Glenn Hegar Texas Comptroller of Public Accounts

M A PMETHODS AND ASSISTANCE PROGRAM 2017 REPORT

Glenn Hegar Texas Comptroller of Public Accounts

2016-17 Final Methods and Assistance Program Review

This review is conducted in accordance with Tax Code Section 5.102(a) and related Comptroller Rule 9.301. The Comptroller is required by statute to review appraisal district governance, taxpayer assistance, operating procedures and appraisal standards.

Mandatory Requirements PASS/FAIL Does the appraisal district have up-to-date appraisal maps? Is the implementation of the appraisal district’s most recent reappraisal plan current? Are the appraisal district’s appraisal records up-to-date and is the appraisal district following established procedures and practices in the valuation of property? Are values reproducible using the appraisal district’s written procedures and appraisal records?

Appraisal District Activities RATING Governance Taxpayer Assistance Operating Procedures Appraisal Standards, Procedures and Methodology

Appraisal District Ratings: Meets All – The total point score is 100 Meets – The total point score ranges from 90 to less than 100 Needs Some Improvement – The total point score ranges from 85 to less than 90 Needs Significant Improvement – The total point score ranges from 75 to less than 85 Unsatisfactory – The total point score is less than 75

Review Areas Total Questions in Review Area (excluding N/A

Questions)

Total “Yes” Points

Total Score (Total “Yes”

Questions/Total Questions) x 100

Governance Taxpayer Assistance Operating Procedures Appraisal Standards, Procedures and Methodology

Glenn Hegar Texas Comptroller of Public Accounts

2016-17 Final Methods and Assistance Program Tier 1 Review

This review is conducted in accordance with Tax Code Section 5.102(a) and related Comptroller Rule 9.301. The Comptroller is required to review appraisal districts’ governance, taxpayer assistance, operating procedures and appraisal standards, procedures and methodology. Each appraisal district is reviewed every other year. This report details the results of the review for the appraisal district named above.

GOVERNANCE

7. Has the chief appraiser calculated thenumber of votes to which each taxingunit is entitled and delivered writtennotice of the voting entitlement by Oct.1 of the most recent odd-numberedyear as described in Tax Code Section6.03(e)?

4. Has the current chief appraisercompleted open meetings training asdescribed in Government Code Section551.005 and open records training asdescribed in Government Code Section552.012?

5. Has the appraisal district’s investmentofficer attended investment training asrequired by Government Code Section2256.008?

6. Does the appraisal district have amanagement training or professionaldevelopment program as discussed inIAAO’s Standard on ProfessionalDevelopment?

1. By Jan. 1 of the current year, did thechief appraiser notify the Comptrollerin writing that he or she is eligible to beappointed or serve as the chiefappraiser, as described in Tax CodeSection 6.05(c)?

2. Does the appraisal district board ofdirectors regularly evaluate the chiefappraiser?

3. Has the chief appraiser completed achief appraiser ethics course within theprevious two years as required byTDLR Rule 94.25?

Governance Review Question Answer Recommendation

Governance Review Question Answer Recommendation 8. Did the board of directors meet at least

quarterly with a quorum in theprevious year as required by Tax CodeSection 6.04(b)?

9. Do the appraisal district’s board ofdirectors’ meeting agendas match whatwas discussed in the meetings?

10. Was the appraisal district’s most recentpreliminary budget produced anddelivered to the taxing units accordingto the requirements of Tax CodeSection 6.06(a)?

11. Did the appraisal district prepare andpost the most recent budget noticeaccording to the requirements of TaxCode Section 6.062?

12. Did the appraisal district board ofdirectors provide notice of and host apublic hearing for the most recentbudget according to the requirementsof Tax Code Section 6.06(b)?

13. Has the chief appraiser appointed aqualified agricultural appraisaladvisory board and has that board metat least once within the previous year,as required by Tax Code Section 6.12?

