FINANCE AND ADMINISTRATION

Property Tax

H.B. 8 – Property Taxes: does the following: (1) changes the frequency of the comptroller’s property value study of an appraisal district from annually to biennially if the most recent study found that the district’s appraisal values were valid; and (2) provides for biennial review of appraisal district methodologies.

H.B. 770 – Property Taxes: this bill will: (1) allow the continuation of a residential homestead property tax exemption on property that is rendered uninhabitable by wind or water damage, provided reconstruction begins within one year; (2) exempt from property taxes the buildings, tangible property, and certain land owned by chambers of commerce with at least 50 dues-paying members for the preceding three years; (3) provide that a senior property tax freeze does not expire for property rendered uninhabitable by wind or water damage; and (4) provide that certain improvements (excluding additional square footage or improved exterior) made to real property because of wind damage do not count against the current-law, ten-percent residential property tax appraisal cap.

H.B. 1038 – Property Taxes: provides that when appraising a residential homestead, the chief appraiser may not ignore the value of neighboring homesteads that: (1) were sold at foreclosure in the previous three years; or (2) have a market value that has declined because of a declining economy.

H.B. 2291 – Property Taxes: does the following: (1) adds language to the motion that must be made whenever a city adopts a property tax rate that exceeds the effective rate, such that the following motion must now be made: “I move that the property tax rate be increased by the adoption of a tax rate of (specify tax rate), which is effectively a (insert percentage by which the proposed tax rate exceeds the effective tax rate) percent increase in the tax rate”; and (2) adds language to the required statement in the tax rate ordinance and on the home page of any Internet Web site operated by the city whenever a city adopts a tax rate that exceeds the effective rate, so that the statement must read as follows: “THE TAX RATE WILL EFFECTIVELY BE RAISED (INSERT PERCENTAGE BY WHICH THE TAX RATE EXCEEDS THE EFFECTIVE MAINTENANCE AND OPERATIONS RATE) PERCENT AND WILL RAISE TAXES FOR MAINTENANCE AND OPERATIONS ON A $100,000 HOME BY APPROXIMATELY $(Insert amount).” (Note: these changes will be in effect for the 2009 tax year. As always, detailed tax rate adoption procedures will be posted on the Legal page of the TML Web site by the end of June 2009.)

H.B. 2555 – Property Taxes: this bill will: (1) extend from three years to five years the maximum duration of certain charitable housing development corporation (CHDO) property tax exemptions; (2) remove the requirement from the fraternal organization property tax exemption that the city council must approve, or call an election to approve, the exemption; and (3) extend the fraternal organization property tax exemption to include property owned by certain tax-exempt corporations that turn over all income to fraternal organizations.

H.B. 3206 – Property Taxes: alters the pollution control equipment property tax exemption (commonly referred to as the “Prop 2” exemption) as follows: (1) provides that the standards and methods used by the Texas Commission on Environmental Quality (TCEQ) to make a pollution exemption determination apply uniformly to all applications for an exemption; and (2) requires the TCEQ to establish a permanent advisory committee consisting of representatives of industry, appraisal districts, taxing units, and environmental groups, to advise the commission regarding implementation of the exemption.

H.B. 3611 – Property Taxes: permits the boards of directors of two or more adjoining appraisal districts to consolidate appraisal review board operations by interlocal contract. (This bill will take effect only if voters approve a proposed constitutional amendment at the November 3, 2009, election. Please see H.J.R. 36, below.)

H.B. 3612 – Property Taxes: creates a pilot program under which property tax disputes may be appealed to the State Office of Administrative Hearings (SOAH) in lieu of district court in the following counties: Bexar, Cameron, El Paso, Harris, Tarrant, and Travis. Appeals could be taken to SOAH for any property category other than industrial or mineral.

H.B. 3613 – Property Taxes: does the following: (1) exempts from property taxes the total value of the homesteads of totally disabled military veterans; (2) grants a partial property tax exemption for a partially-disabled veteran based on the percentage of the veteran’s disability; and (3) provides that the market value of any residential homestead is determined solely on the basis of the property’s value as a residence homestead, regardless of the otherwise “highest and best use” of the property. (Part of this bill will take effect only if voters approve a proposed constitutional amendment at the November 3, 2009, election. Please see H.J.R. 36, below.)

