the preceding tax year, the percentage of state funds for M&O operation to the districts in the current year and the percentage of state funds for M&O in the preceding tax year.

Proposed Effective: 1/1/2018.

Status: HB 1890 left pending in House Ways & Means 3/22/17. SB 1407 referred to Senate Finance 3/16/17.

PROPERTY OWNER WHO PAID TAX GETS REFUND FOR CORRECTED TAX RECORD HB 2989 Bonnen Amends 26.15 The bill clarifies that the property owner who paid a tax on a property that has a correction that decreases the tax liability receives any tax refund on the property.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Left pending in House Ways & Means 3/29/17.

MONTHLY INSTALLMENT PAYMENTS BY DISABLED VETERANS OR SURVIVING SPOUSE ADDED HB 3148 Uresti Adds 31.033 and amends 31.031, 31.08, 33.08 The bill revises the Tax Code sections on quarterly installment payments by certain homeowners. Section 31.031 is changed to address quarterly payments by disabled veterans or unmarried surviving spouse on their homesteads or property that receives a homestead exemption or the disabled veteran exemption under Section 11.22. New Section 31.033 adds monthly payments by disabled veterans or unmarried surviving spouse on property that receives a homestead exemption or the disabled veteran exemption. For 10 equal monthly payments, the

owner pays the first installment before November 1, along with a notice to the taxing unit that the person will pay the remaining in nine equal installments.

Each payment is due before the first day of the next month with the 10th payment due before August 1. A payment after January 1 that is not paid timely is delinquent and incurs the 6% penalty and 1% monthly interest rate. A person may not pay less than the due amount, unless the collector accepts partial payments.

The unpaid amount remains delinquent.

Proposed Effective: 1/1/2018.

Status: Referred to House Ways & Means 3/29/17.

CHIEF APPRAISER LIMITED IN REQUESTING IDENTIFICATION FOR HOMESTEAD EXEMPTION; TAX COLLECTOR SENDS REFUND TO ADDRESS STATED BY OWNER HB 3446 Yvonne Davis Amends 11.43, 25.027, 26.15, 31.12 The bill provides that the chief appraiser may not require an applicant for a homestead exemption to provide any other identification, except current law on driver’s license or state ID, to determine homestead address, unless the chief appraiser possesses reasonable evidence that the address is not the applicant’s homestead. A chief appraiser may not require both spouses of a married couple to sign the residence homestead exemption application. A chief appraiser may not require proof of marriage. The chief appraiser may not deny or cancel an exemption for an expired state ID or because the individual has a temporary license or limited term license. The bill changes Section 25.027, which provides that the CAD may not post on its website a property owner’s age or information that the owner is 65 years of age or older, to state that this age information does not apply to a non-searchable appraisal or tax roll dataset available for download only. For a refund on a residence homestead, the owner may request that the tax collector send the refund to a particular address. If no written request is made, the tax collector sends the refund to the owner’s most recent mailing address in the records of the tax collector. See also Exemptions.

Proposed Effective: 9/1/2017.

Status: Filed.

2017 Legislative Update; Page 55

INSTALLMENT PAYMENT TAXES ALLOWED BY HOMEOWNER SB 595 Lucio Amends 31.031

OF CURRENT LOW-INCOME

The bill makes the right to pay current taxes in four equal installments available to a homeowner whose household income at the homeowner’s homestead is not more than 80% of the applicable area median family income established by HUD. The homeowner must provide the tax collector with any income or household information that the collector requires to establish eligibility.

Proposed Effective: 1/1/2018.

Status: Referred to Senate Finance 2/8/17.

PRORATED TAXES ADDRESSED FOR PROPERTY ACQUIRED BY EMINENT DOMAIN SB 740 Kolkhorst; similar HB 2684 Burns; similar HB 3687 Ashby Amends 26.11; amends Property Code 21.0111, 21.0113, 21.047, 21.063 These bills address an entity acquiring a property by eminent domain authority. The proration of the taxes begins when the entity assumes possession of taxable property under a possession and use agreement or a similar agreement that is entered into under threat of condemnation. The proration uses the effective date of the agreement.

Proposed Effective: 9/1/2017.

Status: SB 740 scheduled for hearing in Senate State Affairs 4/3/17. HB 2684 Referred to House Land & Resource Management 3/23/17.

TAX INFORMATION INCLUDED ON NOTICE AND TAX BILLS TO CERTAIN PROPERTY OWNERS SB 1360 Watson Adds 25.191 and amends 1.085, 25.19, 31.01 The bill addresses specific statements of tax information be added to a property owner’s notice of appraised value for property in certain school districts. These notices are for property that is in a school district that must equalize its wealth by purchasing student credits from the state. The notices include these statements: “Your local school district property taxes are estimated on the tax rate for the

preceding year to be $___. Of those estimated taxes, it is estimated that: "$____ will be used by the school district to fund maintenance and operations of the school district; "$____ will be used by the school district to pay for facilities; and "$____ will be paid by the school district to the state.

"For the preceding year: "$____ was used by the school district to fund maintenance and operations of the school district; "$____ was used by the school district to pay for facilities; and "$____ was paid by the school district to the state.

"For the year preceding the preceding year: "$____ was used by the school district to fund maintenance and operations of the school district; "$____ was used by the school district to pay for facilities; and "$____ was paid by the school district to the state."

The bill states how the chief appraiser estimates the taxes for these items. As an alternative to including this statements on the notice of appraised value, the CAD may do new Section 25.191, for which the Comptroller adopts by rule the format and form. The alternative Notice of Taxes Actually Imposed on Property by Taxing Units provides these statements on a notice sent after the taxing units have adopted their current tax rates. The statements are modified for adopted rates. Tax collectors also include these statements on the owner’s tax bills for these properties in these school districts. See also Appraisal District Administration.

Proposed Effective: 1/1/2018.

Status: Referred to Senate Finance 3/16/17.

Delinquent Tax Litigation RIGHT TO DEFER TAX COLLECTIONS EXTENDED TO 100% DISABLED VETERANS HB 217 Canales Amends 33.06 The bill authorizes those who qualify for the 100% disabled veteran’s homestead exemption to be able to defer or abate the collection of delinquent taxes on that homestead.

Proposed Effective: 9/1/2017.

2017 Legislative Update; Page 56

Status: Reported favorably from House Ways & Means 3/27/17 and recommended for House Local & Consent Calendar.

TAX DEFERRAL PROVISIONS ADDED FOR HISTORIC PROPERTY, ALONG WITH REVISIONS HB 969 Metcalf Adds 33.066; amends 6.035, 6.412, 33.06, 33.065; amends Government Code 403.302 The bill adds a tax deferral for historic family property that has been continuously owned for at least the preceding 100 years by one or more individuals of the same family. Family members are related with the third degree by blood or marriage at the time the property transferred from one to the other. An owner may defer or abate the taxes if the owner has an ownership interest equal to or greater than 50% of the property’s market value. The owner files the affidavit with the chief appraiser. The deferral ends on the first January 1 when the owner no longer has the ownership requirements.

The bill also drops the interest rate from 8% to 2% during a tax deferral or abatement period. The bill changes Section 33.065 to defer collection of taxes on a residence homestead based on appreciating value or owner equity, if the homeowner has an ownership interest that is greater than 10% of the home’s market value for that year. Ownership interest is the difference between the home’s market value for that year and the total outstanding debt secured by liens on the home on January 1. The homeowner must file annually a valid affidavit about ownership interest with the chief appraiser. For Section 33.065, the interest rate drops from 8% to 2% if the homeowner’s ownership interest is equal to or greater than 50% of the home’s market value. The bill also provides that a person with such a historic property tax deferral may serve as an appraisal district director or ARB member.

The Comptroller adjusts the Property Value Study for changes in tax deferral.

Proposed Effective: 1/1/2018.

Status: Referred to House Ways & Means 2/27/17.

ELDERLY OR DISABLED HOMEOWNER CAN DEFER TAXES WITHOUT CONSENT OF MORTGAGE COMPANY HB 1564 Miller Amends 33.06 The bill provides that an elderly or disabled homeowner is not required to obtain the consent of the mortgage company for the residence homestead that the homeowner owns and occupies to obtain a tax deferral, unless the mortgage balance is at least 60% of the homestead’s appraised value or the homeowner has a default for a reason other than nonpayment of taxes. In those cases, the homeowner must obtain written consent from the mortgage company before filing for a tax deferral.

Proposed Effective: 9/1/2017.

Status: Referred to House Ways & Means 3/9/17.

ACTIVE MILITARY PERSON HAS A WAIVER OF PENALTY AND INTEREST AND CAN FILE DEFERRAL HB 1632 Greg Bonnen; SB 771 Creighton Amends 31.02, 3301 These bills address the waiver of penalty and interest on a delinquent tax of an active military person.

Current law provides for a 60-day period for the active military person to pay with no penalty and interest during a war or national emergency declared by federal law. The bills remove the requirement of being during a war or national emergency. These bills also allow the active military person to defer payment with interest accruing at 6% and incurring no penalty.

Proposed Effective: 9/1/2017.

Status: SB 771 referred to Senate Veteran Affairs & Border Security 2/22/17. HB 1632 reported favorably from House Ways & Means 3/27/17 and recommended for House Local & Consent Calendar.

TAXING UNIT MAY WAIVE PENALTY AND INTEREST IF MORTGAGEE FAILS TO SEND TAX BILL TO OWNER HB 1634 Greg Bonnen Amends 33.011 The bill adds that the governing body of a taxing unit may waive penalties and interest on a delinquent tax if the mortgagee failed to mail a copy of the tax bill to the property owner, and the taxpayer paid the tax not 2017 Legislative Update; Page 57

later than the 21st day after the taxpayer knew or should have known of the delinquency. The tax bill was mailed or delivered by electronic means to the mortgagee of the property.

Proposed Effective: 1/1/2018.

Status: Committee substitute left pending in House Ways & Means 3/15/17.

TIME THAT DELINQUENT PROPERTY IS HELD BETWEEN JUDGMENT AND SALE IS EXEMPT FROM TAXES HB 1833, no filed HJR Dutton Adds 11.281 and amends 11.43, 33.52, 34.01, 34.05 The bill and constitutional amendment (no filed HJR at this time) provides for exempting real property held during the period between issuance of a judgement foreclosing a tax lien on the property and the sale of the property at a tax sale or the payment of the taxes before the sale. If the owner pays the amount of the judgment before the sale or redeems the property, a penalty is imposed equal to the taxes that would have been imposed during the exempt period, plus interest at 7% from the date on which taxes would have become due. A tax lien attaches to secure payment of the penalty and interest. For the property to be exempt, a person must file an exemption application.

No post-judgement taxes, penalties and interest may be enforced. A sale by the taxing unit holding the property discharges and extinguishes all liens foreclosed by the judgement. See also Exemptions.

Proposed Effective: 1/1/2018, if voters approve constitutional amendment November 7, 2017.

Status: Referred to House Ways & Means 3/9/17.

OWNER MAY APPLY FOR INSTALLMENT AGREEMNT ON INHERITED PROPERTY WITH A TAX DEFERRAL HB 2635 Dutton Adds 33.025 and amends 6.035, The bill adds that a property owner who inherited a property from a person who at the time of death was receiving a tax deferral may pay the deferred taxes and interest in installments. The owner makes a written request to pay in installments and the collector shall enter an installment agreement. The owner must make the request not later than the date that the deferral period expires. The written installment agreement is for payments to be made monthly or annually. The agreement expires on the earlier of the

date the owner no longer owns the property or the 30th day after the owner fails to make a payment. The property may not be seized or sold or filed for suit to collect a delinquent tax subject to an installment agreement until the date the agreement expires.

Interest continues to accrue on the unpaid balance at 1% per month. The collector must deliver a notice of default of the agreement.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Referred to House Ways & Means 3/21/17.

first-class mail with RETURN SERVICE REQUESTED in all caps and with the date in larger, bold font that the chief appraiser will determine the home no longer qualifies. The chief appraiser may include this notice with a notice about cancelling the homestead exemptions on the home.

Proposed Effective: 9/1/2017.

Status: SB 448 reported from Senate Finance 3/16/17, passed Senate 3/22/17 and received in House 3/23/17. HB 2028 voted from House Ways & Means 3/29/17.

PROPERTY OWNER NOTIFIES MORTGAGE COMPANY BY CERTIFIED MAIL ABOUT TAX LENDER CONTRACT HB 2832 Oliveira; SB 1397 Nichols Amends 32.06

CERTAIN MORTGAGE SERVICERS REQUIRED TO ISSUE ACCOUNTING STATEMENTS TO OWNERS WITH REAL PROPERTY LIENS SB 830 Rodriquez Adds Property Code Chapter 397

The bills address the required notice to the mortgage company by a property owner that has authorized a property tax lender to pay the delinquent taxes on the property. Not later than 10 days before the owner executes a contract with a tax lender, the owner sends by certified mail to the mortgage company a notice that the owner intends to enter into a contract authorizing the lender to pay the delinquent taxes.

Proposed Effective: 9/1/2017.

Status: SB 1397 referred to Senate Business & Commerce 3/16/17. HB 2832 referred to House Ways & Means 3/29/17 and re-referred to House Business & Industry 3/30/17.

