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A BILL TO BE ENTITLED
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AN ACT
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relating to the determination of the value of property for ad |
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valorem tax purposes, including appeals of appraisal review board |
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orders determining protests of property value determinations, and |
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the use of certain values by school districts in adopting tax rates. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 6.411(c), Tax Code, is amended to read as |
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follows: |
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(c) Except for communications described by Section |
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41.66(f)(3), this [This] section does not apply to communications |
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that do not discuss the specific evidence, argument, facts, merits, |
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or property involved in a hearing currently pending before the |
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appraisal review board or to communications between the board and |
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its legal counsel. |
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SECTION 2. Section 6.43, Tax Code, is amended to read as |
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follows: |
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Sec. 6.43. PERSONNEL. (a) The appraisal review board may |
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employ legal counsel as provided by the district budget or use the |
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services of the county attorney and may use the staff of the |
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appraisal office for clerical assistance. |
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(b) The appraisal review board may not employ or retain a |
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person to serve as legal counsel for the board if the person serves |
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as legal counsel for the appraisal district or chief appraiser. |
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This subsection does not prevent the appraisal review board from |
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using the services of the county attorney as authorized by |
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Subsection (a). |
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SECTION 3. Section 23.01, Tax Code, is amended by amending |
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Subsection (b) and adding Subsection (c) to read as follows: |
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(b) The market value of property shall be determined by the |
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application of generally accepted appraisal methods and |
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techniques. If the appraisal district determines the appraised |
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value of a property using mass appraisal standards, the mass |
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appraisal standards must comply with the Uniform Standards of |
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Professional Appraisal Practice. The same or similar appraisal |
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methods and techniques shall be used in appraising the same or |
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similar kinds of property. However, each property shall be |
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appraised based upon the individual characteristics that affect the |
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property's market value, and all available evidence that is |
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specific to the value of the property shall be taken into account in |
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determining the property's market value. |
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(c) Notwithstanding any provision of this subchapter to the |
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contrary, if the appraised value of property in a tax year is |
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determined under Subtitle F, the appraised value of the property as |
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finally determined under that subtitle is considered to be the |
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appraised value of the property for that tax year. In the following |
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tax year, the chief appraiser may not increase the appraised value |
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of the property unless the increase by the chief appraiser is |
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reasonably supported by substantial evidence when all of the |
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reliable and probative evidence in the record is considered as a |
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whole. If the appraised value is finally determined in a protest |
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under Section 41.41(a)(2) or an appeal under Section 42.26, the |
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chief appraiser may satisfy the requirement to reasonably support |
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by substantial evidence an increase in the appraised value of the |
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property in the following tax year by presenting evidence showing |
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that the inequality in the appraisal of property has been corrected |
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with regard to the properties that were considered in determining |
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the value of the subject property. The burden of proof is on the |
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chief appraiser to support an increase in the appraised value of |
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property under the circumstances described by this subsection, not |
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on the property owner. |
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SECTION 4. Sections 23.013, 23.014, and 23.24, Tax Code, |
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are amended to read as follows: |
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Sec. 23.013. MARKET DATA COMPARISON METHOD OF APPRAISAL. |
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(a) If the chief appraiser uses the market data comparison method |
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of appraisal to determine the market value of real property, the |
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chief appraiser shall use comparable sales data and shall adjust |
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the comparable sales to the subject property. |
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(b) A sale is not considered to be a comparable sale unless |
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the sale occurred within 24 months of the date as of which the |
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market value of the subject property is to be determined, except |
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that a sale that did not occur during that period may be considered |
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to be a comparable sale if enough comparable properties were not |
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sold during that period to constitute a representative sample. |
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(c) A sale of a comparable property must be appropriately |
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adjusted for any change in the market value of the comparable |
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property during the period between the date of the sale of the |
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comparable property and the date as of which the market value of the |
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subject property is to be determined. |
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(d) Whether a property is comparable to the subject property |
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shall be determined based on similarities with regard to location, |
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square footage of the lot and improvements, property age, property |
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condition, property access, amenities, views, income, operating |
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expenses, occupancy, and the existence of easements, deed |
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restrictions, or other legal burdens affecting marketability. |
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Sec. 23.014. EXCLUSION OF PROPERTY AS REAL PROPERTY. |
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Except as provided by Section 23.24(b), in [In] determining the |
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market value of real property, the chief appraiser shall analyze |
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the effect on that value of, and exclude from that value the value |
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of, any: |
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(1) tangible personal property, including trade |
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fixtures; |
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(2) intangible personal property; or |
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(3) other property that is not subject to appraisal as |
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real property. |
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Sec. 23.24. FURNITURE, FIXTURES, AND EQUIPMENT. (a) If |
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real property is appraised by a method that takes into account the |
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value of furniture, fixtures, and equipment in or on the real |
