HB 2083 Partially Closes Property Tax Loophole

The Legislative Budget Board noted earlier this year that the loophole was costing the state $70 million to $80 million a year because Texas has to help maintain a certain level of funding at school districts, which are having to repay companies winning court cases based on a 1997 amendment to the state’s tax law.

When the measure takes effect in January, companies for the first time will have to use generally accepted appraisal methods in court cases challenging assessed values under the 18-year-old "equal and uniform" clause of the tax law.

Real Estate Center Research Economist Dr. Charles Gilliland said the bill was pushed by county appraisal districts who said questionable methods were often used during tax appeals to arrive at appraisal values.

"I think it will have some effect on it. How much . . . depends on how much unconscionable activity has been going on," Gilliland said.

Appraisal districts could gain a new advantage from the new standard. "If they see numbers being cooked, it gives them ammunition to raise that issue without going to district court," Gilliland said.

Aside from the appraisal districts, he said not much else will be affected.

"It was a really modest change basically," he said. "It’s the best they can do in this legislature."