The bill applies to a loan secured by a first or subordinate lien on real property that is not a federally related mortgage loan, loan by a regulated credit union or a loan primarily for business purposes or for temporary financing. A mortgage servicers for a loan other than those listed shall provide the borrower an annual January statement about the amount of each payment received during the preceding year, how each payment was applied and the outstanding balance. A borrower can bring action requiring compliance and recover actual damages, $100 for each violation and attorney’s fees.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Business & Commerce 2/27/17.

SPECIAL NOTICES REQUIRED TO CANCEL TAX DEFERRAL FOR OVER-65 HOMEOWNER SB 448 Burton; HB 2028 Goldman Amends 1.07, 33.06 These bills require that the chief appraiser sends a notice by certified mail to an over-65 homeowner before the appraiser determines that the over-65 homeowner is no longer entitled to receive a tax deferral or abatement on the home. The chief appraiser includes a form, along with a self-addressed postage prepaid envelope to return the form, on which the homeowner may indicate if the home remains the person’s principal residence. If the chief appraiser receives no response in 60 days after mailing, the chief appraiser may determine the home is no longer qualified for the tax deferral after 30 days and after making a reasonable effort to locate the homeowner.

Reasonable effort includes mailing a second notice by 2017 Legislative Update; Page 58

INTEREST RATE DEFERRAL HB 2236 Murphy Amends 33.06, 33.065

CHANGED

ON

TAX

The bill changes the current 8% interest rate on a tax deferral or abatement to the five-year Constant Maturity Treasury Rate reported by the Federal Reserve as of January 1 of the year in which the deferral or abatement was obtained.

Proposed Effective: 9/1/2017.

Status: Referred to House Ways & Means 3/20/17.

QUALIFICATIONS DETAILED FOR PROCESS SERVERS FOR LAWSUITS HB 2412 Schofield Adds Civil Practice and Remedies Code 30.022 The bill outlines the qualifications as a process server for any process in a lawsuit, including citation and other notices, writes, order and papers issued by a court. The process server must be 18 years of age or older and not be a party to the suit or interested in the suit’s outcome. Only a sheriff or constable may serve a citation in an action of forcible entry and detainer; a writ that requires the actual taking of possession of a person, property or thing; or a writ requiring that an enforcement action be physically enforced.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Referred to House Judiciary and Jurisprudence 3/22/17.

DELINQUENT TAX SALE MAY INCLUDE PERSONAL PROPERTY AND OTHER REVISIONS HB 3062 Kacal Amends 34.01, 34.015, Civil Practice and Remedies Code 34.0445 The bill revises the delinquent tax sale procedures to include personal property seized by a tax warrant and to include the CAD board of directors (if the CAD collects) for the authorization of on-line bidding and sale. The sale of personal property, including a manufactured home, may take place at the same place as the sale of real property or at the location of the personal property. The bill defines who is a purchaser and person who is bidding. The officer conducting the sale delivers the deed to the person who was the successful bidder at the sale and on the request of that bidder, to the legal spouse of the successful bidder or to a business, religious, charitable or civic organization giving written authorization to an individual to submit a bid Proposed Effective: 9/1/2017.

Status: Referred to House Ways & Means 3/27/17.

HOMEOWNER MAY ABATEMENT PENDING TAX SALE OF HOMESTEAD SB 1378 Zaffirini Adds 33.061

2017 Legislative Update; Page 59

The bill allows a homeowner to abate a sale to foreclose a tax lien on the home that the homeowner owns and occupies. The homeowner delivers an affidavit to the chief appraiser, to the tax collector(s) or the delinquent tax attorney for the taxing unit(s) and to the officer conducting the sale no later than five days before the sale date. The homestead may not be sold until either the second anniversary of the date the homeowner delivered the affidavit or 181 days after the homeowner no longer owns and occupies the home, whichever date is earlier. If the home is sold in violation, the homeowner may file a motion to set aside the sale, if the motion is filed during the applicable redemption period for the property or, if a taxing unit is holding the property, on or before 180 days following the date the taxing unit’s deed of record is filed. This right is not transferable to a third party. Annually, the chief appraiser advertises the ability to abate a tax sale of a homestead.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Finance 3/16/17.

TIMES AND DATE SET FOR PUBLIC TAX SALE OF REAL PROPERTY HB 3311 Huberty Amends 34.01, 34.07; amends Civil Practice and Remedies Code 34.041, amends Property Code 51.002 The bill adds that a real property sale must take place between 10 a.m. and 4 p.m. on the first Tuesday of the month, or if a holiday, on the following business day.

This time and date also applies to a sale conducted by a public auction using online bidding.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Filed.

APPOINTED MASTER RECEIVES FEES AS COSTS OF DELINQUENT TAX LAWSUITS HB 3389 Schofield Amends 33.73 The bill adds that the district clerk shall collect fees taxed as costs of suit and award the fees to the master in each delinquent tax suit for which a master is appointed, regardless of the disposition of the suit.

Proposed Effective: 9/1/2017.

Status: Filed.

PRIORITY OF TAX LIEN CHANGED TO INFERIOR IF CONNECTED TO TAX LIEN TRANSFER HB 3725 Walle Amends 32.05, 32.065 The bill adds an exception that the priority of a tax lien is inferior to a debt, lien, future interest or other encumbrance that existed before attaching the tax lien if the tax lien is transferred to a transferee and the closing costs of the loan secured by the transferred tax lien exceeded $500 or discount points were charged in connection with the loan secured by the transferred tax lien.

Proposed Effective: 9/1/2017.

Status: Filed.

TAXING UNIT MAY WAIVE DELINQUENT PENALTY AND INTEREST FOR CONSCIOUS INDIFFERENCE BY PROPERTY OWNER HB 4293 Craddick Amends 33.011 The bill provides that the governing body of a taxing unit may waive penalties and interest on a delinquent tax if the taxpayer submits evidence showing that the delinquency was not intentional or the result of conscious indifference.

Proposed Effective: 1/1/2018.

Status: Filed 3/27/17, after filing deadline.

TAX LIEN ON ERRONEOUS EXEMPTION ADDED TO APPRAISAL ROLL IS NOT ENFORCED AGAINST NEW OWNER SB 1745, SJR 55 Hinojosa Amends 11.43; amends Tex. Const. Art. 8, Sec. 15 The bill and constitutional amendment provide that if the chief appraiser adds property or appraised value that was erroneously exempted in a prior year to the appraisal roll, a tax lien may not be enforced against the property for payment of taxes, penalties or interest as a result of adding the property if at any time after January 1 of that year the property was sold in an arm’s length transaction to a person who was not related to the seller within the first degree by blood or marriage. See also Exemptions.

Proposed Effective: 9/1/2017. Not contingent on voter approval of constitutional amendment November 7, 2017.

2017 Legislative Update; Page 60

Status: SJR 55 referred to Senate Finance 3/21/17 and SB 1745 3/23/17.

INTEREST RATE CHANGED IN TAX CODE SB 2198 Campbell Adds 1.13 and 1.14 and amends 11.135, 11.181, 11.185, 11.201, 23.46, 23.55, 23.76, 23.86, 23.96, 23.9807, 26.09, 31.12, 33.01, 33.06, 33.065, 42.42, The bill changes the interest rate used to accrued on various provisions of the Tax Code, including special valuation rollback taxes, omitted property, delinquent taxes, tax refunds, tax deferrals and others. The annual interest rate is the lesser of 12% or the sum of 2% and the prime rate published by the Federal Reserve Board on the first business day of the calendar year for which simple interest is calculated.

The Comptroller posts the interest rate on the Comptroller’s website, beginning with the 2018 calendar year. The parties to a motion, effort or appeal may agree to waive or reduce the interest that accrues on a tax, penalty or refund that is subject to a 25.25 error correction; on a delinquent tax or a delinquent tax lawsuit to collect; or for an appeal to district court.

The written agreement is required before the court issues the order for the delinquent tax lawsuit or pending appeal. A district court may waive or reduce interest that has accrued as part of the final judgment to the extent the interest is waived or reduced by agreement.

See also Appraisal District Administration and Appraisal District Litigation.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Finance 3/29/17.

County Tax Assessor-Collectors ADDITIONAL PROCEDURE ADDED DISHONORED CHECK HB 598 Koop; SB 492 West Amends Local Government Code 130.006

FOR

These bills add to the list of procedures that the county tax assessor-collector may establish to include the referral of a dishonored check or credit card invoice to a private collection agency. The private collection agency may charge a fee equal to the amount authorized for a returned check under Local Government Code Section 118.011, which is currently not less than $15 nor more than $30.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: SB 492 passed Senate 3/28/17 and received in House 3/29/17. HB 598 reported favorably in House Ways & Means 3/27/17 and recommended for House Local & Consent Calendar.

CONTINUING EDUCATION HOURS SET FOR NEW COUNTY TAX ASSESSOR-COLLECTOR HB 1719 Thompson; similar SB 929 Hughes Amends 6.231 These bills add that a county tax assessor-collector who assesses or collects property taxes shall successfully complete at least 40 hours of continuing education courses on property tax assessment and collection, including Truth-in-Taxation. HB 1719 requires the hours be completed not later than the first anniversary of the date of taking office; the change applies to a county tax assessor-collector whose first term begins on or after the bill’s effective date. SB 929 substitute follows HB 1719 for one year, rather than nine months, to complete the required course and applies to a county tax assessor-collector whose first term begins on or after the bill’s effective date.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: SB 929 substitute reported from Senate Finance 3/29/17 and placed on Senate Calendar 4/3/17. HB 1719 voted from House Ways & Means 3/29/17.

COUNTY TAX ASSESSOR MAY VOLUNTARILY REGISTER WITH TDLR HB 1738 Greg Bonnen Adds Occupations Code 1151.1515, repeals 1151.003 and amends 1151.151, 1151.160 The bill provides that county tax assessor-collectors and their employees may voluntarily register with the Texas Department of Licensing and Regulation (TDLR). In 2013, the Texas Legislature added an exemption for registration and certification for those individuals. The bill requires TDLR to establish procedures for the expedited reinstatement of a certification held by one of these individuals on June 13, 2013. Those who had not received certification on that date have a five-year extension from the fifth anniversary of the original registration, in addition to the one-year extension authorized in the Code.

Proposed Effective: 9/1/2017.

2017 Legislative Update; Page 61

Status: Left pending in House Ways & Means 3/15/17.

School Finance HOUSE PLANS ADDITIONAL $1.6 BILLION FOR PUBLIC SCHOOL FUNDING HB 21 Huberty Adds Education Code 30.0561, 42.1561, Chapter 42H; amends 11.158, 29.097, 29.098, 29.123, 29.918, 30.087, 34.002, 34.007, 39.0233, 41.002, 41.099, 41.1541, 41.257, 42.006, 42.151, 42.154, 42.1541, 42.302; repeals 39.233, 39.234, 42.155, 42.160 and 42.2513.

The substitute bill increases basic student allotment by $210 to $5,350 per student, which decreases the amount of tax revenue sent by Chapter 41 districts to the state by $355 million over two years, or about 10%. A $200 million grant for two years is set aside for the hold-harmless funding clause for about 156 school districts; the hold harmless clause in the current law would expire. The Legislature will add $1.6 billion more to fund these items above current school funding levels. A county transportation system may not receive funding directly from the state. The funding formulas add additional funding for students with dyslexia or related disorders. The Education Commissioner may award financial hardship grants to eligible districts whose M&O state and local revenue per weighted student is less than it was in the 20162017 school year. [Note: SB 1, the Senate’s version of the state budget, passed the Senate with a $1.8 billion cut in state funding for public schools by having local property tax revenue account for that amount. SB 1 was referred to House Appropriations 3/28/17.]

Proposed Effective: 9/1/2017.

Status: Voted from House Education Committee 3/28/17.

STATE REPEALS ROBIN HOOD FOR SCHOOL FUNDING HB 286 Rinaldi; HB 1319 Landgraf Amends 21.01, 21.02, 25.25, 26.08, 312.210; amends Government Code 403.302; repeals Education Code Chapter 41 and amends various sections

These bills repeal the provisions requiring school districts to reduce their wealth per student to the equalized wealth level, commonly referred to as “Robin Hood” of state school funding. The bill removes all references to Education Code Chapter 41.

Proposed Effective: 9/1/2017.

Status: HB 286 referred to House Public Education 2/13/17. HB 1319 referred to House Public Education 2/27/17.

ADDITIONAL STATE AID FOR TAX REDUCTION CONTINUED HB 308 Burrows, HB 527 Workman; HB 811 King; HB 856 Schubert; SB 419 Kolkhorst Amends Education Code 42.2516, 42.2518 These bills continue the additional state aid for tax reduction (ASATR). HB 527 and HB 856 extend ASATR for two additional school years, through the 2018-2019 school year. HB 811 extends ASATR through the 2020-2021 school year. SB 491 extends ASATR through the 2022-2023 school year. HB 308 extends through 2026-2027.

Proposed Effective: HB 308, HB 527 and HB 856 immediately if passed by two-thirds of both houses; otherwise, effective 9/1/2017. HB 811 and SB 491 immediately if passed by two-thirds of both houses; otherwise, 8/31/2017.