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property, the furniture, fixtures, and equipment shall not be |
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subject to additional appraisal or taxation as personal property. |
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(b) In determining the market value of the real property |
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appraised on the basis of rental income, the chief appraiser may not |
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separately appraise or take into account any personal property |
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valued as a portion of the income of the real property, and the |
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market value of the real property must include the combined value of |
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the real property and the personal property. |
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SECTION 5. Subchapter D, Chapter 23, Tax Code, is amended by |
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adding Section 23.522 to read as follows: |
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Sec. 23.522. TEMPORARY CESSATION OF AGRICULTURAL USE DURING |
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DROUGHT. The eligibility of land for appraisal under this |
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subchapter does not end because the land ceases to be devoted |
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principally to agricultural use to the degree of intensity |
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generally accepted in the area if: |
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(1) a drought declared by the governor creates an |
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agricultural necessity to extend the normal time the land remains |
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out of agricultural production; and |
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(2) the owner of the land intends that the use of the |
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land in that manner and to that degree of intensity be resumed when |
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the declared drought ceases. |
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SECTION 6. Section 26.04, Tax Code, is amended by adding |
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Subsection (d-1) to read as follows: |
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(d-1) This subsection applies only to a school district. |
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Notwithstanding Subsections (a), (b), and (c), on receipt of the |
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estimate of the taxable value of property in the district under |
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Section 26.01(e): |
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(1) the assessor for the district shall: |
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(A) determine an estimate of the values specified |
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in Subsection (a) for the district using the estimated value |
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provided under Section 26.01(e); and |
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(B) submit an appraisal roll to the governing |
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body of the district showing an estimate of each item of information |
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specified by Subsection (b), using the estimated values provided |
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under Section 26.01(e) and determined under Paragraph (A); and |
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(2) an officer or employee designated by the governing |
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body of the school district shall calculate the effective tax rate |
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and the rollback tax rate for the district using the estimates |
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described by Subdivision (1). |
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SECTION 7. Section 26.05, Tax Code, is amended by adding |
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Subsection (a-1) to read as follows: |
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(a-1) This subsection applies only to a school district. |
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The governing body of the school district shall adopt a tax rate for |
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the current tax year before the later of September 30 or the 60th |
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day after the date the estimate of the taxable value of property in |
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the district is received under Section 26.01(e) using the values |
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estimated under that section and Section 26.04(d-1). |
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SECTION 8. Section 41.66(f), Tax Code, is amended to read as |
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follows: |
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(f) A member of the appraisal review board may not |
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communicate with another person concerning: |
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(1) the evidence, argument, facts, merits, or any |
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other matters related to an owner's protest, except during the |
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hearing on the protest; [or] |
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(2) a property that is the subject of the protest, |
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except during a hearing on another protest or other proceeding |
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before the board at which the property is compared to other property |
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or used in a sample of properties; or |
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(3) a factual or hypothetical situation that is |
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substantially similar to a situation that is the subject of the |
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protest, except during the hearing on the protest. |
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SECTION 9. Section 41A.01, Tax Code, is amended to read as |
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follows: |
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Sec. 41A.01. RIGHT OF APPEAL BY PROPERTY OWNER. As an |
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alternative to filing an appeal under Section 42.01, a property |
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owner is entitled to appeal through binding arbitration under this |
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chapter an appraisal review board order determining a protest filed |
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under Section 41.41(a)(1) concerning the appraised or market value |
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of [real] property if: |
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(1) the property qualifies as the owner's residence |
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homestead under Section 11.13; or |
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(2) the appraised or market value, as applicable, of |
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the property as determined by the order is $1 million or less[; and
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[(2)
the appeal does not involve any matter in dispute
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other than the determination of the appraised or market value of the
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property]. |
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SECTION 10. Section 41A.03(a), Tax Code, is amended to read |
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as follows: |
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(a) To appeal an appraisal review board order under this |
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chapter, a property owner must file with the appraisal district not |
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later than the 45th day after the date the property owner receives |
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notice of the order: |
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(1) a completed request for binding arbitration under |
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this chapter in the form prescribed by Section 41A.04; and |
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(2) an arbitration deposit [in the amount of $500,] |
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made payable to the comptroller in the amount of: |
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(A) $500; or |
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(B) $250, if the property owner requests |
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expedited arbitration under Section 41A.031. |
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SECTION 11. Chapter 41A, Tax Code, is amended by adding |
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Section 41A.031 to read as follows: |
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Sec. 41A.031. EXPEDITED ARBITRATION. (a) A property owner |
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is entitled to an expedited arbitration if the property owner |
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includes a request for expedited arbitration in the request filed |
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under Section 41A.03 and pays the required deposit. |
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(b) An expedited arbitration must provide for not more than |
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one hour of argument and testimony on behalf of the property owner |
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and not more than one hour of argument and testimony on behalf of |
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the appraisal district. |
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(c) The comptroller shall adopt rules and processes to |
