By: Nelson, et al. S.B. No. 669
A BILL TO BE ENTITLED
AN ACT
relating to the system for protesting or appealing certain ad
valorem tax determinations; authorizing a fee.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 5.041(b) and (e-1), Tax Code, are
amended to read as follows:
(b) A member of the appraisal review board established for
an appraisal district must complete the course established under
Subsection (a). The course must provide at least eight hours of
classroom training and education. A member of the appraisal review
board may not participate in a hearing conducted by the board unless
the person has completed the course established under Subsection
(a) and received a certificate of course completion.
(e-1) In addition to the course established under
Subsection (a), the comptroller shall approve curricula and provide
materials for use in a continuing education course for members of an
appraisal review board. The course must provide at least four hours
of classroom training and education. The curricula and materials
must include information regarding:
(1) the cost, income, and market data comparison
methods of appraising property;
(2) the appraisal of business personal property;
(3) the determination of capitalization rates for
property appraisal purposes;
(4) the duties of an appraisal review board;
(5) the requirements regarding the independence of an
appraisal review board from the board of directors and the chief
appraiser and other employees of the appraisal district;
(6) the prohibitions against ex parte communications
applicable to appraisal review board members;
(7) the Uniform Standards of Professional Appraisal
Practice;
(8) the duty of the appraisal district to substantiate
the district's determination of the value of property;
(9) the requirements regarding the equal and uniform
appraisal of property;
(10) the right of a property owner to protest the
appraisal of the property as provided by Chapter 41; and
(11) a detailed explanation of each of the actions
described by Sections 25.25, 41.41(a), 41.411, 41.412, 41.413,
41.42, and 41.43 so that members are fully aware of each of the
grounds on which a property appraisal can be appealed.
SECTION 2. Chapter 5, Tax Code, is amended by adding Section
5.043 to read as follows:
Sec. 5.043. TRAINING OF ARBITRATORS. (a) This section
applies only to persons who have agreed to serve as arbitrators
under Chapter 41A.
(b) The comptroller shall:
(1) approve curricula and provide an arbitration
manual and other materials for use in training and educating
arbitrators;
(2) make all materials for use in training and
educating arbitrators freely available online; and
(3) establish and supervise a training program on
property tax law for the training and education of arbitrators.
(c) The training program must:
(1) emphasize the requirements regarding the equal and
uniform appraisal of property; and
(2) be at least four hours in length.
(d) The training program may be provided online. The
comptroller by rule shall prescribe the manner by which the
comptroller may verify that a person taking the training program
online has taken and completed the program.
(e) The comptroller may contract with service providers to
assist with the duties imposed under Subsection (b), but the
training program may not be provided by an appraisal district, the
chief appraiser or another employee of an appraisal district, a
member of the board of directors of an appraisal district, a member
of an appraisal review board, or a taxing unit. The comptroller may
assess a fee to recover a portion of the costs incurred for the
training program, but the fee may not exceed $50 for each person
trained.
(f) The comptroller shall prepare an arbitration manual for
use in the training program. The manual shall be updated regularly
and may be revised on request, in writing, to the comptroller. The
revised language must be approved by the unanimous agreement of a
committee selected by the comptroller and representing, equally,
taxpayers and chief appraisers. The person requesting the revision
must pay the costs of mediation if the comptroller determines that
mediation is required.
SECTION 3. Chapter 5, Tax Code, is amended by adding Section
5.104 to read as follows:
Sec. 5.104. APPRAISAL REVIEW BOARD SURVEY; REPORT.
(a) The comptroller shall prepare:
(1) an appraisal review board survey form that allows
a person described by Subsection (b) to submit comments and
suggestions to the comptroller regarding an appraisal review board;
and
(2) instructions for completing and submitting the
form.
(b) A property owner who files a protest under Chapter 41 or
a motion under Section 25.25 to correct the appraisal roll, the
designated agent of the property owner, or a designated
representative of the appraisal district in which the protest or
motion is filed may complete and submit a survey form under this
section.
(c) The survey form must allow a person to submit comments
and suggestions regarding:
(1) the matters listed in Section 5.103(b); and
(2) any other matter related to the fairness and
efficiency of the appraisal review board.
(d) An appraisal district must provide the survey form and
the instructions for completing and submitting the form to each
property owner or designated agent of the owner:
(1) at or before each hearing conducted under Section
25.25 or Chapter 41 by the appraisal review board established for
the appraisal district or by a panel of the board; and
(2) with each order under Section 25.25 or 41.47
determining a motion or protest, as applicable, delivered by the
board or by a panel of the board.
