Shared from the 5/22/2019 Houston Chronicle eEdition

Tax appraisers: Bill ‘just lunacy’

Legislators approve loosening restrictions on appeals, but local officials fear upheaval

AUSTIN — Legislation that could allow property owners to retroactively appeal years-old tax bills is on the verge of becoming law, raising alarms for county appraisers who warn it would wreak havoc on the budgets of Texas cities and school districts.

If property owners win reductions, local governments could be forced to issue refunds long after they set their budgets and collect taxes, county appraisers say. The result could be financially ruinous, especially for small counties where one or two large properties make up a substantial portion of the tax base, said Kirk Swinney, an Austin-area attorney who represents roughly 70 appraisal districts.

“It creates a powerful, powerful tool in the hands of large property owners to basically bring the local taxing units to their knees with a threat of review for many years in arrears,” he said.

The bill to loosen restrictions on appeals easily cleared the House and Senate and now is on Republican Gov. Greg Abbott’s desk. His office didn’t respond to questions about whether he would sign or veto it.

Reforming the property tax system is top of mind this session, as Abbott and top Republican leaders seek to rein in homeowners’ soaring bills by capping what cities and counties can raise in revenue each year without an election. This bill, however, received little attention.

Rep. Charlie Geren, a Fort Worth Republican who filed it, disagrees his legislation will let property owners file retroactive protests. Geren said the bill simply gives people an opportunity to go back and correct mistakes in a protest if they didn’t “check the right box.” The current laws lets appraisal districts dismiss a protest over procedural errors, without ever considering the merits, he said.

He said the appraisal districts are being “whiny” about House Bill 380.

“The appraisal districts never liked the bill,” he said. “They didn’t even come and talk to me about it.”

Swinney and chief appraisers did raise concerns during public hearings in the House and Senate. They argue the bill goes far beyond Geren’s stated goal and could effectively eliminate the deadlines for contesting a property appraisal.

Jim Popp, a prominent Austin tax attorney who represents businesses and homeowners protesting their property values, said he “would have liked it to be a little more clearly written for the court’s direction, so we wouldn’t be speculating about what the bill meant.”

Popp said he agrees property owners shouldn’t have their protests dismissed over technicalities, but those who miss the deadlines shouldn’t have the right to come back years later and file a challenge. “The system needs finality and rules,” he said.

Currently, property owners must protest within 30 days of receiving notice or by mid-May. Once an appraisal review board issues a decision, property owners have 60 days to file an appeal in district court.

The possibility of property owners protesting their current values in future years means cities, counties and school districts will have an impossible time setting their budgets and tax rates, said Brent South, chief appraiser at Hunt County Appraisal District and a past president of the Texas Association of Appraisal Districts.

“It does away with the deadlines,” South said. “The importance of those deadlines in the property tax code is because it gives certain finality to the taxing units.”

By extending the time frame for filing appeals, the bill could also expand a tax provision that has helped big businesses knock billions of dollars off their property values. So-called equity appeals cut tax bills by a total of nearly $1 billion in the state’s five biggest counties last year, an analysis by Hearst Newspapers found.

Though any property owner can file an equity appeal, businesses with the financial means to file lawsuits year after year have made most use of the 22-year-old tax clause, records show. Efforts to reform the tax provision this session failed to gain traction.

The bill’s Senate sponsor, Sen. Kelly Hancock, R-North Richland Hills, wasn’t available for comment. In the public hearing, he said the bill gives “the property owner a much easier path, rather than being kicked out simply for a minor error on a piece of paper.”

District judges would have the power to give property owners a chance to fix any mistakes, which appraisers said could include not filing a timely protest. But how the courts might interpret the policy, if it becomes law, remains to be seen.

Swinney, who represents appraisal districts, said he has no reason to exaggerate the bill’s effects.

“This helps me. I am in the business of defending local taxing units, and the Legislature created a bunch new avenues to sue them. I am probably going to have to hire help,” he said. “But as a matter of public policy, it’s just lunacy.” amorris@express-news.net

See this article in the e-Edition Here
Edit Privacy