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2010 Attorney General Opinions and Court Decisions

Opinions and Decisions

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2010


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Listed below are recent opinions and decisions concerning various property tax issues. The list is does not include all opinions and decisions concerning property tax. The summaries are provided by the Comptroller's office as a public service intended solely as an informational resource. The summaries are not intended as substitutes for or interpretations of the opinions and decisions summarized and should not be relied upon as such. Additionally, the information provided neither constitutes nor serves as a substitute for legal advice. Questions regarding the meaning or interpretation of any information included or referenced herein should, as appropriate or necessary, be directed to an attorney or other appropriate counsel.

Attorney General Opinions

  • GA-0827 - GA-0827 addresses the taxable status of real property owned by the City of Greenville and leased to a private company. Attorney General’s Opinion Summary: To the extent all of your questions seek a determination about the tax status of various interests in a parcel of property in the City of Greenville, they all involve fact issues that are inappropriate to the attorney general opinion process. Moreover, the initial determination about eligibility of tax exemptions rests with the chief appraiser. We thus cannot address your specific questions. We can advise you generally with respect to the tax exemption of a leasehold interest under section 25.07, Tax Code, that a maintenance hangar intended for the safe and efficient operation of a municipal airport constitutes a public transportation facility.
  • GA-0805 - GA-0805 addresses the proper method of appraising the value of residence homesteads damaged by Hurricane Ike in 2008. Attorney General's Opinion Summary: Calculation of the 2010 appraised value of a residence homestead damaged by Hurricane Ike in 2008 and renovated to its pre-storm status is determined by section 23.23(f) of the Tax Code so long as the structure was "rendered uninhabitable or unusable." If the structure was not rendered uninhabitable or unusable, calculation of the 2010 appraised value is dependent upon whether the renovations may reasonably be said to constitute a mere "repair" or a "new improvement" under section 23.23(e). If the structure was rendered uninhabitable or unusable, calculation of the 2010 appraised value is dependent upon the appraised value the property would have had in 2009 but for the storm damage, together with the market value of all new improvements to the property as described by subdivision (f)(2).
  • GA-0798 - GA-0798 addresses the method by which a hospital district may set an ad valorem tax rate when it has not set a tax rate since 1996. Attorney General’s Opinion Summary: The Tax Code does not provide a special method for a tax rate to be adopted by a hospital district that has not adopted a tax rate or levied a tax since 1996. We cannot predict whether a court would uphold a tax rate adopted without following the rollback procedures mandated by chapter 26 of the Tax Code.
  • GA-0790 - GA-0790 addresses combining real property and improvements on one parcel identification number or taxpayer account for appraisal district record purposes.
  • GA-0780 - GA-0780 addresses the application of Texas Property Code Sec. 5.017 concerning the enforceability of certain restrictive covenants recorded before the effective date of the statute.

Courts of Appeals Decisions

  • Bello v. Tarrant County et al., No. 02-09-00462-CV (Second Court of Appeals – Fort Worth) -
    (December 9, 2010)

    This case involves an appeal in a delinquent tax suit. The trial court entered judgment in favor of the taxing entities and the property owner appealed. In addressing one of several grounds raised on appeal, the appellate court affirmed that service of citation by publication may be authorized in delinquent tax suits.

  • Sections 42.01 and 42.21
    Bexar Appraisal District v. American Opportunity for Housing–Perrin Oaks, L.L.C., No. 04-10-00278-CV (Fourth Court of Appeals — San Antonio)
    -
    (December 8, 2010)

    This case involves an appeal from a denial of a plea to the jurisdiction in a suit relating to a tax exemption. In its opinion, the appellate court provided the following background:

    Perrin Oaks I, Ltd. (Perrin, Ltd.) is the record owner of a housing development project known as Paseo Pointe Apartments (the Apartments). Perrin, Ltd. is a limited partnership comprised of: (1) Perrin Oaks, Inc. (Perrin, Inc.), the sole general partner; and (2) American Opportunity for Housing, Inc. (Housing, Inc.), the sole limited partner. Housing, Inc. is also the sole shareholder of AOP. AOP claims that in 2007, Housing, Inc. and AOP entered into an Assignment and Merger Agreement that merged Perrin, Ltd. into AOP. As a consequence, AOP argues that it is the property owner of the Apartments. BCAD disputes the effect of the merger.

