According to the Legislative Budget Board (LBB), the fiscal implications of SB 2063 will likely be a reduction in taxable property values due to the bill’s restriction on the use of market value evidence in ad valorem tax protests and appeals based solely on unequal appraisal. This shift is expected to benefit property owners who successfully challenge their appraisals, but it comes at a cost to local governments and the state. Lower taxable values would reduce the property tax revenue collected by school districts and other local taxing units. Under the school finance formulas, this revenue loss would trigger increased funding obligations from the state to maintain constitutionally required levels of education funding, thereby increasing costs to the Foundation School Fund.

The bill could also complicate the ability of appraisal districts to defend appraised values. By prohibiting the consideration of market value evidence to support adjustments in comparing properties, districts may be unable to refute claims that a subject property is over-appraised relative to its peers. This could lead to more successful protests and, consequently, more downward adjustments in appraised values. These reduced values, if widespread, could have a compounding effect on local property tax bases, particularly in areas with a high volume of commercial or industrial protests.

For local governments—including cities, counties, and special districts—the bill may lead to initial declines in tax levies unless they raise their tax rates. Because the “no-new-revenue” and “voter-approval” tax rates would be higher under a reduced appraisal base (as per Section 26.04 of the Tax Code), jurisdictions would have the option to adjust rates to offset revenue losses. If local governments choose not to raise rates, they would experience lower revenue; if they do raise rates, some of the loss may be shifted to taxpayers who did not protest their appraisals, slightly diminishing the net tax benefit to successful protestors.

In summary, while the bill aims to improve fairness for property owners challenging unequal appraisals, its fiscal consequence is a likely shift of financial responsibility from local taxing entities to the state, particularly for public education, and potentially higher tax rates for non-protesting property owners if local jurisdictions seek to maintain revenue levels.

SB 2063 addresses a significant procedural issue in the Texas property tax system by prohibiting the use of market value evidence in protests and appeals that are based solely on unequal appraisal claims. The intent behind this measure is to improve the fairness and consistency of the ad valorem tax system by clarifying how property comparability is evaluated and preventing the interjection of subjective or conflicting market value evidence that may skew outcomes or disadvantage taxpayers. The bill responds to growing concerns about transparency and procedural equity in appraisal disputes, especially in the wake of recent legal interpretations that allowed broader consideration of market value during equity-based appeals.

From a liberty-oriented standpoint, the bill strongly aligns with the principles of Individual Liberty and Private Property Rights. It empowers property owners by removing a layer of complexity that appraisal districts have historically used to challenge equity claims, thereby leveling the playing field. It also advances the principle of Limited Government by restricting the evidentiary scope and forcing appraisal entities to rely on standardized, comparable appraisal methods rather than less predictable market-based estimates. This promotes a more predictable, rules-based system of property taxation.

While there are fiscal implications—particularly a projected reduction in taxable values that could increase the state’s share of public education costs and potentially pressure local tax rates—these consequences reflect a necessary correction to protect taxpayers from unfairly inflated assessments. The long-term benefits of restoring confidence in the protest process and reinforcing constitutional protections against unequal taxation outweigh the projected fiscal costs to the state and local taxing entities.

In sum, SB 2063 is a measured, principled response to recent developments in property tax law and represents a meaningful reform that strengthens due process, enhances clarity in appraisal review proceedings, and reinforces trust in the integrity of the tax system. As such, Texas Policy Research recommends that lawmakers vote YES on SB 2063.

• Individual Liberty: This bill enhances individual liberty by giving property owners a clearer and more predictable path to challenge unfair tax assessments. By removing market value as a weapon that appraisal districts can use in protests based solely on unequal appraisal, it ensures that homeowners and business owners are not burdened by opaque or subjective evidence. It protects their right to due process and to be treated equally under the law in a system that directly affects their finances and control over their property.
• Personal Responsibility: The bill reinforces personal responsibility by empowering property owners to advocate for themselves using evidence based on actual comparable properties, not complicated or manipulated market valuations. It simplifies the rules and allows more people to realistically participate in the protest process without needing to hire expensive legal or appraisal experts. This encourages more engagement and accountability in property tax matters.
• Free Enterprise: While the bill isn’t directly about business regulation, it supports free enterprise by giving commercial property owners the same protections as residential ones. Businesses that feel they’re being unfairly taxed compared to similar properties will have a more reliable way to challenge those assessments. This helps create a more stable and predictable tax environment for business investment and growth.
• Private Property Rights: This is the strongest liberty connection. The bill protects private property rights by ensuring that taxes are assessed fairly and based on consistent standards. It prevents taxing authorities from justifying inflated property values by introducing market value estimates when the dispute is only about equal treatment. By focusing the process on whether a property is treated the same as others, it ensures a more defensible and equitable taxation of private property.
• Limited Government: The bill narrows the government’s ability to defend questionable appraisals using subjective market evidence. It places a clear limitation on what appraisal districts and courts can consider in certain protests, reinforcing the idea that government authority must be limited and clearly defined. This reduces the potential for bureaucratic overreach in property taxation.

• HB 3524 (Same As)