By: Williams, Patrick

Shapleigh

A BILL TO BE ENTITLED

AN ACT

relating to ad valorem taxation.

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

ARTICLE 1. CONSOLIDATED APPRAISAL REVIEW BOARDS

SECTION 1.01. Section 6.41, Tax Code, is amended by adding Subsections (g) and (h) to read as follows:

(g) Subsection (a) does not preclude the boards of directors of two or more adjoining appraisal districts from providing for the operation of a consolidated appraisal review board by interlocal contract.

(h) When adjoining appraisal districts by interlocal contract have provided for the operation of a consolidated appraisal review board:

(1) a reference in this or another section of this code to the appraisal district means the adjoining appraisal districts;

(2) a reference in this or another section of this code to the appraisal district board of directors means the boards of directors of the adjoining appraisal districts;

(3) a provision of this code that applies to an appraisal review board also applies to the consolidated appraisal review board; and

(4) a reference in this code to the appraisal review board shall be construed to also refer to the consolidated appraisal review board.

SECTION 1.02. This article takes effect only if the constitutional amendment proposed by the 81st Legislature, Regular Session, 2009, authorizing the legislature to authorize a single board of equalization for two or more adjoining appraisal entities that elect to provide for consolidated equalizations is approved by the voters. If that amendment is not approved by the voters, this article has no effect.

ARTICLE 2. APPRAISAL OF RESIDENCE HOMESTEADS

SECTION 2.01. Section 23.01, Tax Code, is amended by adding Subsection (c) to read as follows:

(c) The market value of a residence homestead shall be determined solely on the basis of the property's value as a residence homestead, regardless of whether the residential use of the property by the owner is considered to be the highest and best use of the property.

SECTION 2.02. (a) Subject to Subsection (b) of this section, this article takes effect only if the constitutional amendment proposed by the 81st Legislature, Regular Session, 2009, authorizing the legislature to provide for the ad valorem taxation of a residence homestead solely on the basis of the property's value as a residence homestead is approved by the voters. If that amendment is not approved by the voters, this article has no effect.

(b) This article takes effect only if a specific appropriation to the Texas Education Agency is included in Senate Bill No. 1 (General Appropriations Act), Acts of the 81st Legislature, Regular Session, 2009, intended to offset the cost to the Foundation School Program resulting from the implementation of this article.

ARTICLE 3. TAXPAYER OMBUDSMAN

SECTION 3.01. Subsection (d), Section 6.04, Tax Code, is amended to read as follows:

(d) The board shall develop and implement policies that provide the public with reasonable opportunity to appear before the board to speak on any issue under the jurisdiction of the board. Reasonable time shall be provided during each board meeting for public comment on appraisal district and appraisal review board policies and procedures, and a report from the taxpayer ombudsman [liaison officer] if one is required by Section 6.052.

SECTION 3.02. Section 6.052, Tax Code, is amended to read as follows:

Sec. 6.052. TAXPAYER OMBUDSMAN [LIAISON OFFICER]. (a) The board of directors for an appraisal district created for a county with a population of more than 50,000 [125,000] shall appoint a taxpayer ombudsman [liaison officer] who shall serve at the pleasure of the board. The taxpayer ombudsman [liaison officer] shall administer the public access functions required by Sections 6.04(d), (e), and (f), and is responsible for resolving disputes not involving matters that may be protested under Section 41.41.

(b) The taxpayer ombudsman shall [liaison officer may] provide information and materials designed to assist property owners in understanding the appraisal process, protest procedures, and related matters.

(c) The taxpayer ombudsman [liaison officer] shall report to the board at each meeting on the status of all complaints filed with the board under Section 6.04(g).

(d) The taxpayer ombudsman [liaison officer] is entitled to compensation as provided by the budget adopted by the board of directors.

(d-1) The appraisal review board shall provide the taxpayer ombudsman with the contact information of each property owner who files a notice of protest under Chapter 41 with the board. On receipt of the information, the taxpayer ombudsman shall contact the property owner to inform the property owner of the services provided by the ombudsman and provide the business address and telephone number of the ombudsman.

(e) The chief appraiser or any other person who performs appraisal services for the appraisal district for compensation is not eligible to be the taxpayer ombudsman [liaison officer] for the appraisal district.

