By Cain                                         S.B. No. 1647

      75R2592 SMH-D                           

                                A BILL TO BE ENTITLED

 1-1                                   AN ACT

 1-2     relating to administrative and judicial review of property tax

 1-3     determinations.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Sections 6.41(b)-(f), Tax Code, are amended to

 1-6     read as follows:

 1-7           (b)  The board consists of three members.  However, a

 1-8     majority of the district judges having jurisdiction in the county

 1-9     for which the appraisal district is established [board of directors

1-10     by resolution of a majority of its members] may increase the size

1-11     of the appraisal review board to not more than nine members or, in

1-12     a district established for a county with a population of at least

1-13     250,000, to not more than 15 members or, in a district established

1-14     for a county with a population of at least one million, to not more

1-15     than 30 members or, in a district established for a county with a

1-16     population of at least 1,500,000, to not more than 45 members.

1-17           (c)  To be eligible to serve on the board, an individual must

1-18     be a resident of the district and must have resided in the district

1-19     for at least two years.  A member of the appraisal district board

1-20     of directors, [or] an officer or employee of the comptroller or [,]

1-21     the appraisal office, or a current or former officer or employee of

1-22     a taxing unit is ineligible to serve on the board.  In an appraisal

1-23     district established for a county having a population of more than

1-24     300,000, an individual who has served for all or part of three

 2-1     previous terms as a board member or auxiliary board member on the

 2-2     appraisal review board is ineligible to serve on the appraisal

 2-3     review board.  In an appraisal district established for any other

 2-4     county, an individual who has served for all or part of three

 2-5     consecutive terms as a board member or auxiliary board member on

 2-6     the appraisal review board is ineligible to serve on the appraisal

 2-7     review board during a term that begins on the next January 1

 2-8     following the third of those consecutive terms.

 2-9           (d)  Members of the board are appointed by [resolution of] a

2-10     majority of the district judges having jurisdiction in the county

2-11     for which the appraisal district is established [board of

2-12     directors].  A vacancy on the board is filled in the same manner

2-13     for the unexpired portion of the term.

2-14           (e)  Members of the board hold office for terms of two years

2-15     beginning January 1.  A majority of the district judges having

2-16     jurisdiction in the county for which the [The] appraisal district

2-17     is established [board of directors by resolution] shall provide for

2-18     staggered terms, so that the terms of as close to one-half of the

2-19     members as possible expire each year.  In making the initial

2-20     appointments, the district judges [board of directors] shall

2-21     designate those members who serve terms of one year.

2-22           (f)  A member of the board may be removed from the board by a

2-23     majority [vote] of the district judges having jurisdiction in the

2-24     county for which the appraisal district is established [board of

2-25     directors].  Grounds for removal are:

2-26                 (1)  a violation of Section 6.412 or 6.413; or

2-27                 (2)  good cause relating to the attendance of members

 3-1     at called meetings of the board as established by written policy

 3-2     adopted by a majority of the appraisal district board of directors.

 3-3           SECTION 2.  Section 6.411, Tax Code, is amended to read as

 3-4     follows:

 3-5           Sec. 6.411.  AUXILIARY [BOARD] MEMBERS IN CERTAIN COUNTIES.

 3-6     (a)  A majority of the district judges having jurisdiction in the

 3-7     county for which [The board of directors of] an appraisal district

 3-8     is established may appoint auxiliary members to [the appraisal

 3-9     review board to] hear taxpayer protests before the appraisal review

3-10     board and to assist the board in performing its other duties.

3-11           (b)  The number of auxiliary members that may be appointed

3-12     is:

3-13                 (1)  for a county with a population of 1,000,000 or

3-14     more, not more than 30 auxiliary members;

3-15                 (2)  for a county with a population of at least 500,000

3-16     but less than 1,000,000, not more than 20 auxiliary members;

3-17                 (3)  for a county with a population of at least 250,000

3-18     but less than 500,000, not more than 10 auxiliary members; and

3-19                 (4)  for a county with a population of less than

3-20     250,000, not more than 6 auxiliary members.

3-21           (c)  Sections 6.41(c), (d), and (e) and Sections 6.412 and

3-22     6.413 apply to auxiliary [board] members [appointed under this

3-23     section].

3-24           (d)  An auxiliary member [of the appraisal review board

3-25     appointed under this section] may not vote in a determination made

3-26     by the board, may not serve as chairman or secretary of the board,

3-27     and is not included in determining what constitutes a quorum of the

 4-1     board or whether a quorum is present at any meeting of the board.

