80R2132 JPL-D

By: Woolley H.B. No. 524

A BILL TO BE ENTITLED

AN ACT

relating to the determination through binding arbitration of certain ad valorem tax protests brought by property owners.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Chapter 41, Tax Code, is amended by adding Subchapter E to read as follows: SUBCHAPTER E. PROTEST THROUGH BINDING ARBITRATION

Sec. 41.81. RIGHT TO ARBITRATION. As an alternative to having a protest brought under Section 41.41 heard by the appraisal review board, a property owner is entitled to have a protest concerning the appraised or market value of property determined through binding arbitration under this subchapter if the appraised or market value, as applicable, of the property as determined by the appraisal district is at least five percent greater than the appraised or market value, as applicable, of the property for the preceding tax year.

Sec. 41.82. NOTICE OF RIGHT TO ARBITRATION. An appraisal district that delivers a notice of appraised value under Section 25.19 shall include with the notice:

(1) a notice of the property owner's rights under this subchapter;

(2) a notice of the right to pursue a protest and appeal as authorized by Subchapter C and Chapters 41A and 42; and

(3) a copy of the form required by Section 41.83(a).

Sec. 41.83. REQUEST FOR ARBITRATION. (a) To request that a protest be determined by an arbitrator under this subchapter, a property owner must file with the appraisal district a completed request for binding arbitration under this subchapter that complies with Section 41.84 not later than the deadline for filing a protest established by Section 41.44.

(b) After filing, a request for arbitration is a valid and enforceable arbitration agreement for purposes of Chapter 171, Civil Practice and Remedies Code.

Sec. 41.84. CONTENTS OF REQUEST FORM. (a) The chief appraiser shall prescribe the form of a request for binding arbitration under this subchapter. The form must require the property owner to provide only:

(1) a brief statement that explains the basis for the property owner's protest of the action of the appraisal district;

(2) a statement containing the appraised or market value, as applicable, of the property:

(A) as determined by the appraisal district and modified after any protest or appeal for the preceding tax year; and

(B) as determined by the appraisal district for the current tax year;

(3) a statement of the owner's opinion of the appraised or market value of the property for the current tax year; and

(4) any other information reasonably necessary for the appraisal district to request appointment of an arbitrator.

(b) The comptroller by rule shall prescribe a model form for purposes of this section.

Sec. 41.85. PROCESSING OF ARBITRATION REQUEST. 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 subchapter, the appraisal district shall:

(1) endorse the request;

(2) submit the request to the comptroller accompanied by an arbitration deposit in the amount of $500 from the appraisal district, made payable to the comptroller; and

(3) request that the comptroller appoint a qualified arbitrator to conduct the arbitration.

Sec. 41.86. 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 subchapter.

(b) To qualify to serve as an arbitrator under this subchapter, 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 $500.

Sec. 41.87. APPOINTMENT OF ARBITRATOR. (a) On receipt of the request and deposit under Section 41.85, 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 jointly select an arbitrator from the registry. The comptroller may send a paper copy of the registry to the parties by regular mail 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 registry, the appraisal district shall notify the comptroller that:

(1) the parties have selected an arbitrator, if the parties have done so, and request that the comptroller appoint the selected arbitrator; or

(2) the parties were unable to agree on the selection of an arbitrator and request that the comptroller 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. 41.88. NOTICE AND HEARING; REPRESENTATION OF PARTIES. (a) On acceptance of an appointment to conduct an arbitration under this subchapter, 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.

(b) The arbitrator:

(1) shall continue the hearing if both parties agree to the continuance; and

(2) may continue a hearing for reasonable cause.

(c) In an arbitration hearing, a property owner may represent himself or herself or may be represented by:

(1) an attorney licensed in this state;

(2) a person licensed as a real estate broker or salesperson under Chapter 1101, Occupations Code, or licensed and certified as a real estate appraiser under Chapter 1103, Occupations Code; or

(3) a property tax consultant registered under Chapter 1103, Occupations Code.

(d) In an arbitration hearing, an appraisal district may be represented by:

(1) a person authorized to represent a property owner under Subsection (c); or

(2) an employee of the appraisal district.

(e) Each party is responsible for the fees of its own representative.

Sec. 41.89. AWARD; PAYMENT OF ARBITRATOR'S FEE. (a) Not later than the 20th day after the date the hearing under Section 41.88 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) may include any remedy or relief that an appraisal review board may order under this chapter, including a determination of the appraised or market value, as applicable, of the property that is the subject of the appeal;

(2) shall specify the arbitrator's fee, which may not exceed $500;

(3) 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

(4) 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 protest 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 41.83 than the value determined by the appraisal district:

(1) the comptroller, on receipt of a copy of the award, shall:

(A) pay the arbitrator's fee out of the arbitration deposit; and

(B) refund to the appraisal district any remaining amount of the arbitration deposit; 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.

(d) If the arbitrator determines that the appraised or market value, as applicable, of the property that is the subject of the protest 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 41.83 than the value determined by the appraisal district:

(1) the comptroller, on receipt of a copy of the award, shall:

(A) pay the arbitrator's fee out of the arbitration deposit; and

(B) refund to the appraisal district any remaining amount of the arbitration deposit;

(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; and

(3) the property owner not later than the 60th day after the date of the award shall reimburse the appraisal district for the arbitrator's fee that was paid out of the appraisal district's deposit.

(e) The appraisal district may bring an action against the property owner to collect the amount of the reimbursement due under Subsection (d)(3).

Sec. 41.90. RULES; DELEGATION OF APPOINTMENT AUTHORITY. The comptroller may:

(1) adopt rules necessary to implement and administer this subchapter; and

(2) designate employees authorized to appoint arbitrators under this subchapter.

SECTION 2. As soon as practicable after the effective date of this Act, but not later than October 1, 2007:

(1) each appraisal district shall prescribe the form of an arbitration request as provided by Section 41.84, Tax Code, as added by this Act; and

(2) the comptroller shall:

(A) prescribe the model form for an arbitration request as provided by Section 41.84, Tax Code, as added by this Act; and

(B) establish a registry of qualified arbitrators as provided by Section 41.86, Tax Code, as added by this Act.

SECTION 3. Subchapter E, Chapter 41, Tax Code, as added by this Act, applies only to a protest filed by a property owner under that chapter on or after the effective date of this Act. A protest filed by a property owner under Chapter 41, Tax Code, before the effective date of this Act is governed by the law in effect immediately before the effective date of this Act, and the former law is continued in effect for that purpose.

SECTION 4. This Act takes effect September 1, 2007.