Status: SB 419 referred to Senate Education 2/1/17.

HB 308 referred to House Public Education 2/15/17. HB 527 referred to House Public Education 2/20/17. HB 811 left pending House Public Education 3/7/17. HB 856 referred to House Public Education 2/23/17.

EDUCATION COMMISSIONER RETURNS DETACHED PROPERTY BACK TO CHAPTER 41 DISTRICT HB 1059 Murphy; SB 1247 Huffman Adds Education Code 41.2065 and amends various sections of Education Code Chapter 41 These bills add that the Commissioner of Education may propose the reattachment of taxable property previously detached from a wealthy Chapter 41 school district to meet wealth requirements. For the reattachment, the original district’s wealth per student for a subsequent school year must be $10,000 or more below the specified wealth level. The Commissioner returns one or more parcels in ascending order of taxable value, beginning with the lowest property value. Current law does not address moving the 2017 Legislative Update; Page 62

property back to a district if property values decrease below the equalized wealth level. For the upcoming school year, Houston ISD is a Chapter 41 district and its voters decided to detach property to equalize its wealth.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, 9/1/2017.

Status: HB 1059 left pending in House Public Education 3/28/17. SB 1247 referred to Senate Education 3/13/17.

EDUCATION COMMISSIONER USE OF EXCESS FUNDS AND THE PERCENTAGE HOMESTEAD EXEMPTION HB 1263 Bohac Repeals Education Code 42.2522 and amends Education Code 7.062 The bill addresses the Education Commissioner’s use of excess funds to school districts. The use of excess funds currently has priority over any provision of Chapter 42, including funding the value loss for onehalf of the percentage homestead exemption in Section 42.2422. That provision is repealed.

Proposed Effective: 9/1/2017.

Status: Referred to House Public Education 2/23/17.

STATE FUNDING CHANGED TO CHAPTER 41 WEALTHY ISDS HB 1280 Gonzalez Amends Education Code 42.251, 42.253, 43.001, 45.259 The bill removes money allocated from the available school fund in the Education Commissioner’s determination of state funds to a Chapter 41 wealthy district.

Proposed Effective: 9/1/2017.

Status: Referred to House Public Education 2/23/17.

CHAPTER 41 RECAPTURE ADJUSTED FOR HIGH PREVALENCE ON MINERAL VALUE HB 1320 Landgraf Adds Education Code 42.012, 42.2529, 42.25291, 42.25292 and amends various sections of Education Code The bill requires the Education Commissioner’s determination of state funds to a Chapter 41 wealthy

district to consider federal concentration grant funds and adjustment for high prevalence of mineral value.

The bill requires that each October 1, a 10-member state committee of appointed members, each from the House and Senate, consult with the Comptroller and LBB to identify districts with a taxable value of property unlikely to produce the projected district tax revenue due to a high prevalence on mineral value.

Proposed Effective: 9/1/2017.

Status: Referred to House Public Education 2/27/17.

EDUCATION COMMISSIONER CONSIDERS OPTIONAL HOMESTEAD EXEMPTION ADJUSTMENT HB 1324 Thompson Amends Education Code 42.2522 The bill provides that the Education Commissioner shall provide funding for one-half of the value loss to a school district that is prohibited from reducing or repealing the optional percentage homestead exemption. This provision expires December 31, 2019. Current law provides funding for one-half of the taxable value loss for the exemption if there are available funds.

Proposed Effective: 9/1/2017.

Status: Referred to House Public Education 2/27/17.

STATE AID PROVIDED TO SCHOOLS FOR DEBT PAYMENTS HB 1788 Thompson Amends Education Code 46.032 and 46.034 The bill provides that state school funding would guarantee level of state and local funds per student per cent of tax effort is $35 of the ISD’s combined tax effort that does not exceed the rate of $0.20 per $100 of value and $60 for each cent of the ISD’s combined tax effort that exceeds the effort above $0.20.

Proposed Effective: 9/1/2017.

Status: Referred to House Public Education 3/14/17.

RECAPTURE AMOUNTS ADJUSTED FOR A CHAPTER 41 ISD HB 1838 Meyer Adds Education Code 41.0932

2017 Legislative Update; Page 63

The bill changes the agreement that a Chapter 41 (wealthy) school district must execute to reduce its taxable wealth to provide that the district retains sufficient M&O tax revenue to pay its average M&O costs per student in average daily attendance, as adjusted for inflation and may not be required to pay for attendance credits that would reduce below that amount. The Education Commissioner determines the average M&O costs per student, based on the district’s M&O expenses per student for the preceding three years, and adjusts for inflation. The Commissioner’s decision is final and may not be appealed.

Proposed Effective: 9/1/2017.

Status: Referred to House Public Education 3/9/17.

SCHOOL DISTRICT RECEIVES NO FUNDING FOR GRANTING OPTIONAL PERCENTAGE HOMESTEAD EXEMPTION HB 2865 Gonzalez Amends 311.011; amends Education Code 7.062 and repeals 42.2522; amends Government Code 403.302 The bill deletes the deduction for one-half of the total dollar amount of the optional percentage homestead from the Comptroller’s Property Value Study. A school district receives no reduction in taxable wealth for granting the exemption.

Proposed Effective: 9/1/2017, beginning with the 2018 Property Value Study.

Status: Referred to House Public Education 3/29/17.

RECAPTURE OF CERTAIN CHAPTER WEALTHY ISD REVENUE CHANGED SB 603 Huffines Adds Education Code 41.0021

41

The bill provides that the Education Commissioner, at the school board’s request, shall consider the district’s wealth per student before exercising one or more options to reduce wealth, if a Chapter 41 wealthy school district has a difference between the district’s wealth per student and equalized wealth level greater than the difference for the 2016-2017 school year.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Education 2/13/17.

HARRIS COUNTY EDUCATION BOARD LOSES TAXING AUTHORITY OR IS ABOLISHED SB 646 Bettencourt; HB 1366 Cain; similar SB 1167 Bettencourt Adds Education Code 11.305 and amends 45.002; SB 1167 amends Election Code 52.092 These bills provide that the county board of education in a county with a population of 3.3 million or more (Harris County) may not levy, assess or collect a countywide equalization tax. The bills begin with the 2017 tax year. SB 1167 abolishes the Harris County Education Board and transfers all assets to the commissioners court of the county. The component school districts shall collect and use any delinquent taxes imposed by the Board.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, 9/1/2017. SB 1167 effective 9/1/2017.

Status: SB 646 referred to Senate Education 2/13/17. SB 1167 referred to Senate Education 3/9/17. HB 1366 referred to House Public Education 3/14/17.

DALLAS COUNTY EDUCATION DISTRICT ELIMINATED HB 2329 Burkett Adds Education Code 11.305 and amends 45.002 The bill applies to county school districts in a county with a population of 2.2 million or more and that is adjacent to a county with a population of more than 600,000 (Dallas County). On or after January 1, 2018, the county school district may not impose a property tax. The county school district may impose a tax to pay the principal and interest on any bond issued before the bill’s effective date. Delinquent taxes are shared with the member school districts in the county in proportion to its membership as of May 1, 2017.

The district shall be abolished unless the component school districts in the county with 75% or more of the student population elect each school year to participate in services offered by the county school district.

Proposed Effective: 9/1/2017.

Status: Referred to House Public Education 3/20/17.

2017 Legislative Update; Page 64

SCHOOL FINANCE SYSTEM OVERHAULED HB 1474 Gonzalez; similar SB 704 Rodriquez Adds Education Code 42.010 and 42.013 and amends and repeals various sections of Education Code These bills require a comprehensive review of the public-school finance weights, allotments and adjustments with a report to the Legislature by December 1, 2018. The bills tie a school’s wealth level to the greater of the M&O per weighted student available to Austin ISD or a district at the 95th percentile in wealth per student. They remove the current wealth of $319,500 of wealth per student. The bills increase the basic allotment from $4,765 to $5,440 or $5,840, based on the Comptroller determination of Texas Consumer Price Index.

Proposed Effective: 9/1/2017.

Status: SB 704 referred to Senate Education 2/21/17. HB 1474 referred to House Public Education 3/7/17.

STATE SCHOOL FUNDING ALLOTMENT INCREASED AND ASATR CONTINUED SB 649 Seliger Amends Education Code 42.101, 42.2516, 42.2518 The bill increases the basic school allotment from $4,765 per student to $5,140 for a Chapter 42 school district. The Legislature sets aside an additional amount of state appropriation not to exceed $150 million for 2017-2018 school year and $75 million for 2018-2019 school year. It also continues the additional state aid for tax reduction (ASATR) through the 2018-2019 school year.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective the 91st day after the session ends. Applies to the 2017-2018 school year.

Status: Referred to Senate Education 2/13/17.

EDUCATION COMMISSIONER ADJUSTS FOR OPTIONAL HOMESTEAD EXEMPTON HB 2706 Gonzalez Amends 42.2522 The bill gives authority to the Education Commissioner to adjust school funding for the optional homestead exemption.

Proposed Effective: 9/1/2017.

Status: Referred to House Public Education 3/28/17.

ADDITIONAL SCHOOL FUNDS GRANTED TO ISD THAT ANNEXES AN UNACCEPTABLE ISD SB 1353 Taylor; HB 3106 Faircloth; similar to HB 3722 King Amends Education Code 13.054 The bills add additional state aid for costs of facility renovation, repair and replacement for a school district that annexes an unacceptable school district.

SB 1353 and HB 3106 provide for the additional state aid for five years, beginning with the school year in which the annexation occurs. HB 3722 does not have a five-year period. The Education Commissioner determines that the district would result in greater payments, in addition to other funding.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

HB 3722 effective 9/1/2017.

Status: SB 1353 referred to Senate Finance 3/16/17. HB 3722 referred to House Public Education 3/23/17 and left pending 3/28/17. HB 3106 referred to House Public Education 3/29/17.

EDUCATION COMMISSIONER ADJUSTS FOR SCHOOL DISTRICT’S RAPID VALUE DECLINE HB 3251 King Amends Education Code 42.2521

acceptable or higher, meets other legal standards, is suitable to student’s educational needs and has adequate resources to provide each eligible student with suitable facilities. A school district may not have a wealth per student that exceeds the product of the guaranteed level, multiplied by 10,000. The funding formula is based on a point system.

Proposed Effective: 9/1/2017.

Status: Filed.

CERTAIN SCHOOL DISTRICTS REQUIRED TO HAVE FINANCIAL INFORMATION ON WEBSITE HB 3597 Fallon; SB 1605 Creighton Adds Education Code Chapter 44, Subchapter D The bill requires the 50 largest school districts in student enrollment to maintain certain financial information on their websites, including total expenditures, total revenue and total property taxes, with each of these items also a dollar amount per student in average daily attendance. Along with a number of other required items and reports, the school districts also include the adopted property tax rate.

Proposed Effective: 9/1/2017.

Status: SB 1605 referred to Senate Education 3/21/17. HB 3597 referred to House Public Education 3/30/17.

The bill removes the provision that money specifically authorized must be available for the Education Commissioner to adjust the taxable value of a school district that, due to factors beyond its control, experiences a raid decline in its tax base in excess of four percent from the preceding year. This change applies beginning with the 2017-2018 school year.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, 9/1/2017.

Status: Referred to House Public Education 3/30/17.

CHAPTER 41 WEALTHY SCHOOL DISTRICT LOWERS REQUIRED PAYMENT BY 25% HB 4087 Faircloth Adds Education Code 41.0933

SCHOOL FINANCE SYSTEM CHANGED TO SUBSTANTIALLY EQUAL ACCESS HB 3737 Hinojosa Amends and repeals numerous sections of Education Code

PROPERTY VALUE STUDY FOR SPECIFIC SCHOOL DISTRICT(S) CHANGED HB 4209 Cyrier Amends Government Code 403.302

The bill revises the school funding system to be substantially equal access to substantially equalized financing for an instructional program that is rated 2017 Legislative Update; Page 65

The bill adds that a Chapter 41 school district may reduce the amount required to be paid for attendance credits by 25% in equalizing the district’s taxable wealth. The district uses the amounts available to pay for M&O costs.

Proposed Effective: 9/1/2017.

Status: Filed.

The bill applies to a school district with less than 2,000 students located in a county contiguous to counties with populations of more than 1 million. In conducting the Property Value Study, the Comptroller

determines that local value is invalid, the taxable value for the district is calculated by multiplying the state value determined by the Comptroller by 1.05, unless the local value exceeds the state value. The Comptroller shall use a margin of error that does not exceed 5% unless the Comptroller determines the sample size of properties makes use of such a margin not feasible, in which case the Comptroller shall use a larger margin of error. The change applies beginning with the 2016 Property Value Study.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective the 91st day after the session ends.

Status: Filed.

SCHOOL INDIRECT COST ALLOTMENTS REVISED TO REFLECT INCREASE IN M&O FUNDING HB 4191 Huberty Amends Education Code 29.097, 29.098, 29.918, 39.0233, 42.1541 and repeals 39.233, 39.234, 42.160, 42.2513.

