H.B. No. 8

	AN ACT
	relating to certain studies and reviews of appraisal districts
	conducted by the comptroller of public accounts.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Sections 403.3011(1), (2), and (4), Government
	Code, are amended to read as follows:
	(1)  "Study" ["Annual study"] means a study conducted
	under Section 403.302.
	(2)  "Eligible school district" means a school district
	for which the comptroller has determined the following:
	(A)  in the most recent [annual] study, the local
	value is invalid under Section 403.302(c) and does not exceed the
	state value for the school district determined in the [annual]
	study;
	(B)  in the two studies [annual study for each of
	the two years] preceding the most recent [annual] study, the school
	district's local value was valid under Section 403.302(c); [and]
	(C)  in the most recent [annual] study, the
	aggregate local value of all of the categories of property sampled
	by the comptroller is not less than 90 percent of the lower limit of
	the margin of error as determined by the comptroller of the
	aggregate value as determined by the comptroller of all of the
	categories of property sampled by the comptroller; and
	(D)  the appraisal district that appraises
	property for the school district was in compliance with the scoring
	requirement of the comptroller's most recent review of the
	appraisal district conducted under Section 5.102, Tax Code.
	(4)  "State value" means the value of property in a
	school district as determined in a [the annual] study.
	SECTION 2.  Section 403.302, Government Code, is amended by
	amending Subsections (a), (c), (c-1), (f), (h), (i), and (l) and
	adding Subsections (a-1), (a-2), (m), (n), and (o) to read as
	follows:
	(a)  The comptroller shall conduct a [an annual] study using
	comparable sales and generally accepted auditing and sampling
	techniques to determine the total taxable value of all property in
	each school district. The study shall determine the taxable value
	of all property and of each category of property in the district and
	the productivity value of all land that qualifies for appraisal on
	the basis of its productive capacity and for which the owner has
	applied for and received a productivity appraisal. The comptroller
	shall make appropriate adjustments in the study to account for
	actions taken under Chapter 41, Education Code.
	(a-1)  The comptroller shall conduct a study:
	(1)  at least every two years in each school district
	for which the most recent study resulted in a determination by the
	comptroller that the school district's local value was valid; and
	(2)  each year in a school district for which the most
	recent study resulted in a determination by the comptroller that
	the school district's local value was not valid.
	(a-2)  If in any year the comptroller does not conduct a
	study, the school district's local value for that year is
	considered to be valid.
	(c)  If after conducting the [annual] study the comptroller
	determines that the local value for a school district is valid, the
	local value is presumed to represent taxable value for the school
	district. In the absence of that presumption, taxable value for a
	school district is the state value for the school district
	determined by the comptroller under Subsections (a) and (b) unless
	the local value exceeds the state value, in which case the taxable
	value for the school district is the district's local value. In
	determining whether the local value for a school district is valid,
	the comptroller shall use a margin of error that does not exceed
	five percent unless the comptroller determines that the size of the
	sample of properties necessary to make the determination makes the
	use of such a margin of error not feasible, in which case the
	comptroller may use a larger margin of error.
	(c-1)  This subsection applies only to a school district
	whose central administrative office is located in a county with a
	population of 9,000 or less and a total area of more than 6,000
	square miles.  If after conducting the [annual] study for a tax
	year the comptroller determines that the local value for a school
	district is not valid, the comptroller shall adjust the taxable
	value determined under Subsections (a) and (b) as follows:
	(1)  for each category of property sampled and tested
	by the comptroller in the school district, the comptroller shall
	use the weighted mean appraisal ratio determined by the study,
	unless the ratio is more than four percentage points lower than the
	weighted mean appraisal ratio determined by the comptroller for
	that category of property in the immediately preceding study, in
	which case the comptroller shall use the weighted mean appraisal
	ratio determined in the immediately preceding study minus four
	percentage points;
	(2)  the comptroller shall use the category weighted
	mean appraisal ratios as adjusted under Subdivision (1) to
	establish a value estimate for each category of property sampled
	and tested by the comptroller in the school district; and
	(3)  the value estimates established under Subdivision
	(2), together with the local tax roll value for any categories not
	sampled and tested by the comptroller, less total deductions
	determined by the comptroller, determine the taxable value for the
	school district.
