85R27337 TJB-F

By: Geren H.B. No. 3168

Substitute the following for H.B. No. 3168:

By: Murr C.S.H.B. No. 3168

A BILL TO BE ENTITLED

AN ACT

relating to ad valorem taxation.

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

SECTION 1. Section 5.05, Tax Code, is amended by adding Subsection (e) to read as follows:

(e) An appraisal review board shall comply with all procedural requirements included in the Appraisal Review Board Manual prepared and issued by the comptroller.

SECTION 2. Section 6.42, Tax Code, is amended by amending Subsection (a) and adding Subsection (d) to read as follows:

(a) A majority of the appraisal review board constitutes a quorum. The local administrative district judge under Subchapter D, Chapter 74, Government Code, in the county in which [board of directors of] the appraisal district is established [by resolution] shall select a chairman and a secretary from among the members of the appraisal review board. The judge [board of directors of the appraisal district] is encouraged to select as chairman [of the appraisal review board] a member of the appraisal review board, if any, who has a background in law and property appraisal.

(d) The concurrence of a majority of the members of the appraisal review board or a panel of the board present at a meeting of the board or panel is sufficient for a recommendation, determination, decision, or other action by the board or panel, and the concurrence of more than a majority of the members of the board or panel may not be required.

SECTION 3. Chapter 6, Tax Code, is amended by adding Subchapter D to read as follows:

SUBCHAPTER D. LIMITED APPEAL OF NONCOMPLIANCE WITH PROCEDURAL

REQUIREMENT

Sec. 6.61. LIMITED APPEAL. (a) Notwithstanding any other law or the Texas Rules of Civil Procedure, an affected property owner may file a petition directly with the district court to compel an appraisal district, chief appraiser, or appraisal review board to comply with a procedural requirement that:

(1) is imposed on the district, chief appraiser, or board under this title, a comptroller rule, or a rule of procedure established by an appraisal review board under Chapter 41; and

(2) the property owner alleges has not been complied with by the district, chief appraiser, or board.

(b) A property owner may not file a petition authorized by this section before the 10th day after the date the property owner provides written notice as provided by this subsection of the owner's intent to file the petition. The notice must state whether the appraisal district, chief appraiser, or appraisal review board failed to comply with a procedural requirement described by Subsection (a) and must identify the procedural requirement. The notice must be sent by certified mail, return receipt requested, to:

(1) the chief appraiser of the appraisal district if the owner alleges that the chief appraiser or appraisal district failed to comply with the requirement;

(2) except as provided by Subdivision (3), the chair of the appraisal review board if the owner alleges that the board failed to comply with the requirement; or

(3) the local administrative district judge if the judge appoints the members of the appraisal review board and the owner alleges that the board failed to comply with the requirement.

(c) A suit brought under this section is for the limited purpose of determining whether the defendant failed to comply with the procedural requirement that is the subject of the suit. The suit may not address the merits of a motion filed under Section 25.25 or a protest filed under Chapter 41.

(d) Neither party may conduct discovery in a suit brought under this section.

(e) A property owner may set the matter that is the subject of the suit for an evidentiary hearing in accordance with the notice requirements provided by Rule 21, Texas Rules of Civil Procedure. A property owner may not set the matter for a hearing under this subsection until the petition initiating the suit has been served on the defendant.

(f) At the end of a hearing under Subsection (e), the court must determine the merits of the suit. If the court determines that the defendant failed to comply with a procedural requirement imposed on the defendant, the court:

(1) shall order the defendant to comply with the procedural requirement;

(2) shall enter any order necessary to preserve rights protected by, and impose duties required by, the law; and

(3) may award court costs and reasonable attorney's fees to the property owner.

(g) An order entered under Subsection (f) is final and may not be appealed.

SECTION 4. Section 21.10(b), Tax Code, is amended to read as follows:

(b) Except as otherwise provided by this subsection, if [If] the application is approved, the property owner is liable to each taxing unit for a penalty in an amount equal to 10 percent of the [difference between the] amount of tax imposed by the taxing unit on the property [without the allocation and the amount of tax imposed on the property] with the allocation. A property owner is not liable for the penalty prescribed by this subsection if the chief appraiser who received the owner's allocation application determines that the owner:

(1) exercised reasonable diligence in attempting to file the application before the deadline imposed by Section 21.09; or

(2) substantially complied with the requirements of that section.

SECTION 5. Sections 25.19(a) and (g), Tax Code, are amended to read as follows:

(a) By April 1 or as soon thereafter as practicable [if the property is a single-family residence that qualifies for an exemption under Section 11.13, or by May 1 or as soon thereafter as practicable in connection with any other property], the chief appraiser shall deliver a clear and understandable written notice to a property owner of the appraised value of the property owner's property if:

(1) the appraised value of the property is greater than it was in the preceding year;

(2) the appraised value of the property is greater than the value rendered by the property owner;

(3) the property was not on the appraisal roll in the preceding year; or

(4) an exemption or partial exemption approved for the property for the preceding year was canceled or reduced for the current year.

