80R10311 JD/YDB-D

By: Otto, Hill, Kolkhorst, Ritter, Thompson, H.B. No. 3494

et al.

A BILL TO BE ENTITLED

AN ACT

relating to the appeal through binding arbitration of a protest of an appraisal review board order, and to related complaints filed by a property owner and disciplinary action by the Board of Tax Professional Examiners; providing penalties.

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

SECTION 1. Section 41A.08(b), Tax Code, as added by Chapter 372, Acts of the 79th Legislature, Regular Session, 2005, is amended to read as follows:

(b) The parties to an arbitration proceeding under this chapter may represent themselves or be represented in the proceeding by an attorney, certified public accountant, [or by a] property tax consultant, real estate appraiser, or real estate broker [acting under power of attorney]. An employee of the appraisal district may represent the appraisal district in the arbitration proceeding. The property owner who is a party to the arbitration proceeding may present evidence or make arguments in the proceeding. A person other than the property owner may not serve as a party representative, present evidence, or make arguments in an arbitration proceeding under this chapter unless the person:

(1) is an employee of the appraisal district;

(2) is a licensed attorney in this state;

(3) 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) is a property tax consultant registered under Chapter 1152, Occupations Code; or

(5) is certified as a certified public accountant under Chapter 901, Occupations Code.

SECTION 2. Section 41A.08, Tax Code, is amended by adding Subsections (c) and (d) to read as follows:

(c) In an arbitration hearing under this chapter:

(1) any party is entitled to present evidence relating to the data or appraisal method used by the appraisal district in determining the market or appraised value of the property that is the subject of the appeal, regardless of whether that evidence was presented to the appraisal review board that determined the protest; and

(2) the property owner is entitled to allege and present evidence to show that the appraisal review board that determined the protest failed to comply with:

(A) a provision of Subchapter C, Chapter 6, or another law of this state applicable to the board;

(B) a rule adopted by the comptroller applicable to the board or the hearing conducted by the board; or

(C) any other substantive or procedural requirement applicable to the hearing conducted by the board.

(d) If the property owner presents evidence under Subsection (c)(2), the arbitrator shall:

(1) make a determination whether the appraisal review board failed to comply with the statute, rule, or procedural requirement as alleged by the property owner; and

(2) include that determination in the record of the hearing.

SECTION 3. Section 41A.11, Tax Code, is amended to read as follows:

Sec. 41A.11. POST APPEAL ADMINISTRATIVE AND COMPLAINT PROCEDURES; DISCIPLINARY ACTION. (a) An arbitration award under this chapter is considered to be a final determination of an appeal for purposes of Subchapter C, Chapter 42.

(b) A property owner may not appeal an arbitration award under this chapter to the Board of Tax Professional Examiners.

(c) A property owner who alleges that a chief appraiser violated a procedural or ethical provision or rule enacted or adopted under this title may file a complaint with the Board of Tax Professional Examiners under Chapter 1151, Occupations Code.

(d) The board shall investigate a complaint filed against a chief appraiser under Subsection (c) and may impose any disciplinary action authorized under Section 1151.202, Occupations Code, for a violation of this title.

SECTION 4. Section 1151.202, Occupations Code, is amended by adding Subsections (a-1) and (a-2) to read as follows:

(a-1) For a violation of Title 1, Tax Code, the board may:

(1) deny, suspend, or revoke a registration of a person;

(2) place on probation a person whose registration has been suspended;

(3) administer a public reprimand of a person for a violation by the person;

(4) stipulate periodic board review of the person;

(5) require the person to successfully complete additional continuing education; or

(6) assess an administrative penalty under Subchapter G.

(a-2) In addition to any disciplinary action authorized by Subsection (a-1) for a violation of Title 1, Tax Code, the board may issue a written reprimand to the registration holder or require the holder to participate in continuing education programs in which the board specifies the courses to be completed and the number of hours required.

SECTION 5. Subchapter E, Chapter 1151, Occupations Code, is amended by adding Section 1151.2021 to read as follows:

Sec. 1151.2021. SCHEDULE OF SANCTIONS. (a) The board by rule shall adopt a schedule of the disciplinary sanctions that the board may impose under this chapter. In adopting the schedule of sanctions, the board shall ensure that the severity of the sanction imposed is appropriate to the type of violation or conduct that is the basis for disciplinary action.

(b) In determining the appropriate disciplinary action, including the amount of any administrative penalty to assess, the board shall consider:

(1) whether the person is being disciplined for multiple violations of either this chapter or Title 1, Tax Code, or a rule or order adopted under this chapter;

(2) whether the person has previously been the subject of disciplinary action by the board and has previously complied with board rules and this chapter;

(3) the seriousness of the violation;

(4) the threat to public safety; and

(5) any mitigating factors.

SECTION 6. Chapter 1151, Occupations Code, is amended by adding Subchapter G to read as follows: SUBCHAPTER G. ADMINISTRATIVE PENALTY

Sec. 1151.301. IMPOSITION OF PENALTY. The board may impose an administrative penalty against a person who violates this chapter, a rule adopted under this chapter, or Title 1, Tax Code.

Sec. 1151.302. AMOUNT OF PENALTY. (a) The amount of the administrative penalty may not exceed $1,000 for each violation. Each day of a continuing violation is a separate violation.

(b) The amount of the penalty shall be based on:

(1) the seriousness of the violation;

(2) the history of previous violations;

(3) the amount necessary to deter a future violation;

(4) efforts made to correct the violation; and

(5) any other matter that justice may require.

Sec. 1151.303. NOTICE OF VIOLATION AND PENALTY. (a) If, after investigating a possible violation and the facts surrounding that possible violation, the board determines that a violation occurred, the board shall give written notice of the violation to the person alleged to have committed the violation.

