WHAT EVERY CPA SHOULD KNOW ABOUT PROPERTY TAXATION

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2009 TSCPA

CPE FAMILY CONFERENCE

Galveston, Texas

WHAT EVERY CPA SHOULD KNOW ABOUT PROPERTY

TAXATION

John Brusniak, Jr. Brusniak | Blackwell PC 17400 Dallas Parkway, Suite 112

Dallas, Texas 75287-7305 (972) 250-6363 john@txtax.com

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John Brusniak, Jr. is the managing shareholder in the law firm of Brusniak | Blackwell PC, located at

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17400 Dallas Parkway, Suite 112, Dallas, Texas 75287-7305, (972) 250-6363, (800) 583-9829; e-mail at

john@ TXtax.com. The firm maintains an inform ational site at www.TXtax.com. Brusniak | Blackwell's practice is limited to the representation of taxpayers with property tax disputes in Texas. M r. Brusniak has been engaged in the representation of property taxpayers for 28 years. He is past Chair of the State Bar of Texas Property Tax

Com mittee, past Chair of the American Bar Association's Property Tax Com mittee and past Chair of the State Bar of Texas, Section of Taxation. He has been named by his peers as a “Texas Super Lawyer” and is President of the National Association of Property Tax Attorneys. He writes a regular column on property tax matters for the State Bar of Texas Taxation Section Newsletter and the Section of Real Property Newsletter and is the author of Brusniak’s Texas Property Tax Digest and Texas Property Tax Practice Insights published by LEXIS-NEXIS. He is a frequent speaker on property tax matters.

TAXPAYER REMEDIES IN THE APPRAISAL PROCESS

BY

JOHN BRUSNIAK, JR

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I. CONSTITUTIONAL RIGHTS.

All taxpayers are guaranteed rights in their dealings with governmental entities through the due process clauses contained in the constitutions of the United States and Texas.

UNITED STATES CONSTITUTION, AMENDMENT XIV.

§. 1. All persons born or naturalized in the United States and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; or shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws.

TEXAS CONSTITUTION, ARTICLE I, § 19. DEPRIVATION OF LIFE, LIBERTY, ETC.; DUE COURSE OF LAW

No citizen of this State shall be deprived of life, liberty, property, privileges or immunities, or in any manner disfranchised, except by the due course of the law of the land.

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TEXAS CONSTITUTION, ARTICLE VIII, § 21. INCREASE IN TOTAL PROPERTY TAXES; NOTICE AND HEARING; CALCULATION.

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(c) The legislature by general law shall require that, subject to reasonable exceptions, a property owner be given notice of a revaluation of his property

and a reasonable estimate of the amount of taxes that would be imposed on his property if the total amount of property taxes for the subdivision were not increased according to any law enacted pursuant to Subsection (a) of this section. The notice must be given before the procedures required in Subsection (a) are instituted.

II. NOTICE TO TAXPAYER.

Appraisal District Notices.

The Appraisal District is required to send written notice to a taxpayer of the valuation of the taxpayer’s property: (a) if the value of the property was raised from its prior year value; (b) if the Appraisal District has sent a value for the property greater than the value rendered by a taxpayer; (c) if the property is being added to the appraisal roll for the first time; (d) if the Appraisal District reappraised the property during the current year (regardless of whether a value change has occurred); (e) if the property owner acquired the property during the preceding year; and (f) if the taxpayer has specifically requested the Appraisal District to mail a notice. TEXAS PROPERTY TAX CODE § 25.19.

NOTE: If the Appraisal District has not changed the value of a property, and none of the above-listed circumstances has occurred, the Appraisal District is not required to mail a notice and it is the taxpayer’s responsibility for recognizing that the prior year’s value is being retained.

Homeowner notices must be mailed by April 1 or as soon thereafter as practicable. All other notices are governed by the following provision.

TEXAS PROPERTY TAX CODE § 25.19. NOTICE OF APPRAISED VALUE. (a) By May 15 or as soon thereafter as practicable, the chief appraiser shall

deliver a clear and understandable written notice to a property owner of the appraised value of the property owner's property if:

(1) the appraised value of the property is greater than it was in the preceding year;

(2) the appraised value of the property is greater than the value rendered by the property owner; or

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(3) the property was not on the appraisal roll in the preceding year. . . .

(g) By May 15 or as soon thereafter as practicable, the chief appraiser shall deliver a written notice to the owner of each property not included in a notice required to be delivered under Subsection (a), if the property was reappraised in the current tax year, if the ownership of the property changed during the preceding year, or if the property owner or the agent of a property owner authorized under § 1.111 makes a written request for the notice.

Failure to Deliver Notices.

If the Appraisal District or Appraisal Review Board fails to deliver any statutory notices, the taxpayer has the right to a hearing on this point, and the scheduling of a new hearing. TEXAS PROPERTY TAX CODE § 41.411. If the Appraisal Review Board denies the taxpayer a hearing, the taxpayer is entitled to challenge this decision with the District Court. DEADLINE: The taxpayer must file all such challenges prior to January 31 following the tax year. NOTE: If a taxpayer has filed a timely protest and the Appraisal Review Board fails to schedule a hearing, the taxpayer does not have to file a motion under this statute to compel a hearing. Harris County Appraisal Review

Bd. v. General Electric Corp., 819 S.W.2d 915 (Tex. App.--Houston [14th Dist.] 1991, writ denied).

TEXAS PROPERTY TAX CODE § 41.411. PROTEST OF FAILURE TO GIVE NOTICE. (a) A property owner is entitled to protest before the appraisal review board the

failure of the chief appraiser or the appraisal review board to provide or deliver any notice to which the property owner is entitled.

(b) If failure to provide or deliver the notice is established, the appraisal review board shall determine a protest made by the property owner on any other grounds of protest authorized by this title relating to the property to which the notice applies.

(c) A property owner who protests as provided by this section must comply with the payment requirements of Section 42.08 or he forfeits his right to a final determination of his protest.

TEXAS PROPERTY TAX CODE § 41.44. NOTICE OF PROTEST. . . .

(c) A property owner who files notice of a protest authorized by Section 41.411 is entitled to a hearing and determination of the protest if he files the notice prior to the date the taxes on the property to which the notice applies become delinquent. An owner of land who files a notice of protest under Subsection

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(a)(3) is entitled to a hearing and determination of the protest without regard to whether the appraisal records are approved.

Delivery of Notice To Wrong Address or Taxpayer.

It is the obligation of Appraisal District to identify the correct taxpayer and to send the notice of appraised value to the correct address. Once a taxpayer testifies that he did not receive a notice of appraised value, the burden of proof shifts to the Appraisal District to prove correct mailing. New

v. Dallas Appraisal Review Board, 734 S.W.2d 712 (Tex. App.--Dallas 1987, writ denied). Notices

sent incorrectly are void.

TEXAS PROPERTY TAX CODE § 1.07. DELIVERY OF NOTICE.

(a) An official or agency required by this title to deliver a notice to a property owner may deliver the notice by regular first-class mail, with postage prepaid, unless this section or another provision of this title requires a different method of delivery or the parties agree that the notice must be delivered as provided by Section 1. 085.

(b) The official or agency shall address the notice to the property owner, the person designated under Section 1.111(f) to receive the notice for the property owner, if that section applies, or, if appropriate, the property owner's agent at his address according to the most recent record in the possession of the official or agency. However, if a property owner files a written request that notices be sent to a particular address, the official or agency shall send the notice to the address stated in the request.

(c) A notice permitted to be delivered by first-class mail by this section is presumed delivered when it is deposited in the mail. This presumption is rebuttable when evidence of failure to receive notice is provided.

