Enrolled Bill Summary

Senate Bill 771	Senate Author:  Williams
Effective:  1-1-10	House Sponsor:  Otto

            Senate Bill 771 amends the Tax Code to require that the property tax appraisal of a property's market value take into account all available evidence that is specific to the property's value.  It provides also that if the appraised value of a property has been lowered by an appraisal review board (ARB) or through binding arbitration or judicial review, the lowered value may not be increased in the following tax year unless the increase by the chief appraiser is reasonably supported by substantial evidence when all of the reliable and probative evidence is considered as a whole.  Elaboration on the evidentiary requirement places the burden of proof on the chief appraiser to support an increase in such circumstances.  The bill, with respect to the market data comparison method of appraisal of real property, establishes when a sale of property is considered to be a comparable sale and adds specifications on how valuations based on comparable sales are to be made.  For appraisals on the basis of rental income, the bill prohibits a chief appraiser from separately appraising or accounting for personal property that is already included in appraisal of real property valued as a portion of the rental income.  The bill accommodates a temporary cessation of agricultural use, without loss of eligibility for open‑space appraisal, in certain drought situations based on a drought declaration by the governor.

            Provisions relating to ARBs increase, from a Class C to a Class A misdemeanor, the offense of ex parte communication by an ARB member with the chief appraiser or other employee of the appraisal district for which the ARB is established.  The bill, however, provides that communication with those parties is not prohibited if it is confined to specified types of administrative, clerical, and logistical matters.  Provisions relating to binding arbitration allow such arbitration as an option to judicial review if a property qualifies as the owner's residence homestead even if the appraised or market value as determined by ARB order is greater than $1 million.  The bill entitles a property owner to expedited arbitration, with a maximum of one hour each of argument and testimony on behalf of the owner and appraisal district, in certain situations.  The required deposit for expedited arbitration is $250, compared to $500 for other arbitration under existing law.  The bill revises the qualifications to serve as an arbitrator, creating one set of prerequisites for initial qualification and another set for qualification beyond two years.  It provides that the parties to an arbitration may use representation other than themselves only at their own cost and allows representation by a certified public accountant.