The Senate Finance Committee met on Tuesday to study monitor the implementation of several pieces of legislation passed in 2019 regarding the investment of state funds and natural disaster funding. Click here to
view the full agenda
. The Committee also spent some time talking about property taxes and property appraisals in general (outside the scope of natural disaster funding).
Investment of State Funds
The Committee was specifically tasked with monitoring the implementation of
HB 4388
(relating to the management of the permanent school fund) and
HB 4611
(relating to certain distributions to the available school fund).
On behalf of the Teacher Retirement System (TRS), Brian Guthrie fielded quite a few questions from the Committee regarding real estate choices for the office space for TRS investors.
Commissioner of Education Mike Morath testified about about the performance of the Permanent School Fund (PSF) and the structure of the PSF's investment oversight. State Board of Education (SBOE) Chairman Keven Ellis testified about the SBOE's role. The PSF is the only fund supervised by an elected board. SBOE Permanent School Fund Committee Chairman Tom Maynard spoke about distributions from the fund and the relationship with the General Land Office (GLO) and specifically the School Land Board (SLB).
Committee members gave much praise to Commissioner Morath and especially the elected members of the SBOE. They also expressed how encouraged they were by the testimony about the working relationship the chief investment officers for the PSF and the GLO. On April 14, the SBOE and SLB will have a joint meeting. All expressed a desire for healthy working relationships in the future.
Natural Disaster Funding
The Committee was specifically asked to monitor the implementation of
HB 492
(relating to a temporary exemption from ad valorem taxation of a portion of the appraised value of certain property damaged by a disaster) and
HB 3384
(relating to the comptroller conducting a limited-scope review of an appraisal district located in a disaster area).
The Committee heard testimony about the specific funding those affected by natural disasters have received, and they discussed unintended consequences and laws that may need to be changed to improve that process. Mike Soto, the Chief Appraiser for Aransas County spoke specifically about his recent experience in the aftermath of Hurricane Harvey.
Korry Castillo testified on behalf of the Comptroller's office. She spoke to the specific monitoring charges related to natural disasters, but at the request of the Committee Chair, she also spoke more broadly about the appraisal process overall under legislation passed in 2019.
Property Taxes and Appraisal Process
Senator Jane Nelson (R-Flower Mound) expressed the frustration she is still hearing from constituents about property taxes (even after rates were compressed) and the entire appraisal process as well as the desire for accountability for those with responsibility and oversight for the appraisal process. Senator Paul Bettencourt (R-Houston) said he looks forward to some further "fine-tuning" of the appraisal process in 2021.
Senator Robert Nichols (R-Jacksonville) made the point that the goal of the appraisal process is to appraise at fair market value and that through the Property Value Study conducted by the Comptroller's office, that school districts may be subject to penalty if their local appraiser was determined to have missed the mark. If a local appraiser values property at an amount that is too far below what the state determines to be fair market value, then it is the school district that is punished. Cities and counties are not subject to penalty from this same study because they do not rely on state funding formulas.