(e) A person who elects to submit the survey form must
submit the form to the comptroller as provided by this section. An
appraisal district may not accept a survey form submitted under
this section.
(f) The comptroller shall allow a person to submit a survey
form to the comptroller in the following manner:
(1) in person;
(2) by mail;
(3) by electronic mail; or
(4) through a web page on the comptroller's Internet
website that allows the person to complete and submit the form.
(g) An appraisal district may not require a property owner
or the designated agent of the owner to complete a survey form at
the appraisal office in order to be permitted to submit the form to
the comptroller.
(h) A property owner or the designated agent of the owner
who elects to submit a survey form provided to the owner or agent
under Subsection (d)(1) or (2) must submit the form not later than
the 45th day after the date the form is sent to the owner or agent
under Subsection (d)(2).
(i) A designated representative of an appraisal district
who elects to submit a survey form following a hearing conducted
under Section 25.25 or Chapter 41 must submit the form not later
than the 45th day after the date the form is sent to the property
owner or designated agent of the owner under Subsection (d)(2)
following that hearing.
(j) The comptroller shall issue an annual report that
summarizes the information included in the survey forms submitted
during the preceding year. The report may not disclose the identity
of a person who submitted a survey form.
(k) The comptroller shall adopt rules necessary to
implement this section.
SECTION 4. Sections 6.412(a) and (d), Tax Code, are amended
to read as follows:
(a) An individual is ineligible to serve on an appraisal
review board if the individual:
(1) is related within the second degree by
consanguinity or affinity, as determined under Chapter 573,
Government Code, to an individual who is engaged in the business of
appraising property for compensation for use in proceedings under
this title or of representing property owners for compensation in
proceedings under this title in the appraisal district for which
the appraisal review board is established;
(2) owns property on which delinquent taxes have been
owed to a taxing unit for more than 60 days after the date the
individual knew or should have known of the delinquency unless:
(A) the delinquent taxes and any penalties and
interest are being paid under an installment payment agreement
under Section 33.02; or
(B) a suit to collect the delinquent taxes is
deferred or abated under Section 33.06 or 33.065; or
(3) is related within the third degree by
consanguinity or within the second degree by affinity, as
determined under Chapter 573, Government Code, to a member of:
(A) the appraisal district's board of directors;
or
(B) the appraisal review board.
(d) A person is ineligible to serve on the appraisal review
board of an appraisal district established for a county described
by Section 6.41(d-1) [having a population of more than 100,000] if
the person:
(1) is a former member of the board of directors,
former officer, or former employee of the appraisal district;
(2) served as a member of the governing body or officer
of a taxing unit for which the appraisal district appraises
property, until the fourth anniversary of the date the person
ceased to be a member or officer; [or]
(3) appeared before the appraisal review board for
compensation during the two-year period preceding the date the
person is appointed; or
(4) served for all or part of three previous terms as a
board member or auxiliary board member on the appraisal review
board.
SECTION 5. Section 6.42(a), Tax Code, is amended to read as
follows:
(a) A majority of the appraisal review board constitutes a
quorum. The local administrative district judge under Subchapter
D, Chapter 74, Government Code, in the county in which [board of
directors of] the appraisal district is established [by resolution]
shall select a chairman and a secretary from among the members of
the appraisal review board. The judge [board of directors of the
appraisal district] is encouraged to select as chairman [of the
appraisal review board] a member of the appraisal review board, if
any, who has a background in law and property appraisal.
SECTION 6. Section 25.25, Tax Code, is amended by adding
Subsections (e-1) and (e-2) and amending Subsection (g) to read as
follows:
(e-1) A panel of an appraisal review board that conducts a
hearing under Subsection (e) involving the appraised value of an
owner's property shall determine the issues that are the subject of
the hearing for the appraisal review board and make the panel's
decision by written order. Not later than the 15th day after the
date the hearing is held, the panel shall:
(1) deliver by hand or certified mail a notice of the
issuance of the order and a copy of the order to the property owner
or the designated agent of the owner and the chief appraiser; and
(2) in the same manner as the appraisal review board,
direct by written order the change in the appraisal roll.
(e-2) A reference in this title to an action taken by an
appraisal review board under this section involving the appraised
value of an owner's property includes an action taken by a panel of
the appraisal review board under Subsection (e-1).