(d) Notice required by Section 11.45(d), 23.44(d), 23.57(d), 23.79(d), or 23.85(d) must be sent by certified mail.

Notice Sent Contrary to Fiduciary Instructions.

Notices mailed to a tax agent, when the taxpayer has instructed that those notices be mailed to the taxpayer, himself, are void and ineffective. First Union Real Estate Investments v. Taylor County

Appraisal District, 758 S.W.2d 380 (Tex.App.-- Eastland 1988, writ denied.) Similarly, a notice sent

directly to the taxpayer when the fiduciary form instructs the Appraisal District to mail the notice to its tax agent, also is void and ineffective. Harris County Appraisal District v. Drever Partners,

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Appraisal District Burden of Proof of Mailing of Notice.

Upon a taxpayer’s claim of nonreceipt of a notice required to be delivered, the Appraisal District must prove (1) that the notice was correctly addressed to the taxpayer at the taxpayer’s most current address, (2) that the notice contained the taxpayer’s name, (3) that the actual notice was placed into the envelope, (4) that the correct amount of first class postage was placed on the actual envelope containing the notice, (5) that the notice was actually delivered to be mailed, and (6) that the notice was not returned by the post office. Harris County Appraisal District v. Dincans, 882 S.W.2d 75 (Tex.App.--Houston [14th Dist.] 1994, writ denied.)

Taxpayer’s Obligation in Filing Documents.

TEXAS PROPERTY TAX CODE § 1.08. TIMELINESS OF ACTION BY MAIL. When a property owner is required by this title to make a payment or to file or deliver a report, application, statement, or other document or paper before a specified date, his action is timely if:

(1) it is sent by regular first-class mail, properly addressed with postage prepaid; and

(2) it bears a post office cancellation mark of a date earlier than the specified date and within the specified period or the property owner furnishes satisfactory proof that it was deposited in the mail before the specified date and within the specified period.

Failure to Deliver Notice of Increase in Value or Addition of Property To the Tax Roll.

TEXAS PROPERTY TAX CODE § 25.19 requires the Appraisal District to deliver to taxpayers a notice informing themif the value of their property is being increased or being added to the tax roll. If the Appraisal District fails to deliver a notice, a taxpayer may file a notice of protest complaining of the malfeasance. The notice of protest must be filed and a tax tender must be made prior to the tax delinquency date (typically January 31) if a timely tax bill is mailed. If a timely tax bill is not mailed, the filing and tax tender deadlines are extended to 125 days after the date on which a proper notice has been delivered to the taxpayer. TEXAS PROPERTY TAX CODE § 41.411 and §41.44.

Failure to Schedule Appraisal Review Board Hearing.

If the Appraisal Review Board fails or refuses to schedule a hearing on a taxpayer protest, the taxpayer may sue the Appraisal Review Board to compel the hearing. TEXAS PROPERTY TAX CODE § 41.45(f). The taxpayer is entitled to recover his reasonable attorneys' fees and court costs in any such proceeding.

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TEXAS PROPERTY TAX CODE § 41.45. HEARING ON PROTEST. . . .

(f) A property owner who has been denied a hearing to which the property owner is entitled under this chapter may bring suit against the appraisal review board by filing a petition or application in district court to compel the board to provide the hearing. If the property owner is entitled to the hearing, the court shall order the hearing to be held and may award court costs and reasonable attorney fees to the property owner.

Renditions.

TEXAS PROPERTY TAX CODE § 22.01. RENDITION GENERALLY.

(a) Except as provided by Chapter 24, a person shall render for taxation all

tangible personal property used for the production of income that the person owns or that the person manages and controls as a fiduciary on January 1. A rendition statement shall contain: (1) the name and address of the property owner; (2) a description of the property by type or category; (3) if the property is inventory, a description of each type of inventory and a general estimate of the quantity of each type of inventory; (4) the physical location or taxable situs of the property; and (5) the property owner's good faith estimate of the market value of the property or, at the option of the property owner, the historical cost when new and the year of acquisition of the property.

(b) When required by the chief appraiser, a person shall render for taxation any other taxable property that he owns or that he manages and controls as a fiduciary on January 1.

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(f) Notwithstanding Subsections (a) and (b), a rendition statement of a person

who owns tangible personal property used for the production of income located in the appraisal district that, in the owner's opinion, has an aggregate value of less than $20,000 is required to contain only: (1) the name and address of the property owner; (2) a general description of the property by type or category; and (3) the physical location or taxable situs of the property.

(g) A person's good faith estimate of the market value of the property under

Subsection (a)(5) is solely for the purpose of compliance with the requirement to render tangible personal property and is inadmissible in any subsequent protest, hearing, appeal, suit, or other proceeding under this title involving the property, except for: (1) a proceeding to determine whether the

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person complied with this section; (2) a proceeding under Section 22.29(b); or (3) a protest under Section 41.41.

(h) If the property that is the subject of the rendition is regulated by the Public

Utility Commission of Texas, the Railroad Commission of Texas, the federal Surface Transportation Board, or the Federal Energy Regulatory Commission, the owner of the property is considered to have complied with the requirements of this section if the owner provides to the chief appraiser, on written request of the chief appraiser, a copy of the annual regulatory report covering the property and sufficient information to enable the chief appraiser to allocate the value of the property among the appropriate taxing units for which the appraisal district appraises property.

(i) Subsection (a) does not apply to a property owner whose property is subject

to appraisal by a third party retained by the appraisal district if the property owner provides information substantially equivalent to that required by Subsection (a) regarding the property directly to the third party appraiser.

(j) Subsection (a) does not apply to property that is exempt from taxation.

(l) If the information contained in the most recent rendition statement filed by a person

in a prior tax year is accurate with respect to the current tax year, the person may comply with the requirements of Subsection (a) by filing a rendition statement on a form prescribed or approved by the comptroller under Section 22.24(c) on which the person has checked the appropriate box to affirm that the information continues to be complete and accurate.

The filing of renditions is mandatory. A chief appraiser may file suit to compel a taxpayer to file a rendition. Robinson v. Budget Rent-A-Car, Inc., 51 S.W.3d 425 (Tex. App.-Houston [1st Dist.] 2001, pet. denied). A ten percent penalty is assessed against late and non-filed renditions. A fifty percent penalty may be assessed against fraudulent renditions. Texas Property Tax Code §§ 22.28 and 22.29.

Renditions are required to be filed between January 1 and April 15; however, for good cause, the chief appraiser may extend the deadline for filing a rendition up to April 30. TEXAS PROPERTY TAX CODE § 22.23. Renditions are to be filed in a form that substantially complies with the form prescribed or approved by the Comptroller, and all information required to be provided by the form must be included.

TEXAS PROPERTY TAX CODE § 22.24.

(a) A person required to render property or to file a report as provided by this chapter shall use a form that substantially complies with the appropriate form prescribed or approved by the comptroller.

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(b) A person filing a rendition or report shall include all information required by Section 22.01.

(c) The comptroller may prescribe or approve different forms for different kinds of property but shall ensure that each form requires a property owner to furnish the information necessary to identify the property and to determine its ownership, taxability, and situs. A form may not require but may permit a property owner to furnish information not specifically required by this chapter to be reported. In addition, a form prescribed or approved under this subsection must contain the following statement in bold type: "If you make a false statement on this form, you could be found guilty of a Class A misdemeanor or a state jail felony under Section 37.10, Penal Code."

(d) Except as required by Section 22.01(a), a rendition or report form shall

permit but not require a property owner to state the owner's good faith estimate of the market value of the property.