14. Does the appraisal district’s taxpayerliaison officer perform the dutiesdescribed in Tax Code Section 6.052?

TAXPAYER ASSISTANCE

Taxpayer Assistance Review Question

Answer Recommendation

15. Did the appraisal district follow itspublic relations plan timeline in theprevious year?

16. Is the information on the appraisaldistrict’s website up-to-date?

17. Does the appraisal district report, andmake available to the public, themetered amount of electricity, water ornatural gas consumed for which it isresponsible to pay and the aggregatecosts for those utility services asrequired by Government Code Section2265?

18. Has the appraisal district developed anannual report in each of the previoustwo calendar years, and is it madeavailable to the public as described inIAAO’s Standard on Public Relations?

Taxpayer Assistance Review Question

Answer Recommendation

19. Are the written documents provided bythe appraisal district to propertyowners, which explain how residentialproperty is appraised, specific to thecounty in which the appraisal district islocated and are those documents madeavailable to the public?

20. Does the appraisal district gather anduse information collected from publicfeedback mechanisms as described inIAAO’s Standard on Public Relations?

21. If the appraisal district mails surveycards to property owners who have aresidence homestead exemption, wasthe process described in Tax CodeSection 11.47 followed in the previousyear?

22. Are the written complaint proceduresfor the appraisal district madeavailable to the public?

23. Are the complaint procedures for theappraisal review board made availableto the public upon request?

24. Does the appraisal district have aprocedure for receiving and respondingto open records requests that complieswith Government Code Chapter 552,and is the procedure being followed?

25. Does the appraisal district notifyproperty owners when denying,modifying or cancelling exemptions asdescribed in Tax Code Sections11.43(h) and 11.45(d)?

26. For residence homestead exemptionscancelled after Sept.1, 2015, did theappraisal district follow the proceduredescribed in Tax Code Section 11.43(q)for individuals who are 65 years of ageor older?

27. Did the appraisal district publicize thenotices required by Tax Code Sections11.44(b), 22.21, 23.43(f), 23.54(g) and23.75(g) in a manner designed toreasonably notify all property owners?

28. Does the appraisal district include, witheach notice sent under Tax CodeSection 25.19 to an eligible propertyowner, instructions for accessing andusing the electronic protest system asdescribed in Tax Code Section 41.415?

Taxpayer Assistance Review Question

Answer Recommendation

29. Has the appraisal district implemented

n

a system that allows the owner of aproperty that has been granted ahomestead exemption to electronicallyreceive and review comparable salesdata and other evidence that the chiefappraiser intends to use at the protesthearing before the appraisal reviewboard, as required by Tax Code Sectio41.415(b)(2)?

30. Did the appraisal district include anapplication form for a residencehomestead exemption with the mostrecent notice of appraised value if theproperty did not qualify for a residencehomestead exemption in that year, asdescribed in Tax Code Section 25.19(b-2)?

OPERATING PROCEDURES

Operating Procedures Review Question

Answer Recommendation

31. Did the appraisal district accuratelyand timely complete the Comptroller’smost recent appraisal districtoperations survey?

32. If anyone in the appraisal districtcalculates and prepares tax bills,agricultural appraisal rollbacks,corrected or supplemental tax bills, taxceilings or ported percentage tax bills,is someone on staff a registered taxassessor-collector?

33. Does the appraisal district receive andprocess arbitration requests asdescribed in Tax Code Section 41A.05and Comptroller Rule 9.804(b)(5)?

34. Do the exemption applications forhomestead exempt properties matchthe appraisal records for thoseproperties?

35. Does the appraisal district follow aprocedure or policy for performing aperiodic review of exempt properties?

36. Did the appraisal district compile apartial exemption list as described inTax Code Section 11.46 andComptroller Rule 9.3010 and was themost recent list made available to thepublic?