    Believing that it qualified for a charitable housing development organization exemption for the Apartments for 2008, AOP “attempted to make” an application for an exemption to BCAD. BCAD, however, required the application to be in the name of Perrin, Ltd., the record owner of the Apartments. Consequently, Perrin, Ltd. filed an application with BCAD for the exemption, which BCAD denied due to Perrin, Ltd.’s failure to provide the required affordable housing. Perrin, Ltd. protested this decision to BCAD’s appraisal review board, which agreed that Perrin, Ltd. was not entitled to the exemption.

    AOP subsequently filed suit in district court appealing the decision of the appraisal review board and seeking a declaration that it was entitled to the exemption. BCAD filed a plea to the jurisdiction asserting that the court lacked subject matter jurisdiction because AOP was not the record owner of the Apartments, and did not protest BCAD’s decision before the appraisal review board. AOP then amended its petition to add Housing, Inc. as a co-plaintiff. BCAD filed a second plea to the jurisdiction, arguing that Housing, Inc. lacked standing because it failed to timely file suit. AOP amended its petition once more, dropping Housing, Inc. from the suit; adding that AOP was the “assignee and successor in interest to [Perrin, Ltd]”; and asserting that it was also entitled to the exemption for 2009. BCAD then supplemented its second plea to the jurisdiction, contending that the court lacked jurisdiction as to 2009 because the appraisal review board made no determinations as to that tax year. AOP filed a response to the plea to the jurisdiction. At the hearing, the parties presented their arguments and some documentary evidence, but offered no testimony. The trial court granted the plea as to 2009, but denied it as to 2008. BCAD appeals the denial of its plea as to the 2008 tax year only. Thus, the trial court’s order is affirmed as to the 2009 tax year.

    The court reversed the trial court as to the tax year at issue and dismissed the underlying cause for lack of subject matter jurisdiction, holding that the appellant failed to raise a fact issue that it has standing or exhausted its administrative remedies. In doing so, the appellate court found as follows:

    The owner of the property that applied for the exemption was Perrin, Ltd. Housing, Inc. appears to have transferred its limited partnership interest in Perrin, Ltd. to AOP. However, a partnership is distinct from its partners. See Tex. Bus. Orgs. Code Ann. §§ 152.056, 153.003 (West 2008 & Supp. 2010). Likewise, partnership property is not property of the partners. See Tex. Bus. Orgs. Code Ann. §§ 152.101, 153.003 (West 2008 & Supp. 2010). The Tax Code provides that the property owner must appeal a protest determination to the district court. Tex. Tax Code Ann. §§ 41.41(a)(9), 42.01(1)(A), 42.21. However, a limited partnership interest in a limited partnership that owns certain property does not equate to ownership of that property. See Tex. Bus. Orgs. Code Ann. §§ 152.101, 153.003. Likewise, the ownership of such a limited partnership interest does not provide a common identity between AOP and Perrin, Ltd. that would be sufficient to consider actions taken by Perrin, Ltd. to be the actions of AOP. Even viewing the evidence in the light most favorable to AOP, there is no evidence that would support AOP’s ability to appeal from a protest made by Perrin, Ltd. based on AOP’s ownership of the limited partnership interest in Perrin, Ltd.

  • Section 33.74
    Dhingra v. Aldine Independent School District et al., No. 01-09-01054-CV (First Court of Appeals – Houston)
    -
    (November 18, 2010)

    This case involves an appeal of a tax master’s report regarding delinquent taxes. After the tax master issued a report to the trial court recommending that the taxing units’ motion for summary judgment be granted, the plaintiff timely filed a notice of appeal of the tax master’s report. The trial court did not hold a hearing de novo, but did sign an order confirming the tax master’s report and granting the taxing units’ motion for summary judgment. The plaintiff appealed the trial court’s judgment, arguing, among other things, that the trial court erred in failing to conduct a hearing de novo. On appeal, the taxing units conceded that the trial court did not conduct a hearing de novo and that remand for such a hearing was appropriate.

    Noting both the mandatory nature of a hearing de novo in the context of Tax Code §33.74 and the taxing units’ concessions that the trial court did not conduct a hearing de novo and that the judgment should be reversed, the appellate court reversed the trial court’s judgment and remanded the case for the trial court to conduct a hearing de novo.

