81R7620 UM-F

By: Williams S.B. No. 1497

A BILL TO BE ENTITLED

AN ACT

relating to binding arbitration of certain appraisal review board orders.

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

SECTION 1. Section 41A.01, Tax Code, is amended to read as follows:

Sec. 41A.01. RIGHT OF APPEAL BY PROPERTY OWNER. (a) Except as provided by Subsection (b), as [As] an alternative to filing an appeal under Section 42.01, a property owner is entitled to appeal through binding arbitration under this chapter an appraisal review board order determining a protest filed under Section 41.41(a)(1) or (2) concerning [the appraised or market value of] real property if:

(1) the property qualifies as the owner's residence homestead under Section 11.13; or

(2) the appraised or market value, as applicable, of the property as determined by the order is $1 million or less[; and

[(2) the appeal does not involve any matter in dispute other than the determination of the appraised or market value of the property].

(b) A property owner may not appeal through binding arbitration under this chapter an appraisal review board order determining a protest filed under Section 41.41(a)(2) if:

(1) the property owner was represented before the appraisal review board by a person who received compensation for representing the property owner; and

(2) the owner or the person representing the owner did not provide to the chief appraiser, at least seven days before the date of the appraisal review board hearing, copies of all the evidence the owner or the person representing the owner used in the appraisal review board hearing.

SECTION 2. Section 41A.04, Tax Code, is amended to read as follows:

Sec. 41A.04. CONTENTS OF REQUEST FORM. The comptroller by rule shall prescribe the form of a request for binding arbitration under this chapter. The form must require the property owner to provide only:

(1) a brief statement that explains the basis for the property owner's appeal of the appraisal review board order;

(2) a statement of the property owner's opinion of:

(A) the correct appraised [or market] value [, as applicable,] of the property that is the subject of the appeal if the property is not land appraised under Subchapter C, D, E, or H, Chapter 23; or

(B) the correct appraised or market value, as applicable according to the order being appealed, of the property that is the subject of the appeal if the property is land appraised under Subchapter C, D, E, or H, Chapter 23; and

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

SECTION 3. Section 41A.05(b), Tax Code, is amended to read as follows:

(b) The comptroller may retain an amount equal to 15 [10] percent of the deposit to cover the comptroller's administrative costs.

SECTION 4. The heading to Section 41A.06, Tax Code, is amended to read as follows:

Sec. 41A.06. REGISTRY AND INITIAL QUALIFICATION [QUALIFICATIONS] OF ARBITRATORS.

SECTION 5. Section 41A.06, Tax Code, is amended by amending Subsection (b) and adding Subsections (c) and (d) to read as follows:

(b) To initially qualify to serve as an arbitrator under this chapter, a person must:

(1) have completed at least 30 hours of training in arbitration and alternative dispute resolution procedures from a university, college, or legal or real estate trade association;

(2) have been licensed or certified continuously during the five years preceding the date the person agrees to serve as an arbitrator, as:

(A) [be licensed as] a real estate broker or salesperson under Chapter 1101, Occupations Code;[,] or

(B) [be licensed or certified as] a real estate appraiser under Chapter 1103, Occupations Code; and

(3) agree to conduct an arbitration for a fee that is not more than 90 percent of the amount of the arbitration deposit required by Section 41A.03.

(c) A person who is registered as a property tax consultant under Chapter 1152, Occupations Code, is not eligible to serve as an arbitrator under this chapter.

(d) A person who performs property tax consulting services, as defined by Section 1152.001, Occupations Code, for compensation in connection with this title that relate to a particular appraisal district is not eligible to serve as an arbitrator of an appeal of an order of the appraisal review board established for that appraisal district.

SECTION 6. Chapter 41A, Tax Code, is amended by adding Section 41A.061 to read as follows:

Sec. 41A.061. CONTINUED QUALIFICATION OF ARBITRATOR; RENEWAL OF AGREEMENT. (a) The comptroller shall include a qualified arbitrator in the registry until the second anniversary of the date the person was added to the registry. To continue to be included in the registry after the second anniversary of the date the person was added to the registry, the person must renew the person's agreement with the comptroller to serve as an arbitrator on or as near as possible to the date on which the person's license or certification issued under Chapter 1101 or 1103, Occupations Code, is renewed.

(b) To renew the person's agreement to serve as an arbitrator, the person must:

(1) file a renewal application with the comptroller at the time and in the manner prescribed by the comptroller;

(2) continue to meet the requirements provided by Section 41A.06(b); and

(3) during the preceding two years have completed at least eight hours of continuing education in arbitration and alternative dispute resolution procedures offered by a university, college, real estate trade association, or legal association.

(c) The comptroller shall remove a person from the registry if the person fails or declines to renew the person's agreement to serve as an arbitrator in the manner required by this section.

SECTION 7. Section 41A.08(b), Tax Code, as added by Chapters 372 (S.B. 1351) and 912 (H.B. 182), Acts of the 79th Legislature, Regular Session, 2005, is reenacted and amended to read as follows:

(b) The parties to an arbitration proceeding under this chapter may represent themselves or, at their own cost, may be represented by:

(1) an employee of the appraisal district;

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

(3) a person who is licensed as a real estate broker or salesperson under Chapter 1101, Occupations Code, or is licensed or certified as a real estate appraiser under Chapter 1103, Occupations Code; [or]

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

(5) an individual who is licensed as a certified accountant under Chapter 901, Occupations Code.