The bill adds that for the 2017-2018 and subsequent school years, the State Board of Education shall by rule revise the indirect cost allotments to reflect any increase in the percentage of M&O funding represented by the basic allotment as a result of the 2017 legislative session.

Proposed Effective: 9/1/2017.

Status: Filed.

SCHOOL FINANCE CHANGES SB 2145 Taylor Amends Education Code and adds 41.459, 41.460 and 41.461 The bill is 69 pages and changes the school finance system. Some key parts are the state will pay to the appraisal district(s) in which a Chapter 41 wealthy school district participates, using funds received from that school district. If a school district fails to collect a delinquent M&O tax owed to the district for two years after the tax is initially due, the collection of the delinquent tax reverts to the state. The Comptroller shall collect the delinquent M&O tax on behalf of the district, with penalties and interest owed, at the earliest opportunity. The Attorney General will assist.

If the Attorney General cannot successfully collect the delinquent M&O taxes, the Comptroller may contract with private attorneys for the collection, 2017 Legislative Update; Page 66

subject to terms and limitations that apply to a school district contracting with private attorneys for that purpose.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Education 3/29/17.

SCHOOL DISTRICTS CONSOLIDATED IN CAMERON COUNTY SB 2112 Lucio Adds Education Code Chapter 13 Subchapter D-1 The bill consolidates school districts in a county that contains an international border and borders the Gulf of Mexico (Cameron County). The territory of a school district that is partly located in Cameron County shall be detached and that territory is annexed and consolidated into a countywide school district.

The consolidation does not apply to territory for a school district that provides only middle school, junior high school and high school magnet programs.

Effective July 1, 2018, each school district in Cameron County is a single countywide school district and is an independent school district. The bill details the temporary school board, election of school board trustees, title to property and debt assumption.

By December 1 of even-numbered years (2018 and 2020), the countywide school board reports to the Governor, Lt. Governor, Speaker and chairs of the House and Senate education committees about the operation of the district, any increase in efficiency or any cost savings and recommendations for legislative actions to enhance efficiency in operating a countywide school district.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Referred to Senate Education 3/28/17.

Special & Miscellaneous CHAPTER 313 JOBS REQUIRED APPRAISAL LIMITATION HB 386 Murphy Amends 313.021, 313.024, 313.032

FOR

The bill clarifies and eases somewhat the jobs requirement for eligibility for the limitation of values for school tax purposes. The bill permits a project to qualify even if the jobs are transferred from elsewhere in the state if the transfer results in net new jobs for

the state. The jobs created must be at least 110% of the lesser of the statewide annual average income or the county median income for manufacturing jobs.

Proposed Effective: 9/1/2017.

Status: Referred to House Ways and Means 2/16/17.

ABATEMENTS/SCHOOL TAX LIMITATIONS FOR WIND FARMS PROHIBITED NEAR MILITARY AIR STATIONS HB 445 Frank; SB 277 Campbell Adds 312.001; amends 312.024, 313.024 These bills prohibit the granting of an abatement or a school tax limitation to a wind turbine located within 30 nautical miles of an airbase.

Proposed Effective: 1/1/2018.

Status: SB 277 placed on Senate Intent Calendar 3/28/17. HB 445 referred to House Ways and Means 2/16/17.

CERTAIN CITIES AUTHORIZED TO HAVE HOMESTEAD LAND BANK PROGRAM HB 470 Johnson Amends Local Government Code 373A.003, 373A.052 The bill revises the requirements about which cities may implement a homestead land bank program.

Proposed Effective: 9/1/2017.

Status: Referred to House Urban Affairs 2/16/17.

HOMEOWNER RECEIVES ABATEMENT FROM DALLAS COUNTY UTILITY AND RECLAMATION DISTRICT HB 549 Anderson; HB 1186 Anderson Adds to Chapter 628, Section 4B, Acts of 68th Texas Legislature These bills provide that the tax assessor-collector for the Dallas County URD may file an exemption application with the appraisal district on behalf of a homeowner granted a tax abatement on a portion of the home’s value.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Referred to House Ways & Means 2/20/17.

HB 1186 reported from House Ways & Means 3/21/17 and recommended to Local/Consent Calendar.

2017 Legislative Update; Page 67

COMPTROLLER VERIFIES REPORTED CHAPTER 313 INFORMATION HB 559 Hernandez; SB 400 Kolkhorst Amends 313.032 These bills are similar and provide that the Comptroller shall verify reported Chapter 313 information using information from the Texas Workforce Commission, the chief appraiser or other reliable sources. HB 559 requires a random sample of not less than 33% of the data certified to the Comptroller. Personal information of an individual is confidential.

Proposed Effective: 9/1/2017.

Status: SB 400 referred to Natural Resources and Economic Development 2/1/17. HB 559 referred to House Ways & Means 2/20/17.

LOCAL TAX INCENTIVES MAY NOT BE OFFERED TO DEVELOP PROPERTY FOR GAMBLING HB 1252 Sanford; similar HB 2644 Sanford Amends 312.204, 313.024; HB 2644 amends Agriculture Coe 12.0272 and Government Code 481.078 HB 1251 provides that a taxing unit may not offer a tax abatement agreement to property that may be used as a gambling establishment, including a game room, racetrack or casino. A school district may not offer a Chapter 313 agreement to such property. HB 2644 provides that money in the Texas Economic Development Fund may not finance a facility for gambling, including bingo or racing greyhounds or horses. The Governor may not award a grant to finance a gambling facility.

Proposed Effective: 9/1/2017.

Status: HB 1252 referred to House Ways & Means 2/23/17. HB 2644 referred to House Appropriations 3/21/17.

LIMIT ON CHAPTER 313 SUPPLEMENTAL PAYMENTS INCREASED HB 1618 Smithee; SB 913 Seliger Amends 313.027 These bills increase the limit allowed for supplemental payments to a school district by a property owner who receives a Chapter 313 agreement to not exceed $75,000 per year. Current law sets the limit at $60,000 per year.

Proposed Effective: 9/1/2017.

Status: SB 913 referred to Senate Natural Resources & Economic Development 2/28/17. HB 1618 referred to House Ways & Means 3/9/17.

APPROVAL PROCESS ADDRESSED FOR CERTAIN TAX ABATEMENT AGREEMENT IN A TIF ZONE HB 1626 Gutierrez Amends 311.0125 The bill addresses a tax abatement agreement in a tax increment financing (TIF) reinvestment zone that the taxing unit is not required to deposit any of its funds into the TIF fund. Such an agreement does not require approval of the board of directors of the TIF zone and the governing body of each taxing unit that does deposit funds into the TIF fund.

Proposed Effective: 9/1/2017.

Status: Referred to House Ways & Means 3/6/17.

PROJECT LOCATED IN MULTIPLE SCHOOL DISTRICTS GRANTED CHAPTER 313 AGREEMENT; COMPTROLLER VERIFIES AGREEMENTS WITH RANDOM SAMPLE HB 1674 Murphy Adds 313.0255, 313.055; amends 313.032 The bill addresses a single unified project located in more than one school district but not more than three contiguous districts. Each school district must enter into the agreement with the owner for the limitation.

For determining required minimum qualified investment, a project is considered to be located in the school district that has the highest taxable value in the preceding tax year. The minimum amount of the limitation is based on the fraction of investment made in the school district to the whole project. The Comptroller considers the single unified project for determining eligibility requirements. For Chapter 313 agreements, the Comptroller shall verify a random sample of not less than 33% of the data certified to the Comptroller, and personal information of an individual is confidential (also included in HB 559).

Proposed Effective: 9/1/2017.

Status: Referred to House Ways & Means 3/6/17.

WATER DESALINATION PROJECT IS ELIGIBLE FOR A CHAPTER 313 AGREEMENT HB 2219 Lozano Amends 313.024 2017 Legislative Update; Page 68

The bill adds a water desalination project as one that is eligible for a limitation on appraised value by a school district under a Chapter 313 agreement.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Referred to House Ways & Means 3/20/17.

CERTAIN CHAPTER 311 TIF AGREEMENTS ADDRESS AFFORDABLE HOUSING HB 2480 Johnson Adds 311.0112 and amends 311.003, 311.006, 311.016 The bill addresses a Chapter 311 tax increment financing (TIF) agreement for affordable housing in a reinvestment zone designated by a municipality with a population of 1.18 million or more, that is located predominately in a county that has a total area of less than 1,000 square miles and that any part of the municipality is located in an area composed of census tracts to a central business district with fewer than 75,000 residents, a median family income of less than $30,000 and a poverty rate that is two times that for the municipality. The municipality prepares an affordable housing impact statement, including estimates of the impact on available housing in the zone for the 30-year period, before adopting an ordinance to designate the reinvestment zone. The impact statement is available to the public and on the municipality’s website for 60 days.

Proposed Effective: 9/1/2017.

Status: Referred to House Urban Affairs 3/21/17.

OVERSIGHT BOARD REVIEWS CHAPTER 313 AGREEMENTS HB 2564 Button; similar to HB 3360 Button Adds Government Code 490G.0055, 490G.0056, 490G.0065, 490.0066 and amends 490G.001, 490G.006, 490G.007 These bills require the Economic Incentive Oversight Board to examine the effectiveness, efficiency and financial impact on the state of the property tax incentive program of Chapter 313, Texas Economic Development Act, by school districts and the Comptroller. HB 2564 includes Type A and Type B corporations under the Title 12, Local Government Code. The Board shall make reports and recommendations to the Legislature and provide that

to the school districts and the Comptroller (with HB 2564 stating upon request).

Proposed Effective: 9/1/2017.

Status: HB 2564 referred to House Economic & Small Business Development 3/27/17.

STATE AND LOCAL TAX INCENTIVES GRANTED FOR ENHANCED OIL RECOVERY PROJECTS HB 2621 Darby Adds Natural Resources Code Chapter 93 The bill provides for state and local tax incentives for certain enhanced oil recovery projects, including an appraised value limitation for property in a reinvestment zone designated by the Texas Railroad Commission. A “hold-harmless appraised value” is the appraised value of the undivided or fractional interest in oil in place on January 1 of the tax year in the area designed by the Railroad Commission as an enhanced recovery reinvestment zone and owned on that date by the person designated by the Commission as the first operator of record for the zone. The value above the hold-harmless appraised value is the amount of the limitation. The governing body of the political subdivision that adopts the limitation on appraised value may not repeal the limitation until the date the applicable enhanced recovery reinvestment zone expires. The operator of record who receives a tax benefit must invest an amount equal to the total taxes saved. The Comptroller adopts rules and the appraisal districts must comply with the requirements for the limitation on appraised value.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Referred to House Ways & Means 3/21/17.

CONFLICTS OF INTEREST AND CLARIFICATIONS ADDED TO TEXAS ECONOMIC DEVELOPMENT ACT HB 3086 Murphy Adds 313.034 and amends 313.021, 313.024, 313.025, 313.027 The bill refines the definition of a qualifying job, which is one that is not transferred from one area in the state to another area, unless the transfer represents a net new job in this state. The qualifying job pays at least 110 percent of the lesser of the state median annual wage for manufacturing jobs in Texas or the county average annual wage for manufacturing jobs 2017 Legislative Update; Page 69

in the county. County average annual wage and sate median annual wage are defined. The school board may not waive a requirement in a new jobs creation requirement for a Chapter 313 agreement. The agreement states the dollar amount of qualified investment and the number of new qualifying jobs. A new subsection addresses conflicts of interest for a school board member, superintendent or school employee Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Referred to House Ways & Means 3/28/17.

UNEQUAL APPRAISAL WAIVED FOR PROPERTY WITH TAX ABATEMENT OR SUBJECT TO TAX RECAPTURE HB 3230 Phelan Amends 312.205, 313.027 The bill provides that a Chapter 312 tax abatement agreement or Chapter 313 agreement include either a waiver of the owner’s right to protest before the ARB and to contest in court the unequal appraisal of the property subject to the agreement or provisions to recapture all or part of the property tax revenue abated that does not attain a value specified in the agreement for the year covered, along with paying penalty or interest, or both, on the recaptured taxes. See also Appraisal Review Board Section.

Proposed Effective: 9/1/2017.

Status: Referred to House Ways & Means 3/30/17.

SCHOOL TRUSTEE DISCLOSES CONFLICT OF INTEREST WITH CHAPTER 313 AGREEMENT HB 3176 Button Amends 313.008, 313.027 The bill adds conflict of interest that a school board trustee must disclose in writing to the school board president and the Comptroller that the trustee has an interest in a Chapter 313 economic development application or has a substantial financial interest in a matter related to the application. The trustee recuses himself or herself from the board’s deliberation and may not participate in any decision on the matter. A substantial interest includes being an employee, member, director or officer of the entity or has an ownership or control directly or indirectly with more than 5% interest in the entity. The Comptroller shall verify the data using any source that the Comptroller considers reliable.

Proposed Effective: 9/1/2017.

Status: Referred to House Economic & Small Business Development 3/30/17.

CERTAIN TIF ZONES HAVE ELECTIONS FOR BOARD OF DIRECTORS HB 4046 Bohac Adds 311.0092, 311.004 The bill sets out the board of directors for reinvestment zones located wholly or partly in a municipality with a population of at least 2 million.

