HBA-MPM H.B. 3525 77(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3525 By: Hochberg Public Education 4/9/2001 Introduced BACKGROUND AND PURPOSE In some instances, a school district's state aid is based on higher property values estimated by the comptroller of public accounts (comptroller) even though the district's local tax revenue is based on property values set by local appraisal districts. In such a case, the school district receives less aid. If the appraisal district appraised the property too low, the school district's local tax revenue will be less than it should be. If the school district then gets higher state values, the comptroller may decide that the local appraisal for the district differs too much from the state property value study and the school district's aid will be diminished to reflect the comptroller's valuation. School districts then receive both less local tax revenue and less state aid, and may have to increase tax rates or cut programs. Frequently, one or more districts within an appraisal district are notified that they will receive state values, while others within the same appraisal district receive local values. To ensure that state aid is distributed equitably, school districts should be appraised in the same manner. House Bill 3525 provides that all school districts within an appraisal district or portions of school districts if the school districts are in more than one appraisal district receive local values or all receive state values. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 3525 amends the Government Code to modify how school district property values are determined. The bill provides that either the market value of property for all school districts for which an appraisal district appraises property less the total of the amounts and values listed for certain residence homestead exemptions, reinvestment zone exemptions, and other exemptions for each district as determined by that appraisal district shall be presumed to be valid, or the taxable value for all such school districts shall be the value determined by the comptroller of public accounts. The bill provides that if more than one appraisal district appraises property for a school district, the portion of the market value of school district property as determined by each appraisal district that appraises property for the school district less the total of the amounts and values for exemptions shall be presumed to be valid if the market value of the property of other school districts for which the appraisal district appraises property less the total of the amounts and values for exemptions is presumed to be valid. EFFECTIVE DATE On passage, or if the Act does not receive the necessary vote, the Act takes effect September 1, 2001.