New Law for Arbitration of Property Tax Appeals

Georgia recently enacted legislation allowing property owners to submit disputes over property tax assessments to arbitration as an alternative to have assessment disputes heard by county boards of equalization.

Georgia’s property tax arbitration procedure was introduced as Senate Bill 240 and is now codified in OCGA 48-5-311(f):

(f) Arbitration. (1) At the option of the taxpayer an appeal shall be submitted to arbitration. (2) Following an election by the taxpayer under paragraph (1) of this subsection, an arbitration appeal shall be effected by the taxpayer’s filing a written notice of arbitration with the county board of tax assessors. The notice of arbitration shall specifically state the grounds for arbitration. The notice shall be filed within 45 days from the date of mailing the notice pursuant to Code Section 48-5-306 except that for counties or municipal corporations providing for the collection and payment of ad valorem taxes in installments the time for filing the notice of appeal shall be 30 days. The county board of tax assessors shall certify to the clerk of the superior court the notice of arbitration and any other papers specified by the person seeking arbitration including, but not limited to, the staff information from the file used by the county board of tax assessors. All papers and information certified to the clerk shall become a part of the record on arbitration. Within 15 days of the filing of the certification to the clerk of the superior court, the judge shall issue an order authorizing the arbitration and appointing a referee. (3) The arbitration of the correctness of the decision of the county board of tax assessors shall be conducted pursuant to the procedures outlined in Article 2 of Chapter 9 of Title 9 with the following exceptions: (A) If both parties agree, the matter may be submitted to a single arbitrator. If both parties agree, the referee may serve as the single arbitrator; (B) If the parties do not agree to a single arbitrator, then three arbitrators shall hear the appeal. Such arbitrators shall be appointed as provided in Code Section 9-9-67. If one or both parties are unable to select an arbitrator, the appeal shall be heard by a single arbitrator who shall be appointed by the judge of the superior court as provided in Code Section 9-9-67; (C) In order to be qualified to serve as an arbitrator, a person must be at least a registered real estate appraiser as classified by the Georgia Real Estate Appraisers Board; (D) The arbitrator or a majority of the arbitrators, as applicable, within 30 days after their appointment shall render a decision regarding the correctness of the decision of the county board of tax assessors and, if correction of the decision is required, regarding the extent and manner in which the decision should be corrected. The decision of the arbitrator or arbitrators, as applicable, may be appealed to the superior court in the same manner as a decision of the board of equalization; (E) The taxpayer shall be responsible for the fees and costs of such taxpayer’s arbitrator and the county shall be responsible for the fees and costs of such county’s arbitrator. The two parties shall each be responsible for one-half of the fees and costs of the third arbitrator. In the event the appeal is submitted to a single arbitrator, the two parties shall each be responsible for one-half of the fees and costs of such arbitrator; and (F) The board of tax assessors shall have the burden of proving their opinions of value and the validity of their proposed assessment by a preponderance of evidence. (4) For any dispute involving the value of real property, at the option of the taxpayer, an appeal may be submitted to binding arbitration in accordance with this paragraph: (A) Following an election by the taxpayer to use the binding arbitration provisions of this subsection, a binding arbitration appeal shall be effected by the taxpayer filing a written notice of arbitration with the county board of tax assessors. The notice of arbitration shall specifically state the grounds for arbitration. The notice shall be filed within 45 days from the date of mailing the notice pursuant to Code Section 48-5-306 except that for counties or municipal corporations providing for the collection and payment of ad valorem taxes in installments, the time for filing the notice of appeal shall be 30 days. Prior to appointment of the arbitrator and within 30 days of filing the notice of appeal, the taxpayer shall provide a copy of the value certified by a professional real estate appraiser as classified by the Georgia Real Estate Appraisers Board as specified in this paragraph to the board of assessors for consideration. If, within 30 days of receiving the taxpayer’s certified appraisal, the board of assessors accepts the taxpayer’s appraisal, that value shall become final. If the county board of tax assessors rejects the taxpayer’s appraisal, the county board of tax assessors shall certify within 30 days the appeal to the clerk of the superior court along with any other papers specified by the person seeking arbitration, including, but not limited to, the staff information from the file used by the county board of tax assessors. All papers and information certified to the clerk shall become a part of the record on arbitration. Within 15 days of filing the certification to the clerk of the superior court, the judge shall issue an order authorizing the arbitration; and (B) The arbitration shall be conducted pursuant to the following procedure: (i) If the parties agree, the matter shall be submitted to a single arbitrator chosen by the parties. If the parties cannot agree on the single arbitrator, the arbitrator shall be chosen by the chief judge of the superior court of the circuit in which the property is located; (ii) In order to be qualified to serve as an arbitrator, a person shall be classified as a State Certified General Property Appraiser pursuant to the rules and regulations of the Georgia Real Estate Appraisers Board and shall have experience or expertise in appraising the type of property that is the subject of the arbitration; (iii) The arbitrator, within 30 days after his or her appointment, shall set a time and place to hear evidence and testimony from both parties. He or she shall provide written notice to the parties personally or by registered or certified mail or statutory overnight delivery not less than ten days before the hearing. The arbitrator may adjourn or postpone the hearing. The chief judge of the superior court of the circuit in which the property is located may direct the arbitrator to proceed promptly with the hearing and the determination of the appeal upon application of any party; (iv) At the hearing, the parties shall be entitled to be heard, to present documents, testimony, and other matters, and to cross-examine witnesses. The arbitrator may hear and determine the controversy upon the documents, testimony, and other matters produced notwithstanding the failure of a party duly notified to appear; (v) The arbitrator shall maintain a record of all pleadings, documents, testimony, and other matters introduced at the hearing. The arbitrator or any party to the proceeding may have the proceedings transcribed by a court reporter; (vi) The provisions of this paragraph may be waived at any time by written consent of the taxpayer and the board of tax assessors; (vii) Within 30 days of the date of the hearing, the arbitrator shall render a decision regarding the value of the property subject to arbitration; (viii) In order to determine the value, the arbitrator shall consider a single value for the property submitted by the board of assessors and a single value submitted by the taxpayer. The taxpayer shall be responsible for the cost of any appraisal by the taxpayer’s appraiser; (ix) Upon consideration of the single value submitted by the board of assessors and the single value submitted by the taxpayer, and evidence supporting the values submitted by the board of assessors and the taxpayer, the arbitrator shall determine which value is the value for the property under appeal; (x) If the taxpayer’s value is determined by the arbitrator to be the value, the county shall be responsible for the fees and costs of such arbitrator. If the board of tax assessors’ value is determined by the arbitrator to be the value, the taxpayer shall be responsible for the fees and costs of such arbitrator; and (xi) The board of tax assessors shall have the burden of proving its opinion of value and the validity of its proposed assessment by a preponderance of evidence. (5) The provisions in subsection (c) of Code Section 48-5-299 shall apply to the valuation established or rendered by any arbitrator or board of arbitration. (6) If the county’s tax bills are issued before an arbitrator or board of arbitration has rendered its decision on property which is on appeal, the county board of tax assessors shall specify to the county tax commissioner the higher of the taxpayer’s return valuation or 85 percent of the current year’s valuation as set by the county board of tax assessors. This amount shall be the basis for a temporary tax bill to be issued. Such tax bill shall be accompanied by a notice to the taxpayer that the bill is a temporary tax bill pending the outcome of the appeal process. Such notice shall also indicate that upon resolution of the appeal, there may be additional taxes due or a refund issued.