ARTICLE 4. STUDIES CONDUCTED BY COMPTROLLER

SECTION 4.01. Subdivisions (1), (2), and (4), Section 403.3011, Government Code, are amended to read as follows:

(1) "Study" ["Annual study"] means a study conducted under Section 403.302.

(2) "Eligible school district" means a school district for which the comptroller has determined the following:

(A) in the most recent [annual] study, the local value is invalid under Section 403.302(c) and does not exceed the state value for the school district determined in the [annual] study;

(B) in the two studies [annual study for each of the two years] preceding the most recent [annual] study, the school district's local value was valid under Section 403.302(c); [and]

(C) in the most recent [annual] study, the aggregate local value of all of the categories of property sampled by the comptroller is not less than 90 percent of the lower limit of the margin of error as determined by the comptroller of the aggregate value as determined by the comptroller of all of the categories of property sampled by the comptroller; and

(D) the appraisal district that appraises property for the school district was in compliance with the scoring requirement of the comptroller's most recent review of the appraisal district conducted under Section 5.102, Tax Code.

(4) "State value" means the value of property in a school district as determined in a [the annual] study.

SECTION 4.02. Section 403.302, Government Code, is amended by amending Subsections (a), (c), (c-1), (f), (h), (i), and (l) and adding Subsections (a-1), (a-2), (m), (n), and (o) to read as follows:

(a) The comptroller shall conduct a [an annual] study using comparable sales and generally accepted auditing and sampling techniques to determine the total taxable value of all property in each school district. The study shall determine the taxable value of all property and of each category of property in the district and the productivity value of all land that qualifies for appraisal on the basis of its productive capacity and for which the owner has applied for and received a productivity appraisal. The comptroller shall make appropriate adjustments in the study to account for actions taken under Chapter 41, Education Code.

(a-1) The comptroller shall conduct a study:

(1) at least every two years in each school district for which the most recent study resulted in a determination by the comptroller that the school district's local value was valid; and

(2) each year in a school district for which the most recent study resulted in a determination by the comptroller that the school district's local value was not valid.

(a-2) If in any year the comptroller does not conduct a study, the school district's local value for that year is considered to be valid.

(c) If after conducting the [annual] study the comptroller determines that the local value for a school district is valid, the local value is presumed to represent taxable value for the school district. In the absence of that presumption, taxable value for a school district is the state value for the school district determined by the comptroller under Subsections (a) and (b) unless the local value exceeds the state value, in which case the taxable value for the school district is the district's local value. In determining whether the local value for a school district is valid, the comptroller shall use a margin of error that does not exceed five percent unless the comptroller determines that the size of the sample of properties necessary to make the determination makes the use of such a margin of error not feasible, in which case the comptroller may use a larger margin of error.

(c-1) This subsection applies only to a school district whose central administrative office is located in a county with a population of 9,000 or less and a total area of more than 6,000 square miles. If after conducting the [annual] study for a tax year the comptroller determines that the local value for a school district is not valid, the comptroller shall adjust the taxable value determined under Subsections (a) and (b) as follows:

(1) for each category of property sampled and tested by the comptroller in the school district, the comptroller shall use the weighted mean appraisal ratio determined by the study, unless the ratio is more than four percentage points lower than the weighted mean appraisal ratio determined by the comptroller for that category of property in the immediately preceding study, in which case the comptroller shall use the weighted mean appraisal ratio determined in the immediately preceding study minus four percentage points;

(2) the comptroller shall use the category weighted mean appraisal ratios as adjusted under Subdivision (1) to establish a value estimate for each category of property sampled and tested by the comptroller in the school district; and

(3) the value estimates established under Subdivision (2), together with the local tax roll value for any categories not sampled and tested by the comptroller, less total deductions determined by the comptroller, determine the taxable value for the school district.

(f) The study shall determine the values as of January 1 of each year:

(1) for a school district in which a study was conducted according to the results of the study; and

(2) for a school district in which a study was not conducted according to the market value determined by the appraisal district that appraises property for the district, less the amounts specified by Subsection (d).

