BILL ANALYSIS

C.S.H.B. 1533

By: Button

Ways & Means

Committee Report (Substituted)

BACKGROUND AND PURPOSE

The bill author has informed the committee that additional training and notification requirements and increased transparency can protect taxpayers and equip them to engage in the property tax appraisal process. C.S.H.B. 1533 seeks to achieve these goals, increase fairness for taxpayers, and expand taxpayer rights and participation by reforming the property tax appraisal process.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

C.S.H.B. 1533 amends the Tax Code to set out and revise provisions relating to the system for appraising property for property tax purposes.

Notice of Appraised Value of Property in Supplemental Appraisal Records

C.S.H.B. 1533 requires the notice of appraised value of property in the supplemental appraisal records pertaining to property that was not on the appraisal roll in a prior year because it was omitted from the roll to be sent by certified mail.

Designated Property Tax Agent

C.S.H.B. 1533 removes the requirement for an agent who electronically submits a designation of agent form to provide the chief appraiser information concerning the Internet Protocol address of the computer the person used to complete the form. This applies only to a written request for information made by a chief appraiser on or after the bill's effective date. A written request for information made before the bill's effective date is governed by the law in effect on the date the request was made, and the former law is continued in effect for that purpose.

Appraisal Review Board Member Training

C.S.H.B. 1533, if the comptroller of public accounts contracts with a service provider to assist with the initial or continuing education training programs for members of an appraisal review board (ARB), requires at least one trainer of such a program to be a taxpayer representative who resides in Texas. An individual is eligible to be a trainer who is a taxpayer representative only if the following conditions are satisfied:

·the individual:

ois licensed to practice law in Texas and has practiced law in Texas for at least five years; and

ohas knowledge of and experience in property tax law; and

·the individual has not:

orepresented an appraisal district, ARB, or taxing unit in any capacity;

oserved as an officer or employee of an appraisal district; or

oserved as a member of an ARB.

The bill authorizes the comptroller to contract with an individual to be a trainer described by these provisions who does not meet those eligibility requirements if:

·no other individual who applies to be a trainer meets those eligibility requirements; and

·the individual to be contracted with meets the following conditions:

oresides in Texas;

ohas knowledge of and experience with the property tax system;

ohas a bachelor's degree; and

ois not:

§an officer or employee of an appraisal district;

§a member of the board of directors of an appraisal district;

§a member of an ARB; or

§an officer or employee of a taxing unit.

These provisions apply only to a course provided on or after January 1, 2026.

Appraisal Districts

C.S.H.B. 1533 requires an appraisal district established in a county with a population of 120,000 or more to maintain a website. The bill requires the chief appraiser of such an appraisal district to post on the district's website the district's completed appraisal records required to be prepared under applicable state law, other than records that are confidential under law, and to update the posted records at least once each week to include any change in the appraised value of property.

Taxpayer Protests

C.S.H.B. 1533 reenacts and amends Section 41.45(b-1), Tax Code, as amended by Chapters 965 (S.B. 1919) and 644 (H.B. 988), Acts of the 87th Legislature, Regular Session, 2021, to, as follows:

·conform to changes made by H.B. 988, with respect to the circumstances under which a taxpayer may appear at a protest hearing remotely by retaining only the option for the taxpayer to elect for remote appearance and removing the option for the ARB to propose a remote hearing;

·conform to changes made by S.B. 1919, with respect to the means by which that remote appearance may occur, which are either telephone conference call or videoconference, as specified by the property owner; and

·change the last day for a property owner to file written notice with an ARB of their intention to appear at a protest hearing remotely by either such means that triggers the requirement for the ARB to conduct the hearing by such remote means from the 10th day before the hearing date to the following:

othe 5th day before the hearing date if the property owner has not designated an agent under applicable state law to represent the owner at the hearing; or

othe 10th day before the hearing date if the property owner has designated an agent to represent the owner.

The bill also requires an ARB that dismisses a protest on jurisdictional grounds to notify the property owner in writing of its decision and state in the notification the grounds for its determination. These provisions apply only to a protest for which a notice of protest is filed by a property owner on or after the bill's effective date. A protest for which a notice of protest is filed by a property owner before the bill's effective date is governed by the law in effect on the date the notice of protest was filed, and the former law is continued in effect for that purpose.

C.S.H.B. 1533 changes the deadline for an ARB to deliver written notice of a good cause hearing on the issuance of a subpoena relating to a protest to the party being subpoenaed and parties to the protest from the 5th day before the hearing date to the 15th day before the hearing date. This change applies only to a subpoena issued on or after the bill's effective date. A subpoena issued before the bill's effective date is governed by the law in effect on the date the subpoena was issued, and the former law is continued in effect for that purpose.