  • Ross et al. v. Linebarger, Goggan, Blair & Sampson, LLC et al., No. 01-10-00082-CV (First Court of Appeals – Houston) -
    (November 18, 2010)

    This case addresses whether a law firm and its employees engaged by governmental units for the purpose of collecting taxes established immunity from suit as governmental agents for actions taken while collecting taxes. After a tax sale and an unsuccessful attempt at redemption, plaintiffs sued various taxing units, the law firm representing the taxing units in the collection of taxes, and employees of the law firm, as well as the individual who purchased the property at the tax sale. The law firm and its employees filed a plea to the jurisdiction, motion for summary judgment, and motion to sever, claiming governmental and official immunity. The trial court granted the plea to the jurisdiction and dismissed all claims against the law firm and its employees.

    Framing the question presented as “whether [the law firm and its employees], engaged by the governmental units for the purpose of performing the governmental function of collecting taxes, has established its immunity from suit as a governmental agent for its actions taken while collecting the taxes,” the appellate court affirmed the trial court’s order granting the plea to the jurisdiction of the law firm and its employees. The appellate court held that the plaintiffs’ pleadings made it clear that the suit against the law firm and its employees was for “actions taken in the course of accomplishing the governmental act delegated to it by the taxing entities that enjoy immunity for the very same act” and concluded “that imposing personal liability on [the law firm and its employees] for actions taken while performing the governmental function of collecting taxes would be contrary to public policy.”

  • Section 42.21(e)
    Braniff CB Ltd. v. Harris County Appraisal District, No. 14-10-00089-CV (Fourteenth Court of Appeals – Houston)
    -
    (November 18, 2010)

    This case addresses the issues of proper plaintiffs for purposes of judicial review under Chapter 42 of the Tax Code and application of Tax Code §42.21(e). The trial court granted a plea to the jurisdiction in favor of Harris County Appraisal District, finding that the plaintiff did not own the property on January 1 of the tax year at issue. In response to HCAD’s plea, the plaintiff had amended its petition to name the record owner and claimed that, pursuant to Tax Code §42.21(e) and Texas Rule of Civil Procedure 28, the procedural defects had been corrected. The trial court granted HCAD’s plea and dismissed the suit. The record property owner appealed.

    The appellate court noted that a plaintiff seeking judicial review of an appraisal review board order under Chapter 42 of the Tax Code must be the property owner, a designated agent of the owner, or the authorized lessee of the property meeting the criteria of Tax Code §41.413. The appellate court stated that appellant’s argument that §42.21(e)(1) “operates to permit [the original plaintiff] to correct or change the party’s name presupposes that [the appellant] was a proper party entitled to seek judicial review.” The appellate court found that the appellant did not pursue its right of protest as the property owner and held that “[w]hen no proper party timely appealed to the district court, the trial court did not acquire subject-matter jurisdiction, and the Review Board’s determination became final.” The appellate court also determined that the appellant “did not make a showing that it was doing business under the common name [of the original plaintiff], nor was there evidence that the entities used the name [of the original plaintiff] as an assumed or common name to warrant application of Rule 28.”

  • Section 42.21(e)
    Hartman Reit Operating Partnership III, L.P. v. Harris County Appraisal District, No. 14-10-00242-CV (Fourteenth Court of Appeals – Houston)
    -
    (November 18, 2010)

    This case addresses the issues of proper plaintiffs for purposes of judicial review under Chapter 42 of the Tax Code and application of Tax Code §42.21(e). The trial court granted a plea to the jurisdiction in favor of Harris County Appraisal District, finding that the plaintiff did not own the property on January 1 of the tax year at issue. In response to HCAD’s plea, the plaintiff had amended its petition to name the record owner and claimed that the procedural defects had been corrected by applying Tax Code §42.21(e) to correct or change the name of the plaintiffs and that Texas Rule of Civil Procedure 28 permitted amendment of the petition to include the name of the record owner as the true name of the property owner. The trial court granted HCAD’s plea and dismissed the suit. The record property owner appealed.

    The appellate court noted that a plaintiff seeking judicial review of an appraisal review board order under Chapter 42 of the Tax Code “must be the property owner, a properly designated agent, or a lessee.” The appellate court stated that appellant’s argument that §42.21(e)(1) “operates to permit [the original plaintiff] to correct or change the party’s name presupposes that [the appellant] was a proper party entitled to seek judicial review.” The appellate court found that the appellant did not pursue its right of protest as the property owner and held that “[w]hen no proper party timely appealed to the district court, the trial court did not acquire subject-matter jurisdiction, and the Review Board’s determination became final.” The appellate court also determined that the appellant “did not make a showing that it was in fact doing business under the common name [of the original plaintiff], nor was there evidence that the entities used the name [of the original plaintiff] as an assumed or common name to warrant application of Rule 28.”