(g) Within 60 days after receiving notice of the appraisal
review board's or a panel's determination of a motion under this
section or of a determination of the appraisal review board that the
property owner has forfeited the right to a final determination of a
motion under this section for failing to comply with the prepayment
requirements of Section 25.26, the property owner or the chief
appraiser may file suit to compel the board or panel to order a
change in the appraisal roll as required by this section. A taxing
unit may not be made a party to a suit filed by a property owner or
chief appraiser under this subsection.
SECTION 7. Section 41.45(d), Tax Code, is amended to read as
follows:
(d) An appraisal review board consisting of more than three
members may sit in panels of not fewer than three members to conduct
protest hearings. Except as provided by Section 41.47(a-1)
[However], the determination of a protest heard by a panel must be
made by the board. If the recommendation of a panel is not accepted
by the board, the board may refer the matter for rehearing to a
panel composed of members who did not hear the original hearing or,
if there are not at least three members who did not hear the
original protest, the board may determine the protest. Before
determining a protest or conducting a rehearing before a new panel
or the board, the board shall deliver notice of the hearing or
meeting to determine the protest in accordance with the provisions
of this subchapter.
SECTION 8. Section 41.46(a), Tax Code, is amended to read as
follows:
(a) The appraisal review board before which a protest
hearing is scheduled shall deliver written notice to the property
owner initiating a protest of the date, time, [and] place, and
subject matter of [fixed for] the hearing on the protest and of the
property owner's entitlement to a postponement of the hearing as
provided by Section 41.45 unless the property owner waives in
writing notice of the hearing. The board shall deliver the notice
not later than the 15th day before the date of the hearing.
SECTION 9. Section 41.461(a), Tax Code, is amended to read
as follows:
(a) At least 14 days before the first scheduled [a] hearing
on a protest, the chief appraiser shall:
(1) deliver a copy of the pamphlet prepared by the
comptroller under Section 5.06 [5.06(a)] to the property owner
initiating the protest if the owner is representing himself, or to
an agent representing the owner if requested by the agent;
(2) inform the property owner that the owner or the
agent of the owner is entitled on request to [may inspect and may
obtain] a copy of the data, schedules, formulas, and all other
information the chief appraiser will [plans to] introduce at the
hearing to establish any matter at issue; and
(3) deliver a copy of the hearing procedures
established by the appraisal review board under Section 41.66 to
the property owner.
SECTION 10. Subchapter C, Chapter 41, Tax Code, is amended
by adding Section 41.462 to read as follows:
Sec. 41.462. AVAILABILITY OF APPRAISAL REVIEW BOARD
EVIDENCE. If requested by the property owner initiating a protest
or an agent representing the property owner, the appraisal district
shall make any evidence to be used in the protest hearing available
to the property owner or agent at least 14 days before the date of
the hearing. The evidence shall be provided at no charge to the
requester, regardless of the means of delivery.
SECTION 11. Section 41.47, Tax Code, is amended by adding
Subsections (a-1), (c-2), and (f) and amending Subsections (b),
(c), (d), and (e) to read as follows:
(a-1) A panel of an appraisal review board hearing a protest
involving the appraised value of an owner's property shall
determine the protest for the appraisal review board and make the
panel's decision by written order. A reference in this title to a
determination or order of an appraisal review board involving the
appraised value of an owner's property includes a determination or
order made by a panel under this subsection.
(b) If on determining a protest the board or panel finds
that the appraisal records are incorrect in some respect raised by
the protest, the board or panel by its order shall correct the
appraisal records by changing the appraised value placed on the
protesting property owner's property or by making the other changes
in the appraisal records that are necessary to conform the records
to the requirements of law. If the appraised value of a taxable
property interest, other than an interest owned by a public utility
or by a cooperative corporation organized to provide utility
service, is changed as the result of a protest or challenge, the
board or panel shall change the appraised value of all other
interests, other than an interest owned by a public utility or by a
cooperative corporation organized to provide utility service, in
the same property, including a mineral in place, in proportion to
the ownership interests.
(c) If the protest is of the determination of the appraised
value of the owner's property, the appraisal review board or panel
must state in the order the appraised value of the property:
(1) as shown in the appraisal records submitted to the
board by the chief appraiser under Section 25.22 or 25.23; and
(2) as finally determined by the board or panel.
(c-2) The board or panel may not determine the appraised
value of the property that is the subject of a protest to be an
amount greater than the appraised value of the property as shown in
the appraisal records submitted to the board by the chief appraiser
under Section 25.22 or 25.23.
(d) The board or panel shall deliver by hand or certified
mail:
(1) a notice of issuance of the order and a copy of the
order to the property owner or the designated agent of the owner and
the chief appraiser; and
(2) a copy of the appraisal review board survey form
prepared under Section 5.104 and instructions for completing and
submitting the form to the property owner or the designated agent of
the owner.
