Arbitrator Patricia Curtis provided the following individual comment regarding proposed §9.4261(c) and (d): "Scheduling arbitration hearings in Harris county is a nightmare. The largest tax firm continues to be understaffed for the number of arbitrations they file. Extremely annoying, since their game is to withdraw probably half of the arbitrations that they file. Additionally, there appears to be a practice of not picking up and signing for the certified mail in a timely fashion, further thwarting the spirit and intent of the Comptroller's rules. Calling HCAD for a hearing date is equally ridiculous, as they are understaffed. As for Harris County arbitrations, requiring a phone call to a voicemail at HCAD and then waiting 3 days for no response does nothing but delay the process. The most efficient way I have found is to simply have the arbitrator set a date and time and send a notice, then work with the parties via joint email if they need to change the date or time. As of today, should you pick up the phone and call the largest tax firm for a date and time, they will give you a date and time in late March and then refuse to hold the date they agreed to until they receive your notice. It is all a game and very unprofessionally handled. Perhaps an administrative fee paid to arbitrators (in addition to the fee charged by the Comptroller) for any withdrawn arbitration once it has been assigned to an arbitrator would discourage this practice."

Arbitrator Salli Smith commented that the proposed §9.4261(d)(2) requirements are "something of a problem given HCAD’s lack of response and can get expensive for the arbitrator. HCAD is running 10+ days out on even responding to an email." Arbitrator Donna Harris provided three examples of her experience in scheduling hearings. First, "[j]ust today, November 30, I sent out a hearing notice asking to be scheduled into a hole in their schedule as I know several have recently been withdrawn. Instead the reply back was they are scheduling for AFTER March 19th. That's 109 days from now." Second, "[b]ack in October, I sent out a hearing notice for December, and was pushed off to the end of January. Even that early in the Arbitration 'season', they are pushing out 90 days." Third, "[t]his situation started last season, and in January 2017, one of the larger companies that represent home owners was pushing their scheduling out into May. By March, they were scheduling in August and September." Arbitrator Donna Harris commented: "Something also needs to be done about all the withdrawals. Many "game" the system to file Arbitration just to get a settlement, and they wait until the very last day before withdrawing. That's not fair to the Arbitrator whose schedule now looks like [S]wiss cheese with so many holes in it. However, with all these withdrawn hearings, this is also why new hearings should be able to fill in the holes, but the property owner agents and CADs aren't acknowledging those dates as available." Ms. Harris also commented that the "CADs and the Agents need to staff up, and if they can't, they should be penalized for pushing hearings out so far and not being able to keep up with their assignments."

Rex Harris commented on proposed §9.4261(d)(2) that the "30-day hearing notification by certified mail [is] unacceptable" and proposed "a compromise of 21 days." He also commented that "PTAD [should] enforce the requirement that written notice of withdrawal be supplied to the arbitrator concurrently" with the comptroller's office. Michael Jacobs also proposed 21 days in lieu of 30 days notice of hearing.

Three appraisal districts commented on proposed §9.4261(c) and (d) regarding the setting and scheduling of arbitration hearings. The Harris County Appraisal District was blunt in commenting that the "one rule that we feel must change for the arbitration process to function in Harris County is 9.4261(d)(2) on the scheduling of arbitrations." One suggestion was to remove the 14-day withdrawal window or "stopping the practice of paying arbitrators when there is a withdrawal." The appraisal district provided additional comment: "Scheduling assigned arbitrations is by far HCAD's and large tax agents biggest hurdle. With the legislation passed making assignment of arbitrators automatic, we have been inundated with thousands of requests for dates from arbitrators within the past two months. Not only are some arbitrators unreasonable about the resources we possess, some seem to only have quick payment and locking in their fourteen-day window to avoid nonpayment in the case of withdrawal on their mind. While the intent of this rule is to extend scheduling past the fourteen-day window, we feel the deadlines contained and language of the rule will empower arbitrators to take more control of the scheduling process. The way the rule is written, we will have three days to set a date or the arbitrator can then schedule when they please. Three days to come to an agreement for a date will not work. If this rule stands as written, all ability to schedule and allocate resources will be taken away from us and the agents serving the property owners. We cannot all reach an agreement on a date in that timeframe. What will stop multiple arbitrators from each scheduling twenty arbitrations in one day, thirty days out, after they don’t agree to the date the CAD and property owner agreed to? How can we handle this? Many of the arbitrators want these heard as quickly as possible so we could end up with a hundred or more arbitrations scheduled in one day. With no re-schedule provision in the rules, many arbitrators will not move dates. With no say in the date, we cannot plan, staff or budget for this entire process. With the requirement that all three parties agree to a date, what will stop them from simply not agreeing to the date the property owner and CAD have agreed to so they can have total control of the date, thirty days out? We ask that something change in this section. What we believe would be best is that the property owner or agent, CAD, and arbitrator must all agree on a date that suits everyone within 120 days of assignment. Period. If that will not work, then the three-day deadline be extended to fourteen days. If that will not work, then possibly a provision for those districts that had over 3,000 filed in the previous year like in similar sections could be added to extend the deadline to fourteen days. Whatever is done some clarification needs to be made to this rule."

