Property Tax Today

Quarterly Property Tax News

January 1, 2018

Property Tax Today

Quarterly Property Tax News

Volume 1 | Jan. 1, 2018

Property Tax Today features content regarding upcoming deadlines, action items and information releases.

Please let us know what you would like to see in future editions by sending property tax questions and/or suggested topics to We will gladly address property tax matters under our authority.

Message from the Comptroller

photo of Comptroller Hegar
Glenn Hegar
Texas Comptroller

In October, I released the Certification Revenue Estimate (CRE) for the fiscal 2018-19 biennium. After each legislative session, the agency releases the CRE to provide the detailed basis by which the Comptroller certified the budget, to revise estimates in the biennial revenue estimate to reflect legislative activity and current economic information, and to take into account final revenue numbers for the recently ended fiscal year.

Despite the still-unfolding economic impacts of Hurricane Harvey, we continue to project steady expansion of the Texas economy following a brief slowdown due to the storm. Texans are resilient and so is our economy.

The Property Tax Assistance Division (PTAD) had a busy December. The annual Institute for Property Taxation conference, co-hosted with the University of Texas, LBJ School of Public Affairs, was a big success, and I'd like to thank everyone who participated or attended. If you didn't get to go this year, keep an eye out for next year's conference!

PTAD also released pre-preliminary information about sampled properties in the 2017 Property Value Study (PVS) to chief appraisers and school superintendents. This allows them to review the information and notify us of any clerical errors in their information before PTAD issues the preliminary PVS results.

PTAD is working diligently to update the vast amount of property tax information published through our website, publications, forms and videos, reflecting changes from the recent legislative session.

The Legislature released interim charges that indicate continuing interest in the state's property tax system. PTAD will work closely with both chambers by offering property tax information and counsel, as requested, to assist them with their studies. It looks to be another busy interim, but we are up for the challenge!

Finally, I'd like to note we've compiled information for Hurricane Harvey evacuees and relief workers and continue to consider additional measures to aid recovery efforts. Please visit our Declared Natural Disasters and Emergencies Tax Help web page for additional information.

Thank you and God Bless Texas.

New Laws, Tax Code and Tax Laws

The annotated Texas Property Tax Code 2017 (Code) and unannotated handbook of selected Texas Property Tax Laws 2017 (Laws) are available for purchase. The cost is $11 for the paper version of either book or $1 for a PDF electronic copy (CD) of the Code and Laws. To order, mail a completed order form with your check in the appropriate amount to the Property Tax Assistance Division, Texas Comptroller of Public Accounts, P.O. Box 13528, Austin, Texas 78711-3528.

Unannotated, copyrighted versions of the publications are also available for free on PTAD's Legal Resources web page.

PTAD's Texas Property Tax Law Changes 2017 is a resource for property tax professionals and the public. It summarizes laws enacted by the Texas Legislature in the 85th Regular and First Called Sessions related to property tax administration. It can also be viewed or downloaded from PTAD's Legal Resources web page.

Constitutional Amendments Passed

On Nov. 7, 2017, Texas voters approved three new property tax related amendments to the Texas Constitution:

  • A property tax exemption of part of the market value of the residence homestead of a partially disabled veteran or the surviving spouse of a partially disabled veteran if the residence homestead was donated to the disabled veteran by a charitable organization for less than its market value.
  • A property tax exemption of all or part of the market value of the residence homestead of the surviving spouse of a first responder who is killed or fatally injured in the line of duty.
  • Allowing home equity loans on agricultural homesteads; lowering the amount for expenses that can be charged to a borrower; removing certain financing expense limitations for a home equity loan; establishing certain authorized lenders to make a home equity loan; changing certain options for the refinancing of home equity loans; and changing the threshold for an advance of a home equity line of credit.

For more information on constitutional amendments, please refer to the Texas Secretary of State's website.

Tax Code Deadline Changes

The following Tax Code deadline changes are the result of legislation passed during the 85th Regular Session. A full calendar of statutory deadlines can be found on PTAD's Property Tax Law Deadlines web page.