(b) The notice must:

(1) include a brief summary of the alleged violation;

(2) state the amount of the proposed administrative penalty; and

(3) inform the person of the person's right to a hearing on the occurrence of the violation, the amount of the penalty, or both.

Sec. 1151.304. PENALTY TO BE PAID OR HEARING REQUESTED. (a) Not later than the 20th day after the date the person receives the notice, the person may:

(1) accept the board's determination, including the proposed administrative penalty; or

(2) make a written request for a hearing on that determination.

(b) If the person accepts the board's determination, the executive director or that executive director's designee by order shall approve the determination and impose the proposed penalty.

Sec. 1151.305. HEARING. (a) If the person timely requests a hearing, the board shall:

(1) set a hearing;

(2) give written notice of the hearing to the person; and

(3) designate a hearings examiner to conduct the hearing.

(b) The hearings examiner shall make findings of fact and conclusions of law and promptly issue to the executive director or that executive director's designee a proposal for decision as to the occurrence of the violation and the amount of any proposed administrative penalty.

Sec. 1151.306. DECISION BY EXECUTIVE DIRECTOR. (a) Based on the findings of fact and conclusions of law and the recommendations of the hearings examiner, the executive director or the executive director's designee by order may determine that:

(1) a violation has occurred and may impose an administrative penalty; or

(2) a violation did not occur.

(b) The board shall give notice of the order to the person. The notice must include:

(1) separate statements of the findings of fact and conclusions of law;

(2) the amount of any penalty imposed; and

(3) a statement of the right of the person to judicial review of the order.

Sec. 1151.307. OPTIONS FOLLOWING DECISION: PAY OR APPEAL. (a) Not later than the 30th day after the date on which the order becomes final, the person shall:

(1) pay the administrative penalty;

(2) pay the penalty and file a petition for judicial review contesting the occurrence of the violation, the amount of the penalty, or both; or

(3) without paying the penalty, file a petition for judicial review contesting the occurrence of the violation, the amount of the penalty, or both.

(b) Within the 30-day period, a person who acts under Subsection (a)(3) may:

(1) stay enforcement of the penalty by:

(A) paying the penalty to the court for placement in an escrow account; or

(B) giving to the court a supersedeas bond that is approved by the court for the amount of the penalty and that is effective until all judicial review of the order is final; or

(2) request the court to stay enforcement of the penalty by:

(A) filing with the court a sworn affidavit of the person stating that the person is financially unable to pay the penalty and is financially unable to give the supersedeas bond; and

(B) giving a copy of the affidavit to the board by certified mail.

(c) If the board receives a copy of an affidavit as provided by Subsection (b)(2), the board may file with the court a contest to the affidavit not later than the fifth day after the date the copy is received.

(d) The court shall hold a hearing on the facts alleged in the affidavit as soon as practicable and shall stay the enforcement of the penalty on finding that the alleged facts are true. The person who files an affidavit has the burden of proving that the person is financially unable to pay the penalty and to give a supersedeas bond.

Sec. 1151.308. COLLECTION OF PENALTY. If the person does not pay the administrative penalty and the enforcement of the penalty is not stayed, the board may refer the matter to the attorney general for collection.

Sec. 1151.309. DETERMINATION BY COURT. (a) If the court sustains the determination that a violation occurred, the court may uphold or reduce the amount of the administrative penalty and order the person to pay the full or reduced amount.

(b) If the court does not sustain the determination that a violation occurred, the court shall order that a penalty is not owed.

Sec. 1151.310. REMITTANCE OF PENALTY AND INTEREST. (a) If, after judicial review, the administrative penalty is reduced or not imposed by the court, the court shall, after the judgment becomes final:

(1) order the appropriate amount, plus accrued interest, be remitted to the person by the board if the person paid the penalty under Section 1151.307(a)(2); or

(2) if the person paid the penalty under Section 1151.307(b)(1)(A) or posted a supersedeas bond, order the board to:

(A) execute a complete release of the escrow account or bond, as appropriate, if the penalty is not imposed; or

(B) release the escrow account or bond, as appropriate, after the reduced penalty has been paid from the account or by the person.

(b) The interest paid under Subsection (a)(1) is accrued at the rate charged on loans to depository institutions by the New York Federal Reserve Bank. The interest shall be paid for the period beginning on the date the penalty is paid and ending on the date the penalty is remitted.

Sec. 1151.311. EXPENSES AND COSTS. (a) In this section, "reasonable expenses and costs" includes expenses incurred by the board and the attorney general in the investigation, initiation, or prosecution of an action, including reasonable investigative costs, court costs, attorney's fees, witness fees, and deposition expenses.

(b) The board may assess reasonable expenses and costs against a person in an administrative hearing if, as a result of the hearing, an administrative penalty is assessed against the person. The person shall pay expenses and costs assessed under this subsection not later than the 30th day after the date the order of the executive director or that executive director's designee requiring the payment of expenses and costs is final. The board may refer the matter to the attorney general for collection of the expenses and costs.

(c) If the attorney general brings an action against a person to enforce an administrative penalty assessed under this subchapter and the person is found liable for an administrative penalty, the attorney general may recover, on behalf of the attorney general and the board, reasonable expenses and costs.

Sec. 1151.312. ADMINISTRATIVE PROCEDURE. A proceeding under this subchapter is subject to Chapter 2001, Government Code.

SECTION 7. Section 41A.08(b), Tax Code, as added by Chapter 912, Acts of the 79th Legislature, Regular Session, 2005, is repealed.

SECTION 8. The change in law made by this Act applies only to a penalty assessed on or after the effective date of this Act. A penalty assessed before that date is governed by the law in effect immediately before that date, and that law is continued in effect for that purpose.

SECTION 9. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2007.