(e) To be valid, a rendition or report must be sworn to before an officer authorized by law to administer an oath. The comptroller may not prescribe or approve a rendition or report form unless the form provides for the person filing the form to swear that the information provided in the rendition or report is true and accurate to the best of the person's knowledge and belief. This subsection does not apply to a rendition or report filed by the property owner, an employee of the property owner, or an employee of a property owner on behalf of an affiliated entity of the property owner.

III. TAXPAYER PROTESTS.

Notices of Protest.

To complain about the value of a taxpayer’s property, its unequal treatment or any other matter, a taxpayer must file a written complaint, denominated a notice of protest, with the Appraisal Review Board (and not the Appraisal District) in a timely fashion. The notice of protest does not need to be on any specific form, although Appraisal Review Boards make such forms available to taxpayers. It is critical for the taxpayer to mark all possible grounds of complaint on the notice of protest.

TEXAS PROPERTY TAX CODE § 41.44. NOTICE OF PROTEST . . .

(d) A notice of protest is sufficient if it identifies the protesting property owner, including a person claiming an ownership interest in the property even if that person is not listed on the appraisal records as an owner of the property,

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identifies the property that is the subject of the protest, and indicates apparent dissatisfaction with some determination of the appraisal office. The notice need not be on an official form, but the comptroller shall prescribe a form that provides for more detail about the nature of the protest. The form must permit a property owner to include each property in the appraisal district that is the subject of a protest. The comptroller, each appraisal office, and each appraisal review board shall make the forms readily available and deliver one to a property owner on request.

Deadline for Filing Notice of Protest.

Homeowner protests must be filed by April 30 or 30 days after the date of mailing of a notice of appraised value by the Appraisal District. All other protests must be filed by the later of May 31 or 30 days after the date of mailing of a notice of appraised value by the Appraisal District. If a taxpayer can show good cause, the deadline for filing a notice of protest may be extended through the date on which the Appraisal Review Board approves the appraisal roll. Homeowners are allowed to file late notices of protest through May 31 without a showing of good cause.

TEXAS PROPERTY TAX CODE § 41.44. NOTICE OF PROTEST.

(a) Except as provided by Subsections (b) and (c), to be entitled to a hearing and determination of a protest, the property owner initiating the protest must file a written notice of the protest with the appraisal review board having authority to hear the matter protested:

(1) before June 1 or not later than the 30th day after the date that notice was delivered to the property owner as provided by § 25.19, whichever is later;

Postponement or Continuance of the Appraisal Review Board Hearing.

Upon a showing of reasonable cause, an Appraisal Review Board shall reschedule or postpone a hearing on a notice of protest. The hearing must be postponed for at least five days but no more than fifteen days unless the parties agree to a different arrangement. TEXAS PROPERTY TAX CODE § 41.45(e). A property owner, unrepresented by a fiduciary, is entitled to postpone an appraisal review board hearing once, without a showing of reasonable cause. TEXAS PROPERTY TAX CODE § 41.45(e). If a property owner or agent is scheduled to appear before more than one Appraisal Review Board on the same day, then the Appraisal Review Board hearing whose notice was mailed first shall be heard on that day, and all other hearings are to be postponed. The owner or agent must produce proof of postal cancellation to establish which hearing notice controls. TEXAS PROPERTY TAX CODE § 41.45(g).

TEXAS PROPERTY TAX CODE § 41.44. NOTICE OF PROTEST. . . .

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(b) A property owner who files his notice of protest after the deadline prescribed by Subsection (a) of this section but before the appraisal review board approves the appraisal records is entitled to a hearing and determination of the protest if he shows good cause as determined by the board for failure to file the notice on time.

TEXAS PROPERTY TAX CODE § 41.45. HEARING ON PROTEST. . . .

(e) The board shall postpone the hearing to a later date if the property owner or the owner's agent shows good cause for the postponement or if the chief appraiser consents to the postponement. The hearing may not be postponed to a date less than five or more than 15 days after the date scheduled for the original hearing unless the date and time of the hearing as postponed are agreed to by the appraisal review board, the property owner, and the chief appraiser. Postponement under this subsection does not require the delivery of additional written notice to the property owner.

TEXAS PROPERTY TAX CODE § 41.45. HEARING ON PROTEST. . . .

(g) In addition to the grounds for a postponement under Subsection (e), the board shall postpone the hearing to a later date if:

(1) the owner of the property or the owner's agent is also scheduled to appear at a hearing on a protest filed with the appraisal review board of another appraisal district;

(2) the hearing before the other appraisal review board is scheduled to occur on the same date as the hearing set by the appraisal review board from which the postponement is sought;

(3) the notice of hearing delivered to the property owner or the owner's agent by the other appraisal review board bears an earlier postmark than the notice of hearing delivered by the board from which the postponement is sought or, if the date of the postmark is identical, the property owner or agent has not requested a postponement of the other hearing; and

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(4) the property owner or the owner's agent includes with the request for a postponement a copy of the notice of hearing delivered to the property owner or the owner's agent by the other appraisal review board.

Minimum Notice of Appraisal Review Board Hearing.

Unless a taxpayer agrees in writing to a shorter period of time, an Appraisal Review Board must give a taxpayer at least 15 days’ notice of the date of the hearing. TEXAS PROPERTY TAX CODE § 41.46 (b).

TEXAS PROPERTY TAX CODE § 41.46. NOTICE OF PROTEST HEARING. (a) The appraisal review board before which a protest hearing is scheduled shall

deliver written notice to the property owner initiating a protest of the date, time, and place fixed for the hearing on the protest unless the property owner waives in writing notice of the hearing. The board shall deliver the notice not later than the 15th day before the date of the hearing.

Discovery of Evidence to be Presented by Appraisal District.

Upon written request by the taxpayer, the Appraisal District is required to make available to the taxpayer all of the evidence which it intends to present at the Appraisal Review Board hearing at least 14 days prior to the scheduled hearing. TEXAS PROPERTY TAX CODE § 41.461(a)(2). If the Appraisal District fails to provide the information as required, the taxpayer is entitled to object to the presentation of the evidence and to obtain a continuance. TEXAS PROPERTY TAX CODE § 41.66(h).

TEXAS PROPERTY TAX CODE § 41.461. NOTICE OF CERTAIN MATTERS BEFORE HEARING.

(a) At least 14 days before a hearing on a protest, the chief appraiser shall: . . .

(2) inform the property owner that the owner or the agent of the owner may inspect and may obtain a copy of the data, schedules, formulas, and all other information the chief appraiser plans to introduce at the hearing to establish any matter at issue;

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TEXAS PROPERTY TAX CODE § 41.66. HEARING PROCEDURES. . . .

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(h) The appraisal review board shall postpone a hearing on a protest if the property owner requests additional time to prepare for the hearing and establishes to the board that the chief appraiser failed to comply with Section 41.461. The board is not required to postpone a hearing more than one time under this subsection.

Exchange of Evidence.

Before the commencement of the Appraisal Review Board hearing, or immediately after the hearing begins, all parties are required to exchange copies of any written material which they intend to submit to the Appraisal Review Board at the hearing. TEXAS PROPERTY TAX CODE § 41.45(h).

TEXAS PROPERTY TAX CODE § 41.45. HEARING ON PROTEST. . . .

(h) Before the hearing on a protest or immediately after the hearing begins, the chief appraiser and the property owner or the owner's agent shall each provide the other with a copy of any written material that the person intends to offer or submit to the appraisal review board at the hearing.

Appearance at Hearing.

It is critical for a taxpayer to either appear in person or by written affidavit before the Appraisal Review Board to offer evidence or argument. The failure of the taxpayer to do so will result in the dismissal of the taxpayer’s notice of protest. Webb County Appraisal Dist. v. New Laredo Hotel,

Inc., 792 S.W.2d 952 (Tex. 1990).

