83rd Texas Legislature Recap:
This publication highlights areas of interest to Texas REALTORS® in the 83rd Texas Legislature and beyond.

The 83rd Texas Legislature produced important victories for the Texas Association of REALTORS®, consumers, and the real estate industry. Here are outcomes of issues on the association’s legislative agenda, including the top three issues – water, transportation and public education.

Water
TAR strongly supported SJR 1 during the legislative session and continues to support the proposed constitutional amendment allowing the state to use money from its Rainy Day Fund to pay for water projects. The amendment will be on the November ballot.

Transportation
In early August, after three failed attempts to fund transportation, the Texas House and Senate passed SJR 1 and HB 1. This legislation would provide TxDOT with an estimated $1.2 billion in additional funds in FY 2015 (if approved by voters in November 2014). The legislation reaches beyond FY 2015, but it’s impossible to predict how much additional funding, if any, the agency would receive in subsequent years.

Pros – This legislation would yield some dollars for transportation, but more importantly, gives transportation advocates time to build support for doing something sustainable in 2015.

Cons – Not only is the $1.2 billion far short of what the agency needs, SJR 1 is not a permanent or reliable funding source. There is some concern that voters may view SJR 1 as a silver bullet and be hostile to lawmakers who seek a permanent solution in future legislative sessions.

TxDOT funding has steadily declined over the years due to an underperforming gas tax and the Legislature’s unwillingness to raise taxes or impose fees. The agency is facing massive funding problems beginning in 2015, when its bonding capacity will be exhausted.

During the interim, the TAR Infrastructure and Utilities Subcommittee will examine long-term, sustainable approaches to transportation funding.

Public Education
HB 5 (Aycock) makes broad changes to high school testing and graduation requirements, and SB 2 (Patrick) calls for an expansion of the state’s charter-school program.

Highlights of the two bills include:
•  Five end-of-course exams instead of 15
•  Flexible “endorsement” plans, such as Business and Industry of STEM (Science, Technology, Engineering and Math), as specialties on top of
foundational courses
•   Expansion of charter schools by 15 per year until 2019, for a total of 315
•  Greater authority for the Texas Education Agency to crack down on low-performing charter schools

HB 5 was signed by the governor on June 10 and was effective immediately. SB 2 was signed by the governor on June 14 and was effective
September 1.

 

FairTaxes

As homeowners and taxpayers, we deserve more than a quick fix
For most of us, the only time we think about property taxes is when we get the annual appraisal notice on our home’s taxable value. It’s a well-documented fact that property taxes in Texas are among the highest in the nation. Incredibly, some officials—even a few who are close to home here in Bexar County—expect us to believe there’s a quick fix. That disclosing the sales prices of our homes will magically solve our problems.

Did you know?
San Antonio area lawmakers introduced ”sales price disclosure” legislation in the 81st session claiming proposed bills would lead to equitable and fair property taxes.

State Representative Michael Villarreal’s House Bill 133 and Senator Jeff Wentworth’s Senate Bill 444 were short-sighted and would have been bad for Texas homeowners. Bexar County Chief Appraiser Michael Amezquita and the San Antonio Express-News also advocated for mandatory sales price disclosure. But disclosure wouldn’t solve our problems, but would potentially make things worse.

Sales price disclosure violates private property rights and, as proven in other states, does not lead to fairness in taxation. It does, however, lead to the introduction of new taxes for property owners. Three-quarters of states that have real estate transfer taxes started with sales price disclosure. One is typically precursor to the other. Skeptical? Read this 50-state analysis from the National Council of State Legislatures and the Federation of Tax Administrators.

The issues
There are some who believe that mandatory sales price disclosure is a silver bullet that will fix property appraisals, but like so many other things that sound too good to be true, it is.

In Texas, the amount you pay for your property is between you and the seller. We believe it should stay that way because Texans deserve privacy in their real estate transactions.

Others believe that making that information available to the public, including property appraisers, will make appraisals more accurate. However, without a uniform set of standards for property appraisals, sales price disclosure would simply be another tool added to a broken system, like a new speedometer in a car that doesn’t run.

Unfortunately, sales price disclosure has also been shown to be ineffective in improving the accuracy of property appraisals in Texas. Through agreements with local Multiple Listing Services, many appraisers in Texas already have access to sales price data. In using that data, however, it’s been discovered that sales price is often misused.   Read more here.

