Just when I think I know everything there is to know about property tax appeals, they go and change the rules on me again. VAB season should be interesting this year, given all of the new policies and procedures promulgated by the Florida Department of Revenue and its infamous (and at times puzzling) 2010 Value Adjustment Board Training materials that are required reading for all VAB Special Magistrates in Florida. Below is a quick summary of some interesting administrative changes that are included in the new Rules and the VAB Training materials.
Good Cause for Late VAB Petitions
The DOR has now included a definition of “good cause.” According to Rule 12D-9.015(11)(a), “good cause” means the verifiable showing of extraordinary circumstances. Examples given by the DOR include a personal, family or business crisis, or a physical or mental illness, infirmity or disability that would reasonably affect the petitioner’s ability to timely file, as well as miscommunications with the Board Clerk, Property Appraiser or their staff regarding the filing time.
Agents for Taxpayers
Rule 12D-9.018(3) clarifies that a taxpayer may be represented by anyone, including a family member, and that the agent need not be a licensed individual. However, a petition filed by an unlicensed agent must be signed by the taxpayer or be accompanied by a written authorization from the taxpayer.
Florida Statute 194.032(2) allows a petitioner to reschedule a hearing one time without good cause. In my experience last year, some Value Adjustment Board Clerks interpreted this section as only allowing the petitioner to request one rescheduling, regardless of whether they had a conflict or other good cause. Rule 12D-9.019 clarifies that a rescheduling for good cause shall not be treated as the one time rescheduling to which a petitioner has a right upon timely request under Fla. Stat. 194.032(2). This Rule also clarifies that if a hearing is rescheduled, the deadlines for the exchange of evidence shall be computed from the new hearing date, if time permits.
Effect of Failure to Provide Income Data/Higgs v. Good
Higgs v. Good is, of course, the case that held that where a taxpayer refused to provide his income data to the Property Appraiser when the Property Appraiser was trying to prepare the tax roll, the taxpayer could not later use that data in an administrative or judicial challenge to their property tax assessment (yes, the case did expressly say “administrative or judicial”). Thus, the DOR has created quite a stir by stating in its 2010 VAB Training materials that “the case of Higgs v. Good does not apply to proceedings of the value adjustment board.”
Note, however, that Fla. Stat. 194.034 still prohibits the VAB from accepting evidence if the Property Appraiser requested it from the petitioner in connection with the VAB proceeding and the petitioner had knowledge of it, but declined to provide it to the Property Appraiser. If such a request is made by the Property Appraiser (and it always is), Rule 12D-9.020(8) deems the petitioner’s evidence timely if it is submitted at least 15 days before the hearing. If submitted less than 15 days before the hearing, it is still considered timely if the VAB finds that it was provided a reasonable time before the hearing.
Order of Presentation of Evidence
Rule 12D-9.024(7) clarifies that the Property Appraiser should present their evidence first in a hearing involving a value dispute. Presumably, the taxpayer would still present their evidence first in exemption and classification hearings. However, if the parties agree, the Special Magistrates generally prefer for the Property Appraiser to state their reasons for denial of an exemption before the taxpayer presents their case.
Applicability of Rules of Evidence
Rule 12D-9.025(2)(a) provides that VAB proceedings are not to be controlled by strict rules of evidence and procedure. However, while formal rules of evidence do not apply, fundamental due process shall be observed and shall govern the proceedings. The VAB Training materials further state that the VABs must not apply strict standards of relevance or materiality in deciding whether to admit evidence into the record, and that any decisions to exclude evidence must not be arbitrary or unreasonable.
In practice, what this likely means is that the VABs should give the parties a bit of leeway when their evidence is challenged on relevance or materiality grounds. However, parties should still be wary about relying on hearsay to prove their case (such as affidavits or appraisals by persons not present at the hearing). The Rules specifically allow petitioners to notify the VAB on their petition that they do not intend to appear, but that they would like their evidence considered anyway. In such situations, Rule 9.024(11) states that the VAB must take into consideration the inability of the opposing party to cross-examine the non-appearing party in determining the sufficiency of the evidence.
Applicability of USPAP
Florida Statute 194.301 now requires the Property Appraiser to comply with “professionally accepted appraisal practices.” Some (including me) had speculated that these “practices” could be construed to include the Uniform Standards of Professional Appraisal Practice [“USPAP”]. Not so, however, as the DOR’s 2010 VAB Training materials have instructed the VABs and Special Magistrates that they are not authorized to determine whether a party is required to comply with USPAP or whether their evidence complies with USPAP.
The Eighth Factor (Costs of Sale)
Another issue that has many people scratching their heads is the DOR’s discussion of “the eighth criterion” in the VAB Training materials. The materials seem to suggest that where the Property Appraiser has reported to the DOR on Form DR-493 a certain percentage adjustment for the eighth criterion of Fla. Stat. 193.011, but has not made such an adjustment to the petitioned property, the VAB should go ahead and make that adjustment. Thus, it would seem that the DOR is advising the VABs to ensure that the same adjustment is made to all properties, regardless of the approach used to calculate the assessment and regardless of whether it would result in an assessment at less than fair market value. I expect that the DOR will be receiving questions from many people about this, and hopefully further clarification will be forthcoming.
Working Waterfront Properties
The VAB Training materials clarify that, despite the legislature’s failure to pass implementing legislation, the constitutional provisions relating to working waterfront properties do apply in 2010, and the DOR anticipates issuing rules later in the summer of 2010.
Finally, the new Rules allow for electronic hearings if the VAB approves of their use and the special magistrate agrees. Procedures for the use of electronic hearings are set forth in Rule 12D-9.026.