TEXAS PROPERTY TAX CODE § 41.45. HEARING ON PROTEST. . . .

(b) The property owner initiating the protest is entitled to an opportunity to appear to offer evidence or argument. The property owner may offer his evidence or argument by affidavit without personally appearing if he attests to the affidavit before an officer authorized to administer oaths and submits the affidavit to the board hearing the protest before it begins the hearing on the protest. On receipt of an affidavit, the board shall notify the chief appraiser. The chief appraiser may inspect the affidavit and is entitled to a copy on request.

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Conduct of Hearing.

Appraisal Review Board hearings are required to be conducted in an informal manner to the greatest extent possible. Traditional rules of evidence are not applicable. Each party is entitled to offer evidence, examine witnesses and cross-examine witnesses in addition to presenting argument to the panel. TEXAS PROPERTY TAX CODE § 41.66(b). Taxpayer must make a presentation to preserve its right of appeal. If the taxpayer makes some type of presentation, the quality of the taxpayer’s evidence will not be reviewed on appeal since trial will be de novo. National Pipe and

Tube Co. v. Liberty County Central Appraisal District, 805 S.W.2d 593 (Tex. App.--Beaumont

1991, writ denied). Concurrence by either party to the other party’s proposed value at an appraisal review board hearing results in a binding valuation agreement and deprives the appraisal review board of jurisdiction over the protest. Sondock v. Harris County Appraisal District, 231 S.W.3d 65

(Tex. App.–Houston [14 Dist.] 2007, no pet.).th

TEXAS PROPERTY TAX CODE § 41.66. HEARING PROCEDURES. . . .

(b) Hearing procedures to the greatest extent practicable shall be informal. Each party to a hearing is entitled to offer evidence, examine or cross-examine witnesses or other parties, and present argument on the matters subject to the hearing.

Burden of Proof.

With the exception of cases involving personal property which was not rendered to the Appraisal District, the Appraisal District has the burden of establishing the value of the property in valuation or equalization cases by a preponderance of the evidence presented at an Appraisal Review Board hearing. If the Appraisal District fails to meet this burden of proof, the protest shall be determined in favor of the property owner. TEXAS PROPERTY TAX CODE § 41.43(a).

TEXAS PROPERTY TAX CODE § 41.43. PROTEST OF INEQUALITY OF APPRAISAL. (a) In a protest authorized by Section 41.41(1) or (2), the appraisal district has

the burden of establishing the value of the property by a preponderance of the evidence presented at the hearing. If the appraisal district fails to meet that standard, the protest shall be determined in favor of the property owner.

Inequality of Appraisal

In addition to valuing property at its market value, an Appraisal District has the burden of insuring that all taxpayers are treated equally with one another. Inequality of appraisal may be proven on a (1) district wide basis, (2) basis of similarly situated sold properties, or (3) basis of appraisal roll comparable properties. The use of tax comparables to determine taxable values is a constitutional method. Harris County Appraisal District v. United Investors Realty Trust, 47 S.W.3d 648

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(Tex.App.-Houston [14th Dist.] 2001, pet. denied). A taxpayer is entitled to be equalized at the median level of appraisal as opposed to a mean or average level of appraisal. A median is calculated by listing all of the comparable properties in order from highest to lowest and using the appraisal ratio or value which is in the middle. If an even number of comparables is used, an average of the two numbers in the middle is to be used. TEXAS PROPERTY TAX CODE § 1.12.

TEXAS CONSTITUTION, ARTICLE VIII, § 1 (a) EQUALITY AND UNIFORMITY. Taxation shall be equal and uniform.

TEXAS PROPERTY TAX CODE § 41.43. PROTEST OF INEQUALITY OF APPRAISAL.

. . .

(b) A protest on the ground of unequal appraisal of property shall be determined in favor of the protesting party unless the appraisal district establishes that the appraisal ratio of the property is not greater than the median level of appraisal of:

(1) a reasonable and representative sample of other properties in the appraisal district;

(2) a sample of properties in the appraisal district consisting of a reasonable number of other properties similarly situated to, or of the same general kind or character as, the property subject to the protest; or

(3) a reasonable number of comparable properties appropriately adjusted. (c) For purposes of this section, evidence includes the data, schedules, formulas,

or other information used to establish the matter at issue.

Subpoenas.

Any party to an Appraisal Review Board proceeding may petition the Appraisal Review Board to issue a subpoena requiring a person to appear before the board and also to produce documents. TEXAS PROPERTY TAX CODE § 41.61(a). Such party must show good cause for the issuance of a subpoena. The Appraisal Review Board is required to hold a hearing to determine whether good cause exists for the issuance of the subpoena and must give at least five days notice of that hearing. TEXAS PROPERTY TAX CODE § 41.61(c). Non-parties to the proceeding are entitled to recoup the cost of producing documents, mileage at the rate of fifteen cents per mile and ten dollars per day. TEXAS PROPERTY TAX CODE § 41.63. If a party fails to honor a subpoena, the subpoena may be enforced in District Court by the County Attorney or the District Attorney. TEXAS PROPERTY TAX CODE § 41.62.

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TEXAS PROPERTY TAX CODE § 41.61. ISSUANCE OF SUBPOENA.

(a) If reasonably necessary in the course of a protest provided by this chapter, the appraisal review board on its own motion or at the written request of a party to the protest, may subpoena witnesses or books, records, or other documents of the property owner or appraisal district that relate to the protest.

(b) On the written request of a party to a protest provided by this chapter, the appraisal review board shall issue a subpoena if the requesting party: (1) shows good cause for issuing the subpoena; and

(2) deposits with the board a sum the board determines is reasonably sufficient to insure payment of the costs estimated to accrue for issuance and service of the subpoena and for compensation of the individual to whom it is directed.

(c) An appraisal review board may not issue a subpoena under this section unless the board holds a hearing at which the board determines that good cause exists for the issuance of the subpoena. The appraisal review board before which a good cause hearing is scheduled shall deliver written notice to the party being subpoenaed and parties to the protest of the date, time, and place of the hearing. The board shall deliver the notice not later than the 5th day before the date of the good cause hearing. The party being subpoenaed must have an opportunity to be heard at the good cause hearing.

Improprieties by Appraisal Review Board.

Taxpayers have no standing to complain about violations of their due process rights which occurred at Appraisal Review Board hearings since the taxpayers are entitled to a statutory de novo trial in District Court. Dallas County Appraisal Dist. v. Institute for Aerobics Research, 766 S.W.2d 318 (Tex. App.--Dallas 1989, writ denied); Keggereis v. Dallas Central Appraisal Dist., 749 S.W.2d 516 (Tex. App.--Dallas 1988, no writ).

Written Decision.

The Appraisal Review Board will issue a written determination to the taxpayer and deliver such decision by certified mail. TEXAS PROPERTY TAX CODE § 41.47. It is critical for a taxpayer to note the date of receipt of this decision since any and all subsequent rights relate to the date of receipt. To be valid the order must sufficiently identify the property on which the decision is being rendered and the identity of the owner. Valero South Texas Processing Co. v. Starr County

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TEXAS PROPERTY TAX CODE § 41.47. DETERMINATION OF PROTEST. (a) The appraisal review board hearing a protest shall determine the protest and

make its decision by written order.

(b) If on determining a protest the board finds that the appraisal records are incorrect in some respect raised by the protest, the board by its order shall correct the appraisal records by changing the appraised value placed on the protesting property owner's property or by making the other changes in the appraisal records that are necessary to conform the records to the requirements of law. If the appraised value of a taxable property interest, other than an interest owned by a public utility or by a cooperative corporation organized to provide utility service, is changed as the result of a protest or challenge, the board shall change the appraised value of all other interests, other than an interest owned by a public utility or by a cooperative corporation organized to provide utility service, in the same property, including a mineral in place, in proportion to the ownership interests. (c) Repealed by Acts 1985, 69th Leg., ch. 504, Sec. 3, eff. June 12, 1985. (d) The board shall deliver by certified mail a notice of issuance of the order and

a copy of the order to the property owner and the chief appraiser.