The TIF board consists of at least 11 but not more than 15 members, unless more than 15 are required by the law change. A majority are elected in a nonpartisan election. Each taxing unit that approves paying into the TIF fund is entitled to appoint a director, including the county or municipality that designated the TIF zone. The State Senator and State Representative for the TIF area are members of the board; they may designate another individual to serve in their place. If there is more than one senate or house district, the ones with the largest portion of the zone serve. For the other directors, the municipality holds an election to select 51 percent of the directors. Elections are in even-numbered years on the uniform November election date. Directors serve two-year, staggered terms. Individuals residing in the zone or in an adjacent area are entitled to vote. An adjacent area to a TIF zone is within two miles of the zone’s boundaries. Eligibility requirements are included.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Filed.

TEXAS COMPTROLLER CREATES POLITICAL SUBDIVISION PUBLIC INFORMATION WAREHOUSE SB 200 Campbell Adds Education Code 44.012; adds Government Code 403.0243; adds Local Government Code Chapter 203, Subchapter D; The bill requires the Comptroller to create an accessible database, called the Political Subdivision Public Information Warehouse, to include all active political subdivisions that are authorized to impose a property tax or sales and use tax. Data shall include the name of the political subdivision, rate of sales and use tax, table of property tax rates, total debt amount, subdivision’s website or contact person if no website 2017 Legislative Update; Page 70

and appraisal district website. The data may include (or link to) the political subdivision’s boundaries, budget for current year, current check registry and any current financial audit or annual report. School districts are required to send to the Comptroller annually an electronic copy of the adopted budget and financial reports. Special districts shall provide boundaries and dissolution information. Political subdivisions are required to transmit the most recently adopted budget and annual financial report. The Comptroller shall create and post the database by December 31, 2019.

Proposed Effective: 9/1/2017.

Status: Left pending in Senate Finance 3/6/17.

TEXAS ECONOMIC DEVELOPMENT ACT FOR SCHOOL DISTRICTS REPEALED SB 600 Burton Repeals 312.0025 and Chapter 313; adds 320.002; amends 23.03, 26.012, 151.3595, 171.602 and 312.403; amends Education Code 42.2515; amends Government Code 403.302 and 2303.507 The bill repeals the Texas Economic Development Act, which allows school districts to grant tax value limitations for economic growth. The bill does not affect current agreements. The bill also changes the name of the state agency to Texas Economic Development and Tourism Office.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Referred to Senate Natural Resources & Economic Development 2/8/17.

TAX INCREMENT FINANCING (TIF) PROVISIONS CHANGED SB 650 Bettencourt Adds 311.0155; amends 311.005, 311.085, 311.010, 311.015; repeals 311.01005 The bill adds to the reinvestment zone that the area be unproductive, underdeveloped or blighted. The Attorney General determines the meaning of those terms. The TIF agreement must be for a facility located in the zone. At least seven days before voting to issues TIF bonds or notes, the municipality will deliver a notice to each owner in the city, to the commissioners court in the county and to each state senator and representative that represents the territory in a county with a reinvestment zone of the date, time and place of that meeting. When the municipality

submits TIF bonds for Attorney General authorization, another notice will be delivered by mail to the commissioners court and to each state senator and representative whose district includes the reinvestment zone.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Natural Resources and Economic Development 2/13/17.

METHOD TO DETERMINE QUALIFIED NEW JOBS FOR CHAPTER 313 AGREEMENT REPEALED SB 1026 Estes Repeals 313.024(d-2) The bill repeals the method for determining whether a property owner has created the number of new qualifying jobs to be eligible for the tax limitation for school M&O taxes..

Proposed Effective: 9/1/2017.

Status: Referred to Senate Natural Resources & Economic Development 3/6/17.

SCHOOL BOARD WAIVING NEW REQUIREMENTS FOR CHAPTER AGREEMENT REPEALED SB 1027 Estes Repeals 313.025(f-1)

JOB 313

The bill repeals the provision for the school board to waive the new jobs creation requirement to be eligible for a tax limitation for school M&O taxes.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Natural Resources & Economic Development 3/6/17.

ECONOMIC DEVELOPMENT REVIEW ADDED FOR LOCAL GOVERNMENT SB 1028 Estes Adds Government Code 490G.0055, 490G.0065 and amends 490G.001 and 490G.007 The bill adds local government to a periodic review of local government programs that award economic development incentives to businesses. The Economic Incentive Oversight Board shall examine the effectiveness, efficiency and financial impact on the state for which local government awards incentives Proposed Effective: 9/1/2017.

Status: Filed.

2017 Legislative Update; Page 71

STATE SENATOR AND/OR STATE REPRESENTATIVE SERVES AS EX-OFFICIO TIF DIRECTOR SB 1465 Taylor Adds 311.0092 The bill requires the board of directors of a reinvestment zone to send a written notice by certified mail to each Senator and to each Representative who is an ex officio member on the board about the membership. A Senator or Representative may elect not to serve or designate another individual in the member’s place by written notice to the board. The Senator and/or Representative are not counted as a member of the board for voting or quorum purposes Proposed Effective: 9/1/2017.

Status: Referred to Senate Natural Resources & Economic Development 3/20/17.

CHAPTER 313 PROVISIONS CHANGED FOR VALUE LIMITATION AND SUPPLEMENTAL PAYMENTS ALONG WITH CONSULTING AGREEMENT AND FEES SB 1627 Estes Adds 313.008 and amends 313.022, 313.027, 313.031, 313.052, 313.054, 313.027 and 313.031 The bill addresses consulting agreements for Chapter 313. A person may not for compensation act as a consultant on behalf of the school district for a value limitation agreement if the person is a district employee or a school board trustee for that district or related to one of these by first degree by blood or marriage for that district. The bill removes the school district’s application fee. The agreement establishes each tax year and the limitation amount is equal to at least 33.3% of the market value of the owner’s qualified property for that tax year. The agreement may include that the owner will protect the district, in the event for a temporary increase in student enrollment for the project, by covering expenses related to portable classrooms or hiring additional personnel. The agreement must require the owner to provide a supplemental payment to the district or another entity on behalf of the district equal to $25 per student per year for each year of the agreement, but not to exceed 2% of the school district’s budget.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Natural Resources & Economic Development 3/22/17.

TAX INCREMENT FINANCING ZONE (TIF) ADDS TRANSPARENCY AND ACCOUNTABILITY SB 1765 Garcia Adds 311.0195 and amends 311.004, 311.005, 311.007, 311.009, 311.0091, The bill adds that a TIF zone established on or after September 1, 2017, terminates in 10 years after ordinance adopting TIF zone. A current zone has limitation added on when it terminates. The TIF zone must be for an unproductive, underdeveloped or blighted area. Directors of the TIF board have the same limited terms as the city councilmembers. The municipality that designates the TIF zone maintains a website to provide residents with transparency about the zone, including costs, budget, annual report, revenues deposited to TIF fund and other items.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Natural Resources & Economic Development 3/23/17.

Open Meetings, Chapter 551 TIME PERIOD ADDED TO PURSUE VIOLATION OF OPEN MEETINGS LAW HB 1784 Faircloth Adds Government Code 551.1425 The bill provides that a person must bring a suit to enforce voiding an action taken by a governing body or to obtain a mandamus or injunction before the first anniversary of the date of the alleged violation.

Proposed Effective: 9/1/2017.

Status: Scheduled for hearing in House Government Transparency & Operation 4/3/17.

VIDEO AND AUDIO RECORDING OF MEETINGS OF CERTAIN WATER DISTRICTS MUST BE AVAILABLE ON INTERNET SB 851 Nelson; HB 2012 Fallon Amends Government Code 551.128; amends Water Code 49.062 These bills add the governing body of a special district subject to Water Code Chapters 51, 53, 54 or 55, with a population of 500 or more, to those entities that shall make a video and audio recording of reasonable quality of each regularly scheduled meeting that is not 2017 Legislative Update; Page 72

a work session or special meeting. An archived copy of the video and audio recording of each meeting must be available on the Internet. The water district’s board shall designate a place inside the district for conducting a meeting. If unable to find a suitable meeting room inside the district, the board may designate a place outside the district that is located not farther than 10 miles from the district’s boundaries.

Proposed Effective: 9/1/2017.

Status: SB 851 referred to Senate Business & Commerce 2/27/17. HB 2012 referred to House Special Purpose Districts 3/13/17.

MEMBER MARKED ABSENT VIDEOCONFERENCE CALL IF DISCONNECTED OR LOST HB 3047 Dale Amends Government Code 551.127

FROM CALL

The bill clarifies that a member of a governmental body who participates in a meeting by videoconference call shall be considered absent from any portion of the meeting that has audio or video communication lost or disconnected. The governmental body may only continue the meeting if a quorum remains present or continues to participate.

Proposed Effective: 9/1/2017.

Status: Referred to House Government Transparency & Operation 3/27/17.

OPEN MEETINGS REVISED TO ADDRESS VIDEO RECORDING HB 3203 Fallon; similar to HB 3708 Fallon Adds Government Code 551.0215, 551.024, 551.1035, 551.147, 551.148 and amends 418.183, 551.000, 551.0725, 551.0726, 551.103, 551.104, 551.121, 551.122, 551.123, 551.126, 551.1281, 551.1282, 551.130, 551.131, 551.145; amends Education Code 7.106, 11.1513; amends Health and Safety Code 116.006; amends Transportation Code 370.262 The bills add a definition for video recording and that meetings of a governmental body shall be kept of the meeting and either a video recording or, if the meeting is a telephone conference call, a recording of the meeting. These bills vary about which entities to which they apply. HB 3203 is for a city with a population of less than 25,000, or a county with a population of less than 100,000 or a school district with student enrollment of less than 5,000, the

governmental body shall prepare and keep minutes or make a recording and the minutes must state the subject of each deliberation and each vote, order, decision or other action taken. For other entities, a governmental body shall archive and make available on its website each open meeting recording. If other entities do not have a website, they may make it available on a public accessed video-sharing or social networking site. The open meeting recording is posted no later than the second business day after the meeting date. A catastrophe or technical breakdown exempts the requirement to post. A governmental boy shall either keep a certified agenda or make a recording of proceedings in each closed meeting. An offense of open meeting or archive recording is a Class C misdemeanor. HB 3708 addresses a county with a population of more than two million adjacent to a county with a one million population and a county with a population of more than 600,000 adjacent to a county with more than two million population, but not all entities in those counties.

Proposed Effective: 9/1/2017.

Status: HB 3203 referred to House Government Transparency & Operation 3/30/17.

PERSON REQUESTS MEETING HAVE PROFESSIONAL SIMULTANEOUS TRANSLATION FROM ENGLISH TO SPANISH HB 4157 Gonzalez of El Paso Adds Government Code 301.035; adds Local Government Code 51.004; adds Local Government Code 81.031 The bill requires professional simultaneous translation from English to Spanish of certain hearings and meetings held by a committee of the Legislature, the governing body of a municipality or the commissioners court of a county. A person must request the translation in writing to the municipal secretary/clerk for the city or the county clerk for the county no later than the third day before the meeting date.

Proposed Effective: 9/1/2017.

Status: Filed.

2017 Legislative Update; Page 73

Open Records, Chapter 552 BIRTHDATE OF LIVING PERSONS EXCEPTED FROM PUBLIC DISCLOSURE HB 760 Raney Adds Government Code 552.157 The bill adds an exception about the date of birth of a living person from public disclosure and that the governmental body may redact the birth date from any information disclosed without requesting an attorney general decision. A county or district clerk and a municipal secretary or clerk may disclose in the ordinary course of business a person’s date of birth and that is not official misconduct or civil or criminal liability.

Proposed Effective: 9/1/2017.

Status: Referred to House Government Transparency & Operation 2/20/17.

COMPETITIVE BIDDING INFORMATION EXCEPTED IN SOME CASES FROM PUBLIC DISCLOSURE HB 792 Capriglione; SB 407 Watson; also HB 839 Ortega; SB 425 Rodriguez Amends Government Code 552.104, 552.305 These bills add that a governmental body may not disclose bidding information if it demonstrates that releasing the information harms its interests by providing a bidder with a competitive advantage.

This exception does not apply to a bid or proposal after the governmental body has executed or awarded the contract. HB 839 and SB 425 only address the exception.

Proposed Effective: 9/1/2017.

Status: SB 407 substitute passed Senate 3/28/17 and received in House 3/29/17. SB 425 referred to Senate Business & Commerce 2/1/17. HB 839 referred to House Government Transparency & Operation 2/21/17. HB 792 re-referred from House General Investigating & Ethics to House Government Transparency & Operation 3/6/17.

DEFINITION OF GOVERNMENTAL BODY EXPANDED HB 793 Capriglione; SB 408 Watson Amends Government Code 552.003, 552.002 These bills add to the definition of “governmental body” to include an organization, corporation, commission, committee, institution or agency that receives public funds, unless the funds are part of an arms-length transaction for services between a vendor and purchaser; is a party to a contract with a governmental body that involves public funds and creates an agency-type relationship between the entity and one or more governmental bodies; or provides services traditionally provided by the governmental body. The floor amendment to SB 408 substitute adds that information maintained by a governmental body is public information subject to the part, section or portion of an entity that receives or spends public funds or uses real or personal property owned or leased by the state or a political subdivision of the state.