H.J.R. 36 – Property Taxes: proposes an amendment to the Texas Constitution which, if approved by voters on November 3, 2009, will authorize the legislature to do the following: (1) permit the boards of directors of two or more adjoining appraisal districts to consolidate appraisal review board operations; and (2) provide that the market value of any residential homestead is determined solely on the basis of the property’s value as a residence homestead, regardless of the otherwise “highest and best use” of the property. (Please see H.B. 3611 and H.B. 3613, above.)

S.B. 252 – Property Taxes: permits the governing body of a city under 10,000 in population to call an election to authorize the governing body to enter into an agreement with the owner of real property that is in or adjacent to the city and is receiving certain Department of Agriculture grants to freeze the property taxes of all taxing entities on that property for five years.

S.B. 771 – Property Taxes: among other things, this bill will: (1) require that all available evidence that is specific to the value of a property shall be taken into account in determining the property’s market value; (2) provide that when the appraised value of a property is reduced following a successful challenge, the appraised value may increase in the following year only if the increase is reasonably supported by substantial evidence when all the reliable and probative evidence in the record is considered as a whole; (3) provide that for number 2 above, the chief appraiser may satisfy the requirement by correcting inequality in the appraisal of other properties that were considered when appraising the subject property; (4) provide that the burden of proof in number 2 above is on the chief appraiser; (5) provide that a sale may not be considered a “comparable” sale for appraisal purposes unless the sale occurred within the 24 preceding months; (6) provide standards for identifying comparable properties; (7) permit property to maintain an agricultural appraisal during a drought; (8) permit arbitration of residential appraisal for matters other than value; and (9) provide for expedited arbitration of certain properties.

S.B. 798 – Property Taxes: does the following: (1) provides that requests for refunds of property tax overpayments shall be made to the tax collector rather than to the auditor as previous law required; and (2) in a city located in a county over 2 million in population, streamlines the process for taxpayers to apply for refunds of property taxes if the amount to be refunded does not exceed $5,000.

S.B. 2442 – Property Taxes: this bill will: (1) alter the charitable organization property tax exemption by providing that exempt charities must provide support to certain beneficiaries without regard to ability to pay, and by allowing the exemption for charities that include training and employment in the production of commodities and charities that assist the blind; (2) exempt from property taxes certain radio stations operated by charitable organizations; and (3) exempt from property taxes certain property owned by a charitable organization and leased to an institute of higher education to the extent that it would otherwise be exempt if owned directly by the institute of higher education.

Sales Tax

H.B. 1801 – Sales Taxes: does the following: (1) adds school supplies (as they are defined by the federal Streamlined Sales and Use Tax Agreement) to the list of exempt items during the August sales tax holiday; and (2) redefines “backpacks” that are currently exempt during the August sales tax holiday to include a backpack with wheels (provided it can also be worn on the back), but excluding luggage, briefcases, athletic bags, duffle bags, gym bags, computer bags, purses, or framed backpacks.

S.B. 636 - Sales Taxes: does the following in relation to sourcing of city sales taxes: (1) provides that when goods are shipped within Texas by a retailer with more than one legal "place of business" for sales tax purposes, sales taxes shall be generally sourced at the location where the retailer first received the order for the goods, provided the order was placed in person; and (2) provides an exception to number 1 above for cities with certain economic development agreements in place prior to January 1, 2009, provided such cities provide notice to the comptroller regarding those agreements.

Purchasing

H.B 987 – Purchasing: provides that reasonable and necessary attorney's fees that are equitable and just are added to the total amount of money that may be awarded to a prevailing party in an adjudication brought against a local governmental entity for breach of a contract.

H.B. 2082 – Purchasing: provides that the current local preference law relating to the purchase of any real property, personal property that is not affixed to real property, or services, is limited to a contract for an expenditure of less than $100,000.

