With regard to proposed §9.4262(g), arbitrator Michael Jacobs commented that although the proposed section "provides for the Arbitrator to receive a copy of materials submitted, the Arbitrator should be provided an earlier copy of the items described in Proposed Rule 9.4262(d) by certified mail, return receipt requested, simultaneously with the initial transmittal of the same to the Comptroller." In responding to this comment, the agency notes that §9.4262(f) and (g) were revised so that a dismissal phase is included in the process for comptroller review of the complaint before involving the arbitrator. Subsection (d) introduces and equates a request for removal with a "complaint." Proposed §9.4262(f) has been revised to provide that requests for removal "or complaints shall be dismissed" under four defined conditions, including that "the complaint is based on one or more substantive arbitration issues, including evidentiary considerations, and the resulting award." Proposed §9.4262(g) now provides that the "requestor/complainant" will be notified "whether the complaint or request is under review or dismissed." It is only if a complaint or request is not dismissed, but taken under review, that "all materials the requestor/complainant submitted will be forwarded electronically or by U.S. Postal Service or a private third-party service such as FedEx or United Parcel Service (UPS) so long as proof of delivery is provided, to the arbitrator who is the subject of the complaint or request, for a response." Proposed §9.4262(i) was revised to add: "If good cause for removal is not found after review, the request for removal will be denied and there is no appeal of this denial."

The Collin Central Appraisal District commented on proposed §9.4262(g) regarding removal of an arbitrator from the registry as follows: "Under the proposed rules, it states "within 30 calendar days after submission, the division will notify the requestor whether the request is accepted for review or denied." The requestor may have multiple cases scheduled with that arbitrator within the 30 calendar day window. We believe that the 30 days should be decreased to 14 or have the rule address the issue. Additionally, consider a rule that puts the effected hearings on hold while the division considers/acts on the division's determination regarding the removal of the scheduled arbitrator." In responding to this comment, the agency notes there is no statutory authority to put pending hearings on hold. The agency further responds that it added adopted §9.4256(f) to provide that if a request for removal or complaint against an arbitrator has been filed under §9.4262 and is pending, it is in the discretion of the director of the Property Tax Assistance Division of the comptroller's office whether to appoint the arbitrator to a particular matter until the complaint is resolved. Arbitrator Loretta Higgins commented on proposed §9.4262(j) by recommending "that 'no appeal' should be struck" from the rule and instead provide for "one appeal to a panel of three arbitrators from the registry selected at random." Ms. Higgins provided a detailed appeal procedure. The agency responds that the procedure proposed would appear to be outside the scope of Chapter 41A, and therefore, no change was made in response to this comment. With regard to proposed §9.4262(b)(5), the Tarrant Appraisal District supported the removal of an arbitrator for repeated bias or misconduct as providing "a measure of accountability previously lacking." The appraisal district also agreed with proposed §9.4263, §9.4265, and §9.4266 with no further comment. No change was suggested and none was made in response to these comments.

With regard to proposed §9.4264(c)(3), the Tarrant Appraisal District commented that it disagreed with the provision that if the arbitrator's determination of value is exactly one-half the difference between the owner's opinion of value and the ARB order, then the arbitrator's fee will be paid out of the deposit. The appraisal district commented that "adding this language encourages an arbitrator to simply split the difference regardless of the evidence presented while the property owner receives refund of the deposit." The agency responds that the substance of this provision is consistent with the previous payment rule under §9.804(g)(3) and that the result is the opposite of what the appraisal district has outlined. The property owner does not receive a refund of the deposit. As a result, no change was made in response to this comment.

With regard to §9.4264, arbitrator Michael Jacobs commented that the adopted §9.4264(b) should "include the alternate submission methods of the Award Form listed in Prop. Rule Section 9.4263(d), namely electronically and facsimile transmission submission methods." In responding to this comment, the agency deleted subsection (b) as it was unnecessary and duplicative of the submission methods set out in §9.4263(d) and re-lettered the subsequent subsections.