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assist in the conduct of an expedited arbitration. |
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SECTION 12. The heading to Section 41A.06, Tax Code, is |
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amended to read as follows: |
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Sec. 41A.06. REGISTRY AND INITIAL QUALIFICATION |
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[QUALIFICATIONS] OF ARBITRATORS. |
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SECTION 13. Section 41A.06(b), Tax Code, is amended to read |
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as follows: |
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(b) To initially qualify to serve as an arbitrator under |
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this chapter, a person must: |
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(1) have completed at least 30 hours of training in |
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arbitration and alternative dispute resolution procedures from a |
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university, college, or legal or real estate trade association; |
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(2) have been licensed or certified continuously |
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during the five years preceding the date the person agrees to serve |
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as an arbitrator, as: |
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(A) [be licensed as] a real estate broker or |
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salesperson under Chapter 1101, Occupations Code; |
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(B) [, or be licensed or certified as] a real |
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estate appraiser under Chapter 1103, Occupations Code; or |
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(C) a certified public accountant under Chapter |
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901, Occupations Code; and |
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(3) agree to conduct an arbitration for a fee that is |
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not more than 90 percent of the amount of the arbitration deposit |
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required by Section 41A.03. |
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SECTION 14. Chapter 41A, Tax Code, is amended by adding |
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Section 41A.061 to read as follows: |
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Sec. 41A.061. CONTINUED QUALIFICATION OF ARBITRATOR; |
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RENEWAL OF AGREEMENT. (a) The comptroller shall include a |
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qualified arbitrator in the registry until the second anniversary |
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of the date the person was added to the registry. To continue to be |
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included in the registry after the second anniversary of the date |
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the person was added to the registry, the person must renew the |
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person's agreement with the comptroller to serve as an arbitrator |
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on or as near as possible to the date on which the person's license |
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or certification issued under Chapter 901, 1101, or 1103, |
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Occupations Code, is renewed. |
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(b) To renew the person's agreement to serve as an |
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arbitrator, the person must: |
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(1) file a renewal application with the comptroller at |
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the time and in the manner prescribed by the comptroller; |
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(2) continue to meet the requirements provided by |
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Section 41A.06(b); and |
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(3) during the preceding two years have completed at |
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least eight hours of continuing education in arbitration and |
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alternative dispute resolution procedures offered by a university, |
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college, real estate trade association, or legal association. |
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(c) The comptroller shall remove a person from the registry |
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if the person fails or declines to renew the person's agreement to |
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serve as an arbitrator in the manner required by this section. |
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SECTION 15. Section 41A.07, Tax Code, is amended by adding |
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Subsection (e) to read as follows: |
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(e) Notwithstanding any other provision of this section, an |
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arbitrator selected or appointed to arbitrate an appeal under this |
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chapter regarding property other than real property must be |
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licensed as a certified public accountant under Chapter 901, |
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Occupations Code. |
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SECTION 16. Section 41A.08(b), Tax Code, as added by |
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Chapters 372 (S.B. 1351) and 912 (H.B. 182), Acts of the 79th |
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Legislature, Regular Session, 2005, is reenacted and amended to |
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read as follows: |
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(b) The parties to an arbitration proceeding under this |
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chapter may represent themselves or, at their own cost, may be |
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represented by: |
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(1) an employee of the appraisal district; |
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(2) an attorney who is licensed in this state; |
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(3) a person who is licensed as a real estate broker or |
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salesperson under Chapter 1101, Occupations Code, or is licensed or |
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certified as a real estate appraiser under Chapter 1103, |
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Occupations Code; [or] |
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(4) a property tax consultant registered under Chapter |
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1152, Occupations Code; or |
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(5) an individual who is licensed as a certified |
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public accountant under Chapter 901, Occupations Code. |
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SECTION 17. (a) Sections 6.411 and 41.66, Tax Code, as |
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amended by this Act, apply only to an offense committed on or after |
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the effective date of this Act. For purposes of this subsection, an |
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offense was committed before the effective date of this Act if any |
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element of the offense occurred before that date. An offense |
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committed before the effective date of this Act is covered by the |
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law in effect when the offense was committed, and the former law is |
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continued in effect for that purpose. |
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(b) Sections 41A.01, 41A.03, 41A.07, and 41A.08, Tax Code, |
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as amended by this Act, and Section 41A.031, Tax Code, as added by |
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this Act, apply only to an appeal through binding arbitration under |
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Chapter 41A of that code that is requested on or after the effective |
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date of this Act. |
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(c) Section 41A.06, Tax Code, as amended by this Act, |
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applies only to a person who initially qualifies to serve as an |
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arbitrator under Chapter 41A, Tax Code, on or after the effective |
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date of this Act. |
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(d) Section 41A.061, Tax Code, as added by this Act, does |
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not affect the eligibility of a person who is included on the |
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registry list of qualified arbitrators on the effective date of |
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this Act to continue to remain on that registry list before the date |
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on which the person's license or certificate under Chapter 901, |
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1101, or 1103, Occupations Code, expires unless renewed. |
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SECTION 18. This Act applies only to the appraisal of |
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property for a tax year beginning on or after the effective date of |
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this Act. |
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SECTION 19. This Act takes effect January 1, 2010. |
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