84(R) - 2015
Relating to access to and fees associated with binding arbitration of appraisal review board orders.
A fiscal note dated April 12, 2015 anticipates that the passage of the bill would increase the value of the properties allowed to go to binding arbitration and would increase the number of binding arbitrations; however, the bill would not affect taxable property values, tax rates, collection rates, or any other variable which might affect the cost to the state through the operation of the school funding formula.
Senate Bill 849 would amend Section 41A.01 of the Tax Code related to the right of appeal by a property owner by increasing from $1 million to $3 million the maximum appraised or market value of a property as determined by an order for a property owner to be able to appeal an appraisal review board through binding arbitration.
Senate Bill 849 would amend Section 41A.03 (a) of the Tax Code related to the request for arbitration by adjusting the amount of the arbitration deposit made to the Comptroller depending on whether the property qualifies or not as a residence homestead, and on its appraised or market value. It would also amend Section 41A.06 (b) of the Tax Code related to the qualifications required of arbitrators by adjusting accordingly the maximum fee for which an arbitrator agrees to conduct an arbitration.
The amount of the deposit the comptroller would be able to retain would be changed from 10 percent of the deposit to $50, regardless of the deposit.
The second chamber sponsor is Representative Gary Elkins.
Vote Recommendation Notes
No amendments or modifications have been made to the bill since we reported on it. We continue to support it.
First chamber recommendation:
Under current law, only property owners whose property qualifies as the owner's residence homestead or whose property's appraised or market value as determined by an order is $1 million or less can appeal, through binding arbitration, an appraisal review board order determining a protest filed under Section 41.41(a)(1) or (2) concerning the appraised or market value of property.
Senate Bill 849 would broaden the scope of property owners that would be able to use binding arbitration.
The arbitration fee, currently equal to $500, would be adjusted in a range from $450 to $1,050 to take into account additional or more extensive work required for properties with higher appraised or market value. The maximum fee an arbitrator would be able to receive to conduct an arbitration would be adjusted accordingly. The Comptroller's fee retained on the deposit to cover administrative costs would remain the same as under current law, by substituting a flat $50 to, currently, an amount equal to 10 percent of the deposit.
By allowing more property owners to be able to choose binding arbitration over action in court, Senate Bill 849 would not only give an additional option to more property owners, it would also allow for both property owners and appraisal review boards to decrease the financial cost of appeals. We support Senate Bill 849.