(g) By April 1 or as soon thereafter as practicable [if the property is a single-family residence that qualifies for an exemption under Section 11.13, or by May 1 or as soon thereafter as practicable in connection with any other property], the chief appraiser shall deliver a written notice to the owner of each property not included in a notice required to be delivered under Subsection (a), if the property was reappraised in the current tax year, if the ownership of the property changed during the preceding year, or if the property owner or the agent of a property owner authorized under Section 1.111 makes a written request for the notice. The chief appraiser shall separate real from personal property and include in the notice for each property:

(1) the appraised value of the property in the preceding year;

(2) the appraised value of the property for the current year and the kind of each partial exemption, if any, approved for the current year;

(3) a detailed explanation of the time and procedure for protesting the value; and

(4) the date and place the appraisal review board will begin hearing protests.

SECTION 6. Section 25.25(d), Tax Code, is amended to read as follows:

(d) At any time prior to the date the taxes become delinquent, a property owner or the chief appraiser may file a motion with the appraisal review board to change the appraisal roll to correct an error, including an error regarding the unequal appraisal or excessive market value of a property, that resulted in an incorrect appraised value for the owner's property. However, the error may not be corrected unless it resulted in an appraised value that exceeds by more than one-third the correct appraised value. If the appraisal roll is changed under this subsection, the property owner must pay to each affected taxing unit a late-correction penalty equal to 10 percent of the amount of taxes as calculated on the basis of the corrected appraised value. Payment of the late-correction penalty is secured by the lien that attaches to the property under Section 32.01 and is subject to enforced collection under Chapter 33. The roll may not be changed under this subsection if:

(1) the property was the subject of a protest brought by the property owner under Chapter 41, a hearing on the protest was conducted in which the property owner offered evidence or argument, and the appraisal review board made a determination of the protest on the merits; or

(2) the appraised value of the property was established as a result of a written agreement between the property owner or the owner's agent and the appraisal district.

SECTION 7. Section 41.03(a), Tax Code, is amended to read as follows:

(a) A taxing unit is entitled to challenge before the appraisal review board:

(1) [the level of appraisals of any category of property in the district or in any territory in the district, but not the appraised value of a single taxpayer's property;

[(2)] an exclusion of property from the appraisal records;

(2) [(3)] a grant in whole or in part of a partial exemption;

(3) [(4)] a determination that land qualifies for appraisal as provided by Subchapter C, D, E, or H, Chapter 23; or

(4) [(5)] failure to identify the taxing unit as one in which a particular property is taxable.

SECTION 8. Section 41.11(a), Tax Code, is amended to read as follows:

(a) Not later than the date the appraisal review board approves the appraisal records as provided by Section 41.12, the secretary of the board shall deliver written notice to a property owner of any change in the records that is ordered by the board as provided by this subchapter and that will result in an increase in the tax liability of the property owner. An owner who receives a notice as provided by this section shall be entitled to protest such action as provided by Section 41.44(a)(2) [41.44(a)(3)].

SECTION 9. Sections 41.44(a) and (c), Tax Code, are amended to read as follows:

(a) Except as provided by Subsections (b), [(b-1),] (c), (c-1), and (c-2), to be entitled to a hearing and determination of a protest, the property owner initiating the protest must file a written notice of the protest with the appraisal review board having authority to hear the matter protested:

(1) before June [May] 1 or not later than the 30th day after the date that notice to the property owner was delivered to the property owner as provided by Section 25.19, [if the property is a single-family residence that qualifies for an exemption under Section 11.13,] whichever is later;

(2) [before June 1 or not later than the 30th day after the date that notice was delivered to the property owner as provided by Section 25.19 in connection with any other property, whichever is later;

[(3)] in the case of a protest of a change in the appraisal records ordered as provided by Subchapter A of this chapter or by Chapter 25, not later than the 30th day after the date notice of the change is delivered to the property owner;

(3) [(4)] in the case of a determination that a change in the use of land appraised under Subchapter C, D, E, or H, Chapter 23, has occurred, not later than the 30th day after the date the notice of the determination is delivered to the property owner; or

(4) [(5)] in the case of a determination of eligibility for a refund under Section 23.1243, not later than the 30th day after the date the notice of the determination is delivered to the property owner.

(c) A property owner who files notice of a protest authorized by Section 41.411 is entitled to a hearing and determination of the protest if the property owner files the notice prior to the date the taxes on the property to which the notice applies become delinquent. An owner of land who files a notice of protest under Subsection (a)(3) [(a)(4)] is entitled to a hearing and determination of the protest without regard to whether the appraisal records are approved.

SECTION 10. Section 41.71, Tax Code, is amended to read as follows:

Sec. 41.71. EVENING AND WEEKEND HEARINGS. (a) An appraisal review board by rule shall provide for hearings on protests [in the evening or] on a Saturday or after 5 p.m. on a weekday [Sunday].

(b) The board may not schedule:

(1) the first hearing on a protest held on a weekday evening to begin after 7 p.m.; or

(2) a hearing on a protest on a Sunday.