H.B. 2515 – Purchasing: this bill requires that a governmental entity that makes a public works contract with a prime contractor shall require the contractor, before beginning the work, to execute to the governmental entity: (1) a performance bond if the contract is in excess of $100,000; and (2) a payment bond if the contract is in excess of $50,000 and the governmental entity is a city or a joint airport board. The bill also provides that a person who furnishes material or labor to a contractor under a prime contract with a city that does not exceed $50,000 and that is for public improvements in this state and who gives notice required by law has a lien on the money, bonds, or warrants due the contractor for the improvements.

H.B. 2820 – Professional Services: adds landscape architectural and geoscientific services to the Professional Services Procurement Act.

H.B. 3668 – Purchasing: provides that if a contract is made without compliance with competitive procurement laws, it is void, and the performance of the contract, including the payment of any money under the contract, may be enjoined by: (1) any property tax-paying resident of the city; or (2) a person who submitted a bid for a contract to which the competitive sealed bidding requirement applies, regardless of residency, if the contract is for the construction of public works.

H.B. 4127 – Playground Equipment: provides that on or after September 1, 2009, public funds may not be used to: (1) purchase playground equipment that does not comply with each applicable provision of ASTM Standard F1487-07ae1, "Consumer Safety Performance Specification for Playground Equipment for Public Use," or that has a horizontal bare metal platform or a bare metal step or slide, unless the bare metal is shielded from direct sun; (2) purchase surfacing for the area under and around playground equipment if the surfacing will not comply with each applicable provision of ASTM Standard F2223-04e1, "Standard Guide for ASTM Standards on Playground Surfacing"; or (3) pay for installation of playground equipment or surfacing if the installation will not comply with each applicable provision of the specifications described by numbers (1) or (2), above, as applicable. The bill also provides that public funds may be used for maintenance of playground equipment or surfacing for the area under and around playground equipment that was purchased before September 1, 2009, even if the equipment or surfacing does not comply with the applicable ASTM International specifications.

S.B. 229 – Design-Build: provides that a city over 100,000 in population may use the design-build procurement method for a certain number of civil works projects in each fiscal year.

Elections

H.B. 401 – Elections: authorizes any city that holds its general election on a date other than the November uniform election date to change the date of its general election to the November uniform election date if the change is made by December 31, 2010.

H.B. 1256 – Complaint Notice: requires an election judge to post notice at one or more locations at a polling place regarding whom to contact to complain about the conduct of the election.

H.B. 1720 – Political Advertising: provides that: (1) an officer or employee of a political subdivision may not knowingly spend or authorize the spending of public funds for political advertising; (2) that prohibition does not apply to a communication that factually describes the purposes of a ballot measure if the communication does not advocate passage or defeat of the measure; (3) an officer or employee of a political subdivision may not spend or authorize the spending of public funds for a communication describing a measure if the communication contains information that the officer or employee knows is false and is sufficiently substantial and important as to be reasonably likely to influence a voter to vote for or against the measure. The bill also provides that it is an affirmative defense to criminal prosecution for an offense described above that an officer or employee of a political subdivision reasonably relied on a court order or an interpretation in a written opinion issued by a court of record, the attorney general, or the Texas Ethics Commission. Finally, the bill provides that on written request of the governing body of a political subdivision that has ordered an election on a measure, the Texas Ethics Commission shall prepare an advance written advisory opinion as to whether a particular communication relating to the measure does or does not comply with the law.

H.B. 2524 – Electronic Voting Machines: requires the general custodian of election records, upon the receipt of an electronic voting system from a vendor, to: (1) verify that the system is certified by the secretary of state; (2) perform a hardware diagnostic test on the system; (3) perform a public test of logic and accuracy on the system, as well as any additional test required by the secretary of state; (4) create a pre-election security procedure; (5) secure access control keys or passwords to voting system equipment; and (6) create a contingency plan for addressing the failure of an electronic voting machine. In addition, the bill prohibits a direct recording electronic voting machine deployed for early voting from being deployed on election day.