The Tarrant Appraisal District and Williamson Central Appraisal District both commented that the deadline under proposed §9.4261(d)(2) for the arbitrator to set the hearing date if no agreement is reached should be changed from three to five business allowing for a full week, due to the overwhelming increase in requests for binding arbitration and the challenge to process them, and because scheduling is difficult during the holiday months.

In responding to all of these comments from arbitrators and appraisal districts about the scheduling of arbitration hearings, the agency revised proposed subsections (c) and (d) in adopting §9.4261. The agency agrees with several of the comments and as a result, adopted §9.4261(d)(2) provides that if no agreement on the hearing date is reached after "fourteen or more calendar days" - instead of "three (3) or more business days" -- of the arbitrator's initial contact attempt, the arbitrator shall set the hearing date, providing "a minimum of 21 calendar-days notice" before the hearing rather than at least 30 days notice as proposed. The agency further responds by noting that with the introduction of the 45 calendar-day settlement period under adopted §9.4255, the volume of arbitrations for which a hearing must be scheduled is expected to be significantly reduced. The agency further responds that with the implementation of the new online arbitration system, communications between arbitrators and the parties are expected to be more efficient. For example, under adopted §9.4261(c), once an arbitrator is appointed after the 45-day settlement period, he or she may contact the parties not only by telephone or email, but through the new online arbitration system as well.

With regard to proposed §9.4261(e), which addresses the contents of the notice of hearing, the Williamson Central Appraisal District commented that the notice should include the arbitration ID number and identification of the property at issue. The appraisal district also commented: "There is no consistency on the notice of hearing letters provided by arbitrators, which makes it very difficult to train staff and for property owners to comprehend. Examples are inconsistent terms used: business days; calendar days; due prior to; due on. Arbitrators have also complained to our office that the Comptroller's Office should have a template form for them to use if they wish to. The agency agrees with the comment that the arbitration ID number should be included in the notice of hearing and this item has been added as adopted §9.4261(e)(1). The agency further responds that it is considering making available a model notice of hearing template for arbitrators.

The Williamson Central Appraisal District commented that proposed §9.4261(g) should be amended to provide that the phrase "exchanged in advance" be added after the phrase that each party at the hearing is entitled "to present evidence material to the controversy." The agency responds that issues regarding the presentation of evidence are to be resolved by the arbitrator, and therefore, no change was made in response to this comment.

With regard to §9.4261(g), the Collin Central Appraisal District commented: "It is our opinion that an Arbitrator should perform their function similar to an ARB, Judge or Jury, making their decision exclusively on the evidence presented by the parties" and requested that the comptroller "consider adopting instructions, rules if you will, that make that specific charge to arbitrators." The agency agrees with this comment and has revised proposed subsection (g) to include the following sentence: "The arbitrator's decision is required to be based solely on the evidence provided at the hearing."

The group of 35 arbitrators commented in their letter regarding the requirement under proposed §9.4261(g) to administer oaths when conducting an arbitration: "The new mandate that arbitrators administer an oath to each witness is more than a little perplexing. While fact witnesses (typically, the property owners themselves) do provide evidence in a minority of cases, and expert testimony is also sometimes offered in commercial property cases, the overwhelming majority of "testimony" provided at hearings consists of claimant and appraisal district representatives providing a recitation of sales prices and assessed values for similar properties identified by searching available sources of verifiable information (MLS listings, appraisal district records, etc.) There is little opportunity for a witness to provide genuinely false testimony in a property tax arbitration, much less opportunity to provide false testimony likely to influence the arbitrator's determination. We think that an opposing party's ability to point out instances of inconsistent and implausible testimony constitutes the best safeguard against false testimony, far more effective than administering a purely ceremonial oath not backed by an immediate threat of punishment, either by sanctions or contempt." Arbitrator Rex Harris commented on the oath requirement as well: "Many arbitrators believe the Tax Code, Chapter 41A gives the arbitrator the option whether or not to require an oath. Some arbitrators have expressed refusal to give oaths based on religious objections (e.g., objecting to the largely discontinued phrase "so help me God"), while others question requiring an oath when there is no mechanism in Chapter 41A "Appeal through Binding Arbitration" for enforcing contempt charges for perjury. I personally do not object to swearing oaths, but I do ask for the exact verbiage or the provision of a specific example of "the same oath required of a witness in a civil action in district court."