While the Georgia Legislature deserves credit for attempting to provide taxpayers an alternative method of resolving property tax disputes, this legislation suffers a number of problems.


Jumble of Rules


Georgia’s arbitration code outlines procedures for general arbitration in OCGA 9-9-1 et seq. Rather than reference general arbitration procedures, the new provisions for property tax arbitration, in (f)(3) above, reference Georgia’s seldom-used provisions for medical malpractice arbitration and then add a number of custom rules for property tax arbitration. Rather than provide orderly directions, this “mash-up” of arbitration provisions creates confusion and invites controversy. Consider the issue of scheduling. (f)(3)(D) states the arbitrator shall render a decision within 30 days of appointment, (f)(4)(B)(iii) and (vii) then allow 30 days after appointment to set the time and place of hearing and 30 days following the hearing to render a decision. The medical malpractice arbitration code allows for postponements and discovery “in the same manner as provided by law for discovery in civil cases in the superior courts” (9-9-72) which would exceed the 30 or 60 day period for reaching a property tax arbitration award. Administering an arbitration under conflicting rules would be challenging and invites conflict among participants.

Award Easily Challenged

Under this new law, should the taxpayer or the county dispute the arbitration award, the award, under (3)(D) above, “may be appealed to superior court in the same manner as a decision of the Board of Equalization.” What does that mean? Pursuant to 48-5-311(g)(3): “The appeal [to Superior Court] shall constitute a de novo action.” In other words, it constitutes a new action requiring a complete re-hearing of matters subject to arbitration. This is completely at odds with the extremely limited basis for modifying or vacating arbitration awards under the Georgia Arbitration Code. The primary purpose of arbitration is to provide participants an opportunity have competing claims heard by a neutral decision-maker and decided quickly, fairly and with finality. Because the property assessment arbitration provisions cannot offer participants a means of resolving a dispute with finality, it is, for practical purposes, a more expensive and cumbersome version of a board of equalization.

The primary benefit of making an alternative process available to taxpayers may be to make the traditional process appear to be a product of choice rather than compulsion.