(h) On request of the commissioner of education or a school district, the comptroller may audit the total taxable value of property in a school district and may revise the [annual] study findings. The request for audit is limited to corrections and changes in a school district's appraisal roll that occurred after preliminary certification of the [annual] study findings by the comptroller. Except as otherwise provided by this subsection, the request for audit must be filed with the comptroller not later than the third anniversary of the date of the final certification of the [annual] study findings. The request for audit may be filed not later than the first anniversary of the date the chief appraiser certifies a change to the appraisal roll if the chief appraiser corrects the appraisal roll under Section 25.25 or 42.41, Tax Code, and the change results in a material reduction in the total taxable value of property in the school district. The comptroller shall certify the findings of the audit to the commissioner of education.

(i) If the comptroller determines in the [annual] study that the market value of property in a school district as determined by the appraisal district that appraises property for the school district, less the total of the amounts and values listed in Subsection (d) as determined by that appraisal district, is valid, the comptroller, in determining the taxable value of property in the school district under Subsection (d), shall for purposes of Subsection (d)(14) subtract from the market value as determined by the appraisal district of residence homesteads to which Section 23.23, Tax Code, applies the amount by which that amount exceeds the appraised value of those properties as calculated by the appraisal district under Section 23.23, Tax Code. If the comptroller determines in the [annual] study that the market value of property in a school district as determined by the appraisal district that appraises property for the school district, less the total of the amounts and values listed in Subsection (d) as determined by that appraisal district, is not valid, the comptroller, in determining the taxable value of property in the school district under Subsection (d), shall for purposes of Subsection (d)(14) subtract from the market value as estimated by the comptroller of residence homesteads to which Section 23.23, Tax Code, applies the amount by which that amount exceeds the appraised value of those properties as calculated by the appraisal district under Section 23.23, Tax Code.

(l) If after conducting the [annual] study for [the year 2003 or] a [subsequent] year the comptroller determines that a school district is an eligible school district, for that year and the following year the taxable value for the school district is the district's local value. [Not later than the first anniversary of the date of the determination that a school district is an eligible school district, the comptroller shall complete an appraisal standards review as provided by Section 5.102, Tax Code, of each appraisal district that appraises property for the school district.]

(m) The Comptroller's Property Value Study Advisory Committee is created. The committee is composed of:

(1) one member of the house of representatives, appointed by the speaker of the house of representatives;

(2) one member of the senate, appointed by the lieutenant governor;

(3) two members who represent appraisal districts, appointed by the comptroller;

(4) two members who represent school districts, appointed by the comptroller; and

(5) three members appointed by the comptroller who are residents of this state and are school district taxpayers or have expertise in school district taxation or ratio studies.

(n) Chapter 2110 does not apply to the size, composition, or duration of the Comptroller's Property Value Study Advisory Committee.

(o) The comptroller shall adopt rules governing the conduct of the study after consultation with the Comptroller's Property Value Study Advisory Committee.

SECTION 4.03. The heading to Section 403.304, Government Code, is amended to read as follows:

Sec. 403.304. COOPERATION WITH COMPTROLLER; CONFIDENTIALITY.

SECTION 4.04. Section 403.304, Government Code, is amended by amending Subsection (a) and adding Subsection (a-1) to read as follows:

(a) A school district, appraisal district, or other governmental entity in this state shall promptly comply with an oral or written request from the comptroller for information to be used in conducting a study, including information that is made confidential by Chapter 552 of this code, Section 22.27, Tax Code, or another law of this state.

(a-1) All information the comptroller obtains from a person, other than a government or governmental subdivision or agency, under an assurance that the information will be kept confidential, in the course of conducting a study [of school district values] is confidential and may not be disclosed except as provided in Subsection (b).

SECTION 4.05. Subsection (c), Section 5.07, Tax Code, is amended to read as follows:

(c) The comptroller shall also prescribe a uniform record system to be used by all appraisal districts for the purpose of submitting data to be used in the [annual] studies required by Section 5.10 of this code and by Section 403.302, Government Code. The record system shall include a compilation of information concerning sales of real property within the boundaries of the appraisal district. The sales information maintained in the uniform record system shall be submitted annually in a form prescribed by the comptroller.