SECTION 8. Sections 41A.09(b), (c), and (d), Tax Code, are amended to read as follows:

(b) An award under this section:

(1) must include a determination of:

(A) the appraised or market value, as applicable, of the property that is the subject of the appeal, if the appeal is an appeal of an appraisal review board order determining a protest under Section 41.41(a)(1); and

(B) the equalized appraised value as calculated under Section 41A.091 of the property that is the subject of the appeal, if the appeal is an appeal of an appraisal review board order determining a protest under Section 41.41(a)(2) and the arbitrator determines the appeal in favor of the property owner;

(2) may not include any relief or determine any issue not specified by this chapter [may include any remedy or relief a court may order under Chapter 42 in an appeal relating to the appraised or market value of property];

(3) shall specify the arbitrator's fee, which may not exceed the amount provided by Section 41A.06(b)(3);

(4) is final and may not be appealed except as permitted under Section 171.088, Civil Practice and Remedies Code, for an award subject to that section; and

(5) may be enforced in the manner provided by Subchapter D, Chapter 171, Civil Practice and Remedies Code.

(c) If the value determined under Subsection (b)(1)(A) or (B), as applicable, or the lower of the values determined under Subsections (b)(1)(A) and (B), if both paragraphs are applicable, [arbitrator determines that the appraised or market value, as applicable, of the property that is the subject of the appeal] is nearer to the property owner's opinion of the appraised or market value, as applicable, of the property as stated in the request for binding arbitration submitted under Section 41A.03 than the value determined by the appraisal review board:

(1) the comptroller, on receipt of a copy of the award, shall refund the property owner's arbitration deposit, less the amount retained by the comptroller under Section 41A.05(b);

(2) the appraisal district, on receipt of a copy of the award, shall pay the arbitrator's fee; and

(3) the chief appraiser shall correct the appraised or market value, as applicable, of the property as shown in the appraisal roll to reflect the arbitrator's determination.

(d) If the value determined under Subsection (b)(1)(A) or (B), as applicable, or the lower of the values determined under Subsections (b)(1)(A) and (B), if both paragraphs are applicable, [arbitrator determines that the appraised or market value, as applicable, of the property that is the subject of the appeal] is not nearer to the property owner's opinion of the appraised or market value, as applicable, of the property as stated in the request for binding arbitration submitted under Section 41A.03 than the value determined by the appraisal review board:

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

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

(B) refund to the owner the owner's arbitration deposit, less the arbitrator's fee and the amount retained by the comptroller under Section 41A.05(b); and

(2) the chief appraiser shall correct the appraised or market value, as applicable, of the property as shown in the appraisal roll to reflect the arbitrator's determination if the value as determined by the arbitrator is less than the value as determined by the appraisal review board.

SECTION 9. Chapter 41A, Tax Code, is amended by adding Section 41A.091 to read as follows:

Sec. 41A.091. DETERMINATION AND REMEDY FOR UNEQUAL APPRAISAL. (a) An arbitrator may determine an appeal of an appraisal review board order determining a protest under Section 41.41(a)(2) in favor of the property owner only if the evidence establishes that:

(1) the appraisal ratio of the property exceeds by at least 10 percent the median level of appraisal of a reasonable and representative sample of other properties in the appraisal district;

(2) the appraisal ratio of the property exceeds by at least 10 percent the median level of appraisal of a sample of properties in the appraisal district consisting of a reasonable number of other properties similarly situated to, or of the same general kind or character as, the property subject to the appeal; or

(3) the appraised value of the property exceeds by at least 10 percent the median appraised value of a reasonable and representative sample of comparable properties appropriately adjusted.

(b) If a determination would result in an award for the property owner under Subsection (a)(1) or (2), the award must state an equalized appraised value of the property calculated by multiplying the appraised value of the property as determined by the appraisal review board by the median level of appraisal according to Subsection (a)(1) or (2), as applicable. If a determination would result in an award for the property owner under Subsection (a)(3), the award must state an equalized appraised value that is equal to the median appraised value determined under that subsection. If a property owner is entitled to an award under more than one method of determination, the lowest of the equalized appraised values is the equalized appraised value.

(c) In making a determination under Subsection (a), an arbitrator:

(1) shall determine each applicable median level of appraisal or median appraised value according to law;

(2) is not required to adopt the median level of appraisal or median appraised value proposed by a party to the appeal; and

(3) may not limit or deny an award to a property owner who is entitled to an award based on any method of determination under Subsection (a) on the ground that the equalized appraised value according to another method of determination under Subsection (a) is higher.

(d) For purposes of establishing the median level of appraisal under Subsection (a)(1), the median level of appraisal by the appraisal district within the applicable category of property as determined by the comptroller under Section 5.10 is admissible as evidence of the median level of appraisal of a reasonable and representative sample of properties in the appraisal district for the year of the comptroller's determination.

(e) For purposes of this section, the value of the property subject to the appeal and the value of a comparable property or sample property that is used for comparison must be the market value as determined by the appraisal district if the property is a residence homestead subject to the limitation on appraised value imposed by Section 23.23.

SECTION 10. (a) Sections 41A.01, 41A.04, 41A.05, 41A.08, and 41A.09, Tax Code, as amended by this Act, and Section 41A.091, Tax Code, as added by this Act, apply only to an appeal through binding arbitration under Chapter 41A of that code that is requested on or after the effective date of this Act.

(b) Section 41A.06, Tax Code, as amended by this Act, applies only to a person who initially qualifies to serve as an arbitrator under Chapter 41A, Tax Code, on or after the effective date of this Act.

(c) Section 41A.061, Tax Code, as added by this Act, does not affect the eligibility of a person who is included on the registry list of qualified arbitrators on the effective date of this Act to continue to remain on that registry list before the date on which the person's license or certificate under Chapter 1101 or 1103, Occupations Code, expires unless renewed.

SECTION 11. 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, 2009.