House Bill 988 provides property owners with a means of addressing errors by appraisal districts regarding scheduling hearings and conducting hearings.
Specifically, property owners can use binding arbitration to hold appraisal districts and ARBs accountable for violations of the following:
rescind procedural rules adopted that are not in compliance with the Comptroller’s model hearing procedures prepared under Tax Code Section 5.103;
(2) schedule a hearing on a protest as required by Tax Code Section 41.45;
(3) deliver information to the property owner in the manner required by Tax Code Section 41.461;
(4) allow the property owner to offer evidence, examine or cross-examine witnesses or other parties and present arguments as required by Tax Code Section 41.66(b);
(5) set a hearing for a time and date certain and postpone a hearing that does not begin within two hours of the scheduled time as required by Section Tax Code 41.66(i);
(6) schedule hearings on protests concerning multiple properties identified in the same notice of protest on the same day at the request of the property owner or the property owner’s designated agent as required by Tax Code Section 41.66(j) or
(7) refrain from using or offering as evidence information requested by the property owner under Tax Code Section 41.461 that was not delivered to the property owner at least 14 days before the hearing as required by Tax Code Section 41.67(d).
This will be a great (really incredible) tool to address violations of the above issues which are perenrial issues at many appraisal districts. For example, in practice, few if any appraisal review boards (ARBs) consider unequal appraisal.
There are specific rules to notify the appraisal review board chairman, the chief appraiser and the appraisal district’s taxpayer liaison officer by certified mail, return receipt requested, of the procedural violation prior to filing for binding arbitration.
Following is a detailed explanation:
Chapter 41A. Appeal Through Binding Arbitration Section 41A.015 HB 988 adds this section to authorize a property owner who has filed a notice of protest to file a request for limited binding arbitration to compel the appraisal review board or chief appraiser take certain action to compel the appraisal review board or chief appraiser, as appropriate, to: (1) rescind procedural rules adopted that are not in compliance with the Comptroller’s model hearing procedures prepared under Tax Code Section 5.103; (2) schedule a hearing on a protest as required by Tax Code Section 41.45; (3) deliver information to the property owner in the manner required by Tax Code Section 41.461; (4) allow the property owner to offer evidence, examine or cross-examine witnesses or other parties and present arguments as required by Tax Code Section 41.66(b); (5) set a hearing for a time and date certain and postpone a hearing that does not begin within two hours of the scheduled time as required by Section Tax Code 41.66(i); (6) schedule hearings on protests concerning multiple properties identified in the same notice of protest on the same day at the request of the property owner or the property owner’s designated agent as required by Tax Code Section 41.66(j) or (7) refrain from using or offering as evidence information requested by the property owner under Tax Code Section 41.461 that was not delivered to the property owner at least 14 days before the hearing as required by Tax Code Section 41.67(d).
Notice to ARB, Chief Appraiser and Taxpayer Liaison Officer Prior to Filing
The bill prohibits a property owner from filing a request for limited binding arbitration unless: (1) the property owner has delivered written notice to the appraisal review board chairman, the chief appraiser and the appraisal district’s taxpayer liaison officer by certified mail, return receipt requested, of the procedural requirement with which the property owner alleges the appraisal review board or chief appraiser failed to comply on or before the fifth business day after the date the appraisal review board or chief appraiser was required to comply with the requirement; and the appraisal review board chairman or chief appraiser, as applicable, fails to deliver to the property owner on or before the 10th day after the date the notice is delivered a written statement confirming that the appraisal review board or chief appraiser will comply with the requirement or cure a failure to comply with the requirement.
Appraisal District / Appraisal Review Board Given Opportunity to Cure Defect
Except as otherwise provided by Subtitle F, the failure to comply with a procedural requirement listed under Subsection (a) is not a ground for postponement of a protest hearing. The appraisal review board is authorized to cure an alleged failure to comply with a procedural requirement that occurred during a hearing by rescinding the order determining the protest for which the hearing was held and scheduling a new hearing on the protest. A property owner is required to request limited binding arbitration by filing a request with the Comptroller. The property owner is prohibited from filing the request earlier than the 11th day or later than the 30th day after the date the property owner delivers the notice of the alleged violation to the appraisal review board chairman, the chief appraiser, and the taxpayer liaison officer for the applicable appraisal district.
Binding Arbitration for Process Violations
The bill requires a request for limited binding arbitration be in a Comptroller-prescribed form and be accompanied by an arbitration deposit payable to the comptroller in the amount of: (1) $450, if the property that is the subject of the protest to which the arbitration relates qualifies as the property owner’s residence homestead under Tax Code Section 11.13 (Residence Homestead) and the appraised or market value, as applicable, of the property is $500,000 or less, as determined by the appraisal district for the most recent tax year; or (2) $550, for property other than property described by Subdivision (1).