	(f)  The study shall determine the values as of January 1 of
	each year:
	(1)  for a school district in which a study was
	conducted according to the results of the study; and
	(2)  for a school district in which a study was not
	conducted according to the market value determined by the appraisal
	district that appraises property for the district, less the amounts
	specified by Subsection (d).
	(h)  On request of the commissioner of education or a school
	district, the comptroller may audit the total taxable value of
	property in a school district and may revise the [annual] study
	findings. The request for audit is limited to corrections and
	changes in a school district's appraisal roll that occurred after
	preliminary certification of the [annual] study findings by the
	comptroller. Except as otherwise provided by this subsection, the
	request for audit must be filed with the comptroller not later than
	the third anniversary of the date of the final certification of the
	[annual] study findings. The request for audit may be filed not
	later than the first anniversary of the date the chief appraiser
	certifies a change to the appraisal roll if the chief appraiser
	corrects the appraisal roll under Section 25.25 or 42.41, Tax Code,
	and the change results in a material reduction in the total taxable
	value of property in the school district. The comptroller shall
	certify the findings of the audit to the commissioner of education.
	(i)  If the comptroller determines in the [annual] study that
	the market value of property in a school district as determined by
	the appraisal district that appraises property for the school
	district, less the total of the amounts and values listed in
	Subsection (d) as determined by that appraisal district, is valid,
	the comptroller, in determining the taxable value of property in
	the school district under Subsection (d), shall for purposes of
	Subsection (d)(14) subtract from the market value as determined by
	the appraisal district of residence homesteads to which Section
	23.23, Tax Code, applies the amount by which that amount exceeds the
	appraised value of those properties as calculated by the appraisal
	district under Section 23.23, Tax Code.  If the comptroller
	determines in the [annual] study that the market value of property
	in a school district as determined by the appraisal district that
	appraises property for the school district, less the total of the
	amounts and values listed in Subsection (d) as determined by that
	appraisal district, is not valid, the comptroller, in determining
	the taxable value of property in the school district under
	Subsection (d), shall for purposes of Subsection (d)(14) subtract
	from the market value as estimated by the comptroller of residence
	homesteads to which Section 23.23, Tax Code, applies the amount by
	which that amount exceeds the appraised value of those properties
	as calculated by the appraisal district under Section 23.23, Tax
	Code.
	(l)  If after conducting the [annual] study for [the year
	2003 or] a [subsequent] year the comptroller determines that a
	school district is an eligible school district, for that year and
	the following year the taxable value for the school district is the
	district's local value. [Not later than the first anniversary of
	the date of the determination that a school district is an eligible
	school district, the comptroller shall complete an appraisal
	standards review as provided by Section 5.102, Tax Code, of each
	appraisal district that appraises property for the school
	district.]
	(m)  The Comptroller's Property Value Study Advisory
	Committee is created. The committee is composed of:
	(1)  one member of the house of representatives,
	appointed by the speaker of the house of representatives;
	(2)  one member of the senate, appointed by the
	lieutenant governor;
	(3)  two members who represent appraisal districts,
	appointed by the comptroller;
	(4)  two members who represent school districts,
	appointed by the comptroller; and
	(5)  three members appointed by the comptroller who are
	residents of this state and are school district taxpayers or have
	expertise in school district taxation or ratio studies.
	(n)  Chapter 2110 does not apply to the size, composition, or
	duration of the Comptroller's Property Value Study Advisory
	Committee.
	(o)  The comptroller shall adopt rules governing the conduct
	of the study after consultation with the Comptroller's Property
	Value Study Advisory Committee.
	SECTION 3.  The heading to Section 403.304, Government Code,
	is amended to read as follows:
	Sec. 403.304.  COOPERATION WITH COMPTROLLER;
	CONFIDENTIALITY.
	SECTION 4.  Section 403.304, Government Code, is amended by
	amending Subsection (a) and adding Subsection (a-1) to read as
	follows:
	(a)  A school district, appraisal district, or other
	governmental entity in this state shall promptly comply with an
	oral or written request from the comptroller for information to be
	used in conducting a study, including information that is made
	confidential by Chapter 552 of this code, Section 22.27, Tax Code,
	or another law of this state.