SECTION 4.06. Subsection (a), Section 5.10, Tax Code, is amended to read as follows:

(a) At least once every two years, the [The] comptroller shall conduct a [an annual] study in each appraisal district to determine the degree of uniformity of and the median level of appraisals by the appraisal district within each major category of property. The comptroller shall publish a report of the findings of the study, including in the report the median levels of appraisal for each major category of property, the coefficient of dispersion around the median level of appraisal for each major category of property, and any other standard statistical measures that the comptroller considers appropriate. In conducting the study, the comptroller shall apply appropriate standard statistical analysis techniques to data collected as part of the [annual] study of school district taxable values required by Section 403.302, Government Code.

SECTION 4.07. Section 5.102, Tax Code, is amended to read as follows:

Sec. 5.102. REVIEW OF APPRAISAL DISTRICTS [STANDARDS]. (a) At least once every two years, the [The] comptroller shall review the governance of each appraisal district, taxpayer assistance provided, and the operating and appraisal standards, procedures, and methodology used by each appraisal district [that appraises property for an eligible school district as defined by Section 403.3011, Government Code,] to determine compliance with generally accepted [appraisal] standards, procedures, and methodology [and practices]. After consultation with the advisory committee created under Section 403.302, Government Code, the [The] comptroller by rule may establish procedures and standards for conducting and scoring the review.

(b) In conducting the review, the comptroller is entitled to access to all records and reports of the appraisal district, to copy or print any record or report of the appraisal district, and to the assistance of the appraisal district's officers and employees.

(c) At the conclusion of the review, the comptroller shall, in writing, notify the appraisal district concerning its performance in the review. If the review results in a finding that an appraisal district is not in compliance with generally accepted [appraisal] standards, procedures, and methodology [and practices], the comptroller shall deliver a report that details the comptroller's findings and recommendations for improvement to:

(1) the appraisal district's chief appraiser and board of directors; and

(2) the superintendent and board of trustees of each school district participating in the appraisal district.

(d) If the appraisal district fails to comply with the recommendations in the report and the comptroller finds that the board of directors of the appraisal district failed to take remedial action reasonably designed to ensure substantial compliance with each recommendation in the report before the first anniversary of the date the report was issued, the comptroller shall notify the Board of Tax Professional Examiners, or a successor to the board, which shall take action necessary to ensure that the recommendations in the report are implemented as soon as practicable [judge of each district court in the county for which the appraisal district is established, who shall appoint a board of conservators consisting of five members to implement the recommendations. The board of conservators shall exercise supervision and control over the operations of the appraisal district until the comptroller determines under Section 403.302, Government Code, that in the same year the taxable value of each school district for which the appraisal district appraises property is the local value for the school district. The appraisal district shall bear the costs related to the supervision and control of the district by the board of conservators].

(e) Before February 1 of the year following the year in which the Board of Tax Professional Examiners, or its successor, takes action under Subsection (d), and with the assistance of the comptroller, the board shall determine whether the recommendations in the most recent report have been substantially implemented. The presiding officer of the board shall notify the chief appraiser and the board of directors of the appraisal district in writing of the board's determination.

SECTION 4.08. Subsections (a), (d), and (e), Section 5.12, Tax Code, are amended to read as follows:

(a) The comptroller shall audit the performance of an appraisal district if one or more of the following conditions exist according to each of two consecutive [annual] studies conducted by the comptroller under Section 5.10 [of this code], regardless of whether the prescribed condition or conditions that exist are the same for each of those studies:

(1) the overall median level of appraisal for all property in the district for which the comptroller determines a median level of appraisal is less than 0.75;

(2) the coefficient of dispersion around the overall median level of appraisal of the properties used to determine the overall median level of appraisal for all property in the district for which the comptroller determines a median level of appraisal exceeds 0.30; or

(3) the difference between the median levels of appraisal for any two classes of property in the district for which the comptroller determines a median level of appraisal is more than 0.45.

(d) A request for a performance audit of an appraisal district may not be made under Subsection (b) or (c) [of this section] if according to each of the two most recently published [annual] studies conducted by the comptroller under Section 5.10 [of this code]:

(1) the overall median level of appraisal for all property in the district for which the comptroller determines a median level of appraisal is more than 0.90 and less than 1.10;

(2) the coefficient of dispersion around the overall median level of appraisal of the properties used to determine the overall median level of appraisal for all property in the district for which the comptroller determines a median level of appraisal is less than 0.15; and

(3) the difference between the highest and lowest median levels of appraisal in the district for the classes of property for which the comptroller determines a median level of appraisal is less than 0.20.