March 31 Last day to file applications for allocation under Secs. 21.03, 21.031, 21.05 or 21.055. For good cause, chief appraisers shall extend the deadline up to 30 days. Other deadlines apply if the property was not on the appraisal roll in the previous year (Sec. 21.09(b)).
April 1 Last day to file rendition statements and property reports for most types of property in counties in which one or more taxing units exempt freeport property. Chief appraiser shall extend deadline to May 1 upon written request (Sec. 22.23(c)).
April 15 Last day to file renditions and property information reports on most property types in counties in which no taxing unit exempts freeport property. Chief appraiser shall extend deadline to May 15 upon written request (Sec. 22.23(a) and (b)).
April 30 Last day to file rendition statements and property reports for property regulated by the Texas Public Utility Commission, Texas Railroad Commission, Federal Surface Transportation Board or the Federal Energy Regulatory Commission. Chief appraiser may extend deadline 15 days for good cause (Sec. 22.23(d)).
May 1 Last day to file rendition statements and property reports for most property types, if an extension was requested in writing, in counties in which one or more taxing units exempts freeport property. Chief appraiser may extend deadline an additional 15 days for good cause (Sec. 22.23(c)).
May 15 Last day to file renditions and property reports for most property types, if an extension was requested in writing, in counties in which no taxing unit exempts freeport property. Chief appraiser may extend deadline an additional 15 days for good cause (Sec. 22.23(b)).
May 15 Last day to file protest with appraisal review board (ARB) (or by 30th day after notice of appraised value is delivered, whichever is later) (Sec. 41.44(a)(1)).
June 15 Last day for chief appraisers to accept and approve or deny late-filed freeport exemption applications (Sec. 11.4391(a)).

Local Government Relief Applications

The application period for a qualified city or county to apply for state assistance for a local government disproportionately affected by disabled veteran exemption under Local Government Code Section 140.011 is Feb. 1 through April 1.

To apply, a city or county must submit Comptroller Form 50-833, Local Governments Disproportionately Affected by Disabled Veterans Exemption, together with the required documentation during the application period of Feb. 1 through April 1, as the application period cannot be extended.

Further information regarding the application process and required documentation can be found on the PTAD's Local Government Relief web page.

Texas Timberland

Timberland productivity tax is a local property tax, and like all property tax in Texas, local appraisal districts determine the values and local taxing units set the tax rates. The chief appraiser of the local appraisal district develops the degree of intensity standards for a typical timber operation performed by a prudent landowner in the area. Timberland is appraised based on its productivity capacity. Land qualifies for productivity appraisal if it:

  • is currently and actively devoted to timber production to the degree of intensity generally accepted for the area;
  • is intended to produce income; and
  • has been devoted principally to timber production or agricultural use for any five of the preceding seven years.

The Comptroller's office provides overview and assistance by publishing the Manual for the Appraisal of Timberland (2004), determining and publishing the annual capitalization rate and developing forms, all of which can be accessed through PTAD's website.

The capitalization rate is primarily based on the interest rate specified by the Farm Credit Bank of Texas. The USDA Forest Service publishes average timber growth rates, and the Texas A&M Forest Service publishes average annual timber prices and reports annual management cost data to the Comptroller's office. The Comptroller's office uses this data in determining PVS values for timberland. PTAD's Joe Holcomb recently co-authored an article with Rajan Parajuli and Burl Carraway, both of Texas A&M Forest Service, for the Texas Forestry Association explaining the basics of Texas timberland appraisal.

Irrigation Well Expenses

PTAD uses three sources of data to arrive at irrigation well expenses: Marshall & Swift, the Texas Water Development Board and PTAD's annual Farm and Ranch Survey. The data collected is used to arrive at a regional cost-per-foot, drilling depth, life expectancy, acres served and annual maintenance expenses. These regional numbers are applied to individual counties.

Every county includes the initial drilling cost of the well in its well expense amount. Additional costs may be included in the county's expense amount depending upon on who typically pays for well maintenance and repair. If the landowner is responsible for the maintenance, 100 percent of the maintenance cost is added to the initial cost to arrive at the final landowner expense amount. Nothing is added to the initial cost if the tenant is responsible for the maintenance and repair. If the maintenance is shared, 50 percent of the maintenance cost is added to the initial drilling cost.

PTAD calculates this for both cash and share leases. For example, if a landowner is typically responsible for the maintenance for a share lease but the tenant is typically responsible for the maintenance in a cash lease, there will be two different expense amounts for that county.

The final well expense amount is combined with other typical expenses and used in calculating the net to land value.

Rendition Statements and Property Reports

Prior to the 85th Regular Session, all rendition statements and property reports were due after Jan. 1 and not later than April 15. That's still true for some, but HB 2228 changed that for two types of property:

  • property located in an appraisal district in which one or more taxing units exempt freeport property under Tax Code Section 11.251 (now due no later than April 1); and
  • property regulated by the Public Utility Commission, Texas Railroad Commission, Federal Surface Transportation Board or Federal Energy Regulatory Commission (now due no later than April 30).

Persons filing rendition statements or property reports in counties with a taxing unit that offers freeport exemptions may submit a written request to extend the filing deadline to May 1.

The chief appraiser may further extend the deadline for an additional 15 days for good cause shown in writing by the property owner for both property types.

