Supplement: TX HB5133 | 2023-2024 | 88th Legislature | Fiscal Note (Introduced)
For additional supplements on Texas HB5133 please see the Bill Drafting List
Bill Title: Relating to a requirement that an appraisal review board rely on an appraisal of residential real property prepared by an appraiser and submitted to the board by the property owner to determine a protest regarding the value of the property.
Status: 2023-04-24 - Left pending in committee [HB5133 Detail]
Download: Texas-2023-HB5133-Fiscal_Note_Introduced_.html
Bill Title: Relating to a requirement that an appraisal review board rely on an appraisal of residential real property prepared by an appraiser and submitted to the board by the property owner to determine a protest regarding the value of the property.
Status: 2023-04-24 - Left pending in committee [HB5133 Detail]
Download: Texas-2023-HB5133-Fiscal_Note_Introduced_.html
| TO: |
Honorable Morgan Meyer, Chair, House Committee on Ways & Means |
| FROM: |
Jerry McGinty, Director, Legislative Budget Board
|
| IN RE: |
HB5133 by Bell, Cecil (Relating to a requirement that an appraisal review board rely on an appraisal of residential real property prepared by an appraiser and submitted to the board by the property owner to determine a protest regarding the value of the property.), As Introduced |
Estimated Two-year Net Impact to General Revenue Related Funds for HB5133, As Introduced : a negative impact of ($74,721,000) through the biennium ending August 31, 2025.
General Revenue-Related Funds, Five- Year Impact:
| Fiscal Year | Probable Net Positive/(Negative) Impact to General Revenue Related Funds |
|---|---|
| 2024 | $0 |
| 2025 | ($74,721,000) |
| 2026 | ($85,530,000) |
| 2027 | ($94,727,000) |
| 2028 | ($98,534,000) |
All Funds, Five-Year Impact:
| Fiscal Year | Probable Savings/(Cost) from Foundation School Fund 193 | Probable Savings/(Cost) from Recapture Payments Atten Crdts 8905 | Probable Revenue Gain/(Loss) from School Districts |
|---|---|---|---|
| 2024 | $0 | $0 | $0 |
| 2025 | ($74,721,000) | $31,435,000 | ($111,758,000) |
| 2026 | ($85,530,000) | $34,644,000 | ($125,210,000) |
| 2027 | ($94,727,000) | $38,801,000 | ($136,790,000) |
| 2028 | ($98,534,000) | $40,416,000 | ($143,588,000) |
Fiscal Analysis
The bill would amend Chapter 41 of the Tax Code to provide that if a property owner files a protest related to residential property and timely files with the appraisal review board (ARB) and chief appraiser a copy of an appraisal of the property performed by a certified appraiser that supports the appraised or market value of the property, the ARB is required to determine the protest in favor of the property owner and issue an order changing the property's appraised or market value to the value determined by the appraisal submitted by the property owner.
The bill would make conforming changes to Chapter 41 of the Tax Code and Section 37.10(c)(4) of the Penal Code.
The bill would make conforming changes to Chapter 41 of the Tax Code and Section 37.10(c)(4) of the Penal Code.
Methodology
The bill would direct the ARB to rule in favor of the property owner's certified appraisal of the residential real property under protest. It is expected there could be significant variance in independent appraisals from appraisal district values as they often would not be products of the same mass appraisal methodology in use by appraisal districts, with independent appraisals both higher and lower than appraisal district values. But property owners would file for use of independent appraisals only when they are lower than appraisal district values, with the result that average appraised values determined by ARBs would be reduced. Total ARB reductions below original appraised values for residential property value protests in 2021 were $9,606,013,196. This estimate assumes total ARB reductions of residential property appraisals would increase by twenty percent, representing a decline in total taxable value of residential property of approximately 4/10 of one percent.
Under provisions of the Education Code, the school district tax revenue loss is partially transferred to the state. The estimated cost to the Foundation School Program (FSP) is $74.7 million in fiscal year 2025, increasing to $98.5 million in fiscal year 2028. The cost to the FSP includes estimated decreases in Recapture Payments - Attendance Credits of $31.4 million in fiscal year 2025, increasing to $40.4 million in fiscal year 2028 as a result of school district tax revenue loss. The decrease in recapture is reflected as a savings in the table above because recapture is appropriated as a method of finance for the FSP in the General Appropriations Act.
Under provisions of the Education Code, the school district tax revenue loss is partially transferred to the state. The estimated cost to the Foundation School Program (FSP) is $74.7 million in fiscal year 2025, increasing to $98.5 million in fiscal year 2028. The cost to the FSP includes estimated decreases in Recapture Payments - Attendance Credits of $31.4 million in fiscal year 2025, increasing to $40.4 million in fiscal year 2028 as a result of school district tax revenue loss. The decrease in recapture is reflected as a savings in the table above because recapture is appropriated as a method of finance for the FSP in the General Appropriations Act.
Local Government Impact
Passage of the bill would direct the ARB to rule in favor of the property owner's certified appraisal of the residential real property under protest. As a result taxable property values would be reduced. However, the no-new-revenue and voter-approval tax rates as provided by Section 26.04, Tax Code could be higher as a consequence of the exemption proposed by the bill.
| Source Agencies: | 304 Comptroller of Public Accounts |
| LBB Staff: | JMc, SD, BRI |