(e) The notice of the issuance of the order must contain a prominently printed statement in upper-case bold lettering informing the property owner in clear and concise language of the property owner's right to appeal the board's decision to district court. The statement must describe the deadline prescribed by Section 42.06(a) of this code for filing a written notice of appeal, and the deadline prescribed by Section 42.21(a) of this code for filing the petition for review with the district court.

IV. LAWSUITS AFTER PROTESTS.

Right to Sue.

Taxpayers who follow the normal appeals process have the right to challenge the determinations of the Appraisal Review Board before the District Court. TEXAS PROPERTY TAX CODE § 42.01. TEXAS PROPERTY TAX CODE § 42.01. RIGHT OF APPEAL BY PROPERTY OWNER. A property owner is entitled to appeal:

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(A) a protest by the property owner as provided by Subchapter C of Chapter 41; or

(B) a determination of an appraisal review board on a motion filed under Section 25.25; or

(2) an order of the comptroller issued as provided by Subchapter B, Chapter 24, apportioning among the counties the appraised value of railroad rolling stock owned by the property owner.

Concurrence by either party to the other party’s proposed value at an appraisal review board hearing results in a binding valuation agreement and deprives the appraisal review board of jurisdiction over the protest, and the district court over an appeal taken from any appraisal review board order.

Sondock v. Harris County Appraisal District, 231 S.W.3d 65 (Tex. App.–Houston [14 Dist.] 2007,th

no pet.). Challenges to breaches of valuation settlement agreements may be brought under the Texas

Declaratory Judgments Act. MHCB (USA) Leasing and Finance Corp. v. Galveston Central Appraisal District, No. 01-06-00529-CV (Tex. App. –Houston [1st Dist.] September 20, 2007, no pet h.). (to be published).

Notice of Appeal.

Taxpayers who wish to appeal the decisions of an Appraisal Review Board to the District Court are no longer required to file a written notice of appeal.

Time for Filing Lawsuit.

The lawsuit must be filed within 45 days of the receipt of the Order Determining Protest from the Appraisal Review Board. TEXAS PROPERTY TAX CODE § 42.21(a). This requirement is jurisdictional. Failure to file the lawsuit within 45 days deprives the court of the power to hear the lawsuit. Appraisal Review Bd. v. International Church of the Foursquare Gospel, 719 S.W.2d 160 (Tex. 1986); Hurst v. Guadalupe County Appraisal Dist., 752 S.W.2d (Tex. App--San Antonio 1988, no writ).

TEXAS PROPERTY TAX CODE § 42.21. PETITION FOR REVIEW.

(a) A party who appeals as provided by this chapter must file a petition for review with the district court within 45 days after the party received notice that a final order has been entered from which an appeal may be had. Failure to timely file a petition bars any appeal under this chapter.

Who To Sue.

The taxpayer must sue the Appraisal District. TEXAS PROPERTY TAX CODE § 42.21(b). In appropriate circumstances, the taxpayer may also sue the Appraisal Review Board. Failure to sue

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the correct party (or all of the correct parties) results in the dismissal of the lawsuit. Appraisal

Review Bd. v. International Church of the Foursquare Gospel, 719 S.W.2d 160 (Tex. 1986).

TEXAS PROPERTY TAX CODE § 42.21. PETITION FOR REVIEW. . . .

(b) A petition for review brought under Section 42.02 must be brought against the owner of the property involved in the appeal. A petition for review brought under Section 42.031 must be brought against the appraisal district and against the owner of the property involved in the appeal. A petition for review brought under Subdivision (2) or (3) of Section 42.01 or under Section 42.03 must be brought against the comptroller. Any other petition for review under this chapter must be brought against the appraisal district. A petition for review is not required to be brought against the appraisal review board, but may be brought against the appraisal review board in addition to any other required party, if appropriate.

Payment of Taxes Pending Suit.

General Standard: The taxpayer must tender a correct tax payment or his lawsuit will be dismissed.

TEXAS PROPERTY TAX CODE § 42.08. The taxpayer may pay the taxes billed in full. Alternatively, the taxpayer has the option of the paying the undisputed amount of tax.

If the taxpayer makes an error in calculating the tax tender, the Appraisal District may ask the court to dismiss the lawsuit. The court will determine whether the taxpayer has substantially complied with the payment statute. Note: Late payment or failure to pay one or more of the taxing units never constitutes substantial compliance, except within the jurisdiction of the Houston Court of Appeals which has indicated that cases will be reviewed on a case by case basis. See Harris County

Appraisal District v. Dipaola Realty Associates, 841 S.W.2d 487 (Tex. App.--Houston [1st Dist.]

1992, writ denied).

A taxpayer who contests the taxability of its property within a taxing unit does not need to make any tax tender. Pratt & Whitney Canada, Inc. v. McLennan County Appraisal District, 927 S.W.2d 651 (Tex. App.--Waco 1996, writ denied).

If a taxpayer is unable to tender the amounts required by this section, the taxpayer must file an oath of inability to pay the taxes with the court. The court is required to hold a hearing and determine the taxpayer’s ability to pay and may set up whatever payment terms it deems reasonable. If the taxpayer fails to comply with the court’s order within 30 days, the court is required to dismiss the lawsuit. TEXAS PROPERTY TAX CODE § 42.08(d).

If a taxpayer elects to pay the undisputed amount and a higher valuation is later set, the taxpayer must pay interest and penalties on the amount of the underpayment. TEXAS PROPERTY TAX CODE § 42.42(c).

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If a taxpayer pays less than the required amount pursuant to a court order based on the taxpayer’s inability to make the payment, the taxpayer is only required to pay interest on the amount of the underpayment and not any penalties. TEXAS PROPERTY TAX CODE § 42.42(d).

If a taxpayer pays the tax bill in full and a lower value is later determined, the taxing entities are required to pay interest to the taxpayer on the refunded amount at the rate of 8 percent per annum. TEXAS PROPERTY TAX CODE § 42.43(b).

TEXAS PROPERTY TAX CODE § 42.08. FORFEITURE OF REMEDY FOR NONPAYMENT OF TAXES.

(a) The pendency of an appeal as provided by this chapter does not affect the delinquency date for the taxes on the property subject to the appeal. However, that delinquency date applies only to the amount of taxes required to be paid under Subsection (b) If the property owner complies with Subsection (b), the delinquency date for any additional amount of taxes due on the property is determined by Section 42.42(c), and that additional amount is not delinquent before that date.

(b) Except as provided in Subsection (d), a property owner who appeals as provided by this chapter must pay taxes on the property subject to the appeal in the amount required by this subsection before the delinquency date or the property owner forfeits the right to proceed to a final determination of the appeal. The amount of taxes the property owner must pay on the property before the delinquency date to comply with this subsection is the lesser of: (1) the amount of taxes due on the portion of the taxable value of the

property that is not in dispute; or

(2) the amount of taxes due on the property under the order from which the appeal is taken.