Specific Form for Binding Arbitration for Process Violations
The bill requires the Comptroller’s office to prescribe the limited binding arbitration request form and that the form require the property owner to provide: (1) a statement that the property owner has provided the required written notice of violation; (2) a statement that the property owner has made the required arbitration deposit; (3) a brief statement identifying the procedural requirement with which the property owner alleges the appraisal review board or chief appraiser, as applicable, has failed to comply; (4) a description of the action taken or not taken by the appraisal review board or chief appraiser regarding the procedural requirement; (5) a description of the property to which the award will apply; and (6) any other information reasonably necessary for the Comptroller to appoint an arbitrator. The bill requires the Comptroller, on receipt of the request and deposit, to appoint an arbitrator from the arbitrator registry who is an eligible licensed attorney. The bill provides that the appraisal review board, the chief appraiser and the property owner are parties to the limited binding arbitration and authorizes the appraisal review board to appear by counsel, chairman or a person designated by the chairman. The chief appraiser may appear by counsel, in person or by a designated employee, and the property owner may appear in the manner provided by certain subsections.
Arbitration Award – Loser Pays Binding Arbitration Fee
The bill requires the arbitrator to make an arbitration award and deliver an electronic copy of it to the property owner, the appraisal review board chairman, the chief appraiser and the Comptroller. The bill provides that an award under this section: (1) must include a determination of whether the ARB or chief appraiser failed to comply with a procedural requirement as alleged in the limited binding arbitration request; (2) if the arbitrator determines that the appraisal review board or chief appraiser failed to comply with a procedural requirement as the request alleged, to the arbitrator must direct the appraisal review board or chief appraiser, as applicable, to comply with the procedural requirement, or, if the hearing on the protest has been held and the appraisal review board has issued an order determining the protest, the arbitrator must direct the appraisal review board to rescind the order and hold a new hearing on the protest that complies with the procedural requirement; (3) is required to specify the arbitrator’s fee; (4) is final and is prohibited from being appealed; and (5) is enforceable as provided by Tax Code Section 41A.09 (Award; Payment of Arbitrator’s Fee).
Process if Arbitrator Rules for Property Owner
The bill provides that, if the arbitrator determines that the appraisal review board or chief appraiser failed to comply with the procedural requirement that was the subject of the limited binding arbitration: (1) the comptroller, on receipt of a copy of the award, must refund the property owner’s arbitration deposit, less the Comptroller’s $50 administration fee (relating to authorizing the comptroller to retain $50 of the property owner’s arbitration deposit to cover the comptroller’s administrative costs); and (2) the appraisal district must pay the arbitrator’s fee. The bill requires the Comptroller pay the arbitrator’s fee out of the owner’s arbitration deposit and to refund to the owner the owner’s arbitration deposit, less the arbitrator’s fee and the Comptroller’s $50 administration fee, if the arbitrator determines that the appraisal review board or chief appraiser complied with the procedural requirement that was the subject of the limited binding arbitration. The appraisal review board or the chief appraiser, as soon as practicable after receiving notice of an award, must take any action required to comply with the requirements of the award, and, if the award requires the appraisal review board to conduct a new hearing, to schedule and conduct the hearing.
Property Owner Can Pursue Binding Arbitration over Hearing Process and also File Judicial Appeal
An award under this section does not affect the property owner’s right to appeal the final determination of a protest by the appraisal review board under Tax Code Chapter 42 or to pursue any other legal or statutory remedy available to the property owner.
Multiple Violations Can be Grouped into One Binding Arbitration Filing for Process Errors
A property owner may request a single limited binding arbitration that covers more than one property, more than one protest hearing or an allegation of the failure by the appraisal review board or chief appraiser to comply with more than one procedural requirement so long as the filing requirements are met for each alleged failure to comply. The arbitration deposit amount and the arbitrator’s fee are computed as if a single property were the subject of the arbitration. If the arbitration involves an allegation of the failure by the appraisal review board or chief appraiser to comply with procedural requirements, the bill requires the appraisal review board to come into compliance or, if an order was already issued, rescind the order and hold a new hearing. The bill specifies that Tax Code Section 41A.06 applies to the registration and qualification of an arbitrator under this section except that an arbitrator under this section is required to be a licensed attorney and is required to agree to conduct an arbitration for a fee that is not more than $400 if the property qualifies as the property owner’s residence homestead and the appraised or market value of the property is $500,000 or less or $500 if the property subject to the arbitration is for any other type property. Except as otherwise provided, the provisions of this chapter apply to a limited binding arbitration under this section. In the event of a conflict between this section and another provision of this chapter, this section controls. Effective June 15, 2021.
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