REVIEW OF PROPERTY TAX RECOMMENDATIONS from 2015 GEER
REPORT
The GEER report for 2015 makes several recommendations relating to the equal and
uniform remedy. A review of the report indicates that the analysis leading to the
recommendations needs further exploration and development to lead to more
supportable conclusions. It also appears that the analysis was not based on input from
taxpayers or taxpayer representatives. The Tax Equity Council offers the following
comment.
The recommendations of the GEER report would result in the elimination of
the current equal and uniform remedy and substantial damage to a
taxpayer’s constitutional right to challenge incorrect and flawed tax
appraisals and to avoid unfair tax increases.
GEER Recommendation 1: Amend statute to use deviation from the median
appraisal ratio instead of median appraised value as the basis to determine equal and
uniform appraisal.
TAX EQUITY COUNCIL DOES NOT SUPPORT RECOMMENDATION 1
This recommendation would require use of appraisal ratios rather than median
appraised value. The result of this recommendation would be the elimination of
any meaningful remedy and the elimination of the constitutional right to equal
and uniform taxation.
The current statute provides for two types of equal and uniform remedies. The
first determines an appraisal ratio through a ratio study. This remedy set forth in
Section 42.26(a)(1) and (2) requires the selection of a “sample” of comparable
properties and then for each comparable property the development of a ratio of
the tax value to the market value of each comparable. From discussions with
practitioners around the state, it appears that this remedy has been used in a
lawsuit 2 times from 1982 to 2014. This remedy essentially provides no equal
and uniform protection. Its failure is because it requires a sample and requires
determination of market value for each comparable property. A sample is a
statistical term and would require the retention of a statistician. Further, it is
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difficult or impossible to determine market value of the comps within compliance
within generally accepted appraisal techniques.
The second remedy contained in Section 42.26(a)(3) compares the taxation
value of comps to the subject and has proven an effective guarantee of the
conditional right to equal and uniform taxation.
GEER Recommendation 2: Amend statute to establish standards for what defines
comparable property, limit comparable properties to those in the same appraisal
district, require adjustments to be based on general appraisal standards, and establish
which appraised value is used at each stage of protest and appeal.
Recommendation Part 2a: “establish standards for what defines comparable
property”
TAX EQUITY COUNCIL SUPPORTS THIS PART OF RECOMMENDATION 2:
This can be accomplished by requiring an equal and uniform appraisal to be
determined using generally accepted appraisal techniques.
Recommendation Part 2b: “limit comparable properties to those in the same
appraisal district”
TAX EQUITY COUNCIL
RECOMMENDATION 2:
DOES
NOT
SUPPORT
THIS
PART
OF
Chief appraisers contend that it is only fair to the system and to them
to be compared to properties that they have appraised. This is an
outdated concept. The constitution states that “all” taxation shall be
equal and uniform. It does not limit equality to the county.
Previously, the Constitution provided that a remedy should originate in
the county in which the property was located. The Constitution was
amended in 2009 in HJR 36 by Otto to allow equity across county
lines.
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In addition, school finance is clearly an across county lines event.
Values in one county effect school finance in another county. The
comptroller’s MAP survey and ratio study support multi-county
uniformity.
Finally, in some situations there are no comparables or very few
comparables in a county and equity is only available by looking at
comps outside the county.
The concerns of chief appraisers on this issue are adequately
addressed by the comparable property requirements of the statute.
Recommendation Part 2c: “require adjustments to be based on general
appraisal standards”
TAX EQUITY COUNCIL SUPPORTS THIS PART OF RECOMMENDATION 2:
This can be accomplished by requiring an equal and uniform appraisal to be
determined using generally accepted appraisal techniques.
Recommendation Part 2d: “establish which appraised value is used at each
stage of protest and appeal”
TAX EQUITY COUNCIL
RECOMMENDATION 2:
DOES
NOT
SUPPORT
THIS
PART
OF
Appraisal Districts contend that for purposes of a protest the value used on the
comparables should be the initial value rather than any value reduced at an ARB
hearing. They also contend that for purposes of a lawsuit the value used for
comparables should be the ARB value instead of values reduced by other
lawsuits.
This results in “almost” or “kind of” equal and uniform taxation.
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GEER Recommendation 3: Amend statue to require the Texas Comptroller of Public
Accounts to establish standards for development and calibration of adjustments for
industrial, petrochemical refining and processing, utility properties, and other unique
properties by rule.
TAX EQUITY COUNCIL DOES NOT SUPPORT RECOMMENDATION 3:
This can be accomplished by requiring an equal and uniform appraisal to be
determined using generally accepted appraisal techniques.
GEER Recommendation 4: Amend statute to require a property owner who loses an
equity lawsuit to pay an appraisal district’s attorney fees to make this requirement
consistent for both property owners and appraisal districts.
TAX EQUITY COUNCIL DOES NOT SUPPORT RECOMMENDATION 4:
Current law provides for the award of attorney fees to a prevailing taxpayer but
not to a prevailing appraisal district. This has been the law since the inception of
the Property Tax Code in 1982 and has proven to work quite well. There is no
need to change this provision. This creates a more level playing field for
taxpayers. Taxpayers are challenging the government and the value placed on
their property. The burden should be on the government to defend their values
from essentially a taking of a taxpayer’s property. This provision encourages
settlement discussion and unnecessary and expensive trials. There have been on
the average 24 trials in Texas over the last five years.
TAX EQUITY COUNCIL RECOMMENDATION
The Tax Equity Council recommends legislation which would require an equal
and uniform analysis to be performed using generally accepted appraisal
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techniques which is the same standard currently applied to a market value
analysis.
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