The agency responds that Tax Code, §41A.08(a), provides that the arbitrator shall "conduct the hearing in the manner provided by Subchapter C, Chapter 171, Civil Practice and Remedies Code" which includes §171.049 titled "Oaths." Under this provision, arbitrators "may administer to each witness testifying before them the oath required of a witness in a civil action pending in a district court." The agency further responds by noting that under Tax Code, §41A.01, a property owner's right to an appeal through binding arbitration is "an alternative to filing an appeal under Section 42.01" for judicial review in district court where the oath is administered to each testifying witness. The agency further responds that the comptroller's Model Hearing Procedures, which appraisal review boards are required under Tax Code, §5.103(d), to follow in establishing their own hearing procedures, states that a member of the ARB is to inform witnesses that all testimony must be given under oath and to swear-in all witnesses who plan to testify. In light of the statutes cited and given the role arbitrations play in the administration of the property tax system, individuals should not be permitted to testify at the hearing without first taking an oath to tell the truth. As a result, adopted §9.4261(g) still requires that the arbitrator administer the oath to each witness but also provides, as Mr. Harris requested, that the "arbitrator shall ask each witness testifying to swear or affirm that the testimony he or she is about to give shall be the truth, the whole truth, and nothing but the truth."

With regard to proposed §9.4261(m) which sets out the circumstances which require the arbitrator to dismiss a pending arbitration, the Fort Bend Central Appraisal District commented that if a written agreement has been reached between the owner or agent and the appraisal district, the arbitrator should be required to dismiss the case once proof of the agreement has been received because "Agents are entering into written agreements and not withdrawing the arbitration." The agency agrees with this comment and has revised proposed subsection (m) to include the requirement that dismissal is required if "the owner or agent and appraisal district have executed a written agreement resolving the matter " as adopted §9.4261(m)(6).

The Tarrant Appraisal District commented that it agreed with proposed §9.4261(l) prohibiting ex parte communications and as no change was requested, none was made in response to this comment. Arbitrator Loretta Higgins recommended a rule be added whereby agents and their employees who file more than 10 arbitration requests a year that are dismissed because a district court action had been filed should be barred for three years from representing a client in arbitration subject to an appeal process. Ms. Higgins also commented that deposit refunds should not be provided for any dismissal or withdrawal unless the property owner or agent attends a settlement conference before the hearing and how the refund deposit should be paid in the event they failed to attend. The agency responds that these recommendations appear to be outside the scope of the comptroller’s statutory authority under Chapter 41A and so cannot be considered.

Arbitrator Rex Harris commented on proposed §9.4261(o) that the 120-day requirement for completion of arbitrations should "be 'toned down', amended to 'suggested,' 'strongly encouraged,' or removed altogether" due to protest volume. The agency responds that the volume of arbitration hearings required under the adopted arbitration rules should decrease significantly but has amended this subsection to provide more specificity for failure to comply with the timely completion of arbitration proceedings. Adopted §9.4261(o) provides that failure to comply "may constitute good cause for removal of the arbitrator from the comptroller's registry of arbitrators pursuant to §9.4262(b) of this title."

With regard to proposed §9.4262, arbitrator Michael Jacobs commented that proposed subsection (b) regarding the removal of an arbitrator from the registry for repeated instances of bias or misconduct "does not contain a definition of the words 'bias' or 'misconduct." Mr. Jacobs further commented: "The word 'misconduct' could be defined by cross-reference to subsection (4)" for violating various provisions of subchapter K and "bias" could be defined as "expressed statements made by the arbitrator that evidence that the arbitrator prefers the owner over the appraisal district or the appraisal district over the owner." In responding to this comment, the agency revised proposed §9.4262(b) to add two additional grounds for removal. Adopted §9.4262(b)(6) and (7), respectively, provide that the comptroller shall remove a person from the registry if "the person has engaged in fraudulent conduct" or "the director of the Property Tax Assistance Division of the comptroller's office determines, in the exercise of his or her discretion, that the type or nature of the conduct in which the person has engaged constitutes good cause for removal of the person from the registry of arbitrators." The agency also revised proposed §9.4262(c) to remove from the clear and convincing evidence standard, the phrase "and that the allegations constitute good cause for removal" because the phrase is not part of the evidentiary standard.