 4-2           (e)  An auxiliary member [of the appraisal review board

 4-3     appointed under this section] is entitled to make a recommendation

 4-4     to the board in a protest heard by the member but is not entitled

 4-5     to vote on the determination of the protest by the board.

 4-6           (f)  An auxiliary member [of the appraisal review board

 4-7     appointed under this section] is entitled to the per diem set by

 4-8     the appraisal district budget for each day on which the member

 4-9     actively engages in performing the member's duties under Subsection

4-10     (a) or (e) and is entitled to actual and necessary expenses

4-11     incurred in performing those duties in the same manner as [other]

4-12     members of the appraisal review board.

4-13           SECTION 3.  The heading to Chapter 41, Tax Code, is amended

4-14     to read as follows:

4-15                  CHAPTER 41. ADMINISTRATIVE [LOCAL] REVIEW

4-16           SECTION 4.  Section 41.43, Tax Code, is amended to read as

4-17     follows:

4-18           Sec. 41.43.  PROTEST OF DETERMINATION OF VALUE OR INEQUALITY

4-19     OF APPRAISAL.  (a)  In a protest authorized by Section 41.41(1) or

4-20     (2), the appraisal district has the burden of establishing the

4-21     value of the property.

4-22           (b)  A protest on the ground of unequal appraisal of property

4-23     shall be determined in favor of the protesting party unless [if]

4-24     the appraisal district [protesting party] establishes that the

4-25     appraisal ratio of the property is not greater than the median

4-26     level of appraisal of:

4-27                 (1)  a reasonable and representative sample of other

 5-1     properties in the appraisal district; or

 5-2                 (2)  a sample of properties in the appraisal district

 5-3     consisting of a reasonable number of other properties similarly

 5-4     situated to, or of the same general kind or character as, the

 5-5     property subject to the protest.

 5-6           SECTION 5.  Subchapter D, Chapter 41, Tax Code, is amended by

 5-7     adding Section 41.71 to read as follows:

 5-8           Sec. 41.71.  LOCATION AND TIME OF HEARINGS.  (a)  An

 5-9     appraisal review board may not conduct a hearing under Subchapter A

5-10     or C in a building in which an office of the appraisal district is

5-11     located.

5-12           (b)  An appraisal review board shall regularly schedule

5-13     hearings in the evening.

5-14           SECTION 6.  Chapter 41, Tax Code, is amended by adding

5-15     Subchapter E to read as follows:

5-16           SUBCHAPTER E. DETERMINATION OF PROTEST BY STATE OFFICE

5-17                         OF ADMINISTRATIVE HEARINGS

5-18           Sec. 41.91.  DEFINITION.  In this subchapter, "office" means

5-19     the State Office of Administrative Hearings.

5-20           Sec. 41.92.  RULES.  The office shall adopt rules of practice

5-21     and procedure for protest proceedings under this subchapter.

5-22           Sec. 41.93.  ELECTION OF REMEDIES.  (a)  A property owner is

5-23     entitled to have the office conduct a hearing and determine a

5-24     protest if the property owner:

5-25                 (1)  files a notice of protest with the appraisal

5-26     review board under Section 41.44;

5-27                 (2)  is entitled to a hearing and determination of a

 6-1     protest under that section;

 6-2                 (3)  requests in the notice of protest that the office

 6-3     conduct the hearing and determine the protest; and

 6-4                 (4)  pays a filing fee of $100 with the notice of

 6-5     protest.

 6-6           (b)  A property owner who submits a request under this

 6-7     section waives the right to a hearing and determination of the

 6-8     protest by the appraisal review board.

 6-9           Sec. 41.94.  FORWARDING OF NOTICE OF PROTEST AND FILING FEE

6-10     TO OFFICE.  On receipt of a notice under Section 41.93 and the

6-11     required filing fee, the appraisal review board shall forward the

6-12     notice and the filing fee to the office.

6-13           Sec. 41.95.  CONTESTED CASE.  Except as otherwise provided by

6-14     this subchapter, the provisions of Chapter 2001, Government Code,

6-15     applicable to a contested case apply to the determination of a

6-16     protest under this subchapter.

6-17           Sec. 41.96.  BURDEN OF PROOF.  Section 41.43 applies to the

6-18     determination of a protest under this subchapter.