(c) A property owner that pays an amount of taxes greater than that required by Subsection (b) does not forfeit the property owner's right to a final determination of the appeal by making the payment. If the property owner files a timely appeal under this chapter, taxes paid on the property are considered paid under protest, even if paid before the appeal is filed. (d) After filing an oath of inability to pay the taxes at issue, a party may be

excused from the requirement of prepayment of tax as a prerequisite to appeal if the court, after notice and hearing, finds that such prepayment would constitute an unreasonable restraint on the party's right of access to the courts. On the motion of a party, the court shall hold a hearing to review and determine compliance with this section, and the reviewing court may set such terms and conditions on any grant of relief as may be reasonably required by

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the circumstances. If the court determines that the property owner has not substantially complied with this section, the court shall dismiss the pending action. If the court determines that the property owner has substantially but not fully complied with this section, the court shall dismiss the pending action unless the property owner fully complies with the court's determination within 30 days of the determination.

TEXAS PROPERTY TAX CODE § 42.42. CORRECTED AND SUPPLEMENTAL TAX BILLS.

(a) Except as provided by Subsection (b) of this section, if the final determination of an appeal that changes a property owner's tax liability occurs after the tax bill is mailed, the assessor for each affected taxing unit shall prepare and mail a corrected tax bill in the manner provided by Chapter 31 of this code for tax bills generally. The assessor shall include with the bill a brief explanation of the reason for and effect of the corrected bill.

(b) If the final determination of an appeal that increases a property owner's tax liability occurs after the property owner has paid his taxes, the assessor for each affected taxing unit shall prepare and mail a supplemental tax bill in the manner provided by Chapter 31 for tax bills generally. The assessor shall include with the bill a brief explanation of the reason for and effect of the supplemental bill. The additional tax is due on receipt of the supplemental bill and becomes delinquent if not paid before the delinquency date prescribed by Chapter 31 or before the first day of the next month after the date of mailing that will provide at least 21 days for payment of the tax, whichever is later.

(c) If the final determination of an appeal occurs after the property owner has paid a portion of the tax finally determined to be due as required by Section 42.08, the assessor for each affected taxing unit shall prepare and mail a supplemental tax bill in the form and manner prescribed by Subsection (b). The additional tax is due and becomes delinquent as provided by Subsection (b), but the property owner is liable for penalties and interest on the tax included in the supplemental bill calculated as provided by Section 33.01 as if the tax included in the supplemental bill became delinquent on the original delinquency date prescribed by Chapter 31.

(d) If the property owner did not pay any portion of the taxes imposed on the property because the court found that payment would constitute an unreasonable restraint on the owner's right of access to the courts as provided by Section 42.08(d), after the final determination of the appeal the assessor for each affected taxing unit shall prepare and mail a supplemental tax bill in the form and manner prescribed by Subsection (b). The additional tax is due and becomes delinquent as provided by Subsection (b), but the property

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owner is liable for interest on the tax included in the supplemental bill calculated as provided by Section 33.01 as if the tax included in the supplemental bill became delinquent on the delinquency date prescribed by Chapter 31.

TEXAS PROPERTY TAX CODE § 42.43. REFUND.

(a) If the final determination of an appeal that decreases a property owner's tax liability occurs after the property owner has paid his taxes, the taxing unit shall refund to the property owner the difference between the amount of taxes paid and amount of taxes for which the property owner is liable.

(b) For a refund made under this section because an exemption under Section 11.20 that was denied by the chief appraiser or appraisal review board is granted, the taxing unit shall include with the refund interest on the amount refunded calculated at an annual rate that is equal to the auction average rate quoted on a bank discount basis for three-month treasury bills issued by the United States government, as published by the Federal Reserve Board, for the week in which the taxes became delinquent, but not more than 10 percent, calculated from the delinquency date for the taxes until the date the refund is made. For any other refund made under this section, the taxing unit shall include with the refund interest on the amount refunded at an annual rate of eight percent, calculated from the delinquency date for the taxes until the date the refund is made.

Standard of Review.

The court will review the taxpayer's complaint against the Appraisal District on a de novo basis. TEXAS PROPERTY TAX CODE § 42.23(a). This means that all parties start over from the beginning in providing the value of the taxpayer's property. Nothing presented at the Appraisal Review Board hearing may be introduced into evidence at trial. EXCEPTION: The Appraisal District may introduce proof that the taxpayer did not comply with Appraisal Review Board hearing minimum requirements of proof (i.e., that the taxpayer did not appear at the hearing or that the taxpayer did not introduce evidence or argument at the hearing). If this occurs, the taxpayer's suit will be dismissed. Also, the taxpayer is prohibited from raising grounds of protest to the court which were not first presented to the Appraisal Review Board.

SUGGESTION: Mark all boxes of the protest form which could possibly ever be raised. TEXAS PROPERTY TAX CODE § 42.23. SCOPE OF REVIEW.

(a) Review is by trial de novo. The district court shall try all issues of fact and law raised by the pleadings in the manner applicable to civil suits generally.

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(b) The court may not admit in evidence the fact of prior action by the appraisal review board or comptroller, except to the extent necessary to establish its jurisdiction.

(c) Any party is entitled to trial by jury on demand.

Multiple Years.

If an Appraisal Review Board issues an order determining protest for a subsequent year on a property that is already in litigation, it is the option of the property owner whether to amend the existing lawsuit to include the subsequent year or to file a new lawsuit. TEXAS PROPERTY TAX CODE § 42.21(c).

TEXAS PROPERTY TAX CODE § 42.21. PETITION FOR REVIEW. . . .

(c) If an appeal under this chapter is pending when the appraisal review board issues an order in a subsequent year under a protest by the same property owner and that protest relates to the same property that is involved in the pending appeal, the property owner may appeal the subsequent appraisal review board order by amending the original petition for the pending appeal to include the grounds for appealing the subsequent order. The amended petition must be filed with the court in the period provided by Subsection (a) for filing a petition for review of the subsequent order. A property owner may appeal the subsequent appraisal review board order under this subsection or may appeal the order independently of the pending appeal as otherwise provided by this section, but may not do both. A property owner may change the election of remedies provided by this subsection at any time before the end of the period provided by Subsection (a) for filing a petition for review.

Attorneys' Fees.

The taxpayer is entitled to recover attorneys' fees if he prevails in his suit. TEXAS PROPERTY TAX CODE § 42.29. The recovery is limited to the greater of $15,000 or 20% of the taxes in dispute (whichever is more); however, if the taxes in dispute are less than $15,000, then the taxpayer may not recover more attorneys' fees that the amount of taxes in dispute. In no event may a taxpayer recover more than $100,000 in attorneys’ fees for a property in one tax year. The award of attorneys' fees to a prevailing taxpayer in suits involving excessive valuation or in equality is mandatory.

Zapata County Appraisal District v. Coastal Oil & Gas Corp., 90 S.W.3d 847 (Tex. App. -San

Antonio 2002, pet. denied). The Appraisal District is not entitled to recover attorneys' fees from the

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TEXAS PROPERTY TAX CODE § 42.29. ATTORNEY'S FEES.

(a) A property owner who prevails in an appeal to the court under Section 42.25 or 42.26 may be awarded reasonable attorney's fees. The amount of the award may not exceed the greater of:

(1) $15,000; or

(2) 20 percent of the total amount by which the property owner's tax liability is reduced as a result of the appeal.

(b) Notwithstanding Subsection (a), the amount of an award of attorney's fees may not exceed the lesser of:

(1) $100,000; or

(2) the total amount by which the property owner's tax liability is reduced as a result of the appeal.

Court Costs.

The court may award either party the costs of court (i.e., filing fees, jury fees, costs of depositions, etc.). TEXAS PROPERTY TAX CODE § 42.07.

TEXAS PROPERTY TAX CODE § 42.07. COSTS OF APPEAL.

The reviewing court in its discretion may charge all or part of the costs of an appeal taken as provided by this chapter against any of the parties.

Arbitration.