  • Section 42.21(e)
    GSL Welcome BP 32 LLC v. Harris County Appraisal District, No. 01-10-00189-CV (First Court of Appeals-Houston)
    -
    (November 10, 2010)

    This case addresses the issues of proper plaintiffs for purposes of judicial review under Chapter 42 of the Tax Code and application of Tax Code, §42.21(e). The trial court granted a plea to the jurisdiction in favor of Harris County Appraisal District, finding that the plaintiff had no right to appeal to district court because the plaintiff did not own the property on January 1 of the tax year at issue. In response to HCAD’s plea, the plaintiff had amended its petition to name the record owner and moved to substitute the record owner as plaintiff pursuant to Tax Code, §42.21(e) and Texas Rule of Civil Procedure 28, claiming that the plaintiff and the record owner were not distinct parties, but the same party that sued under a misnomer and a common name assignment. Finding that the original plaintiff lacked standing to protest before the ARB and to pursue judicial review because it did not own the property on January 1 and that the record owner lacked standing to seek judicial review because it had not exhausted administrative remedies by protest to the ARB, the trial court denied the motion to substitute and granted HCAD’s plea. The record property owner appealed.

    The appellate court noted that a plaintiff seeking judicial review of an appraisal review board order under Chapter 42 of the Tax Code must be the property owner, a properly designated agent pursuant to Tax Code, §1.111, or a lessee meeting the criteria of Tax Code, §41.413.” The appellate court held that subsection (e) of section 42.21, permitting a correction or change of the name of a party under certain circumstances, “presupposes that both the original plaintiff and the plaintiff to be substituted have standing to seek judicial review of the board’s order.” In a footnote, the appellate court limited this holding to circumstances in which “both the original plaintiff and the amended plaintiff lack standing to seek judicial review,” expressing “no opinion on whether [42.21(e)] permits amendment after the statutory time period when one or both plaintiffs have standing.” The appellate court further held that application of misnomer law to allow a petition naming the record owner “to relate back to the timely filed original petition does not cure [the] jurisdictional defects.” The appellate court also determined that the trial court had correctly denied appellant’s motion under Texas Rule of Civil Procedure 28, holding that the record owner failed to present evidence that it did business under the common name of the original plaintiff.

