By: Lucio III H.B. No. 1248

A BILL TO BE ENTITLED

AN ACT

relating to alternative resolution procedures for ad valorem tax suits brought under Chapter 42 of the Texas Property Tax Code for purposes of enhancing the public policy of this state of reducing the delay and the costs of litigation.

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

SECTION 1. Chapter 42, Tax Code, is amended by adding Section 42.228 to read as follows:

Sec. 42.228. ALTERNATIVE DISPUTE RESOLUTION FOR EXPEDITING APPEALS.

(a) A party to a lawsuit brought under Chapter 42 of the Property Tax Code may elect alternative dispute resolution procedures for the purpose of expediting the resolution of the lawsuit.

(b) The alternative dispute resolution procedures contained in this section may be implemented by the request of a plaintiff included in the filing of the plaintiff's original petition or by a defendant included in the filing of the defendant's answer to plaintiff's original petition. The alternative dispute resolution procedures contained in this section shall be an alternative to and in place of the procedures contained in the Texas Rules of Civil Procedure to the extent they conflict.

(c) Limitations on Certain Discovery: Discovery shall be limited as follows except as set by order of the court upon hearing or by agreement of the parties:

(1) Document Production: The parties shall not serve and shall not be required to answer a Request for Production of Documents except as provided herein.

(2) Written Interrogatories: The parties shall not serve and shall not be required to answer written interrogatories.

(3) Requests for Admission: The parties shall not serve and shall not be required to answer requests for admission.

(4) Depositions on Written Questions. The parties shall not serve and shall not be required to answer depositions on written questions.

(5) Discovery from Non-Parties. The parties shall not serve discovery on non-parties.

(d) Request for Production of Documents: Document production shall be required and limited as follows:

(1) Document Production by Property Owner in Section 42.25 Lawsuit Involving Real Property: A property owner who files an appeal concerning real property under Sections 42.25 of this Chapter shall without request produce the following documents in the property owner's possession at least thirty days prior to a scheduled mediation or within 14 days of a disclosure of a testifying witness under subsection (f):

(i) any rent roll for the subject property for the year prior to the year subject to the appeal;

(ii) the operating statement for the year prior to the year subject to appeal if the subject property is leased for use;

(iii) any fee simple appraisal report of the subject property done within the last three years or any other appraisal done in the prior year in possession of the plaintiff;

(iv) any document stating or supporting the owner's opinion, if any, of deferred maintenance or costs to cure,

(v) any document stating or supporting the owner's opinion of value.

(2) Document Production by Appraisal District in Section 42.25 Lawsuit Involving Real Property: The Appraisal District shall produce the following documents in the appraisal district's possession without request to the property owner at least thirty days prior to a scheduled mediation or within 14 days of a disclosure of a testifying witness under subsection (f, whichever is earlier:

(i) the appraisal records as set forth in Section 25.02 of this Code for the subject property for the tax year at issue,

(ii) the evidence submitted by the Appraisal District or Property Owner to the Appraisal Review Board concerning the subject property for the tax year at issue,

(iii) any appraisal reports or valuation analysis within its possession, custody, or control concerning the subject property relating to the tax year at issue for any of the three years preceding the tax year at issue,

(iv) the information and material identified in Sections 23.011, 23.012, 23.013, and 23.014 of Chapter 23 of this Title used in appraising the market value of the property.

(3) Production Involving Personal Property: In a suit concerning personal property filed under Sections 42.25 or 42.26 of this Chapter, the parties may serve Requests for Production. The Requests for Production shall be limited to ten discreet requests with each subpart of a request considered to be a discreet request.