A taxpayer who files suit has an absolute right to demand that the court order the parties to participate in non-binding arbitration. TEXAS PROPERTY TAX CODE § 42.225. The party who prevails at the arbitration is allowed to introduce the arbitration verdict at the trial on the merits of the suit, if the suit does not settle as a result of the arbitration. If the trial court renders a verdict setting the appraised value of the taxpayer's property at an amount equal to or less than the arbitration award, the trial court is required to award attorney's fees. NOTE: The parties have the right to contract between themselves to make the arbitration verdict binding.

TEXAS PROPERTY TAX CODE § 42.225. PROPERTY OWNER'S RIGHT TO APPEAL THROUGH ARBITRATION.

(a) On motion by a property owner who appeals an appraisal review board order under this chapter, the court shall submit the appeal to nonbinding arbitration. The court shall order the nonbinding arbitration to be conducted in

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accordance with Chapter 154, Civil Practice and Remedies Code. If the appeal proceeds to trial following an arbitration award or finding under this subsection, either party may introduce the award or finding into evidence. In addition, the court shall award the property owner reasonable attorney fees if the trial was not requested by the property owner and the determination of the appeal results in an appraised value for the owner's property that is equal to or less than the appraised value under the arbitration award or finding. However, the amount of an award of attorney fees under this subsection is subject to the same limitations as those provided by Section 42.29.

(b) On motion by the property owner, the court shall order the parties to an appeal of an appraisal review board order under this chapter to submit to binding arbitration if the appraisal district joins in the motion or consents to the arbitration. A binding arbitration award under this subsection is binding and enforceable in the same manner as a contract obligation.

(c) The court shall appoint an impartial third party to conduct an arbitration under this section. The impartial third party is appointed by the court and serves as provided by Subchapter C, Chapter 154, Civil Practice and Remedies Code.

(d) Each party or counsel for the party may present the position of the party before the impartial third party, who must render a specific arbitration award. (e) Prior to submission of a case to arbitration the court shall determine matters

related to jurisdiction, venue, and interpretation of the law.

(f) Except as provided in this section, an arbitration award may include any remedy or relief that a court could order under this chapter.

V. COMPLAINTS AFTER NORMAL APPEALS PERIOD HAS EXPIRED.

Substantial Valuation Errors.

If the Appraisal District has over-appraised a taxpayer's property by more that 33% then the taxpayer has until January 31 to complain about the valuation to the Appraisal Review Board. TEXAS PROPERTY TAX CODE § 25.25(d). NOTE: To proceed with such a motion, the taxpayer must pay his taxes in the same fashion as if a normal lawsuit was pending. TEXAS PROPERTY TAX CODE § 25.25(e). PENALTY: The taxpayer who prevails in a motion to correct valuation must pay a penalty of 10% of the total taxes assessed under the corrected value. If the taxpayer is dissatisfied with the determination of the Appraisal Review Board on his motion, the taxpayer has the right to appeal this decision to the District Court. This suit must be filed within 45 days of the taxpayer's receipt of the Appraisal Review Board's decision. TEXAS PROPERTY TAX CODE § 25.25(g). This requirement is jurisdictional. Fountain Parkway, Ltd. v. Tarrant Appraisal District, 920

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S.W.2d 799 (Tex. App.--Fort Worth 1996, writ denied). NOTE: To qualify under this section, the property may not have been "the subject of a protest brought by the property owner under Chapter 41" and it may not have been the subject of a written valuation agreement between the property owner and the Appraisal District. A withdrawn notice of protest does not preclude the filing of a motion under this section. Jim Sowell Construction Company, Inc. v. Dallas Central Appraisal

District, 900 S.W.2d 82 (Tex. App.--Dallas 1995, writ denied); nor does failure to appear at a

hearing preclude the filing of a motion under this section. Koger Equity, Inc. v. Bexar County Appraisal Review Board, No. 04-02-00848-CV (Tex. App. - San Antonio, October 8, 2003, no pet.

h.). (to be published). A signed withdrawal of protest and valuation agreement precludes subsequent

motions even on behalf of succeeding property owners. Dallas Central Appraisal District v. Park

Stemmons, Ltd., 948 S.W.2d 11 (Tex. App.--Dallas 1997, no writ).

Clerical Errors, Multiple Appraisal, Property Not In the Form or In The Location Shown On the Appraisal Roll.

Certain errors are so egregious that the Property Tax Code allows challenges to take place substantially after the fact. These include clerical errors (i.e., calculation mistakes, mistakes in transcribing or entering numbers, or erroneously recording an Appraisal Review Board decision)

Comdisco, Inc. v. Tarrant County Appraisal District, 927 S.W.2d 325 (Tex. App.--Fort Worth 1996,

writ ref’d), multiple appraisals (i.e., taxing the same property more than once in a year), Brooks

County Central Appraisal District v. Tipperary Energy Corp., 847 S.W.2d 592 (Tex. App. --San

Antonio 1992, no writ), and property not in the form shown on the appraisal roll or not in the location shown on the appraisal roll (e.g., showing the property to be in Dallas, Texas when it was in fact in New York, New York). TEXAS PROPERTY TAX CODE § 25.25(c). NOTE: To proceed with such a motion, the taxpayer must pay his taxes in the same fashion as if a normal lawsuit was pending. TEXAS PROPERTY TAX CODE § 25.25(e). DEADLINES: There is a five-year statute of limitations. If the taxpayer is dissatisfied with the determination of the Appraisal Review Board on his motion, the taxpayer has the right to appeal this decision to the District Court. This suit must be filed within 45 days of the taxpayer's receipt of the Appraisal Review Board's decision. TEXAS PROPERTY TAX CODE § 25.25(g).

TEXAS PROPERTY TAX CODE § 25.25. CORRECTION OF APPRAISAL ROLL. (a) Except as provided by Chapters 41 and 42 of this code and by this section,

the appraisal roll may not be changed.

(b) The chief appraiser may change the appraisal roll at any time to correct a name or address, a determination of ownership, a description of property, multiple appraisals of a property, or a clerical error or other inaccuracy as prescribed by board rule that does not increase the amount of tax liability. Before the 10 day after the end of each calendar quarter, the chief appraiserth shall submit to the appraisal review board and to the board of directors of the appraisal district a written report of each change made under this subsection that decreases the tax liability of the owner of the property. The report must include:

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(1) a description of each property; and (2) the name of the owner of that property.

(c) The appraisal review board, on motion of the chief appraiser or of a property owner, may direct by written order changes in the appraisal roll for any of the five preceding years to correct:

(1) clerical errors that affect a property owner's liability for a tax imposed in that tax year;

(2) multiple appraisals of a property in that tax year; or

(3) the inclusion of property that does not exist in the form or at the location described in the appraisal roll.

(d) At any time prior to the date the taxes become delinquent, a property owner or the chief appraiser may file a motion with the appraisal review board to change the appraisal roll to correct an error that resulted in an incorrect appraised value for the owner's property. However, the error may not be corrected unless it resulted in an appraised value that exceeds by more than one-third the correct appraised value. If the appraisal roll is changed under this subsection, the property owner must pay to each affected taxing unit a late-correction penalty equal to 10 percent of the amount of taxes as calculated on the basis of the corrected appraised value. The roll may not be changed under this subsection if:

(1) the property was the subject of a protest brought by the property owner under Chapter 41, a hearing on the protest was conducted in which the property owner offered evidence or argument, and the appraisal review board made a determination of the protest on the merits; or

(2) the appraised value of the property was established as a result of a written agreement between the property owner or the owner’s agent and the appraisal district.

