H.B. No. 182
AN ACT
relating to the appeal of certain ad valorem tax determinations
through binding arbitration.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle F, Title 1, Tax Code, is amended by
adding Chapter 41A to read as follows:
CHAPTER 41A. APPEAL THROUGH BINDING ARBITRATION
Sec. 41A.01. RIGHT OF APPEAL BY PROPERTY OWNER. As an
alternative to filing an appeal under Section 42.01, a property
owner is entitled to appeal through binding arbitration under this
chapter an appraisal review board order determining a protest
concerning the appraised or market value of real property if:
(1) the appraised or market value, as applicable, of
the property as determined by the order is $1 million or less; and
(2) the appeal does not involve any matter in dispute
other than the determination of the appraised or market value of the
property.
Sec. 41A.02. NOTICE OF RIGHT TO ARBITRATION. An appraisal
review board that delivers notice of issuance of an order described
by Section 41A.01 and a copy of the order to a property owner as
required by Section 41.47 shall include with the notice and copy:
(1) a notice of the property owner's rights under this
chapter; and
(2) a copy of the form prescribed under Section
41A.04.
Sec. 41A.03. REQUEST FOR ARBITRATION. (a) To appeal an
appraisal review board order under this chapter, a property owner
must file with the appraisal district not later than the 45th day
after the date the property owner receives notice of the order:
(1) a completed request for binding arbitration under
this chapter in the form prescribed by Section 41A.04; and
(2) an arbitration deposit in the amount of $500, made
payable to the comptroller.
(b) A property owner who fails to strictly comply with this
section waives the property owner's right to request arbitration
under this chapter. A property owner who appeals an appraisal
review board order determining a protest concerning the appraised
or market value, as applicable, of the owner's property under
Chapter 42 waives the owner's right to request binding arbitration
under this chapter regarding the value of that property. An
arbitrator shall dismiss any pending arbitration proceeding if the
property owner's rights are waived under this subsection.
Sec. 41A.04. CONTENTS OF REQUEST FORM. The comptroller by
rule shall prescribe the form of a request for binding arbitration
under this chapter. The form must require the property owner to
provide only:
(1) a brief statement that explains the basis for the
property owner's appeal of the appraisal review board order;
(2) a statement of the property owner's opinion of the
appraised or market value, as applicable, of the property that is
the subject of the appeal; and
(3) any other information reasonably necessary for the
appraisal district to request appointment of an arbitrator.
Sec. 41A.05. PROCESSING OF REGISTRATION REQUEST. (a) Not
later than the 10th day after the date an appraisal district
receives from a property owner a completed request for binding
arbitration under this chapter and an arbitration deposit as
required by Section 41A.03, the appraisal district shall:
(1) certify the request;
(2) submit the request and deposit to the comptroller;
and
(3) request the comptroller to appoint a qualified
arbitrator to conduct the arbitration.
(b) The comptroller may retain an amount equal to 10 percent
of the deposit to cover the comptroller's administrative costs.
Sec. 41A.06. REGISTRY AND QUALIFICATIONS OF ARBITRATORS.
(a) The comptroller shall maintain a registry listing the
qualified persons who have agreed to serve as arbitrators under
this chapter.
(b) To qualify to serve as an arbitrator under this chapter,
a person must:
(1) have 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;
(2) be licensed as a real estate broker or salesperson
under Chapter 1101, Occupations Code, or be licensed or certified
as a real estate appraiser under Chapter 1103, Occupations Code;
and
(3) agree to conduct an arbitration for a fee that is
not more than 90 percent of the amount of the arbitration deposit
required by Section 41A.03.
Sec. 41A.07. APPOINTMENT OF ARBITRATOR. (a) On receipt of
the request and deposit under Section 41A.05, the comptroller shall
send the property owner and the appraisal district a copy of the
comptroller's registry of qualified arbitrators and request that
the parties select an arbitrator from the registry. The
comptroller may send a copy of the registry to the parties by
regular mail in paper form or may send the parties written notice of
the Internet address of a website at which the registry is
maintained and may be accessed. The parties shall attempt to select
an arbitrator from the registry.
(b) Not later than the 20th day after the date the parties
receive the copy of the registry or notice of the Internet address
of the registry website, the appraisal district shall notify the
comptroller that:
(1) the parties have selected an arbitrator and
request that the comptroller appoint the selected arbitrator; or
(2) the parties were unable to select an arbitrator
and request the comptroller to appoint an arbitrator.
(c) On receipt of notice from the appraisal district under
Subsection (b), the comptroller shall:
(1) appoint:
(A) the arbitrator selected under Subsection
(b)(1), if applicable; or
(B) any arbitrator included in the comptroller's
registry, if Subsection (b)(2) applies; and
(2) send notice to the arbitrator appointed,
requesting that the arbitrator conduct the arbitration.
(d) If the arbitrator appointed is unable or unwilling to
conduct the arbitration for any reason, the arbitrator shall
promptly notify the comptroller that the arbitrator does not accept
the appointment and state the reason. The comptroller shall
appoint a substitute arbitrator promptly after receipt of the
notice.
Sec. 41A.08. NOTICE AND HEARING; REPRESENTATION OF PARTIES.