6-19           Sec. 41.97.  HEARING ON AND DETERMINATION OF PROTEST.   The

6-20     administrative law judge to whom the protest is assigned shall

6-21     conduct a hearing on the protest and issue a proposal for decision

6-22     determining the protest.  The proposal is binding on the parties

6-23     and the appraisal review board.

6-24           Sec. 41.98.  NOTIFICATION OF DETERMINATION; CORRECTION OF

6-25     APPRAISAL RECORDS.  (a)  The office shall notify the property

6-26     owner, chief appraiser, and appraisal review board of the proposal

6-27     for decision.

 7-1           (b)  The appraisal review board by written order shall

 7-2     determine the protest in accordance with the proposal for decision

 7-3     and shall correct the appraisal records as necessary to conform to

 7-4     the order.

 7-5           Sec. 41.99.  ATTORNEY'S FEES AND COSTS.  (a)  The appraisal

 7-6     district shall reimburse the office for the office's costs of

 7-7     conducting hearings under this subchapter.

 7-8           (b)  If a protest is authorized by Section 41.41(1) or (2)

 7-9     and the administrative law judge determines that the appraised

7-10     value of the property that is the subject of the protest is less

7-11     than the appraised value of the property as determined by the chief

7-12     appraiser, the property owner is entitled to recover from the

7-13     appraisal district the owner's reasonable attorney's fees and costs

7-14     multiplied by a fraction the numerator of which is the difference

7-15     between the appraised value as determined by the chief appraiser

7-16     and the appraised value as determined by the administrative law

7-17     judge and the denominator of which is the difference between the

7-18     appraised value as determined by the chief appraiser and the

7-19     appraised value as claimed by the owner.

7-20           Sec. 41.100.  SANCTIONS.   The administrative law judge may

7-21     impose sanctions against a party or its representative as provided

7-22     by Sections 2003.047(i) and (j), Government Code, as added by

7-23     Chapter 765, Acts of the 74th Legislature, 1995.

7-24           Sec. 41.101.  APPEAL.  An order of the appraisal review board

7-25     determining a protest under this subchapter is considered to have

7-26     been issued under Subchapter C for purposes of appeal under Chapter

7-27     42, except that judicial review of the protest is under the

 8-1     substantial evidence rule.

 8-2           SECTION 7.  Section 42.23, Tax Code, is amended by adding

 8-3     Subsection (d) to read as follows:

 8-4           (d)  The burden of proof is on the appraisal district in an

 8-5     appeal under Section 42.01(1) or 42.02.

 8-6           SECTION 8.  (a)  The changes in law made by Sections 4-6 of

 8-7     this Act apply only to a protest of a property appraisal the notice

 8-8     of which is filed on or after the effective date of this Act.  A

 8-9     protest of a property appraisal the notice of which is filed before

8-10     the effective date of this Act is covered by the law in effect when

8-11     the notice of protest was filed, and the former law is continued in

8-12     effect for that purpose.

8-13           (b)  The change in law made by Section 7 of this Act applies

8-14     only to an appeal from an order of an appraisal review board in

8-15     which the petition for review is filed on or after the effective

8-16     date of this Act.  An appeal from an order of an appraisal review

8-17     board in which the petition for review was filed before the

8-18     effective date of this Act is covered by the law in effect when the

8-19     petition for review was filed, and the former law is continued in

8-20     effect for that purpose.

8-21           SECTION 9.  (a)  This Act takes effect January 1, 1998.

8-22           (b)  As soon as practicable on or after the effective date of

8-23     this Act, the district judges having jurisdiction in the county for

8-24     which an appraisal district is established shall  appoint the

8-25     members of the appraisal review board for the district.  In making

8-26     the initial appointments, the district judges shall designate those

8-27     members who serve terms of one year.

 9-1           (c)  The term of an appraisal review board member serving on

 9-2     December 31, 1997, expires on January 1, 1998.

 9-3           (d)  Auxiliary members may be appointed under Section 6.411,

 9-4     Tax Code, as amended by this Act, by the district judges having

 9-5     jurisdiction in the county for which an appraisal district is

 9-6     established on or after January 1, 1998.

 9-7           (e)  The term of an auxiliary member serving on December 31,

 9-8     1997, expires on January 1, 1998.

 9-9           SECTION 10.  The importance of this legislation and the

9-10     crowded condition of the calendars in both houses create an

9-11     emergency and an imperative public necessity that the

9-12     constitutional rule requiring bills to be read on three several

9-13     days in each house be suspended, and this rule is hereby suspended.