(e) If the chief appraiser and the property owner do not agree to the correction before the 15th day after the date the motion is filed, a party bringing a motion under Subsection (c) or (d) is entitled on request to a hearing on and a determination of the motion by the appraisal review board. A party bringing a motion under this section must describe the error or errors that the motion is seeking to correct. Not later than 15 days before the date of the hearing, the board shall deliver written notice of the date, time, and place of the hearing to the chief appraiser, the property owner, and the presiding officer of the

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governing body of each taxing unit in which the property is located. The chief appraiser, the property owner, and each taxing unit are entitled to present evidence and argument at the hearing and to receive written notice of the board's determination of the motion. A property owner who files the motion must comply with the payment requirements of Section 42.08 or forfeit the right to a final determination of the motion.

(f) The chief appraiser shall certify each change made as provided by this section to the assessor for each unit affected by the change within five days after the date the change is entered.

(g) Within 45 days after receiving notice of the appraisal review board's determination of a motion under this section, the property owner or the chief appraiser may file suit to compel the board to order a change in the appraisal roll as required by this section.

(h) The appraisal review board, on the joint motion of the property owner and the chief appraiser filed at any time prior to the date the taxes become delinquent, shall by written order correct an error that resulted in an incorrect appraised value for the owner's property.

(i) A person who acquires property after January 1 of the tax year at issue is entitled to file any motion that this section authorizes the person who owned the property on January 1 of that year to file, if the deadline for filing the motion has not passed.

(j) If during the pendency of a motion under this section the ownership of property subject to the motion changes, the new owner of the property is entitled to proceed with the motion in the same manner as the property owner who filed the motion.

(k) The chief appraiser shall change the appraisal records and school district appraisal rolls promptly to reflect the detachment and annexation of property among school districts under Subchapter C or G, Chapter 41, Education Code.

(l) A motion may be filed under Subsection (c) regardless of whether, for a tax year to which the motion relates, the owner of the property protested under Chapter 41 an action relating to the value of the property that is the subject of the motion.

(m) The hearing on a motion under Subsection (c) or (d) shall be conducted in the manner provided by Subchapter C, Chapter 41.

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(n) After a chief appraiser certifies a change under Subsection (b) that corrects multiple appraisals of a property, the liability of a taxing unit for a refund of taxes under Section 26.15(f), and any penalty or interest on those taxes, is limited to taxes paid for the tax year in which the appraisal roll is changed and the four tax years preceding that year.

(o) The failure or refusal of a chief appraiser to change an apppraisal roll under Subsection (b) is not:

(1) an action that the appraisal review board is authorized to determine under this section;

(2) an action that may be the subject of a suit to compel filed under Subsection (g);

(3) an action that a property owner is entitled to protest under Section 41.41; or

(4) an action that may be appealed under Chapter 42.

VI. DELINQUENT TAX DISPUTES.

Limited Challenges.

Taxpayers are limited in the matters which they can bring up when they are sued for delinquent taxes. TEXAS PROPERTY TAX CODE § 42.09. A taxpayer is limited (a) to arguing that the taxpayer was not the owner of the property in dispute on January 1 of the tax year in dispute (this eliminates personal liability for the tax, but does not eliminate the tax lien which has been placed on the property) and (b) to arguing that the property was not located within the boundaries of the taxing unit seeking to impose the tax (This eliminates the tax lien on the property, but not the personal liability on the part of the taxpayer.) The taxpayer cannot bring up such issues as the overvaluation of the property. NOTE: The Corpus Christi Court of Appeals has ruled that a taxpayer challenging a personal property delinquent tax may claim that he did not own a portion of the personal property at issue. General Electric Capital Corp. v. City of Corpus Christi, 805 S.W.2d 596 (Tex. App.--Corpus Christi 1993, writ denied).

TEXAS PROPERTY TAX CODE § 42.09. REMEDIES EXCLUSIVE.

(a) Except as provided by Subsection (b) of this section, procedures prescribed by this title for adjudication of the grounds of protest authorized by this title are exclusive, and a property owner may not raise any of those grounds: (1) in defense to a suit to enforce collection of delinquent taxes; or

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(2) as a basis of a claim for relief in a suit by the property owner to arrest or prevent the tax collection process or to obtain a refund of taxes paid.

(b) A person against whom a suit to collect a delinquent property tax is filed may plead as an affirmative defense:

(1) if the suit is to enforce personal liability for the tax, that the defendant did not own the property on which the tax was imposed on January 1 of the year for which the tax was imposed; or

(2) if the suit is to foreclose a lien securing the payment of a tax on real property, that the property was not located within the boundaries of the taxing unit seeking to foreclose the lien on January 1 of the year for which the tax was imposed.

(c) For purposes of this section, "suit" includes a counterclaim, cross-claim, or other claim filed in the course of a lawsuit.

Collection Fee Notices.

Most taxing units impose a 15% or 20% collection penalty on all taxes which are delinquent on July 1 (this is a one time penalty). To collect this penalty, the taxing unit must have mailed a notice to the owner of the property between May 1 and May 31 notifying the taxpayer that such a penalty will be imposed. TEXAS PROPERTY TAX CODE § 33.07.

TEXAS PROPERTY TAX CODE § 33.07. ADDITIONAL PENALTY FOR COLLECTION COSTS FOR TAXES DUE BEFORE JUNE 1.

(a) A taxing unit or appraisal district may provide, in the manner required by law for official action by the body, that taxes that become delinquent on or after February 1 of a year but not later than May 1 of that year and that remain delinquent on July 1 of the year in which they become delinquent incur an additional penalty to defray costs of collection, if the unit or district or another unit that collects taxes for the unit has contracted with an attorney pursuant to Section 6.30. The amount of the penalty may not exceed the amount of the compensation specified in the contract with the attorney to be paid in connection with the collection of the delinquent taxes.

. . .

(d) If a taxing unit or appraisal district provides for a penalty under this section, the collector shall deliver a notice of delinquency and of the penalty to the property owner at least 30 and not more than 60 days before July 1.

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Statutes of Limitations.

If raised by the taxpayer in a delinquent tax suit, a taxing unit is barred from collecting taxes on real property that have been delinquent for more that 20 years and from collecting taxes on personal property which have been delinquent for more that 4 years. TEXAS PROPERTY TAX CODE § 33.05.

TEXAS PROPERTY TAX CODE § 33.05. LIMITATION ON COLLECTION OF TAXES. (a) Personal property may not be seized and a suit may not be filed:

(1) to collect a tax on personal property that has been delinquent more than four years; or

(2) to collect a tax on real property that has been delinquent more than 20 years.

(b) A tax delinquent for more than the limitation period prescribed by this section and any penalty and interest on the tax is presumed paid unless a suit to collect the tax is pending.

(c) If there is no pending litigation concerning the delinquent tax at the time of the cancellation and removal, the collector for a taxing unit shall cancel and remove from the delinquent tax roll:

(1) a tax on real property that has been delinquent for more than 20 years; (2) a tax on personal property that has been delinquent for more than 10

years; and

(3) a tax on real property that has been delinquent for more than 10 years if the property has been owned for at least the preceding eight years by a home-rule municipality in a county with a population of more than two million.

Failure to Deliver Notice of Increase in Value or Addition of Property To the Tax Roll.

TEXAS PROPERTY TAX CODE § 25.19 requires the Appraisal District to deliver to taxpayers a notice informing themif the value of their property is being increased or being added to the tax roll. If the Appraisal District fails to deliver a notice, a taxpayer may file a notice of protest complaining of the malfeasance. The notice of protest must be filed and a tax tender must be made prior to the tax delinquency date (typically January 31) if a timely tax bill is mailed. If a timely tax bill is not mailed, the filing and tax tender deadlines are extended to 125 days after the date on which a proper notice has been delivered to the taxpayer. TEXAS PROPERTY TAX CODE § 41.411 and §41.44.

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References

  1. t www.TXtax.com