(e) A request for a performance audit of an appraisal district may not be made under Subsection (b) or (c) [of this section]:

(1) during the two years immediately following the publication of the second of two consecutive [annual] studies according to which the comptroller is required to conduct an audit of the district under Subsection (a) [of this section]; [or]

(2) during the year immediately following the date the results of an audit of the district conducted by the comptroller under Subsection (a) [of this section] are reported to the chief appraiser of the district; or

(3) during a year in which the comptroller is conducting a review of the district under Section 5.102.

SECTION 4.09. Subsection (a), Section 5.13, Tax Code, is amended to read as follows:

(a) The comptroller shall complete an audit required by Section 5.12(a) [of this code] within two years after the date of the publication of the second of the two [annual] studies the results of which required the audit to be conducted. The comptroller shall complete an audit requested under Section 5.12(b) or (c) [of this code] as soon as practicable after the request is made.

SECTION 4.10. Section 41A.12, Tax Code, is amended to read as follows:

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.

SECTION 4.11. Section 5.101 and Subsection (g), Section 5.12, Tax Code, are repealed.

SECTION 4.12. As soon as possible after the effective date of this Act, the speaker of the house of representatives, lieutenant governor, and comptroller of public accounts shall appoint members to the Comptroller's Property Value Study Advisory Committee in accordance with Subsection (m), Section 403.302, Government Code, as added by this Act.

SECTION 4.13. The change in law made by this article applies only to a study conducted under Section 5.10, Tax Code, or Section 403.302, Government Code, or a review conducted under Section 5.102, Tax Code, for a year that begins on or after January 1, 2009. A study or review for a year that began before that date is covered by the law in effect immediately before the effective date of this Act, and the former law is continued in effect for that purpose.

ARTICLE 5. STUDY REGARDING CIRCUIT BREAKER PROGRAMS

SECTION 5.01. (a) In this section, "circuit breaker program" means a program that limits the amount of ad valorem taxes that may be imposed on a residence homestead based on the owner's annual income.

(b) The comptroller of public accounts shall conduct a study to examine circuit breaker programs.

(c) Before collecting information for purposes of the study, the comptroller of public accounts shall establish an advisory committee to assist the comptroller in conducting the study. The advisory committee must be composed of representatives of:

(1) school districts and other taxing units;

(2) home builders;

(3) real estate agents;

(4) mortgage lenders;

(5) financial agencies involved in mortgage markets;

(6) organizations interested in housing for low-income and moderate-income households;

(7) organizations interested in the effect of ad valorem taxes on low-income and moderate-income households;

(8) organizations interested in the effect of public policy on low-income and moderate-income households; and

(9) other appropriate, interested organizations or members of the public, as determined by the comptroller.

(d) The comptroller of public accounts, with the assistance of the advisory committee, shall study:

(1) methods to implement a circuit breaker program, including the use of rebates or tax credits;

(2) methods to create a simple, transparent process for the owner of a residence homestead to apply for and receive a limitation on the amount of ad valorem taxes that may be imposed on the homestead under a circuit breaker program;

(3) the effects of different designs of a circuit breaker program, including the effect of:

(A) limiting which taxing units are involved;

(B) basing eligibility on a maximum annual income level;

(C) limiting the dollar amount of the benefit that a property owner could receive in the program; and

(D) basing eligibility on a minimum ratio of residence homestead ad valorem taxes imposed to annual income, including a progressive scale of minimum ratios based on annual income; and

(4) methods to ensure the reliability of a property owner's statement of annual income.

(e) The comptroller of public accounts and the advisory committee shall analyze the information studied and prepare a report that:

(1) describes the parameters, techniques, and legal assumptions established under Subsection (d) of this section that were used in conducting the study;

(2) estimates the benefit of alternative designs of a circuit breaker program for property owners in various annual income brackets and with varying amounts of residence homestead ad valorem tax liability, including an estimate of the percentage of property owners in various annual income brackets that would benefit and the dollar amount of the benefit to those property owners;

(3) estimates the cost to the state and taxing units of implementing alternative designs of a circuit breaker program, including the percentage by which the amount of ad valorem taxes collected would be reduced;

(4) analyzes the effects on this state's economy of implementing a circuit breaker program, including the effect on home ownership rates, the residential housing market, and economic development; and

(5) specifies any necessary statutory changes the comptroller and the advisory committee determine are necessary to implement a circuit breaker program described by the study.