Operating Procedures Review Question

Answer Recommendation

37. Does the appraisal district maintaindocumentation for deferrals asrequired by Tax Code Section 33.06(b)?

38. Not later than April 30 of the mostrecent year, did the appraisal districtprepare and certify to the assessor foreach county, municipality and schooldistrict participating in the appraisaldistrict an estimate of the taxable valueof property in that taxing unit asdescribed by Tax Code Section26.01(e)?

39. Did the chief appraiser prepare andcertify the two most recent appraisalrolls to the assessor for each taxing unitparticipating in the district asdescribed in Tax Code Section26.01(a)?

40. Are corrections of the appraisal rollpresented to the appraisal district’sboard of directors and appraisal reviewboard as described in Tax Code Section25.25(b)?

41. When the appraisal roll is changedaccording to Tax Code Section25.25(d), does the appraisal districtnotify the tax assessor-collector that a10 percent penalty should be charged tothe property owner and, if theappraisal district also performscollection functions, is a 10 percentpenalty assessed according to therequirements of Tax Code Section25.25(d)?

42. Has the appraisal district’s recordsretention schedule that is on file withthe State Library and ArchivesCommission, as described in LocalGovernment Code Section 203.041,been implemented?

43. Does the appraisal district havecomprehensive and workable writtenprocedures concerning disasterrecovery and mitigation?

44. Does the appraisal district’s disasterrecovery plan address how recoverywill occur if the chief appraiser isincapacitated during the disaster?

45. Does the chief appraiser submit thecompleted appraisal records to theappraisal review board for review anddetermination of protests as describedin Tax Code Section 25.22?

Operating Procedures Review Question

Answer Recommendation

46. Did all members serving on theappraisal review board in the previoustwo years attend the training andcomplete the statement required byTax Code Sections 5.041(b) , (b-1), (e)and (e-1)?

47. Do the appraisal review board’s orders of determination comply with the requirements of Tax Code Sections 41.47(c)(1) and (2) and the Comptroller’s model hearing procedures as they relate to Tax Code Section 5.103(b)(2)?

48. Did the appraisal review board hearand determine all or substantially alltimely filed protests; determine alltimely filed challenges; submit a list ofapproved changes in the records to thechief appraiser; and approve theappraisal records by the deadlineestablished in Tax Code Section 41.12in the previous year?

49. Was the most recent writtenreappraisal plan adopted by theappraisal district’s board of directorsby the Sept. 15 deadline listed in TaxCode Section 6.05(i)?

50. Did the appraisal district send copies ofthe most recent reappraisal plan to thepresiding officers of the governing bodyof each taxing unit participating in thedistrict and to the Comptroller by thedate described in Tax Code Section6.05(i)?

51. Does the appraisal district’s writtenreappraisal plan define the marketareas in the county as required by TaxCode Section 25.18?

52. Does the appraisal district’s writtenreappraisal plan identify the propertiesto be appraised in each year covered bythe plan and have those beenreappraised as identified in the plan asrequired by Tax Code Section 25.18?

53. Does the appraisal district’s writtenreappraisal plan reference or include awork schedule, calendar, timeline orother means to determine workcompletion dates?

54. Did the appraisal district submit thetwo most recent electronic appraisalroll and electronic property transactionsubmissions to the Comptroller timely?

Operating Procedures Review Question

Answer Recommendation

55. Are properties identified as sales in themost recent electronic propertytransaction submission correctly codedas sales?

APPRAISAL STANDARDS, PROCEDURES AND METHODOLOGY

Appraisal Standards, Procedures and Methodology Review

Question

Answer Recommendation

56. Have the inspection dates in theappraisal records been updated withinthe previous six years as discussed inIAAO’s Standard on Mass Appraisal ofReal Property?

57. Does the appraisal district addpreviously omitted real property to theappraisal roll for the previous fiveyears as described in Tax Code Section25.21?

58. Did the appraisal district complete andproduce a written mass appraisalreport in the previous two years asrequired by USPAP Standard 6?

59. Do the appraisal district’s contractscontain the items described in IAAO’sStandard on Contracting forAssessment Services?