Board of Directors (BOD) Training

PTAD is pleased to provide the Appraisal District Director's Manual and its companion video, Appraisal District Board of Directors Training. Directors are encouraged to use these valuable resources, particularly for newly appointed directors, to understand their duties and responsibilities.

The Office of the Attorney General offers the following videos as further resources for directors:

PVS Pre-Preliminary Results

The 2017 PVS pre-preliminary release of information about sampled properties was sent to chief appraisers and school superintendents for review in December 2017. Only local data and values for sampled properties were included. PTAD-determined values were not provided.

Chief appraisers and school superintendents were asked to carefully review the local value information and report any clerical errors to PTAD by Jan. 9, 2018, so they can be corrected before the preliminary PVS release at the end of January 2018. Before the January release, PTAD may add, delete or correct sample characteristics as we receive additional information from chief appraisers and PTAD appraisers.

School districts or eligible taxpayers can file a petition protesting the Comptroller's preliminary findings released at the end of January. The petition must be filed no more than 40 days after the date on which the Comptroller's findings are certified to the Commissioner of Education. Information regarding the protest process can be found on PTAD's Property Value Study and Self Reports web page.

Notes from the Field

In conducting the PVS, PTAD analyzes certain property categories, according to generally accepted sampling and statistical techniques, to estimate their legally required value, which is usually market value. PTAD begins its analysis by gathering and preparing market data, including property sales, building costs and income information. One of the interesting trends that PTAD researches is residential inventory levels.

A good rule of thumb for determining residential market stability is if an area has about six months of inventory. If a market area has less than six months of inventory, houses are in demand, creating a seller's market, and property values typically rise. If a market area has more than six months of inventory, there is an oversupply of inventory, creating a buyer's market, and property values typically decline. The Texas A&M University Real Estate Center publishes residential inventory data on its website, including the information used in the chart below.

City 2014 2017 Market
Amarillo 4 3.2 Seller
Austin 1.8 2.1 Seller
Brownsville/Harlingen 13.8 9.9 Buyer
Dallas 3 1.8 Seller
El Paso 7.7 5.5 Stable
Houston 2.5 3.5 Seller
Midland 3.1 3.4 Seller
San Antonio 4 3 Seller
Texarkana 12 14 Buyer
Waco 5.3 2.6 Seller

Source: Texas A&M University Real Estate Center

ARB Training Registration

Registration for ARB member training is open. ARB members are not allowed to participate in hearings, vote on determinations of protests or be reappointed to additional terms until they have completed the Comptroller's ARB training courses and signed statements agreeing to comply with Tax Code requirements during ARB hearings.

This requirement is especially important to an ARB member in the second year of his or her first term because the member may not have taken the continuing education course in the prior year. Please ensure that ARB members register on time so they complete training requirements prior to the scheduling of ARB hearings in 2018.

The fee for registration is $50 for new member training and $50 for returning member training. The deadline for registration is Jan. 31, 2018.

Details about locations, dates and other matters, including registration, are available on PTAD's Appraisal Review Board Training web page. ARB members must attend one of the live training seminars or one of the telecast training sessions held in certain regional education service centers across Texas.

Operations Survey

Tax Code Section 5.03(b) authorizes the Comptroller's office to require an annual report on the administration and operation of each appraisal office, and the operations survey provides data for that report.

Electronic surveys will soon be sent to appraisal districts for collection of their operations data for the 2017 Tax Year. Responses are requested by March 31, 2018.

All responses must be submitted electronically through the online survey; however, a non-fillable PDF version of the survey will be made available on PTAD's website for use as a working copy only. Appraisal district staff members must enter the appraisal district's responses directly into the online survey. Paper copies will not be accepted.

Survey data from previous years can be found on PTAD's Property Tax Survey Data and Reports web page.

Property Classification

Comptroller Rule 9.3059 and Government Code Section 403.304 require appraisal districts to annually submit their appraisal rolls electronically in a prescribed format. Please refer to the Electronic Appraisal Roll Submission Manual for detailed information on the submission process.

Tax Code Section 5.07(c) requires appraisal districts to maintain property sales information collected as part of their uniform record keeping systems. Appraisal districts must submit the data to the Comptroller's office, where it is compiled into a statewide database. The Electronic Appraisal Roll Submission Manual gives an overview of the prescribed electronic format and provides information regarding the submission procedures.

Please remember to use the Texas Property Tax Assistance Property Classification Guide when classifying property for value analysis and in reporting valuations for the biennial PVS.

The companion Texas Property Tax Assistance Classification Guide Video allows for continuing education credit for property tax professionals registered with the Texas Department of Licensing and Regulation.