(f) The comptroller of public accounts may contract with appraisal districts, taxing units, or other appropriate organizations for assistance and to obtain information necessary to conduct the study. A state agency, appraisal district, or taxing unit shall assist the comptroller if the comptroller requests information or assistance in conducting the study.

(g) Not later than December 1, 2010, the comptroller of public accounts shall submit to the governor, lieutenant governor, and speaker of the house of representatives the report prepared under Subsection (e) of this section.

SECTION 5.02. This article expires September 1, 2011.

SECTION 5.03. This article takes effect September 1, 2009.

ARTICLE 6. SETTING OF SCHOOL DISTRICT TAX RATES

SECTION 6.01. Section 26.04, Tax Code, is amended by adding Subsection (d-1) to read as follows:

(d-1) This subsection applies only to a school district. Notwithstanding Subsections (a), (b), and (c), on receipt of the estimate of the taxable value of property in the district under Section 26.01(e):

(1) the assessor for the district shall:

(A) determine an estimate of the values specified in Subsection (a) for the district using the estimated value provided under Section 26.01(e); and

(B) submit an appraisal roll to the governing body of the district showing an estimate of each item of information specified by Subsection (b), using the estimated values provided under Section 26.01(e) and determined under Paragraph (A); and

(2) an officer or employee designated by the governing body of the school district shall calculate the effective tax rate and the rollback tax rate for the district using the estimates described by Subdivision (1).

SECTION 6.02. Section 26.05, Tax Code, is amended by adding Subsection (a-1) to read as follows:

(a-1) This subsection applies only to a school district. The governing body of the school district shall adopt a tax rate for the current tax year before the later of September 30 or the 60th day after the date the estimate of the taxable value of property in the district is received under Section 26.01(e) using the values estimated under that section and Section 26.04(d-1).

ARTICLE 7. COMMUNICATIONS WITH APPRAISAL REVIEW BOARD MEMBERS

SECTION 7.01. Subsection (c), Section 6.411, Tax Code, is amended to read as follows:

(c) Except for communications described by Section 41.66(f)(3), this [This] section does not apply to communications that do not discuss the specific evidence, argument, facts, merits, or property involved in a hearing currently pending before the appraisal review board or to communications between the board and its legal counsel.

SECTION 7.02. Subsection (f), Section 41.66, Tax Code, is amended to read as follows:

(f) A member of the appraisal review board may not communicate with another person concerning:

(1) the evidence, argument, facts, merits, or any other matters related to an owner's protest, except during the hearing on the protest; [or]

(2) a property that is the subject of the protest, except during a hearing on another protest or other proceeding before the board at which the property is compared to other property or used in a sample of properties; or

(3) a factual or hypothetical situation that is substantially similar to a situation that is the subject of the protest, except during the hearing on the protest.

SECTION 7.03. (a) The change in law made by this article applies only to an offense committed on or after the effective date of this article. For purposes of this section, an offense is committed before the effective date of this article if any element of the offense occurs before that date.

(b) An offense committed before the effective date of this article is covered by the law in effect when the offense was committed, and the former law is continued in effect for that purpose.

ARTICLE 8. RESTRICTION ON AUTHORITY OF APPRAISAL REVIEW BOARD TO

RETAIN LEGAL COUNSEL

SECTION 8.01. Section 6.43, Tax Code, is amended to read as follows:

Sec. 6.43. PERSONNEL. (a) The appraisal review board may employ legal counsel as provided by the district budget or use the services of the county attorney and may use the staff of the appraisal office for clerical assistance.

(b) The appraisal review board may not employ or retain a person to serve as legal counsel for the board if the person serves as legal counsel for the appraisal district or chief appraiser. This subsection does not prevent the appraisal review board from using the services of the county attorney as authorized by Subsection (a).