H.B. 3062 – Elections: provides that the governing body of a political subdivision, other than a county, that orders an election shall deliver notice of the election to the county clerk and voter registrar of each county in which the political subdivision is located not later than the 60th day before election day.

S.B. 1134 – Election Clerks: allows certain underage students to serve as election clerks.

S.B. 1970 – Elections: this bill: (1) provides that a special election of a city is considered to be a separate election from a general election for city officers or another special election of the city held at the same time; (2) requires a city to post a copy of the order declaring the election of each unopposed candidate at each polling place that would have been used in an election had it not been cancelled; (3) requires a city to print on each ballot for a separate election the names and offices of those candidates who were unopposed and declared elected for an election that was to be held at the same time; (4) allows a city that orders an election on a measure to declare the measure moot and remove it from the ballot if the city determines that the action to be authorized by the voters may not be taken regardless of the outcome of the election; (5) requires the notice of a general or special election to state the location of each polling place, including each early voting polling place; (6) requires an election order to state the location of each early voting polling place; (7) requires an early voting clerk to notify the voter registrar of a federal postcard application that states a voting residence address located outside the registrar’s county; (8) provides that a person who changes residence to another county may cast a vote during the early voting period if the person is registered to vote in the county of former residence at the time the person offers to vote in the new county; (9) allows a city to have a voting system technician present at a polling place, a meeting of the early voting ballot board, or a central counting station to maintain or operate voting system equipment; (10) requires a city to post notice of the dates of the filing period for an application for a place on the ballot in a public place within the main city office building not later than the 30th day before the first day on which the application may be submitted; (11) requires a recount deposit to be $60 for each precinct in which paper ballots were used and $100 for each precinct where an electronic voting system was used; and (12) allows for joint elections only if elections are ordered by the authorities of two or more political subdivisions to be held on the same day in all or part of the same county.

S.B. 2085 – Political Advertising: provides that: (1) an officer or employee of a political subdivision may not knowingly spend or authorize the spending of public funds for political advertising; (2) it is an affirmative defense to criminal prosecution for an offense described above that an officer or employee of a political subdivision reasonably relied on a court order or an interpretation in a written opinion issued by a court of record, the attorney general, or the Texas Ethics Commission; and (3) on written request of the governing body of a political subdivision that has ordered an election on a measure, the Texas Ethics Commission shall prepare an advance written advisory opinion as to whether a particular communication relating to the measure does or does not comply with the law.

Open Government

H.B. 2004 – Security Breach Notification: requires a city that owns, licenses, or maintains computerized data that includes sensitive personal information to comply with Section 521.053 of the Business & Commerce Code, which requires that an entity discovering or receiving notification of a breach of sensitive personal information by an unauthorized person must disclose the breach to the individuals as quickly as possible. The bill also requires a city to notify each consumer-reporting agency of a breach that affects at one time more than 10,000 persons, and adds mental and physical health information to the list of sensitive personal information under the security breach statute and to the list of information not subject to the Public Information Act.

S.B. 375 – Accident Report Information: this bill provides for the confidentiality of certain types of accident reports and allows TxDoT to release aggregated or statistical information relating to motor vehicle accidents, subject to certain exceptions.

S.B. 1068 – Public Information: this bill: (1) allows a city to redact certain personal information relating to a current or former city employee, official, or peace officer under the Public Information Act without first requesting a decision from the attorney general; (2) allows a city to redact certain personal information relating to a volunteer worker or member of the board of directors of a family violence shelter center or sexual assault program under the Public Information Act without first requesting a decision from the attorney general; (3) provides that a requestor of information may seek a decision from the attorney general’s office regarding information that was redacted by the city without first seeking a decision from the attorney general; (4) requires a city that redacts information without seeking a decision from the attorney general to provide certain information to the requestor on a form prescribed by the attorney general; and (5) creates an exception to disclosure that protects information in the custody of a city if that information relates to an employee or officer of the city and disclosure of the information would subject the employee or officer to a substantial threat of physical harm.