(e) The notice of the issuance of the order must contain a
prominently printed statement in upper-case bold lettering
informing the property owner in clear and concise language of the
property owner's right to appeal the order of the board or panel
[board's decision] to district court. The statement must describe
the deadline prescribed by Section 42.06(a) [of this code] for
filing a written notice of appeal[,] and the deadline prescribed by
Section 42.21(a) [of this code] for filing the petition for review
with the district court.
(f) The appraisal review board or panel shall take the
actions required by Subsection (a) or (a-1), as applicable, and
Subsection (d) not later than the 15th day after the date the
hearing on the protest is concluded.
SECTION 12. Section 41.66, Tax Code, is amended by amending
Subsections (h), (i), and (j) and adding Subsections (j-1) and (p)
to read as follows:
(h) The appraisal review board shall postpone a hearing on a
protest if the property owner or the designated agent of the owner
requests additional time to prepare for the hearing and establishes
to the board that the chief appraiser failed to comply with Section
41.461. The board is not required to postpone a hearing more than
one time under this subsection.
(i) A hearing on a protest filed by a property owner or the
designated agent of the owner [who is not represented by an agent
designated under Section 1.111] shall be set for a time and date
certain. If the hearing is not commenced within two hours of the
time set for the hearing, the appraisal review board shall postpone
the hearing on the request of the property owner or the designated
agent of the owner.
(j) On the request of a property owner or the [a] designated
agent of the owner, an appraisal review board shall schedule
hearings on protests concerning up to 20 designated properties to
be held consecutively on the same day. The designated properties
must be identified in the same notice of protest, and the notice
must contain in boldfaced type the statement "request for same-day
protest hearings." A property owner or the designated agent of the
owner may [not] file more than one request under this subsection
with the appraisal review board in the same tax year. The appraisal
review board may schedule hearings on protests concerning more than
20 properties filed by the same property owner or the designated
agent of the owner and may use different panels to conduct the
hearings based on the board's customary scheduling. The appraisal
review board may follow the practices customarily used by the board
in the scheduling of hearings under this subsection.
(j-1) An appraisal review board may schedule the hearings on
all protests filed by a property owner or the designated agent of
the owner to be held consecutively. The notice of the hearings must
state the date and time that the first hearing will begin, state the
date the last hearing will end, and list the order in which the
hearings will be held. The order of the hearings listed in the
notice may not be changed without the agreement of the property
owner or the designated agent of the owner, the chief appraiser, and
the appraisal review board. The board may not reschedule a hearing
for which notice is given under this subsection to a date earlier
than the seventh day after the date the last hearing was scheduled
to end unless agreed to by the property owner or the designated
agent of the owner, the chief appraiser, and the appraisal review
board. Unless agreed to by the parties, the board must provide
written notice of the date and time of the rescheduled hearing to
the property owner or the designated agent of the owner not later
than the seventh day before the date of the hearing.
(p) At the end of a hearing on a protest, the appraisal
review board shall provide the property owner or the designated
agent of the owner one or more documents indicating that the members
of the board hearing the protest signed the affidavit required by
Subsection (g).
SECTION 13. Section 41.67(d), Tax Code, is amended to read
as follows:
(d) Information that was previously requested under Section
41.461 by the protesting party that was not delivered [made
available] to the protesting party at least 14 days before the first
scheduled [or postponed] hearing may not be used or offered in any
form as evidence in the hearing, including as a document or through
argument or testimony.
SECTION 14. Section 41A.06(b), Tax Code, is amended to read
as follows:
(b) To initially qualify to serve as an arbitrator under
this chapter, a person must:
(1) meet the following requirements, as applicable:
(A) be licensed as an attorney in this state; or
(B) have:
(i) completed at least 30 hours of training
in arbitration and alternative dispute resolution procedures from a
university, college, or legal or real estate trade association; and
(ii) been licensed or certified
continuously during the five years preceding the date the person
agrees to serve as an arbitrator as:
(a) a real estate broker or sales
agent [salesperson] under Chapter 1101, Occupations Code;
(b) a real estate appraiser under
Chapter 1103, Occupations Code; or
(c) a certified public accountant
under Chapter 901, Occupations Code; [and]
(2) complete the course for training and education of
appraisal review board members established under Section 5.041 and
be issued a certificate indicating course completion;
(3) complete the training program on property tax law
for the training and education of arbitrators established under
Section 5.043; and
(4) agree to conduct an arbitration for a fee that is
not more than:
(A) $400, if the property qualifies as the
owner's residence homestead under Section 11.13 and the appraised
or market value, as applicable, of the property is $500,000 or less,
as determined by the order;
(B) $450, if the property qualifies as the
owner's residence homestead under Section 11.13 and the appraised
or market value, as applicable, of the property is more than
$500,000, as determined by the order;
(C) $450, if the property does not qualify as the
owner's residence homestead under Section 11.13 and the appraised
or market value, as applicable, of the property is $1 million or
less, as determined by the order;
(D) $750, if the property does not qualify as the
owner's residence homestead under Section 11.13 and the appraised
or market value, as applicable, of the property is more than $1
million but not more than $2 million, as determined by the order; or
(E) $1,000, if the property does not qualify as
the owner's residence homestead under Section 11.13 and the
appraised or market value, as applicable, of the property is more
than $2 million but not more than $3 million, as determined by the
order.