Better ideas
There are solutions to the flawed property appraisal process we currently have in Bexar County and statewide. Here are some of those solutions:

•  Continue to lower property tax rates.

•  Require appraisers to adhere to uniform standards in property appraisals, specifically the Uniform Standards of Professional Appraisal Practice set forth by The Appraisal Foundation.

•  Enforce those standards at the statewide level by giving the Texas Comptroller’s Office enforcement authority over the appraisal districts throughout Texas.

•  Create a new appraisal appeal process to ensure independence from the appraisal district.

•  Adjust the tax-rate calculation to ensure local taxing districts don’t realize a windfall when property values increase.

Now that the 81st Legislative Session has concluded, let’s watch for developments on legislation enacted during this last session to create more consistency, uniformity and transparency in the appraisal process. The 82nd session is set to begin in 2011. Contact your legislator and let them know that you are watching and waiting for better measures to be set up and enacted over the coming months leading to January 2011. They are accountable and must ensure a better appraisal process results during this time for all Texans!

The problem
Mandatory sales price disclosure does nothing to fix Texas’ broken property appraisal system. Worse, in 37 of 40 states, mandatory sales price disclosure has been the precursor to new sales taxes on real estate, also known as real estate transfer taxes. Transfer taxes are just another form of property tax. San Antonio homeowners already pay way too much.

The solution
We’re leading the fight for legislative reforms to ease the long-term financial burdens on San Antonio’s homeowners.

Perspectives
This is an important issue and we want you to hear many sides. Unfortunately, many folks only hear the side of this story that the news media choose to tell.
What has Occurred in the 81st Legislature

SUPPORTED APPRAISAL REFORM

Our position: Support efforts to make the appraisal process more transparent and to make appraisal entities more accountable and efficient.

Legislative activity: All of association-backed appraisal reforms passed. H.B. 8 would ensure increased oversight of appraisal districts. H.B. 3613 allows for a residential homestead to be appraised as a residence, not on the basis of the “highest and best use” appraisal standard. S.B. 771, among other things, would mandate updated appraisal methods, give consumers alternatives to costly lawsuits when appealing a ruling by an appraisal review board, and add CPAs to the list of people qualified to act as arbitrators. H.J.R. 36 proposes a constitutional amendment to make appraisal practices more uniform.

Status: H.B. 8, H.B. 3613, and S.B. 771 were sent to the governor. H.J.R. 36 will be placed on Nov. 3 ballot.

OPPOSED MANDATORY SALES-PRICE DISCLOSURE

Our position: Oppose efforts to mandate disclosure of home sales prices.

Legislative activity: The Texas Association of REALTORS® stopped all proposals (H.B. 133, S.B. 444, and H.B. 2257) calling for mandatory sales-price disclosure.

Status: H.B. 133, S.B. 444, and H.B. 2257 were defeated in House committee.

About us
This initiative for a better property tax solution is led by the San Antonio Board of REALTORS® and the Texas Association of REALTORS®.

Representing the largest professional membership associations in San Antonio and Texas, respectively, we advocate on behalf of REALTORS® and homeowners. It is our mission to protect private property rights, support the free enterprise system, reduce the state’s over-reliance on property taxes, and promote public policies that benefit homeowners.

What we stand for
As REALTORS® and homeowners, we advocate a two-step approach:
•  Lower property tax rates.
•  Reform the appraisal system.

To learn more about the San Antonio Board of REALTORS®, visit our home page.  To learn more about home ownership opportunities in our state, visitTexasRealEstate.com.

Appraisal Reform

Our position on Appraisal Reform: Support efforts to make the appraisal process more transparent and to make appraisal entities more accountable and efficient.

Legislative activity: All of association-backed appraisal reforms passed. H.B. 8 would ensure increased oversight of appraisal districts. H.B. 3613 allows for a residential homestead to be appraised as a residence, not on the basis of the “highest and best use” appraisal standard. S.B. 771, among other things, would mandate updated appraisal methods, give consumers alternatives to costly lawsuits when appealing a ruling by an appraisal review board, and add CPAs to the list of people qualified to act as arbitrators. H.J.R. 36 proposes a constitutional amendment to make appraisal practices more uniform.

Status: H.B. 8, H.B. 3613, and S.B. 771 were sent to the governor. H.J.R. 36 will be placed on Nov. 3 ballot.

These laws became effective January 1, 2010

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