S.B. 1182 – Open Government: this bill: (1) provides that a quorum of the city council may receive from municipal staff, and a member of the governing body may make, a report regarding items of community interest during a council meeting without having given notice of the subject of the report, provided no action is taken or discussed; (2) provides that an “item of community interest” includes expressions of thanks, congratulations, or condolence; information regarding holiday schedules; honorary recognitions of city officials, employees, or other citizens; reminders about upcoming events sponsored by the city or other entity that is scheduled to be attended by a city official or city employee; and announcements involving imminent threats to the public health and safety of the city; (3) requires a governmental body to send to the attorney general a copy of the written comments submitted to a requestor within fifteen business days of receiving a written request for information under the Public Information Act (PIA); (4) clarifies that, under the PIA, a suit by a governmental body challenging the determination of the attorney general must be filed in a Travis County district court; (5) requires a law enforcement agency to provide reports of child abuse or neglect in response to a request from either the child who is the subject of the reported abuse or the child’s parent or guardian, unless the parent or guardian is alleged to have committed the abuse or neglect; (6) requires a law enforcement agency to redact any personally identifiable information regarding a victim or witness under 18 years of age who is not the child requestor or other child of the parent or guardian; and (7) requires a law enforcement agency to redact any information that is otherwise excepted from required disclosure under law.

S.B. 1629 – Public Information Act: provides that an individual who, for substantial financial gain, works for either a newspaper of general circulation that is published on the Internet by a news medium engaged in the business of disseminating news or information to the public, or for a magazine that is published at least once a week or on the Internet by a news medium engaged in the business of disseminating news or information to the general public, is exempt from the required prepayment of personnel costs incurred by a governmental body in responding to certain requests that require large amounts of personnel time.

Other Bills

H.B. 1505 – Alcoholic Beverages: this bill provides that neither the advertising of an entertainment event, nor the advertising of an alcoholic beverage product is prohibited at a city-owned facility that is financed with public securities, the interest on which is exempt from federal income taxation. The bill also provides that a financial arrangement with concessionaires operating at certain city-owned facilities under contract with a city does not constitute evidence of “subterfuge ownership” as prohibited by state law.

H.B. 3756 – Libraries: will: (1) allow a major resource system of libraries to expand its membership to include nonpublic libraries that are operated by units of local government; (2) allow a library operated by a unit of local government to become a member of a regional library system; (3) make records-retention schedules apply to records relating to the conduct of official business from periods before Texas was a state; and (4) abolish the local government records committee, which currently reviews and approves any changes to local government records retention schedules.

S.B. 1 – State Budget/Parks: This is the state budget bill. Of interest to cities is the fact that local parks grant funding will increase slightly from $31 million for the previous biennium to $31.2 million. Total funding for local park grants, however, will decrease from $49.45 million to $36.2 million per biennium. Of that funding, $6.5 million will be earmarked for two specific local park projects (compared to $16.7 million for 18 specific projects last biennium).

S.B. 638 – Depositories: permits city depository banks to pool collateral for deposit amounts in excess of FDIC insurance. Specifically, the bill does the following with respect to pooled collateral: (1) gives cities and banks the option to participate in the program; (2) requires 102-percent collateralization; (3) requires state comptroller oversight of pooled collateral; and (4) requires third-party safekeeping of collateral in most cases.

S.B. 1003 – Office of State-Federal Relations: does the following: (1) requires a city to report to the office on any contract between the city and a federal level lobbyist; (2) mandates that a city submit one report not later than the 30th day after the date the contract is executed and a second report not later than the 30th day after the date the contract is terminated; (3) provides that the report must include the name of the lobbyist or firm, the issue for which the lobbyist was hired, and the amount of compensation paid or to be paid to the lobbyist under the contract; (4) provides that a city or other political subdivision contracting with a federal level lobbyist before September 1, 2009, shall, if the contract has not terminated before that date, submit a report not later than September 30, 2009; and (5) provides that these requirements do not apply to a city whose lobbyist is required by other law to disclose, report, and make available the information required by these sections to the public and a federal or state entity.

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No other person or entity may reproduce, duplicate, or distribute any part of this document without the written authorization of the
Texas Municipal League.

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