Binding Arbitration

C.S.H.B. 1533 entitles a person leasing property who is contractually obligated to reimburse the property owner for taxes imposed on the property, as an alternative to an appeal in district court, to appeal through binding arbitration an ARB order determining a protest concerning the appraised or market value of a property if the protest was brought before the ARB by the person leasing the property or if the protest was brought by the property owner if the property owner does not appeal the order. This entitlement applies only if the appraised or market value, as applicable, of the property as determined by the order is $5 million or less. The bill establishes that the person appealing the order is considered the property owner for purposes of the appeal and requires the comptroller to deliver a copy of any notice relating to the appeal to the property owner and to the person bringing the appeal. These provisions apply only to a request for binding arbitration that is filed on or after January 1, 2026. A request for binding arbitration that is filed before January 1, 2026, is governed by the law in effect on the date the request was filed, and the former law is continued in effect for that purpose.

Discovery During Appeal

C.S.H.B. 1533 prohibits the district court hearing an appeal of an ARB order in a taxpayer protest from ordering discovery unless the discovery is requested by a party to the appeal. The bill further prohibits the court from imposing deadlines for discovery related to an expert witness, including deadlines for designating an expert witness, that fall before the deadlines specified by the Texas Rules of Civil Procedure or otherwise accelerating discovery related to an expert witness, unless agreed to by the parties. These provisions apply only to an appeal filed on or after the bill's effective date. An appeal filed before the bill's effective date is governed by the law in effect on the date the appeal was filed, and the former law is continued in effect for that purpose.

EFFECTIVE DATE

September 1, 2025.

COMPARISON OF INTRODUCED AND SUBSTITUTE

While C.S.H.B. 1533 may differ from the introduced in minor or nonsubstantive ways, the following summarizes the substantial differences between the introduced and committee substitute versions of the bill.

Both the introduced and the substitute require at least one trainer of the initial and continuing education training programs for members of an ARB to be a taxpayer representative who meets certain eligibility requirements. However, the substitute conditions that requirement on the comptroller contracting with a service provider to assist with those programs, whereas the introduced did not. The substitute also includes an authorization absent from the introduced for the comptroller to contract with an individual who does not meet those eligibility requirements if:

·no other individual who applies to be a trainer meets those eligibility requirements; and

·the individual to be contracted with meets the following conditions:

oresides in Texas;

ohas knowledge of and experience with the property tax system;

ohas a bachelor's degree; and

ois not:

§an officer or employee of an appraisal district;

§a member of the board of directors of an appraisal district;

§a member of an appraisal review board; or

§an officer or employee of a taxing unit.

The substitute includes a procedural provision absent from the introduced establishing that this authorization applies only to a course provided on or after January 1, 2026.

Both the introduced and the substitute require an appraisal district established in a county with a population of 120,000 or more to post on the appraisal district's website the district's appraisal records. However, the substitute specifies that those records are the completed appraisal records required to be prepared under applicable state law, whereas the introduced did not.

Both the introduced and the substitute change the last day for a property owner to file written notice with an ARB of their intention to appear at a taxpayer protest hearing remotely by either telephone conference call or videoconference that triggers the requirement for the ARB to conduct the hearing by such remote means. However, whereas the introduced changed that day from the 10th day before the hearing date to the 5th day before the hearing date, the substitute changes that day from the 10th day before the hearing date to the following:

·the 5th day before the hearing date if the property owner has not designated an agent under applicable state law to represent the owner at the hearing; or

·the 10th day before the hearing date if the property owner has designated an agent to represent the owner.

Whereas the introduced required an ARB that dismisses a taxpayer protest on jurisdictional grounds to make its decision by written order and state in the order the grounds for its determination, the substitute requires such an ARB to notify the property owner in writing of its decision and state in the notification the grounds for its determination.

The substitute omits provisions from the introduced that did the following:

·expanded the scope of the authorization for a property owner who files notice of a property tax protest to request limited binding arbitration for purposes of compelling compliance by a chief appraiser or ARB, as appropriate, to rescind procedural rules adopted by the ARB that are not in compliance with the model hearing procedures prepared by the comptroller so as to authorize the property owner also to compel compliance with hearing procedures adopted by the ARB;

·expanded the matters that may be the subject of an arbitration request to include, for a protest on the ground of unequal appraisal of property, using the appraised values of comparable properties as corrected by an agreement between the property owner or the owner's agent and the chief appraiser or by a determination of the ARB;

·established that these provisions applied only to a request for binding arbitration that is filed on or after January 1, 2026, that a request for binding arbitration that is filed before that date was governed by the law in effect on the date the request was filed, and that the former law was continued in effect for that purpose.

The substitute includes procedural provisions absent from the introduced establishing that, for purposes of the bill's provisions relating to discovery during appeal, an appeal filed before the bill's effective date is governed by the law in effect on the date the appeal was filed, and the former law is continued in effect for that purpose.