With regard to proposed §9.4264(g) which addresses the payment or refund of the deposit in a dismissal, arbitrator Loretta Higgins commented as follows: "It is recommended that an arbitrator who is forced to dismiss a case with prejudice be compensated $200 from the taxpayer's deposit to offset for expenses" and time. Ms. Higgins commented further: "The reasoning behind this is the arbitrator has incurred personal costs to accept the appointment, mail hearing notices and make time provisions for the hearing. The current provision of making separate arrangements for payment causes an ethical conflict as the arbitrator is duty bound to dismiss the hearing after investing time, personal expense and effort." The agency agrees with Ms. Higgins' reasoning and proposed §9.4264(g) has been changed for adoption as §9.4264(f). This subsection now provides as follows: "If an arbitrator dismisses a pending arbitration pursuant to §9.4261(m)(2) through (m)(7) of this title (relating to Provision of Arbitration Services), the arbitrator's fee shall be paid out of the deposit. If the arbitration is dismissed under §9.4261(m)(1) for delinquent taxes, the comptroller shall refund to the owner or agent the deposit, less the $50 retained by the comptroller for administrative costs." Put another way, the arbitrator will be paid his or her fee out of the deposit in all dismissals except for those for delinquent taxes (for which the owner or agent receives a refund of the deposit, less the comptroller's $50 administrative fee, as required by Tax Code, §41A.10(b)). The following language has been stricken as Ms. Higgins suggested: "In such event, the arbitrator must seek payment from the owner or agent for the services rendered prior to the dismissal of the proceeding."

Numerous arbitrators commented on proposed §9.4264(h), which permits property owners or their agents to withdraw their requests for arbitration and have their deposits refunded, less a $50 fee paid to the comptroller, if done so within 14 days before the noticed hearing date. Thirty-five arbitrators and Patrick Mahoney set out their comments as a group regarding proposed §9.4264(h) as follows: "As a general proposition, we do not take issue with the idea of property owners and claimant's agents having a fourteen-day window for withdrawing arbitration requests with little penalty. What we do consider objectionable is the interplay between this proposed rule and the 30-day hearing notice window created by Proposed Rule 9.4261(d)(2). The Comptroller's office is surely aware that certain claimant's agents withdraw a disproportionately large percentage of their requests. While we do not currently have access to a statistical breakdown of withdrawals by agent, based on anecdotal evidence we are confident that the percentage for at least one claimant's agent exceeds 25% of cases filed. Almost invariably, these withdrawals occur after the claimant's agent receives notice that the case has been scheduled for hearing. The waste occasioned by this practice is readily apparent, and while the Comptroller's office is at least compensated in some part, arbitrators have to date been asked to assume the risk of wasting their own time and money on as much as a quarter of the cases filed by certain agents. We can think of no legitimate justification for this practice. What is clear is that the claimant's agents guilty of this practice are more than capable of the basic triage necessary to avoid filing meritless requests for arbitration, and yet are unwilling to do so in light of the "safe harbor" provided by the current 14-day notice of hearing requirement in combination with the opportunity to withdraw cases fourteen days before the first scheduled hearing with minimal cost. Expanding the window by requiring thirty days' notice of the first scheduled hearing will lead to further abuse, because claimant's agents will be emboldened by the substantially larger window during which they can withdraw meritless cases with little penalty. As arbitrators, we object to being left further out-of-pocket by the Comptroller's proposal." In their group comment, these arbitrators suggested the following: "To address this problem, we suggest that the Comptroller's office minimize or remove the "safe harbor" for withdrawing requests for arbitration after they have been assigned to an arbitrator. This seems the most appropriate solution from an equitable standpoint, as it will curb the abuse described above, and the Comptroller's office can build in a window of time that allows claimant's agents to withdraw the request without additional penalty. Alternatively, we suggest that the Comptroller's office impose a reduced arbitrator's fee (say, $100) as a penalty for cases withdrawn after arbitrator acceptance without regard to the timing of the withdrawal. Either solution would eliminate, at least in part, the benefit accruing to claimant's agents for engaging in the practice of meritless filings, while at the same time defraying postage costs and at least partially compensating arbitrators for their wasted time and effort."