(a) On acceptance of an appointment to conduct an arbitration under
this chapter, the arbitrator shall set the date, time, and place of
a hearing on the arbitration. The arbitrator shall give notice of
and conduct the hearing in the manner provided by Subchapter C,
Chapter 171, Civil Practice and Remedies Code. The arbitrator:
(1) shall continue a hearing if both parties agree to
the continuance; and
(2) may continue a hearing for reasonable cause.
(b) The parties to an arbitration proceeding under this
chapter may represent themselves or may be represented by:
(1) an employee of the appraisal district;
(2) an attorney who is licensed in this state;
(3) a person who is licensed as a real estate broker or
salesperson under Chapter 1101, Occupations Code, or is licensed or
certified as a real estate appraiser under Chapter 1103,
Occupations Code; or
(4) a property tax consultant registered under Chapter
1152, Occupations Code.
Sec. 41A.09. AWARD; PAYMENT OF ARBITRATOR'S FEE. (a) Not
later than the 20th day after the date the hearing under Section
41A.08 is concluded, the arbitrator shall make an arbitration award
and deliver a copy of the award to the property owner, appraisal
district, and comptroller.
(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)(3);
(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.
(c) If the arbitrator determines that the appraised or
market value, as applicable, of the property that is the subject of
the appeal is nearer to the property owner's opinion of the
appraised or market value, as applicable, of the property as stated
in the request for binding arbitration submitted under Section
41A.03 than the value determined by the appraisal review board:
(1) the comptroller, on receipt of a copy of the award,
shall refund the property owner's arbitration deposit, less the
amount retained by the comptroller under Section 41A.05(b);
(2) the appraisal district, on receipt of a copy of the
award, shall pay the arbitrator's fee; and
(3) the chief appraiser shall correct the appraised or
market value, as applicable, of the property as shown in the
appraisal roll to reflect the arbitrator's determination.
(d) If the arbitrator determines that the appraised or
market value, as applicable, of the property that is the subject of
the appeal is not nearer to the property owner's opinion of the
appraised or market value, as applicable, of the property as stated
in the request for binding arbitration submitted under Section
41A.03 than the value determined by the appraisal review board:
(1) the comptroller, on receipt of a copy of the award,
shall:
(A) pay the arbitrator's fee out of the owner's
arbitration deposit; and
(B) refund to the owner the owner's arbitration
deposit, less the arbitrator's fee and the amount retained by the
comptroller under Section 41A.05(b); and
(2) the chief appraiser shall correct the appraised or
market value, as applicable, of the property as shown in the
appraisal roll to reflect the arbitrator's determination if the
value as determined by the arbitrator is less than the value as
determined by the appraisal review board.
(e) The comptroller by rule may prescribe a standard form
for an award and may require arbitrators to use the award form when
making awards under this chapter.
Sec. 41A.10. PAYMENT OF TAXES PENDING APPEAL. (a) The
pendency of an appeal under this chapter does not affect the
delinquency date for the taxes on the property subject to the
appeal. A property owner who appeals an appraisal review board
order under this chapter shall pay taxes on the property subject to
the appeal in an amount equal to the amount of taxes due on the
portion of the taxable value of the property that is not in dispute.
If the final determination of an appeal under this chapter
decreases the property owner's tax liability to less than the
amount of taxes paid, the taxing unit shall refund to the property
owner the difference between the amount of taxes paid and the amount
of taxes for which the property owner is liable.
(b) A property owner may not file an appeal under this
chapter if the taxes on the property subject to the appeal are
delinquent. An arbitrator who determines that the taxes on the
property subject to an appeal are delinquent shall dismiss the
pending appeal with prejudice. If an appeal is dismissed under this
subsection, the comptroller shall refund the property owner's
arbitration deposit, less the amount retained by the comptroller
under Section 41A.05(b).
Sec. 41A.11. POSTAPPEAL ADMINISTRATIVE PROCEDURES. An
arbitration award under this chapter is considered to be a final
determination of an appeal for purposes of Subchapter C, Chapter
42.
Sec. 41A.12. USE OF PROPERTIES AS SAMPLES. An arbitrator's
determination of market value under this chapter is the market
value of the property subject to the appeal for the purposes of the
annual study conducted under Section 403.302, Government Code.
Sec. 41A.13. RULES. The comptroller may adopt rules
necessary to implement and administer this chapter.
SECTION 2. As soon as practicable after the effective date
of this Act, but not later than January 1, 2006, the comptroller
shall:
(1) prescribe the model form for an arbitration
request as provided by Section 41A.04, Tax Code, as added by this
Act; and
(2) establish a registry of qualified arbitrators as
provided by Section 41A.06(a), Tax Code, as added by this Act.
SECTION 3. This Act takes effect September 1, 2005.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 182 was passed by the House on April
20, 2005, by a non-record vote; that the House refused to concur in
Senate amendments to H.B. No. 182 on May 23, 2005, and requested the
appointment of a conference committee to consider the differences
between the two houses; and that the House adopted the conference
committee report on H.B. No. 182 on May 28, 2005, by a non-record
vote.
______________________________
Chief Clerk of the House
I certify that H.B. No. 182 was passed by the Senate, with
amendments, on May 20, 2005, by the following vote: Yeas 31, Nays
0; at the request of the House, the Senate appointed a conference
committee to consider the differences between the two houses; and
that the Senate adopted the conference committee report on H.B. No.
182 on May 29, 2005, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor