What happens if the appraisal district and ARB ignore law during hearings?

Big news!  During the past 40 years, there was no consequence if the appraisal district or the appraisal review board ignored the laws regarding property tax hearings including the following:

  • Sending proper hearing notice,
  • Providing hearing evidence 14 days prior to the hearing if requested,
  • Only providing lawful evidence at the ARB hearing,
  • Ruling in favor of the property owner unless the appraisal district proves their case “by a preponderance of the evidence presented at the hearing”,
  • Ruling in favor of the property owner if the appraisal district does not present lawful evidence,
  • Considering appeals on unequal appraisal, including both the appraisal district’s and owners’ unequal appraisal evidence,
  • Allow the property owner to cross-examine the appraisal district’s appraiser.

Two sections of House Bill 988 provide a mechanism for property owners to remedy unlawful behavior by the appraisal district or appraisal review board during appraisal review board hearings.

  • Provides taxpayers can notify the Taxpayer Liaison Officer (TLO) of violations of law with requirements for the appraisal district board of directors to remedy the problem.
  • Provides an option for filing binding arbitration to require the appraisal district / appraisal review board to comply with laws regarding hearings.

New Statute – Property owners can notify the Taxpayer Liaison Officer if the appraisal district and/ or appraisal review board: 1) do not have lawful hearing procedures or 2) or not following the lawful procedures.  The Taxpayer Liaison Officer (TLO) is required to investigate and report to the appraisal district board of directors.

Huge Change -If the TLO is notified of unlawful behavior by the appraisal review board, the TLO is required to investigate.  If the complaint is valid, the appraisal district board of directors is required to address the issue with the chairman of the appraisal review board.

This is a Huge Change since the appraisal district board of directors has routinely dismissed complaints about unlawful behavior by the appraisal review board since they are “separate and apart” from the appraisal district.

New Statute –  A person who owns property in an appraisal district or the chief appraiser of an appraisal district may file a complaint with the taxpayer liaison officer for the appraisal district alleging that the appraisal review board established for the appraisal district has adopted or is implementing hearing procedures that are not in compliance with the model hearing procedures prepared by the comptroller under Section 5.103 or is not complying with procedural requirements under this chapter.  The taxpayer liaison officer shall investigate the complaint and report the findings of the investigation to the board of directors of the appraisal district.  The board of directors shall direct the chairman of the appraisal review board to take remedial action if, after reviewing the taxpayer liaison officer’s report, the board of directors determines that the allegations contained in the complaint are true. The board of directors may remove the member of the appraisal review board serving as chairman of the appraisal review board from that member’s position as chairman if the board determines that the chairman has failed to take the actions necessary to bring the appraisal review board into compliance with Section 5.103(d) or this chapter, as applicable.

New Statute Providing for Option for Binding Arbitration if Appraisal District or Appraisal Review Board Do not Comply with Lawful Hearing Procedures

SECTION 20.  Chapter 41A, Tax Code, is amended by adding Section 41A.015 to read as follows:

Sec. 41A.015.  LIMITED BINDING ARBITRATION TO COMPEL COMPLIANCE WITH CERTAIN PROCEDURAL REQUIREMENTS RELATED TO PROTESTS.  (a)  A property owner who has filed a notice of protest under Chapter 41 may file a request for limited binding arbitration under this section to compel the appraisal review board or chief appraiser, as appropriate, to:

(1)  rescind procedural rules adopted by the appraisal review board that are not in compliance with the model hearing procedures prepared by the comptroller under Section 5.103;

(2)  schedule a hearing on a protest as required by Section 41.45;

(3)  deliver information to the property owner in the manner required by 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 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 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 Section 41.66(j); or

(7)  refrain from using or offering as evidence information requested by the property owner under Section 41.461 that was not delivered to the property owner at least 14 days before the hearing as required by Section 41.67(d).

(b)  A property owner may not file a request for limited binding arbitration under this section unless:

(1)  the property owner has delivered written notice to the chairman of the appraisal review board, the chief appraiser, and the taxpayer liaison officer for the applicable appraisal district 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

(2)  the chairman of the appraisal review board 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, as applicable, will comply with the requirement or cure a failure to comply with the requirement.

(c)  Except as otherwise provided by this subtitle, the failure to comply with a procedural requirement listed under Subsection (a) is not a ground for postponement of a hearing on a protest.  An appraisal review board may 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.

(d)  A property owner must request limited binding arbitration under this section by filing a request with the comptroller.  The property owner may not file the request earlier than the 11th day or later than the 30th day after the date the property owner delivers the notice required by Subsection (b)(1) to the chairman of the appraisal review board, the chief appraiser, and the taxpayer liaison officer for the applicable appraisal district.

(e)  A request for limited binding arbitration under this section must be in a form prescribed by the comptroller 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 Section 11.13 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).

(f)  The comptroller shall prescribe the form to be used for submitting a request for limited binding arbitration under this section.  The form must require the property owner to provide:

(1)  a statement that the property owner has provided the written notice required by Subsection (b);

(2)  a statement that the property owner has made the arbitration deposit required by this section;

(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 identified under Subdivision (3);

(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.

(g)  On receipt of the request and deposit under this section, the comptroller shall appoint an arbitrator from the registry maintained under Section 41A.06 who is eligible to serve as an arbitrator under Subsection (p) of this section.  Section 41A.07(h) does not apply to the appointment of an arbitrator under this section.

Blog Author

Patrick O’Connor, MAI, Owner and President
Patrick O’Connor has been active in reducing property taxes, providing expert witness testimony and appraising commercial real estate property since 1983. Pat is active in publishing analyses and data with respect to the real estate market, while being a highly regarded media spokesperson for the real estate community. He holds a MAI, the highest achievable designation from the Appraisal Institute, and is a licensed senior property tax consultant. Pat earned a Master of Business Administration from Harvard University. In 2001, he authored the first definitive consumer guide to Texas property taxes, Cut Your Texas Property Taxes.

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