Proposed Effective: 9/1/2017.

Status: SB 408 substitute, with one floor amendment, passed the Senate 3/28/17 and received in House 3/29/17. HB 793 referred to House Government Transparency & Operation 2/20/17.

COMPUTER SECURITY INFORMATION CONFIDENTIAL HB 1861 Elkins Amends Government Code 552.139

IS

The bill adds that information collected, assembled or maintained by or for a governmental body to prevent, detect or investigate a computer security incident, including a breach of system security, is confidential.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Scheduled for hearing in House Government Transparency & Operation 4/3/17.

EXPEDITED RESPONSE ADDED TO REQEUST FOR PUBLIC INFORMATION HB 2328 Lucio; SB 1347 Watson Adds Government Code Chapter 5, Subchapter J, and amends 552.2615, 552.263, 552.302, 552.352 The bills add that the governmental body may withhold information that it deems confidential 2017 Legislative Update; Page 74

without requesting an Attorney General’s ruling. The governmental body must inform the requestor in writing within five business days of the request of the list of exceptions and any judicial decisions or laws to withhold the information; information that is open records with the confidential information redacted; a notice form set out by the Attorney General; and some other items. The requestor may appeal the response within 30 calendar days to the governmental body.

The appeal is considered a new request and subject to an Attorney General decision.

Proposed Effective: 9/1/2017.

Status: SB 1347 referred to Senate Business and Commerce 3/14/17. HB 2328 scheduled for hearing in House Government Transparency & Operation 4/3/17.

OPEN RECORDS RETURNED ON PERSONAL DEVICES; ATTORNEY GENERAL RULES ON FAILURE TO RESPOND TO OPEN RECORDS REQUEST HB 2670 Hunter; similar HB 3848 Hunter; similar SB 1646 Watson Adds Government Code 552.234 and amends 552.003, 552.004, 552.203, 552.353; HB 3848 adds 552.0222 and 552.328 and amends 552.101, 552.102, 552.221, 552.301 The bills add a definition for temporary custodian of public records. They provide that a current or former officer or employee of a governmental body who maintains public information on a privately-owned device shall forward or transfer the public information to the governmental body to be preserved or preserve the public information in its original form on the privately-owned device. A current or former officer or employee does not have a personal or property right to public information created or received while acting in an official capacity. A temporary custodian shall surrender within 10 days of a request for the return of the information. The governing body may request the Attorney General to sue to compel the return. HB 3848 also includes that a governmental body is not authorized to withhold a birthdate except as provided

by Section 551.018 or as provided by constitutional or statutory law. The public information officer shall send written notice to a requestor in 10 days if the governmental body does not have any information for the request. A requestor may send a written complaint to the Attorney General for failure of a governmental body to respond to a request. If the Attorney General

finds that the governmental body did fail in its duty, the Attorney General shall notify the governmental body, require open records training be completed within six months and inform that no open records charges may be assessed in response to the request. If the governmental body seeks to withhold its response, it must request an Attorney General decision within five days and release the requested information unless there is a compelling reason to withhold it. SB 1646 is a mixture of both HB 2670 and HB 3848.

Proposed Effective: 9/1/2017.

Status: SB 1646 referred to Senate Business and Commerce 3/22/17. HB 2670 referred to House Government Transparency & Operation 3/23/17.

HB 3848 referred to House Government Transparency & Operation 3/30/17.

COURT COSTS AND ATTORNEY’S FEES ADDRESSED FOR LAWSUIT ON OPEN RECORDS HB 2783 Smithee Amends Government Code 552.323 The bill adds that the court shall assess reasonable court costs and attorney’s fees to whom a governmental body voluntarily released requested information after filing an answer to the lawsuit.

Current law only addresses court costs and attorney’s fees to the plaintiff who substantially prevails.

Proposed Effective: 9/1/2017.

Status: Referred to House Judiciary & Civil Jurisprudence 3/30/17.

OPEN RECORDS PROCEDURES ADDRESSES MONTHLY AND YEARLY LIMITS ON A REQUESTOR WHO DOES NOT PAY OR WITHDRAW REQUESTS HB 3107 Ashby Amends 552.221, 552.261, 552.275, 552.3215 The bill adds that an open records request is considered withdrawn if the requestor fails to inspect or duplicate the public information in the governmental body’s office on or before the 60th day after the information is available or fails to pay the postage and accrued open record charges. All requests received in one calendar day from an individual may be treated as a single request for calculating costs. A governmental body may not combine multiple requests from separate individuals who submit requests on behalf of an organization. A governmental 2017 Legislative Update; Page 75

body may establish reasonable monthly and yearly limits on time that personnel are required to spend producing public information. All county officials who have designated the same officer for public information may calculate the time that personnel are required to spend collectively for purposes of the monthly or yearly limit. A monthly time limit may not be less than 15 hours for a requestor for a one-month period. If a requestor submitted an unpaid request that was not withdrawn, the governmental body is not required to compile a new request by that requestor until the date the requestor pays each unpaid statement with a previous request or withdraws the previous request. The news media is exempted for these requirements, including an individual who supervises or assist in gathering new or information or to an individual who is or was a journalist, scholar or researcher employed by higher education institution. A complainant may file with the Attorney General on or after the 90th day that the complainant filed with the district or county attorney who has not brought action on the complaint.

Proposed Effective: 9/1/2017.

Status: Scheduled for hearing in House Government Transparency & Operation 4/3/17.

PUBLIC REQUEST FOR INFORMATION IN ELECTRONIC INFORMATION INCLUDES FILE FORMAT INFORMATION HB 3581 Capriglione Adds Government Code 552.0224 and amends 552.003, 552.228, 552.231 The bill adds definitions for “file format” to be specifications by which information in electronic form is encoded for computer storage, including file type and extension, and “record layout” to describe type or category for data field, location in a data file and number of characters. The record layout of a data file maintained by a governmental body or vender on behalf its behalf is public information and not confidential and not excepted from required disclosure. A requestor is entitled to a detailed description of specific programming or manipulation task required of the information.

Proposed Effective: 9/1/2017.

Status: Referred to House Government Transparency & Operation 3/30/17.

INFORMATION REQUESTS ADDRESSED TO ENTITY THAT MAY OR MAY NOT BE A GOVERNMENTAL BODY HB 4144 Paddie Amends Government Code 552.003, 552.301, 552.306, 552.324, 552.325 The bill adds that a person may submit a request to an organization, corporation, commission, committee, institution or agency for inspection or copies of information with the written assertion that the entity is a governmental body. If the entity is not a governmental body, it must ask for a decision from the Attorney General if there is not a previous determination. The Attorney General may adopt rules for this provision.

Proposed Effective: 9/1/2017.

Status: Filed.

GOVERNMENTAL BODY PROVIDES PUBLIC RECORDS ON PUBLIC WEBSITE SB 79 Nelson Amends Government Code 552.221 The bill changes the term “political subdivision” to “governmental body” for the requirements of providing requested public records on a website maintained by the governmental body.

Proposed Effective: 9/1/2017.

Status: Set on Senate Local Calendar 4/3/17.

CERTAIN PUBLIC OFFICIALS HAVE ACCESS TO PUBLIC INFORMATION AND PROPERTY SB 515 Taylor; HB 3271 Shaheen Adds Local Government Code Chapter 206 and Chapter 305, Subchapter C; adds Government Code Chapter 674 The bills add that a county, municipal or special district elected or appointed public official has right of access to information that is public information of the entity and access to public property. Confidential information must be held confidential by the public official. The bills include that appointed state board members have access to public information and property. The Attorney General shall adopt rules for procedures and deadlines by January 1, 2018.

Proposed Effective: 1/1/2018, except provision for Attorney General rules effective immediately if passed by two-thirds of both houses; otherwise, effective 9/1/2017.

2017 Legislative Update; Page 76

Status: SB 515 substitute placed on Senate Calendar 4/3/17. HB 3271 referred to House General Investigating & Ethics 3/28/17.

PUBLIC INFORMAITON ESTABLISHED BY STATE SB 623 Burton Adds Government Code Chapter 561

WEBSITE

The bill requires the Comptroller to establish a public information searchable website to include state and local government information. A governmental entity would post public information to the Comptroller’s site or send to the Comptroller for posting. A person could subscribe to email notices of public information for a specific government entity. The government entity is still required to post information as required by law in a newspaper or locally.

Proposed Effective: 9/1/2017, with the website ready no later than 9/1/2018.

Status: Referred to Senate Business and Commerce 2/13/17.

PUBLIC OFFICERS HAVE RIGHT TO INFORMATION OF THEIR GOVERNMENT BODY SB 1357 Hall Adds Government Code Chapter 620 The bill provides that an elected or appointed officer of a governmental body has the right to access to information of that body. Chapter 551, Open Records Act, does not apply to this access. The official does not have to obtain approval from the governing body to obtain information. The governing body may not adopt or enforce a measure to restrict or limit access.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Referred to Senate Business and Commerce 3/16/17.

Other Codes and Statutes SETTLEMENT AGREEMENTS WITH GOVERNMENT CANNOT RESTRICT MEDIA ACCESS HB 53 Romero; HB 1463 Huffman Adds Civil Practice and Remedies Code Chapter 116

The bills prohibit a governmental unit in a settlement agreement of $30,000 or greater to include a condition of the settlement that the parties agree not to disclose any fact, allegation, evidence or other matter to any other person, including the media. HB 53 substitute provides that a settlement agreement provision entered into in violation of this is void and unenforceable. This does not affect information that is privileged or confidential under other law.

Proposed Effective: 9/1/2017.

Status: HB 53 substitute reported from House Judiciary and Civil Jurisprudence 3/23/17. HB 1463 referred to House State Affairs 3/20/17.

CELL PHONES RESTRICTED WHEN DRIVING HB 62 Craddick; HB 160 Lucio; SB 31 Zaffirini; also HB 520 Turner Adds Transportation Code 545.4251 and amends 521.161, 545.424, 545.425, 708.052 These bills restrict the use of cell phones while driving. They allow for “hands free” use. They contain penalties for violations, with higher penalties after first conviction. The first three bills are identical, and HB 520 addresses the same areas differently.

Proposed Effective: 9/1/2017.

Status: SB 31 placed on Senate Intent Calendar 3/21/17. House passed HB 62 with six amendments 3/16/17 and received in Senate 3/20/17. HB 160 referred to House Transportation 2/14/17. HB 520 left pending in House Transportation 3/9/17.

THE SAGA OF CARRYING HANDGUNS CONTINUE HB 99 Keough; HB 191 Bernal; HB 234 Anchia; HB 556 Keough; HB 560 Springer; HB 899 Nevarez; HB 927 White; SB 459 Huffines; SJR 30 Huffines; SB 618 Estes Amends various provisions as noted below These bills continue the review of carrying concealed and open-carry handguns in public places. HB 99 adds Chapter 40 to the Texas Penal Code, to be called the “Texas Firearm Protection Act.” HB 191 adds Government Code 411.2045, for the Department of Public Safety to adopt rules on signs, along with a Spanish translation, with printable copies available on the DPS website. HB 234 amends Government Code 411.209 and Penal Code 30.06 and 30.07 to remove the word “concealed” regarding a licensed handgun 2017 Legislative Update; Page 77

holder to carry on property owned or leased by a governmental entity. HB 556 adds Chapter 95A to Civil Practice and Remedies Code, on liability of certain persons in allowing or forbidding handguns on certain premises. HB 560 amends Penal Code 30.06, 46.03, 46.035 and 46.15 to revise current language.

HB 556 adds Civil Practice and Remedies Code Chapter 95A on the liability of persons in allowing or forbidding handguns on certain premises, but does not apply to an entity required to display a sign under Government Code Section 411.204. HB 899 amends Penal Code 30.06 to require the Department of Public Safety to adopt rules and make available online a printable electronic sign to be posted on a building or property where the property owner seeks to prohibit a license holder from carrying a concealed or opencarry handgun.

HB 927 and SB 459 amend Local Government Code 29.001 that prohibits local regulation by a political subdivision of firearms, knives and ammunition that is not authorized by state law. HB 927 also adds Chapter 247 and sets a civil penalty between $1,000 and $1,500 for the first violation and between $10,000 to $10,500 for a second or subsequent violation if the political subdivision does. Each day of a continuing violation constitutes a separate violation enforced and collected by the Attorney General from a filed complaint. The political subdivision has 15 days to cure a violation. If approved by voters November 7, SJR 30 adds Article 1, Section 23-a, that the state or a political subdivision may not adopt or enforce a law, ordinance, order or regulation requiring the registration of a firearm.

SB 618 adds Civil Practice and Remedies Act Chapter 95A that there is no cause of action against an owner or lessee for allowing the carrying of handguns on property by giving notice.

Proposed Effective: 9/1/2017. HB 99 effective immediately if passed by two-thirds of both houses; otherwise, effective 9/1/2017.

Status: SJR 30 referred to Senate State Affairs 1/30/17; SB 459 referred to Senate State Affairs 2/6/17.