Tax Bills/Delinquency

In most cases, the deadline for paying your property taxes is Jan. 31. Taxes that remain unpaid on Feb. 1 are considered delinquent. Penalty and interest charges are added to the original amount.

Failure to receive a tax bill does not affect the validity of the tax, penalty or interest due, the delinquency date, the existence of a tax lien or any procedure the taxing unit institutes to collect the tax.

Check with the tax collection office on local payment options that may be available, such as credit card payments, deferrals, discounts, escrow accounts, installment payments, split payments, partial payments and work contracts.

Information regarding payment of property taxes can be found on PTAD's Property Tax Bills web page.

Texas House of Representatives Interim Charges

Speaker Joe Straus published the 85th Legislature Interim Committee Charges in October 2017. The House Ways and Means Committee is charged with reviewing the property tax system and identifying improvements relating to the following:

  • transparency and communications with taxpayers;
  • the tax-rate-setting process;
  • the training and expertise required of appraisal review board members;
  • ARB composition, structure and process; and
  • appeals of ARB orders.

The Committee is also charged with reviewing the impact of Hurricane Harvey on state and local taxes, including examining the need for and the feasibility of requiring reappraisal of all property affected by large-scale disasters such as Harvey and identifying improvements to the tax-rate-setting process following such disasters.

Texas Senate Interim Charges

Lieutenant Governor Dan Patrick published the Senate 2017 Interim Legislative Charges in October 2017. Property tax-related charges to the Senate Finance Committee include evaluating the following:

  • property tax as it applies to business personal property and the current $500 exemption; and
  • the interest rate charged on delinquent property taxes and delinquent state taxes, compared to the interest rate paid on property tax refunds and state tax refunds.

The Senate Select Committee on Property Tax Reform charges include the following:

  • studying and recommending ways to enhance voter engagement in local government decisions around budgets and property tax rates through digital media and social media;
  • evaluating the effective tax rate and rollback tax rate calculations and identifying modifications that would yield a rollback process that is meaningful for local governments and for citizens;
  • evaluating the operations of the ARBs, specifically the training and expertise of members, whether ARB operations are sufficiently independent of appraisal districts and taxing units and whether ARBs and/or chief appraisers should be elected;
  • evaluating whether existing libraries of property tax data and collection methods are adequate for studying local property tax outcomes and identifying drivers of growing property tax levies; and
  • studying the feasibility of replacing the property tax with sales tax or other consumption tax revenue, with emphasis on school maintenance and operations tax.

The Senate Veteran Affairs and Border Security Committee is charged with monitoring the implementation and impact of SB 277 by Campbell 85(R) passed by the Texas Legislature, relating to ad valorem tax incentives for wind-powered energy devices near military aviation facilities, and making recommendations for any needed improvements or steps to ensure completion.

Attorney General Opinion

The following opinion was issued by the Office of the Attorney General.

Opinion No. KP-0175 (PDF) (November 13, 2017)

A tax appraisal district has no authority to detach property from one school district and transfer the property to another school district under Education Code Section 13.051. The Legislature has not given an appraisal district independent authority to determine or alter the boundaries established by a school district.

Action Items

Below is a list of action items for the first quarter of 2018. A full list of important property tax law deadlines for appraisal districts, taxing units and property owners can be found on PTAD's website.

  • Jan. 1 – Chief appraiser eligibility forms due
  • Jan. 9 – Deadline to review and report clerical errors on local value information provided in the PVS pre-preliminary results
  • Jan. 31 – Chief appraiser's deadline to deliver applications for exemptions and agricultural designation requiring annual applications
  • Jan. 31 – ARB training registration deadline
  • Jan. 31 – Deadline for appraisal district to give public notice of the capitalization rate to be used in that year to appraise property with low- and moderate-income housing exemptions
  • Feb. 1 – EPTS due for all appraisal districts
  • Feb. 1 – Deadline for chief appraisers in certain counties to provide notice regarding the availability of agreement forms authorizing electronic communication, if delivering the form
  • Feb. 15 – Deadline for county tax collector to disburse motor vehicle, vessel and outboard motor, heavy equipment and manufactured housing inventory taxes from escrow accounts to taxing units
  • March 15 – Deadline to protest preliminary PVS results
  • April 1 – Deadline for qualified local governments to file applications for disabled veterans assistance payments

If the last day for one of the deadlines is on Saturday, Sunday or a legal or state holiday, the act is timely if performed on the next regular business day.

Prior Issues >>

Please be advised that the information in this newsletter is current as of the date of its publication and is provided solely as an informational resource. The information provided neither constitutes nor serves as a substitute for legal advice. Questions regarding the meaning or interpretation of any information included or referenced herein should be directed to legal counsel and not to the Comptroller's staff.