SECTION 11. Section 41A.01, Tax Code, is amended to read as follows:

Sec. 41A.01. RIGHT OF APPEAL BY PROPERTY OWNER. 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), or a motion filed under Section 25.25(d), concerning the appraised or market value of 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 $3 million or less.

SECTION 12. Sections 41A.03(a) and (a-1), Tax Code, are amended to read as follows:

(a) To appeal an appraisal review board order under this chapter, a property owner must file with the appraisal district not later than the 60th [45th] day after the date the property owner receives notice of the order:

(1) a completed request for binding arbitration under this chapter in the form prescribed by Section 41A.04; and

(2) an arbitration deposit made payable to the comptroller in the amount of:

(A) $450, if the property qualifies as the owner's residence homestead under Section 11.13 and the appraised or market value, as applicable, of the property is $500,000 or less, as determined by the order;

(B) $500, if the property qualifies as the owner's residence homestead under Section 11.13 and the appraised or market value, as applicable, of the property is more than $500,000, as determined by the order;

(C) $500, if the property does not qualify as the owner's residence homestead under Section 11.13 and the appraised or market value, as applicable, of the property is $1 million or less, as determined by the order;

(D) $800, if the property does not qualify as the owner's residence homestead under Section 11.13 and the appraised or market value, as applicable, of the property is more than $1 million but not more than $2 million, as determined by the order; or

(E) $1,050, if the property does not qualify as the owner's residence homestead under Section 11.13 and the appraised or market value, as applicable, of the property is more than $2 million but not more than $3 million, as determined by the order.

(a-1) If a property owner requests binding arbitration under this chapter to appeal appraisal review board orders involving two or more tracts of land that are contiguous to one another, a single arbitration deposit in the amount provided by Subsection (a)(2) is sufficient to satisfy the requirement of Subsection (a)(2). For purposes of this subsection, a tract of land is considered to be contiguous with another tract of land if the tracts are divided only by a road, railroad track, river, or stream.

SECTION 13. The following provisions of the Tax Code are repealed:

(1) Section 6.414; and

(2) Section 41.44(b-1).

SECTION 14. Subchapter D, Chapter 6, Tax Code, as added by this Act, applies only to a procedural requirement as described by Section 6.61(a) of that code that a property owner alleges was not complied with on or after the effective date of Section 6.61 of that chapter as provided by this Act.

SECTION 15. Section 21.10(b), Tax Code, as amended by this Act, applies only to an allocation application that is approved by the chief appraiser of an appraisal district on or after the effective date of that subsection as provided by this Act. An allocation application that is approved by the chief appraiser before the effective date of that subsection is governed by the law in effect on the date the application is approved, and the former law is continued in effect for that purpose.

SECTION 16. Section 41.03(a), Tax Code, as amended by this Act, applies only to a challenge under Chapter 41, Tax Code, for which a challenge petition is filed on or after the effective date of that subsection as provided by this Act. A challenge under Chapter 41, Tax Code, for which a challenge petition was filed before the effective date of that subsection is governed by the law in effect on the date the challenge petition was filed, and the former law is continued in effect for that purpose.

SECTION 17. Section 41.44, Tax Code, as amended by this Act, applies only to a protest filed under Chapter 41, Tax Code, on or after the effective date of that section as provided by this Act. A protest filed under that chapter before the effective date of that section is governed by the law in effect on the date the protest was filed, and the former law is continued in effect for that purpose.

SECTION 18. Section 41.71, Tax Code, as amended by this Act, applies only to a hearing on a protest under Chapter 41, Tax Code, that is scheduled on or after the effective date of that section as provided by this Act. A hearing on a protest under Chapter 41, Tax Code, that is scheduled before the effective date of that section is governed by the law in effect on the date the hearing was scheduled, and that law is continued in effect for that purpose.

SECTION 19. Sections 41A.01 and 41A.03, Tax Code, as amended by this Act, apply only to a request for binding arbitration under Chapter 41A, Tax Code, that is filed on or after the effective date of those sections as provided by this Act. A request for binding arbitration under Chapter 41A, Tax Code, that is filed before the effective date of those sections is governed by the law in effect on the date the request is filed, and the former law is continued in effect for that purpose.

SECTION 20. (a) Except as provided by Subsections (b) and (c) of this section, this Act takes effect January 1, 2018.

(b) The following provisions take effect immediately if this Act receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution, or September 1, 2017, if this Act does not receive the vote necessary for immediate effect:

(1) Section 5.05(e), Tax Code, as added by this Act;

(2) Section 6.61, Tax Code, as added by this Act;

(3) Section 21.10(b), Tax Code, as amended by this Act;

(4) Section 25.25(d), Tax Code, as amended by this Act; and

(5) Section 41.03(a), Tax Code, as amended by this Act.

(c) The following provisions take effect immediately if this Act receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution, or January 1, 2018, if this Act does not receive the vote necessary for immediate effect:

(1) Section 41A.01, Tax Code, as amended by this Act; and

(2) Sections 41A.03(a) and (a-1), Tax Code, as amended by this Act.