ARTICLE 9. PILOT PROGRAM IN CERTAIN COUNTIES

SECTION 9.01. Chapter 2003, Government Code, is amended by adding Subchapter Z to read as follows:

SUBCHAPTER Z. PILOT PROGRAM: APPEALS FROM APPRAISAL REVIEW BOARD

DETERMINATIONS IN CERTAIN COUNTIES

Sec. 2003.901. PILOT PROGRAM. (a) Not later than January 1, 2010, the office shall develop a pilot program under which, as an alternative to filing an appeal under Section 42.01, Tax Code, a property owner may appeal to the office an appraisal review board order determining a protest concerning the appraised or market value of property brought under Section 41.41(a)(1) or (2), Tax Code, if the appraised or market value, as applicable, of the property that was the subject of the protest, as determined by the board order, is more than $1 million.

(b) The pilot program shall be developed and implemented in conformance with the provisions of this subchapter.

Sec. 2003.902. COUNTIES INCLUDED. The pilot program shall be implemented in Bexar, Dallas, El Paso, Harris, Tarrant, and Travis Counties for a three-year period beginning with the ad valorem tax year that begins January 1, 2010.

Sec. 2003.903. APPLICABILITY TO REAL AND PERSONAL PROPERTY. The pilot program must be applicable to a determination of the appraised or market value made by an appraisal review board in connection with real or personal property, other than industrial property or minerals.

Sec. 2003.904. EDUCATION AND TRAINING OF ADMINISTRATIVE LAW JUDGES. (a) An administrative law judge assigned to hear an appeal brought under this subchapter must have knowledge of:

(1) each of the appraisal methods a chief appraiser may use to determine the appraised value or the market value of property under Chapter 23, Tax Code; and

(2) the proper method for determining an appeal of a protest, including a protest brought on the ground of unequal appraisal.

(b) An administrative law judge is entitled to attend one or more training and education courses under Sections 5.04 and 5.041, Tax Code, to receive a copy of the materials used in a course, or both, without charge.

Sec. 2003.905. NOTICE OF APPEAL TO OFFICE. (a) To appeal an appraisal review board order to the office under this subchapter, a property owner must file with the chief appraiser of the appraisal district not later than the 15th day after the date the property owner receives notice of the order:

(1) a completed notice of appeal to the office in the form prescribed by Section 2003.906; and

(2) a filing fee in the amount of $300, made payable to the office.

(b) As soon as practicable after receipt of a notice of appeal, the chief appraiser for the appraisal district shall:

(1) indicate, where appropriate, those entries in the records that are subject to the appeal;

(2) submit the notice of appeal and filing fee to the office; and

(3) request the appointment of a qualified administrative law judge to hear the appeal.

Sec. 2003.906. CONTENTS OF NOTICE OF APPEAL. The chief administrative law judge by rule shall prescribe the form of a notice of appeal under this subchapter. The form must require the property owner to provide:

(1) a copy of the order of the appraisal review board;

(2) a brief statement that explains the basis for the property owner's appeal of the order; and

(3) 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.

Sec. 2003.907. NOTICE TO PROPERTY OWNERS. An appraisal review board of an appraisal district established in a county listed in Section 2003.902 that delivers notice of issuance of an order described by Section 2003.901 pertaining to property described by Section 2003.903 and a copy of the order to a property owner as required by Section 41.47, Tax Code, shall include with the notice and copy:

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

(2) a copy of the notice of appeal prescribed by Section 2003.906.

Sec. 2003.908. DESIGNATION OF ADMINISTRATIVE LAW JUDGE. (a) As soon as practicable after the office receives a notice of appeal and the filing fee, the office shall designate an administrative law judge to hear the appeal.

(b) As soon as practicable after the administrative law judge is designated, the administrative law judge shall set the date, time, and place of the hearing on the appeal.

(c) The hearing must be held in a building or facility that is owned or partly or entirely leased by the office and located in the county in which the applicable appraisal district is established, except that if the office does not own or lease a building or facility in the county, the hearing may be held in any public or privately owned building or facility in that county, preferably a building or facility in which the office regularly conducts business. The hearing may not be held in a building or facility that is owned, leased, or under the control of the appraisal district.

Sec. 2003.909. SCOPE OF APPEAL. An appeal is by trial de novo. The administrative law judge may not admit into evidence the fact of previous action by the appraisal review board, except as otherwise provided by this subchapter.