HB 191 referred to House Homeland Security and Public Safety 2/14/17. HB 234 referred to House Homeland Security and Public Safety 2/13/17. SB 618 referred to Senate State Affairs 2/13/17. HB 556 left pending in House Judiciary and Civil

Jurisprudence 3/28/17. HB 560 referred to House Homeland Security and Public Safety 2/20/17. HB 927 referred to House Homeland Security & Public Safety 2/21/17. HB 899 referred to House Homeland Security and Public Safety 2/23/17. HB 99 referred to House Select/Federal Power Responsibility 3/1/17.

AREAS FOR BREASTFEEDING CONTINUE HB 443 Walle; SB 279 Zaffirini; HB 742 Farrar Amends Government Code 619.004; SB 279 also adds Government Code 443.0134; HB 742 amends Health and Safety Code 165.001 and 165.002 HB 443 and SB 279 remove the language of “multiple user” before bathroom. A public employer shall provide a place, other than a bathroom, for breastfeeding. SB 279 also requires a place in the Texas Capitol, other than a bathroom, for breastfeeding. HB 742 provides that a person may not interfere with, or restrict the right of, a mother to breast-feed on the premises. The mother may bring civil action for injunctive relief, damages up to $500 each day of violation, attorney’s fees and court costs.

The Comptroller annually shall include in its tax policy e-newsletter the rights of breastfeeding.

Proposed Effective: 9/1/2017.

Status: SB 279 referred to Senate Business & Commerce 1/30/17. HB 443 left pending in House Business and Industry 3/6/17. HB 742 left pending in House Business & Industry 3/6/17.

EMPLOYEE RESIGNING WITH ADVANCED NOTICE GETS NO UNEMPLOYMENT BENEFITS HB 463 Dale Amends Labor Code 207.045 The bill disqualifies a person from unemployment benefits when the person resigned with advance notice and the employer terminated the person before the date stated in the advanced notice of resignation.

Proposed Effective: 9/1/2017.

Status: Left pending in House Economic & Small Business Development 3/23/17.

CRIMINAL HISTORY QUESTION PROHIBITED ON EMPLOYMENT APPLICATION HB 548 Deshotel Adds Labor Code Chapter 52, Subchapter H 2017 Legislative Update; Page 78

The bill prohibits an employer from including a question about an applicant’s criminal history on an initial employment application. The employer may inquire and consider any criminal history if the applicant is conditionally offered employment or invited for an interview. The employer may not consider any offense that occurred or was alleged to have occurred more than seven years before the employment decision.

Proposed Effective: 9/1/2017.

Status: Left pending in House Business & Industry 3/20/17.

OCCUPATIONS REGULATION MAY NOT BE SUBSTANTIALLY BURDENSOME HB 552 White Adds Occupations Code Chapter 60 The bill requires regulation of an occupation only if the state agency demonstrates that the regulation is necessary to fulfill state law and not substantially burdensome. An individual may present evidence that a regulation substantially burdens the individual’s right to engage in a lawful occupation. The state has the burden of establishing by clear and convincing evidence that the regulation is necessary to fulfill the purpose and intent of state law. The individual may file suit against the state for declaratory judgment.

Proposed Effective: 9/1/2017.

Status: Referred to House Licensing & Administrative Procedures 2/20/17.

PUBLIC EMPLOYEE REPORTS STATE OR LOCAL GOVERNMENT VIOLATIONS HB 563 Israel Amends Government Code 554.002 The bill expands to whom a public employee may in good faith report a violation of law without being suspended or terminated. The employee may report the violation to the employee’s supervisor, an individual or office designated for reporting grievances, a member of the human resources staff, the Attorney General or an appropriate law enforcement authority.

Proposed Effective: 9/1/2017.

Status: Left pending in House Government Transparency & Operations 3/27/17.

POLITICAL SUBDIVISION CANNOT SET RULES ON PRIVATE EMPLOYER’S USE OF CRIMINAL HISTORY FOR EMPLOYMENT HB 577 Workman; SB 1262 Huffman Adds Labor Code Chapter 106 The bills prohibit a political subdivision for adopting or enforcing any ordinance or other local regulation that prohibits, limits or regulates a private employer’s ability to request, consider or take employment action based on the criminal history of an applicant. The bills address actions by the City of Austin regarding private employers and their application process. A political subdivision may adopt or enforce an ordinance/regulation on criminal history of an individual for a contract, grant, license, permit or business with the political subdivision.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Left pending in House Business & Industry 3/20/17. SB 1262 referred to Senate Business & Commerce 3/13/17.

MAXIMUM SERVICE ANNUITY SET FOR A PUBLIC RETIREMENT SYSTEM HB 632 Fallon Adds Government Code 810.002 The bill limits a public retirement system’s service annuity to an eligible retiring member on or after September 1, 2017, to not exceed the lesser of (1) basic pay of a member of the U. S. Armed Forces on active duty at the highest salary for pay grade 0-10, or (2) the annual rate of basic pay for a position under level II of the Executive Schedule as defined by 5 U.S.C. Section 5313.

Proposed Effective: 9/1/2017.

Status: Left pending in House Pensions 3/13/17.

COMPOSITION OF THE BOARD OF TRUSTEES CHANGED FOR TCDRS HB 737 Shaheen Amends Government Code 845.001 The bill changes the composition of the nine-member board of trustees of the Texas County and District Retirement System to be four county commissioners, one special district board member, one employee or retiree of a county and three members of the public.

The public member may not be a member or retiree of 2017 Legislative Update; Page 79

TCDRS, hold or have held an elected office or is or has been a governmental entity employee.

Proposed Effective: 9/1/2017.

Status: Referred to House Pensions 2/20/17.

LOCAL GOVERNMENT REQUIRED TO PARTICPATE IN FEDERAL E-VERIFY PROGRAM HB 765 Shaheen Adds Local Government Code Chapter 179 The bill requires political subdivisions to register and participate in the federal E-verify program for all new employees. Beginning September 1, 2018, a political subdivision may not receive state funds if it fails to do so. The Governor’s Office shall adopt rules.

Proposed Effective: 9/1/2017.

Status: Referred to House State Affairs 3/1/17.

REGULATORY TAX DEFINITION ADDED TO TEXAS CONSTITUTION HB 888, HJR 22 Raymond Adds Tax Code Chapter 102; adds Government Code 325.0124; adds Tex. Const. Art. 8, Section 2-a The bill and constitutional amendment, titled the “honesty in state taxation,” adds a definition of “regulatory tax” as a fee, levy, surcharge, assessment, penalty or other charge to raise revenue for general purposes. After the election, the Legislature may not enact a law if the tax is identified as a fee, levy, surcharge, assessment or penalty. By January 1, 2020, the Legislature shall revise every reference in state statute.

Proposed Effective: 9/1/2017; amendment effective if voters approve constitutional amendment November 7, 2017.

Status: HB 888 referred to House Ways & Means 2/23/17 and HJR 22 3/20/17.

GOVERNING BODY ADOPTS POLICY ON HEDGING IN INVESTMENT OF PUBLIC FUNDS HB 1003 Capriglione Adds Government Code 2256.0206 and amends Government Code 2256.009, 2256.010, 2256.011, 2256.014, 2256.015, 2256.016, 2256.019 The bill adds interesting-bearing bank accounts and negotiable certificates of deposits with a rating of a least 1 to the list of investments. A governing body

shall establish a policy regarding hedging transactions.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Left pending in House Investment & Financial Services 3/28/17.

RENEWAL FEE FOR STATE LIMITED HB 1055 Burkett Amends Occupations Code 57.003

LICENSES

The bill limits a state agency from increasing the fee for a license or renewal of a license to not exceed the fee on January 1, 2017.

Proposed Effective: 9/1/2017.

Status: Left pending in House Licensing & Administrative Procedures 3/20/17.

RECIPIENT OF STATE FUNDS PROHIBITED FROM LOBBYING HB 1316 Swanson Amends Government Code 556.0055 The bill prohibits a political subdivision or private entity that receives state funds from paying for lobbying.

Proposed Effective: 9/1/2017.

Status: Referred to House General Investigating & Ethics 2/27/17.

DISCLOSURE REQUIREMENTS CHANGED FOR BUSINESSES CONTRACTING WITH GOVERNMENT ENTITIES HB 1610 Kuempel; similar HB 1295 Capriglione Amends Government Code 2252.908 The bills revise requirements for disclosure of interested parties by a business that contracts with a governmental entity or the state. HB 1610 addresses a contract that required an action by the governing body and has a value of at least $10 million. Current law sets the value at $1 million. The business entity submits a disclosure of interested parties to the Texas Ethics Commission annually and not later than the 30th day of any material change in the parties. The Texas Ethics Commission shall adopt any necessary rules by December 1, 2017. HB 1295 adds definitions for controlling interest, intermediary, signed and value. It retains the $1 million value. It also adds to the list of 10 types of contracts that the requirements 2017 Legislative Update; Page 80

do not apply. It adds penalties for failure to file the disclosure.

Proposed Effective: 9/1/2017.

Status: HB 1295 and HB 1610 left pending in House General Investigating & Ethics 3/23/17.

INVESTMENT POLICY PRESENTATION REVISED TO BE ANY BUSINESS ORGANIZATION HB 1701 Parker Amends Government Code 2256.005 The bill revises the presentation of the investment policy to be any business organization offering to engage in an investment transaction that has accepted authority granted by the entity under the contract to exercise investment discretion in investing the entity’s funds.

Proposed Effective: 9/1/2017.

Status: Left pending in House Investments & Financial Services 3/28/17.

LBB FACES SUNSET REVIEW AND A REVIEW OF ITS FISCAL NOTE ACCURACY HB 1841 Burrows; SB 1358 Hall Adds Government Code 322.026 and 403.0146 The bills provide that the Legislative Budget Board (LBB) is subject to sunset review and, if not continued, is abolished September 1, 2019. It requires that the Comptroller conduct a study for each fiscal biennium to determine the accuracy of fiscal notes prepared by the LBB, including the proposal cost estimate to the actual cost of the bill or resolution. The Comptroller reports to the Legislature by December 1 of even-numbered years with the results, issues of concerns and areas of improvement.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: HB 1841 referred to House Appropriations 3/13/17. SB 1358 referred to Senate Finance 3/16/17.

INDIVIDUAL MUST CONSENT TO HIS OR HER IMAGE PUBLICATION HB 2024 Davis of Dallas Adds Business & Commerce Code Chapter 113 The bill provides that a person may not publish an unauthorized image on the Internet. A business entity operating an Internet website and receives a request

from an individual depicted in an unauthorized image shall remove the image within 48 hours from the request. Civil penalty for violation is $200 or less. The Attorney General or local prosecuting attorney may bring action to collect civil penalty. The bill applies to any publication of an image regardless of whether the image was initially published before the bill’s effective date. The bill does not apply to an image published by the news media, by law enforcement or in the public domain by an individual who appears in the image.

Proposed Effective: 9/1/2017.

Status: Referred to House Business and Industry 3/13/17.

PUBLIC FUNDS PROHIBITED FOR USE FOR POLITICAL CONTRIBUTIONS OR EXPENDITURES HB 2471 Davis of Harris Adds Election Code 253.007 The bill provides that it is unlawful to use public funds for political contributions or political expenditures or to directly or indirectly employ a person to use public funds in such a way. A violation is a Class A misdemeanor.

Proposed Effective: 9/1/2017.

Status: Referred to House General Investigating and Ethics 3/21/17.

VENDOR FILES DISCLOSURE FORM QUARTERLY FOR GIFT TO LOCAL OFFICIAL HB 2473 Davis of Harris Adds Local Government Code Chapter 176A and amends 176.001, 176.003, 176.006, 176.009, 176.013 The bill provides for the disclosure by vendors of gifts to certain local government officers and of certain relationships with local officers. Each calendar quarter, by the 15th of the month, a vendor shall submit a completed disclosure form to a local government entity if the vendor has a contract or is seeking a contract and has given one or more gifts during the preceding calendar quarter with an aggregate value of more than $100 to a local government officer. It does not apply to a gift given directly as part of a sponsorship or contribution to a non-profit organization. Failure to file the disclosure is a Class C misdemeanor.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

2017 Legislative Update; Page 81

Status: Referred to House General Investigating and Ethics 3/21/17.

LEGISLATORS STUDY UNFUNDED MANDATES HB 2789 White; similar SB 1438 Zaffirini HB 2789 none stated. SB 1438 adds Government Code 320.002 and 320.003 and amends 320.001 The bills set up a study group to look at unfunded mandates by legislative action. HB 2789 sets up a nine-member study group by October 1, 2017, with three members appointed by the Governor, three appointed by the Lt. Governor and 3 appointed by the Speaker. The group will study the mandates imposed by state statutes or agency rules to require counties to establish, expand or modify activities that requires increased expenses and for which the state provided no funding to the counties. The group reports by August 31, 2018 and is abolished September 1, 2019.

SB 1438 sets up an unfunded mandates interagency work group of the State Auditor, Legislative Budget Board Director, Comptroller, one Senator and one Representative to publish by September 1 an advisory list of unfunded mandates following a legislative session. The group removes mandates from previous legislative sessions that receive funding and adds back those where funding ends. A mandate does not include one that complies with federal law, received voter approval or affects employee pensions and benefits.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: SB 1438 referred to Senate Finance 3/20/17. HB 2789 referred to House State Affairs 3/30/17.