Arbitrator Mark Ritchie commented by providing what he called "a timely example of the sort of conduct complained of by myself and many other arbitrators in a public comment letter" sent to the comptroller regarding "the (in)advisability of allowing for a 14-day withdrawal window in combination with the mandate of delivering hearing notice by CMRRR." Mr. Ritchie commented that he had received an email from an agent requesting withdrawal of an arbitration hearing set for the next day, December 5, and anticipated the agent would claim a timely withdrawal because the green card indicated the agent received the hearing notice November 27 even though it appeared the notice had been available for pickup by the agent since November 18. Mr. Ritchie further commented: "By not picking up the CMRRR letter, [the agents] have put themselves in the position of being able to withdraw cases with impunity on the eve of hearing, in a manner that I suggest violates the spirit of Rule 9.804." He concluded: "If the Comptroller's office does not already have an applicable interpretation for this situation, I would suggest holding agents responsible for retrieving CMRRR within a reasonable amount of time, at most two days after they have received notice to pick up the letter." Arbitrator Tracy Stanley commented by suggesting that once an arbitrator is appointed, and the CMRRR is mailed notifying the parties of a hearing date, the arbitrator’s fee is earned. Arbitrator Rex Harris commented that given the 14 days in which owners or agents can withdraw requests and obtain a refund, "[m]any arbitrators were thus taught in their training to immediately assign a 2-week hearing date in order to ensure reimbursement for the time spent in accepting the appointment and arranging the hearing, which should not be construed to involve a de minimus investment of time, supplies, and postage." Mr. Harris continued his comments: "Property agents, as well, have been notorious for 'gaming' the system by withdrawing a large proportion of arbitrations at the 'eleventh hour', after reviewing the lack of merit of their cases, ensuring the arbitrator is 'cheated' out of any reimbursement for time and funds already expended." Mr. Harris further commented that for 2016 hearings, 40% of his accepted arbitrations were subsequently withdrawn at "significant cumulative expense" to him. Arbitrator Al Cannistra commented that a minimum arbitrator's fee of $50 should be provided to arbitrators in the case of a withdrawal. Arbitrators Loretta Higgins and Michael Jacobs each commented that if an arbitration request is timely withdrawn after the arbitrator is appointed, $50 should be paid from the deposit to offset the arbitrator's administrative expenses in the matter. Arbitrator Michael Jacobs also commented that proposed §9.4264(h) should be clarified to refer to the "initial" hearing date, not any subsequently continued or rescheduled hearing date.

The Harris County Appraisal District commented on proposed §9.4264(h) as follows: "We feel the property owners should not have to pay a fee for withdrawn arbitrations. With the increasing number of arbitrations in Harris County, we have seen this process turn into a lucrative business for some arbitrators. With payment on the line, many are eager to get the date in the books as quickly as possible and not be willing to work with property owners in changing the date so that their fee is secure. If anything, they should only receive payment for their time spent on the process which should be very negligible. Another suggestion is to change the window from fourteen days to thirty days. A change in this rule could make some big leaps on getting us all working together on scheduling."

In responding to these comments from the group of 35 arbitrators, 6 individual arbitrators, and the Harris County Appraisal District, the agency revised proposed §9.4264(h). The agency notes first that under adopted §9.4255(c), property owners and agents now have 45 calendar days in which to settle their cases and receive a refund of the deposit less the $50 administrative fee. Arbitrators are not appointed to an arbitration until the expiration of this 45-day period under adopted §9.4255(c). As a result, adopted §9.4264(g) now provides that "[i]f the owner or agent does not notify the comptroller of the withdrawal of a request for arbitration in writing received before the expiration of the 45 calendar-day settlement period pursuant to §9.4255(c) of this title, the comptroller shall pay out of the deposit the fee, if any, charged by the arbitrator." Put another way, once an arbitrator accepts an appointment to a case, he or she is to be paid the arbitrator's fee in the event the request for arbitration subsequently is withdrawn.

These new sections are adopted under Tax Code, §41A.13 (Rules), which authorizes the comptroller to adopt rules necessary to implement and administer Tax Code, Chapter 41A governing the appeal of appraisal review board orders through binding arbitration.

These new sections implement Tax Code, §§41A.01(2), 41A.03(a)(2)(F), 41A.06(b)(2)(F), 41A.061(c)(2), 41A.07(a)(1) and (2), and 41A.07(e), (f), and (g), and 41A.13.