News and Insights

Texas Bill Would Reform the State’s Property Tax

Tax Development Nov 30, 2016

On November 29, Texas Senators Paul Bettencourt, Brandon Creighton, Kelly Hancock, and Van Taylor filed Senate Bill 2 (“SB 2”), “Property Tax Reform & Relief Act of 2017.”  

As introduced, SB 2 would:

  • Lower the rollback tax rate from 8% to 4%;
  • Require automatic tax ratification elections if a tax rate exceeds the rollback rate;
  • Require that tax ratification elections be held on general election dates;
  • Create a Property Tax Administration Advisory Board in the Texas Comptroller’s office;
  • Require appraisal districts to use the appraisal manuals issued by the Texas Comptroller;
  • Provide a uniform deadline of May 15 for all property tax protests;
  • Require specialized Appraisal Review Board panels in counties with a population of at least 120,000 for commercial properties, utilities, industrial and manufacturing properties, and multifamily residential real properties;
  • Clarify that a majority vote by an Appraisal Review Board is binding;
  • Allow properties with a value up to $5 million to use binding arbitration in lieu of litigation; and
  • Prohibit local governments from challenging the value of an entire class of properties. 

The proposed reforms are the result of testimony provided during public hearings held by the Senate Committee on Property Tax Reform & Relief. These reforms should increase taxpayer participation, simplify the process, and result in more uniform appraisals.