	(a-1)  All information the comptroller obtains from a
	person, other than a government or governmental subdivision or
	agency, under an assurance that the information will be kept
	confidential, in the course of conducting a study [of school
	district values] is confidential and may not be disclosed except as
	provided in Subsection (b).
	SECTION 5.  Section 5.07(c), Tax Code, is amended to read as
	follows:
	(c)  The comptroller shall also prescribe a uniform record
	system to be used by all appraisal districts for the purpose of
	submitting data to be used in the [annual] studies required by
	Section 5.10 of this code and by Section 403.302, Government Code.
	The record system shall include a compilation of information
	concerning sales of real property within the boundaries of the
	appraisal district. The sales information maintained in the
	uniform record system shall be submitted annually in a form
	prescribed by the comptroller.
	SECTION 6.  Section 5.10(a), Tax Code, is amended to read as
	follows:
	(a)  At least once every two years, the [The] comptroller
	shall conduct a [an annual] study in each appraisal district to
	determine the degree of uniformity of and the median level of
	appraisals by the appraisal district within each major category of
	property. The comptroller shall publish a report of the findings of
	the study, including in the report the median levels of appraisal
	for each major category of property, the coefficient of dispersion
	around the median level of appraisal for each major category of
	property, and any other standard statistical measures that the
	comptroller considers appropriate. In conducting the study, the
	comptroller shall apply appropriate standard statistical analysis
	techniques to data collected as part of the [annual] study of school
	district taxable values required by Section 403.302, Government
	Code.
	SECTION 7.  Section 5.102, Tax Code, is amended to read as
	follows:
	Sec. 5.102.  REVIEW OF APPRAISAL DISTRICTS [STANDARDS].  (a)
	At least once every two years, the [The] comptroller shall review
	the governance of each appraisal district, taxpayer assistance
	provided, and the operating and appraisal standards, procedures,
	and methodology used by each appraisal district [that appraises
	property for an eligible school district as defined by Section
	403.3011, Government Code], to determine compliance with generally
	accepted [appraisal] standards, procedures, and methodology [and
	practices]. After consultation with the advisory committee created
	under Section 403.302, Government Code, the [The] comptroller by
	rule may establish procedures and standards for conducting and
	scoring the review.
	(b)  In conducting the review, the comptroller is entitled to
	access to all records and reports of the appraisal district, to copy
	or print any record or report of the appraisal district, and to the
	assistance of the appraisal district's officers and employees.
	(c)  At the conclusion of the review, the comptroller shall,
	in writing, notify the appraisal district concerning its
	performance in the review.  If the review results in a finding that
	an appraisal district is not in compliance with generally accepted
	[appraisal] standards, procedures, and methodology [and
	practices], the comptroller shall deliver a report that details the
	comptroller's findings and recommendations for improvement to:
	(1)  the appraisal district's chief appraiser and board
	of directors; and
	(2)  the superintendent and board of trustees of each
	school district participating in the appraisal district.
	(d)  If the appraisal district fails to comply with the
	recommendations in the report and the comptroller finds that the
	board of directors of the appraisal district failed to take
	remedial action reasonably designed to ensure substantial
	compliance with each recommendation in the report before the first
	anniversary of the date the report was issued, the comptroller
	shall notify the Board of Tax Professional Examiners, or a
	successor to the board, which shall take action necessary to ensure
	that the recommendations in the report are implemented as soon as
	practicable [judge of each district court in the county for which
	the appraisal district is established, who shall appoint a board of
	conservators consisting of five members to implement the
	recommendations. The board of conservators shall exercise
	supervision and control over the operations of the appraisal
	district until the comptroller determines under Section 403.302,
	Government Code, that in the same year the taxable value of each
	school district for which the appraisal district appraises property
	is the local value for the school district. The appraisal district
	shall bear the costs related to the supervision and control of the
	district by the board of conservators].
	(e)  Before February 1 of the year following the year in
	which the Board of Tax Professional Examiners, or its successor,
	takes action under Subsection (d), and with the assistance of the
	comptroller, the board shall determine whether the recommendations
	in the most recent report have been substantially implemented. The
	presiding officer of the board shall notify the chief appraiser and
	the board of directors of the appraisal district in writing of the
	board's determination.