Sec. 2003.910. REPRESENTATION OF PARTIES. (a) A property owner may be represented at the hearing by:

(1) the property owner;

(2) an attorney who is licensed in this state;

(3) a certified public accountant; or

(4) any other person who is not otherwise prohibited from appearing in a hearing held by the office.

(b) The appraisal district may be represented by the chief appraiser or a person designated by the chief appraiser.

Sec. 2003.911. DETERMINATION OF ADMINISTRATIVE LAW JUDGE. (a) As soon as practicable, but not later than the 30th day after the date the hearing is concluded, the administrative law judge shall issue a determination and send a copy to the property owner and the chief appraiser.

(b) The determination:

(1) must include a determination of the appraised or market value, as applicable, of the property that is the subject of the appeal;

(2) must state the administrative law judge's rationale for the determination of value;

(3) may include any remedy or relief a court may order under Chapter 42, Tax Code, in an appeal relating to the appraised or market value of property; and

(4) shall specify whether the appraisal district or the property owner is required to pay the costs of the hearing and the amount of those costs.

(c) If the administrative law judge 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 the hearing submitted by the property owner than the value determined by the appraisal review board:

(1) the office, on receipt of a copy of the determination, shall refund the property owner's filing fee;

(2) the appraisal district, on receipt of a copy of the determination, shall pay the costs of the appeal as specified in the determination; 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 administrative law judge's determination.

(d) If the administrative law judge 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 property owner's request for a hearing than the value determined by the appraisal review board:

(1) the office, on receipt of a copy of the determination, shall retain the property owner's filing fee;

(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 administrative law judge's determination if the value as determined by the administrative law judge is less than the value as determined by the appraisal review board; and

(3) the property owner shall pay the difference between the costs of the appeal as specified in the determination and the property owner's filing fee.

(e) Notwithstanding Subsection (a), the office by rule may implement a process under which:

(1) the administrative law judge issues a proposal for determination to the parties;

(2) the parties are given a reasonable period in which to make written objections to the proposal; and

(3) the administrative law judge is authorized to take into account those written objections before issuing a final determination.

Sec. 2003.912. PAYMENT OF TAXES PENDING APPEAL. (a) The pendency of an appeal to the office 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 to the office 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 the appeal decreases the property owner's tax liability to an amount less than the amount of taxes paid, each 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 appeal to the office if the taxes on the property subject to the appeal are delinquent. An administrative law judge 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 office shall retain the property owner's filing fee.

Sec. 2003.913. JUDICIAL APPEAL. (a) A final order of an administrative law judge determining an appeal brought under this subchapter may be appealed to a district court in the manner provided by Chapter 42, Tax Code, except that a party is not entitled to a jury trial.

(b) A chief appraiser may not bring an appeal unless the board of directors of the appraisal district votes to allow the appeal.

(c) Except as provided by Subsection (a), to the extent that they can be made applicable, the provisions of Chapter 42, Tax Code, also apply to an appeal of a final order of an administrative law judge determining an appeal brought under this subchapter.

Sec. 2003.914. EFFECT ON RIGHT TO JUDICIAL APPEAL. An appeal to the office under this subchapter does not prevent the property owner from seeking judicial review of the order of the appraisal review board. The period in which a petition for review must be filed under Section 42.21, Tax Code, is tolled beginning on the date the notice of appeal under this subchapter is filed and ending on the date the administrative law judge issues the judge's determination.

Sec. 2003.915. REPORT TO LEGISLATURE. Not later than January 1, 2013, the office and the chief appraisers of the appraisal districts established in the counties in which the pilot program is implemented shall submit a report to the legislature that includes:

(1) the number of appeals for property in each appraisal district;

(2) the number of appeals that were settled before being heard by an administrative law judge;

(3) the number of appeals brought on the ground of excessive appraisal;

(4) the number of appeals brought on the ground of unequal appraisal;

(5) the number of judicial appeals of an administrative law judge's determination for each appraisal district; and

(6) any recommendations for future legislative action that the office or the chief appraisers consider appropriate.

Sec. 2003.916. EXPIRATION. This subchapter expires January 1, 2013.

ARTICLE 10. APPLICABILITY; EFFECTIVE DATE

SECTION 10.01. This Act applies only to an ad valorem tax year that begins on or after the effective date of this Act.

SECTION 10.02. Except as otherwise provided by this Act, this Act takes effect January 1, 2010.