COUNTY PUBLIC WORKS PROJECT MAY REQUIRE AN ELECTION HB 2797 Munoz Adds Local Government Code Chapter 120 The bill adds election required to fund certain public works of a county using county revenue or incurring county debt. A project cost of $50 million or more requires an election to approve the funding.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Referred to House County Affairs 3/27/17.

FISCAL NOTE BY LEGISLATIVE STATES INCLUDES COUNTY OR CITY IMPACT HB 3030 Burns Adds Government Code 314.006

POLITICAL SUBDIVISIONS SET TERMS LIMITS NOT TO EXCEED 12 YEARS SB 110 Huffines Adds Government Code 601.010

The bill requires the Legislative Budget Board to include in each fiscal note a statement indicating whether the bill may create increased cost for one or more counties or municipalities.

Proposed Effective: 9/1/2017.

Status: Referred to House Appropriations 3/27/17.

The bill requires the governing body of a political subdivision to establish term limits no later than January 1, 2018, to ensure that a person may not serve longer than 12 years in an office, regardless of whether the person serves consecutive terms. Terms that began before January 1, 2019 are not counted.

Proposed Effective: If Texas voters approve constitutional amendment November 7, 2017.

Status: Referred to Senate State Affairs 1/25/17.

VOTERS DECIDE WHETHER TO REPEAL PROHIBITION ON STATE CORPORATE INCOME TAX HJR 58 Schofield; similar HJR 79 Klick; SJR 45 Bettencourt Adds Tex. Const. Art. 8, Section 24-a and amends Section 1; HJR 79 repeals Art. 8, Sec. 24 These bills provide for a constitutional amendment to allow the Legislature to impose a corporate income tax, but not an individual income tax. HJR 79 would require imposing an individual income tax only if two-thirds of Texas voters voted to repeal the prohibition on an individual income tax.

Proposed Effective: Amendment effective if voters approve constitutional amendment November 7, 2017.

Status: SJR 45 referred to Senate Finance 3/9/17.

HJR 58 and HJR 79 referred to House Ways & Means 3/20/17.

TWO-THIRDS VOTE REQUIRED TO PASS TAX BILL BY TEXAS LEGISLATURE HJR 63 Shaheen Adds Tex. Const. Art. 8, Section 30 The constitutional amendment would allow require a two-thirds vote of all members of the Senate and House on the final consideration of a bill that imposes a new state tax or increases the rate of an existing state tax. The state tax does not include a tax or other levy by a political subdivision.

Proposed Effective: Amendment effective if voters approve constitutional amendment November 7, 2017.

Status: Referred to House Ways & Means 3/20/17.

2017 Legislative Update; Page 82

POLITICAL SUBDIVISION PROHIBITED FROM LOBBYING; ALTERNATIVE IS TO REQUIRE REPORTING TO ETHICS COMMISSION AND ON WEBSITE SB 241 Burton; SB 445 Burton Amends Local Government Code 89.002; amends Government Code 556.0056 These bills apply to a political subdivision that imposes a tax or to a regional mobility authority, toll road authority or transit authority. SB 241 provides that the governing body of a political subdivision may not spend public money to directly or indirectly influence or attempt to influence the outcome of any pending legislation. Exceptions are an elected official acting as an officer of the political subdivision; an employee who would not be required to register as a lobbyist; or an officer or employee providing information to a member of the Legislature or appearing before a legislative committee at the request of the member or committee. The governing body may spend public money for membership fees in a nonprofit state association only if a majority of the governing body approves the membership; the association exists for betterment of local government and local government officials; the association if not with a labor organization; the association does not directly or indirectly influence or attempt to influence the outcome of pending legislation; and the association does not directly or indirectly contribute any money, services or other thing to a political campaign or endorse a candidate. A taxpayer in the political subdivision may seek injunctive relief for any violation to prevent any further prohibited activity. The taxpayer may recover attorney fees and court costs. SB 445 provides that a political

subdivision may spend money directly or indirectly to influence pending legislation only if a majority of the governing body approves the expenditure in open meeting as a stand-alone item. The political subdivision shall post on its website and file a report with the Texas Ethics Commission about the money spent, name of any person required to register as a lobbyist, an electronic copy of lobbyist’s contract and membership fees/dues of any nonprofit state association that directly or indirectly influences legislation. The Texas Ethics Commission shall make the information available as an online searchable database. Noncompliance entitles an interested party to appropriate injunctive relief to prevent further violation.

Proposed Effective: 9/1/2017.

Status: SB 241 referred to Senate State Affairs 1/30/1. SB 445 substitute voted from Senate State Affairs 3/30/17.

EMPLOYERS GIVE TIME OFF TO VOTE AND TO OBTAIN VOTER ID SB 283 Watson; SB 285 Watson SB 283 amends Election Code 276.004; SB 285 adds Labor Code Chapter 84 These bills address voting rights. SB 283 provides that a person may not refuse to permit a person to be absent from work to vote on election date or while early voting is in progress. SB 285 allows time off to obtain an election ID certificate by requesting time off not later than 24 hours before the time the employee will be absent from work. The employer may not require the employee to use existing leave time or reduce the pay for any pay period of lasting eight hours or less. On return to work, the employee provides reasonable documentation about absence to obtain election ID. Texas Workforce Commission shall design a sign that each employer shall place in a prominent location.

Proposed Effective: 9/1/2017.

Status: Both bills referred to Senate State Affairs 1/30/17.

PUBLIC EMPLOYEE HAS RIGHT TO REPRESENTATION IN CERTAIN INTERNAL INVESTIGATIONS SB 369 Garcia; HB 2587 Alonzo Adds Government Code 617.0045

2017 Legislative Update; Page 83

These bills give a public employee, on request, the right to representation in any investigatory interview of the employee initiated by the employee’s public employer that may result in disciplinary action.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: SB 369 referred to Senate Natural Resources and Economic Development 2/1/17. HB 2587 referred to House State Affairs 3/30/17.

STATE AUDITOR STUDIES LEGISLATIVE BILL COST ESTIMATES SB 398 Kolkhurst Adds Government Code 321.0139 The bill requires the State Auditor to conduct a study on the probable cost estimates used in Legislative Budget Board fiscal notes with the actual cost for passed legislation. The study shall be a random sampling of 10% of the fiscal notes. The State Auditor reports to the Legislature by September 1, 2018.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Referred to Senate Administration 2/1/17.

RETIREMENT SYSTEM EVALUATES INVESTMENT PRACTICES AND PERFORMANCE SB 509 Huffman Adds Government Code 802.109 and amends Government Code 802.002 The substitute bill requires that a public retirement system shall include in its annual report a listing, by asset class, of all direct and indirect commissions and fees paid during the previous fiscal year for the sale, purchase or management of system assets and the names of investment managers. A public retirement system is required to select an independent firm with substantial experience in evaluating institutional investment practices and performance, with specific items to be evaluated. The evaluation is required once every three years if at least $100 million in book value; once every six years if at least $30 million but less than $100 million; and no evaluation required if less than $30 million in book value. A retirement system files investment performance reports with the Texas Legislature.

Proposed Effective: 9/1/2017.

Status: Substitute reported from Senate State Affairs 3/22/17.

ETHICS REQUIREMENTS CHANGED SB 14 Taylor; HB 1283 Geren Adds Government Code 601.011, 810.002 and amends various sections of the Government Code The bill changes ethic requirements for public officers, including that certain elected officials are ineligible for their retirement annuity if they committed a qualifying felony while in office.

Proposed Effective: 1/8/2019.

Status: SB 14 passed Senate and received in House 2/8/17. HB 1283 referred to House General Investigating & Ethics 3/22/17.

LINE ITEM FOR PUBLIC NOTICE EXPENDITURES REQUIRED IN PROPOSED BUDGET SB 622 Burton; HB 1596 Lozano Adds Local Government Code 140.0045 These bills require that the proposed budget of a political subdivision must include a line item showing expenditures for public notices required by law to be published in a newspaper or a clear comparison between those expenditures in the proposed budget and actual expenditures in the preceding year. The floor amendment provides that this provision does not apply to a county with a population of less than 50,000 or to a political subdivision located in such a county.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: SB 622 reported from Senate Intergovernmental Relations 3/27/17; with one floor amendment, passed Senate 3/29/17 and received in House 3/30/17. HB 1596 referred to House Government Transparency & Operations 3/20/17.

PERSON RECOUPS ATTORNEY’S FEES AND COURT COSTS FOR CHALLENGE IN COURT SB 635 Huffines Adds Civil Practice and Remedies Code Chapter 38A The bill authorizes a court to award attorney’s fees and court costs to a person who prevails in the action of challenging an order, ordinance or measure of a political subdivision as unenforceable because that action was preempted by state constitution or state 2017 Legislative Update; Page 84

law. The bill also provides for the award of attorney’s fees and court costs if an officer of a political subdivision failed to perform an act of the office required by state constitution or state law. The political subdivision for whom the public officer served at the time pays those amounts.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Intergovernmental Relations 2/13/17.

CERTAIN COUNTIES FOLLOW SPECIFIC FINANCIAL ACCOUNTING AND REPORTING REQUIREMENTS SB 753 Perry; HB 1930 Frullo; HB 3320 Frank Repeals Government Code 2266; amends Local Government Code 112.002 These bills address a county with a county auditor and with a population of 190,000 or more. It requires that a regulation adopted may not be inconsistent with generally accepted accounting principles as established by the Governmental Accounting Standards Board.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: SB 753 referred to Senate State Affairs 2/22/17. HB 1930 left pending in House Government Transparency & Operation 3/27/17.

TEXAS RAILROAD COMMISSION CONTINUED SB 300 Taylor; HB 1818 Gonzales; similar SB 2120 Seliger Amends Natural Resources Code 81.01001 and adds 81.065, 81.066, 81.071 These bills continue the Texas Railroad Commission to 2029.

Proposed Effective: 9/1/2017.

Status: SB 300 referred to Senate Natural Resources & Economic Development 2/27/17. HB 1818 substitute, with five floor amendments, passed House 3/29/17 and received in Senate 3/30/17. SB 2120 referred to Senate Natural Resources & Economic Development 3/28/17.

WATER DISTRICT DISSOLUTION ADDRESSED SB 1175 Hinojosa Adds Water Code Chapter 49, Subchapter P, and amends Water Code 49.323

The bill addresses the dissolution of a water district and transferring the assets and obligations to another political subdivision by election.

Proposed Effective: 9/1/2017.

Status: Referred to Senate Intergovernmental Relations 3/9/17.

CODE REVISIONS AND OTHER NONSUBSTANTIVE CHANGES CLEAN UP STATUTES SB 1488 West; HB 3502 Landgraf Amends various Codes The bills clean up non-substantive additions to and corrections in enacted Codes and conforms codifications enacted by the 84th Legislature to other Acts of that legislature Proposed Effective: 9/1/2017.

Status: SB 1488 referred to Senate Administration 3/20/17.

RAILROAD COMMISSION RENAMED TO TEXAS OIL & GAS COMMISSION HB 4113 Alonzo Adds Natural Resources 81.010015 and amends 80.001, 81.01005, 81.0521; amends Election Code 52.092 The bill renames the Railroad Commission to Texas Oil & Gas Commission. Any reference to the old name is to be the new name. The renamed Commission has three commissioners serving staggered, six-year terms Proposed Effective: 9/1/2017.

Status: Filed.

USING TAX PROCEEDS PROHIBITED FOR LOBBYING ACTIVITIES OR LOBBYISTS SB 2044 Bettencourt Adds Government Code 556.0056 The bill applies to a governmental entity, including a political subdivision, that is wholly or partly funded by tax proceeds. A governmental entity may not spend tax proceeds to directly or indirectly influence or attempt to influence the outcome of legislation before the Legislature. It does not prevent an officer or employee of a governmental entity or an elected officer from appearing before a committee at the request of the committee or legislative member about the entity’s budget needs or effect of pending 2017 Legislative Update; Page 85

legislation. The governmental body may not employ a registered lobbyist. If the governmental entity does engage in the prohibited activity, a taxpayer of the entity may seek injunctive relief and is entitled to recover reasonable attorney’s fees and court costs.

Proposed Effective: 9/1/2017.

Status: Referred to Senate State Affairs 3/28/17.

LOCAL GOVERNMENT REQUIRED TO REPORT LOBBYING EXPENDITURES SB 2045 Bettencourt Adds Local Government Code 140.0051 The bill requires a local government entity, including a county, city, school district or hospital district, but not a junior college district, to report lobbying expenditures. The entity submits to the Texas Ethics Committee a clear and concise statement on total expenditures during a regular legislative session, including with whom the entity has contracted for lobbying and the amount paid to the registered lobbyist. The entity files two statements: the first is due by the second Tuesday in January of oddnumbered years and the second by the 21st day after the legislative session ends.

Proposed Effective: Immediately if passed by twothirds of both houses; otherwise, effective 9/1/2017.

Status: Referred to Senate State Affairs 3/28/17.