	SECTION 8.  Sections 5.12(a), (d), and (e), Tax Code, are
	amended to read as follows:
	(a)  The comptroller shall audit the performance of an
	appraisal district if one or more of the following conditions exist
	according to each of two consecutive [annual] studies conducted by
	the comptroller under Section 5.10 [of this code], regardless of
	whether the prescribed condition or conditions that exist are the
	same for each of those studies:
	(1)  the overall median level of appraisal for all
	property in the district for which the comptroller determines a
	median level of appraisal is less than 0.75;
	(2)  the coefficient of dispersion around the overall
	median level of appraisal of the properties used to determine the
	overall median level of appraisal for all property in the district
	for which the comptroller determines a median level of appraisal
	exceeds 0.30; or
	(3)  the difference between the median levels of
	appraisal for any two classes of property in the district for which
	the comptroller determines a median level of appraisal is more than
	0.45.
	(d)  A request for a performance audit of an appraisal
	district may not be made under Subsection (b) or (c) [of this
	section] if according to each of the two most recently published
	[annual] studies conducted by the comptroller under Section 5.10
	[of this code]:
	(1)  the overall median level of appraisal for all
	property in the district for which the comptroller determines a
	median level of appraisal is more than 0.90 and less than 1.10;
	(2)  the coefficient of dispersion around the overall
	median level of appraisal of the properties used to determine the
	overall median level of appraisal for all property in the district
	for which the comptroller determines a median level of appraisal is
	less than 0.15; and
	(3)  the difference between the highest and lowest
	median levels of appraisal in the district for the classes of
	property for which the comptroller determines a median level of
	appraisal is less than 0.20.
	(e)  A request for a performance audit of an appraisal
	district may not be made under Subsection (b) or (c) [of this
	section]:
	(1)  during the two years immediately following the
	publication of the second of two consecutive [annual] studies
	according to which the comptroller is required to conduct an audit
	of the district under Subsection (a) [of this section]; [or]
	(2)  during the year immediately following the date the
	results of an audit of the district conducted by the comptroller
	under Subsection (a) [of this section] are reported to the chief
	appraiser of the district; or
	(3)  during a year in which the comptroller is
	conducting a review of the district under Section 5.102.
	SECTION 9.  Section 5.13(a), Tax Code, is amended to read as
	follows:
	(a)  The comptroller shall complete an audit required by
	Section 5.12(a) [of this code] within two years after the date of
	the publication of the second of the two [annual] studies the
	results of which required the audit to be conducted. The
	comptroller shall complete an audit requested under Section 5.12(b)
	or (c) [of this code] as soon as practicable after the request is
	made.
	SECTION 10.  Section 41A.12, Tax Code, is amended to read as
	follows:
	Sec. 41A.12.  USE OF PROPERTIES AS SAMPLES.  An arbitrator's
	determination of market value under this chapter is the market
	value of the property subject to the appeal for the purposes of the
	[annual] study conducted under Section 403.302, Government Code.
	SECTION 11.  Sections 5.101 and 5.12(g), Tax Code, are
	repealed.
	SECTION 12.  As soon as possible after the effective date of
	this Act, the speaker of the house of representatives, lieutenant
	governor, and comptroller shall appoint members to the
	Comptroller's Property Value Study Advisory Committee in
	accordance with Section 403.302(m), Government Code, as added by
	this Act.
	SECTION 13.  The change in law made by this Act applies only
	to a study conducted under Section 5.10, Tax Code, or Section
	403.302, Government Code, or a review conducted under Section
	5.102, Tax Code, for a year that begins on or after January 1, 2009.
	A study or review for a year that began before that date is covered
	by the law in effect immediately before the effective date of this
	Act, and the former law is continued in effect for that purpose.
	SECTION 14.  This Act takes effect January 1, 2010.
	______________________________	______________________________
	President of the Senate	Speaker of the House
	I certify that H.B. No. 8 was passed by the House on April 24,
	2009, by the following vote:  Yeas 141, Nays 0, 1 present, not
	voting.
	______________________________
	Chief Clerk of the House
	I certify that H.B. No. 8 was passed by the Senate on May 21,
	2009, by the following vote:  Yeas 31, Nays 0.
	______________________________
	Secretary of the Senate
	APPROVED:  _____________________
	Date
	_____________________
	Governor