SECTION 15. Section 41A.061(b), Tax Code, is amended to
read as follows:
(b) To renew the person's agreement to serve as an
arbitrator, the person must:
(1) file a renewal application with the comptroller at
the time and in the manner prescribed by the comptroller;
(2) continue to meet the requirements provided by
Sections 41A.06(b)(1) and (4) [Section 41A.06(b)]; and
(3) during the preceding two years have completed at
least eight hours of continuing education in arbitration and
alternative dispute resolution procedures offered by a university,
college, real estate trade association, or legal association.
SECTION 16. Section 41A.09(b), Tax Code, is amended to read
as follows:
(b) An award under this section:
(1) must include a determination of the appraised or
market value, as applicable, of the property that is the subject of
the appeal;
(2) may include any remedy or relief a court may order
under Chapter 42 in an appeal relating to the appraised or market
value of property;
(3) shall specify the arbitrator's fee, which may not
exceed the amount provided by Section 41A.06(b)(4) [41A.06(b)(2)];
(4) is final and may not be appealed except as
permitted under Section 171.088, Civil Practice and Remedies Code,
for an award subject to that section; and
(5) may be enforced in the manner provided by
Subchapter D, Chapter 171, Civil Practice and Remedies Code.
SECTION 17. Sections 5.103(e) and (f), 6.412(e), and
41A.06(c), Tax Code, are repealed.
SECTION 18. The changes in law made by this Act to Section
5.041, Tax Code, apply only to an appraisal review board member
appointed to serve a term of office that begins on or after the
effective date of this Act.
SECTION 19. The comptroller shall implement Section 5.043,
Tax Code, as added by this Act, and adopt rules required by that
section as soon as practicable after the effective date of this Act.
SECTION 20. The comptroller shall adopt rules necessary to
implement Section 5.104, Tax Code, as added by this Act, and shall
prepare and make available the survey form and instructions for
completing and submitting the form required by that section as soon
as practicable after the effective date of this Act. An appraisal
district is not required to provide the survey form or instructions
under a requirement of that section until the form and instructions
are prepared and made available by the comptroller.
SECTION 21. The changes in law made by this Act to Section
6.412, Tax Code, do not affect the eligibility of a person serving
on an appraisal review board immediately before the effective date
of this Act to continue to serve on the board for the term to which
the member was appointed.
SECTION 22. The change in law made by this Act to Section
25.25, Tax Code, applies only to a motion to correct an appraisal
roll filed on or after the effective date of this Act.
SECTION 23. The changes in law made by this Act to Chapter
41, Tax Code, apply only to a protest for which the notice of
protest was filed by a property owner or the designated agent of the
owner with the appraisal review board established for an appraisal
district on or after the effective date of this Act.
SECTION 24. The changes in law made by this Act in the
qualifications of persons serving as arbitrators in binding
arbitrations of appeals of appraisal review board orders do not
affect the entitlement of a person serving as an arbitrator
immediately before the effective date of this Act to continue to
serve as an arbitrator and to conduct hearings on arbitrations
until the person is required to renew the person's agreement with
the comptroller to serve as an arbitrator. The changes in law apply
only to a person who initially qualifies to serve as an arbitrator
or who renews the person's agreement with the comptroller to serve
as an arbitrator on or after the effective date of this Act. This
Act does not prohibit a person who is serving as an arbitrator on
the effective date of this Act from renewing the person's agreement
with the comptroller to serve as an arbitrator if the person has the
qualifications required for an arbitrator under the Tax Code as
amended by this Act.
SECTION 25. This Act takes effect January 1, 2018.