(4) Production by Appraisal District in Section 42.26 Lawsuit Involving Real Property: For purposes of an appeal filed under Section 42.26 of this Code, the property owner may identify in a Request for Production to the appraisal district, the properties claimed as comparable to the subject which shall not exceed ten. The Appraisal District shall produce to the property owner at least thirty days prior to a scheduled mediation or within 14 days of a disclosure under subsection (f) for the comparables identified by the property owner:

(i) the appraisal records as set forth in Section 25.02 of this Code for the property for the tax year at issue,

(ii) the evidence submitted by the Appraisal District or Property Owner to the Appraisal Review Board concerning the property for the tax year at issue,

(iii) any appraisal reports or valuation analysis within its possession, custody, or control concerning the property relating to the tax year at issue or identified comparable properties for any of the three years preceding the tax year at issue unless otherwise prohibited from disclosure under this code,

(iv) the information and material identified in Sections 23.011, 23.012, 23.013, and 23.014 of Chapter 23 of this Title used in appraising the market value of the property,

(e)Oral Depositions. Oral depositions shall be limited as follows:

(1) Witnesses. The parties may take the oral depositions of testifying experts, the property owner or a corporate representative of the property owner, and a corporate representative of the Appraisal District.

(2) Timing. No party shall be required to submit itself or its testifying expert witnesses for oral deposition until the parties have attended settlement discussions pursuant to Section 42.227 of this Chapter, if such settlement discussions were requested.

(3) Scheduling. The parties shall cooperate in good faith to schedule oral depositions at a time and place convenient for the parties, witnesses, and counsel. The deposition of an owner or owner representative may be taken in the county in which the owner resides or may be taken by telephone.

(4) Length. Depositions of fact witnesses are limited to three hours per deposition. Depositions of testifying expert witnesses are limited to six hours per deposition.

(5) Court Reporter. The parties shall cooperate in good faith to use the same court reporter or videographer service.

(6) Exhibits. The parties shall cooperate in good faith to number documents, photographs, and other information used as exhibits at oral depositions sequentially, regardless of the identity of the deponent or the party introducing the exhibit. The parties shall use the same exhibit numbers when referring to such exhibits in pretrial motions and at trial. The written opinion of an expert shall be admitted in to evidence.

(7) Documents for a Deposition: The parties upon request shall produce any documents set forth in subsection (d) of this section, the witness's written opinions, if any, and the witnesses's work file , if any, supporting the witnesses's opinion.

(f) Expert Witnesses. The parties may serve Requests for Disclosure as in civil suits generally. In addition to the requirements for a Request for Disclosure set forth in the Rules of Civil Procedure, within 30 days of retaining an expert witness, a party shall disclose the identity of the expert and whether the expert has been retained to perform an appraisal under section 42.25 or 42.26 or both.

(g) Pre-trial Disputes. The parties shall attempt in good faith to resolve any disputes concerning pre-trial matters. Before the court may be asked to intervene, the lead attorneys for the parties shall try to resolve the dispute by telephone or by meeting in person without either party filing any motion with the court or sending any correspondence concerning the dispute.

(h) Hearings. The parties shall cooperate in good faith to set hearings at a time convenient for the court, witnesses, and the attorneys. Before the court may be asked to set a hearing, the party seeking a hearing must contact opposing counsel to inquire about availability.

(i) Exceptions. Except where specifically prohibited by this Chapter, the procedures and limitations set forth in this Section may be modified in any suit by agreement of the parties or by court order for good cause

(j) Additional Discovery Requests. A party seeking additional discovery, as in civil suits generally, may file a motion with the court. The motion shall include the specific discovery requests, a written reason in support of good cause for each specific request and a certificate that a good faith effort has been made to have a telephone or in person conference with opposing counsel. The court may grant the motion if the party requesting the additional discovery demonstrates a need for the additional discovery is necessary for an expert to form a reliable opinion of the market value of the subject property under Section 42.25, Tax Code or the equal and uniform value of the property under Section 42.26, Tax Code. In a suit brought under Section 42.25 of this code, a defendant may file a Request for Production limited to the closing statement for the purchase of the subject property if the subject property was purchased in the two years prior to the tax year which is the subject of the lawsuit.

(k) Award of Attorney's Fees: If a party files a motion with the court and does not prevail in the motion, the court shall award reasonable attorney fees related to the motion.

SECTION 2. This Act takes effect immediately if it receives a vote of two-thirds of all 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, 2017.