60. Does the appraisal district follow aprocedure or process for reviewing,verifying or evaluating the work oftheir appraisal services and mappingcontractors?

61. Does the appraisal district haveappraisal related criteria and a processfor determining whether the factorsaffecting market value of real propertyare unusually complex in certain areasof the county, as discussed in Tax CodeSection 41.415(g)?

62. Does the appraisal district run ratiostudies by market area andneighborhood, property class, orstratum?

63. Does the appraisal district use ratiostudies effectively?

64. Are the appraisal district’s costschedules and appraisal models used insuch a way that adjustments are madefor neighborhood factors and propertyspecific factors?

Appraisal Standards, Procedures and Methodology Review

Question

Answer Recommendation

65. Has the appraisal district adjusted itsresidential property cost schedulesbased on sales data, ratio studies, localconditions or market factors within theprevious two years?

66. Has the appraisal district adjusted itscommercial property cost schedulesbased on sales data, ratio studies, localconditions or market factors within theprevious two years?

67. Did the appraisal district use discoverytechniques for personal propertyaccounts in the current or previousyear, as discussed in IAAO’s Standardon Valuation of Personal Property?

68. Does the appraisal district follow itswritten procedures for inspecting newpersonal property accounts in the 12months after they are created, asdiscussed in IAAO’s Standard onValuation of Personal Property?

69. Does the appraisal district have an up-to-date personal property manual orprocedures as discussed in IAAO’sStandard on Valuation of PersonalProperty?

70. Does the appraisal district apply therendition penalty for taxpayers who donot render timely according to TaxCode Section 22.28 and are penaltieswaived when necessary, as described inTax Code Section 22.30?

71. Domuthepr

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es the appraisal district perform ltiple quality control steps to ensure accuracy and uniformity of

operty valuations? es the appraisal district gather ome and expense data and calculate ues using the income approach for lti-family properties? es the appraisal district gather ome and expense data and calculate ues using the income approach for ice properties? es the appraisal district gather ome and expense data and calculate ues using the income approach for

retail properties?Does the appraisal district gather ncome and expense data and calculate

values using the income approach for warehouse properties?

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Appraisal Standards, Procedures and Methodology Review

Question

Answer

76. Does the appraisal district collect landsales and maintain a verified land salesfile?

77. Does the appraisal district collectresidential property sales and maintaina verified residential sales file?

78. Does the appraisal district collectcommercial property sales andmaintain a verified commercial salesfile?

79. Does the appraisal district collectmulti-family property sales andmaintain a verified multi-family salesfile?

80. Does the appraisal district adjustland sales?

81. Does the appraisal district adjustresidential property sales?

82. Does the appraisal district adjustcommercial property sales?

83. Does the appraisal district adjust multi-family sales?

84. Does the appraisal district performinspections of properties as a result ofreceiving wildlife management useappraisal applications?

85. Does the appraisal district performinspections of properties as a result ofreceiving agricultural use appraisalapplications?

86. For properties that have been grantedagricultural use appraisal, arecompleted applications and requireddocumentation on file?

87. Have agricultural appraisal intensity-of-use standards been evaluated orupdated within the previous five years?

88. Did the appraisal district useinformation obtained from the sourceslisted in Tax Code Section 23.51(3) toestablish subcategories for agriculturaluse appraisal, as described in thatsection?

89. Are net-to-land calculations foragricultural use land designated asnative pasture reproducible from theappraisal district’s appraisal records?

90. Are net-to-land calculations foragricultural use land designated as dryand irrigated cropland reproduciblefrom the appraisal district’s records?

Recommendation

Appraisal Standards, Procedures and Methodology Review

Question

Answer Recommendation

91. Does the appraisal district notify thetax assessor-collector that anagricultural use appraisal change of ushas occurred according to theComptroller’s Manual for theAppraisal of Agricultural Land and, ifthe appraisal district also performscollection functions, are rollback taxescalculated according to therequirements of Tax Code Section23.55?

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