  • Sections 1.111(e) and 6.05(e)
    KM TS Spring Cypress LLC v. Harris County Appraisal District, No. 14-09-00978-CV (Fourteenth Court of Appeals-Houston)
    -
    (October 7, 2010)
    This case addresses agreements under Tax Code, §1.111(e). The trial court granted a plea to the jurisdiction in favor of Harris County Appraisal District, finding that the property owner had no right to appeal to district court because an agreement had been reached pursuant to Tax Code, §1.111(e) during the protest hearing before the appraisal review board. The property owner argued that the appeal was not barred because Tax Code, §1.111(e) requires an agreement with the chief appraiser and that an appraisal district representative, rather than the chief appraiser, had appeared at the hearing.
    The appellate court noted that “[a]lthough the Tax Code requires the appearance of the chief appraiser at a protest hearing, it also allows the chief appraiser to delegate authority to his employees” pursuant to Tax Code, §6.05(e). The court noted that the property owner cited no authority, and the court was aware of no authority, that prohibited the chief appraiser from delegating authority to reach an agreement with a property owner. The appellate court rejected the property owner’s claim that an agreement between a property owner and an appraisal district representative appearing on behalf of the chief appraiser is not an agreement subject to Tax Code, §1.111(e) and held that such an agreement precludes appeal to district court.
  • Harris County Appraisal District v. Houston Laureate Associates, Ltd. Et al., No. 14-09-00380-CV (Fourteenth Court of Appeals – Houston) -
    (August 26, 2010)
    This case addresses admissibility of expert testimony on a claim of unequal appraisal. The appellate court found that an attorney’s alleged violation of an ethical rule does not provide a basis for excluding evidence, that a witness paid a flat fee for his services as an expert by a tax consulting firm with a contingency interest in the litigation is acceptable as long as the expert’s fee is not contingent on the substance of the testimony or outcome of the trial, that nothing in the record suggested that the expert’s fee was contingent upon the content of his testimony, that questions posed by the trial court elicited testimony that clarified that the expert’s fee was not contingent upon the outcome of the case, and that alleged errors in the expert’s testimony and report were addressed by the expert’s testimony.
    The appellate court held that the presentation of the expert’s testimony did not violate the prohibitions of Rule 3.04(b) of the Texas Rule of Professional Conduct or Opinion No. 553 of the Professional Ethics Committee for the State Bar of Texas. The appellate court further held that the trial court did not abuse its discretion in determining the expert’s testimony was reliable and that, because the evidence was admissible, the trial court’s judgment was supported by the evidence.
  • Sections 101.055 and 101.106 Tx. Civ. Prac. & Rem. Code
    Skoda v. Montague County, No. 02-09-00362-CV (Second Court of Appeals-Fort Worth)
    -
    (August 5, 2010)
    This case concerned a taxpayer's suit under the Texas Tort Claims Act against a county and its tax assessor-collector alleging taxpayer was wrongfully sued for property taxes. The trial court's dismissal of the suit against the tax collector-assessor was upheld because under the provisions of Tex. Civ. Prac. & Rem. Code Sec. 101.106 an employee is entitled to a dismissal when the government body is sued under the Texas Tort Claims Act. The trial court's dismissal as to the county was upheld because Tx. Civ. Prac. & Rem. Code Sec. 101.055 provides that the Texas Tort Claims Act does not apply to a claim arising in connection with the assessment or collection of taxes.
  • Section 23.13
    Land v. Palo Pinto Appraisal District, No. 11-08-00248-CV (Eleventh Court of Appeals-Eastland)
    -
    (August 5, 2010)
    The court held that a trial court may use either the equity method or consider comparable sales when determining the value of a leasehold interest in property owned by a tax exempt entity.
  • Sections 34.08 and 33.54
    Roberts v. T.P. Three Enters., No 14-09-00206-CV (Fourteenth Court of Appeals-Houston)
    -
    (August 3, 2010)
    This case involves a claim for adverse possession against a person claiming title under a deed from a tax sale. The claim was denied on two grounds: the Tax Code Section 34.08 requirement of a deposit into the registry of accrued taxes or an affidavit of inability to pay was not in the record and the exception to the time bar under Tax Code Section 33.54 was not allowed since there was no evidence that the taxes had been paid.
  • Tex. R. Civ. P. 106
    San Benito Enters., LLC v. Cameron County, No. 13-10-00422-CV (Thirteenth Court of Appeals-Corpus Christi)
    -
    (August 2, 2010)
    Taxpayer sought to void a default judgment for ad valorem taxes alleging that the service of process failed to include a copy of the plaintiff's petition. The trial court's dismissal was upheld on the basis that Tex. R. Civil P. 106(a)(1) provides that a copy of the petition is not required in a suit for delinquent ad valorem taxes.
  • Section 23.55
    Rizzo v. Ancira, No. 03-09-00424-CV (Third Court of Appeals-Austin)
    -
    (July 29, 2010)
    This case addressed the sufficiency of evidence to enforce a contract clause that the seller of the property would be responsible for roll back taxes under Tax Code Sec. 23.51 resulting from change of use as agricultural land before the property was sold.
  • Section 42.21
    Bilinsco Inc. and Linda Boyd v. Harris County Appraisal District and Harris County Appraisal Review Board, No. 01-09-00877-CV (First Court of Appeals-Houston)
    -
    (July 22, 2010)
    The court held that since the property owner failed to serve the appraisal district within the statutorily prescribed time period and did not present any evidence to justify a delay, the district's motion for summary judgment was properly granted.
  • Sections 41.44 and 42.09
    Houston Independent School District, City of Houston, Harris County, Harris County Education Department, Port of Houston of Harris County Authority, Harris County Flood Control District, Harris County Hospital District, and Houston Community College Systems v. Ned B. Morris III, Daniel W. Shipper, Patrick A. Shipper, Anita Gibson, Mary Ann Mosely, Deborah L. Moore, Linda Shipper Bender, Caroline D. Armstrong, Pamela K. Moore, Joyce Salter, And James R. Hunt, No. 01-08-00011-CV (First Court of Appeals-Houston) -
    (July 22, 2010)
    This case involves the requirement that property owners must exhaust all administrative remedies before bringing an action in district court.
  • Section 11.182
    AHF-Arbors at Huntsville I, LLC, and AHF-Arbors at Huntsville II, LLC v.Walker County Appraisal District, No. 10-08-00011-CV and 10-08-00012-CV (Tenth Court of Appeals-Waco)
    -
    (July 21, 2010)
    This case was decided on the requirement of Tax Code Sec. 11.182(g) that for owners to receive an exemption as a community housing development organization they must file a copy of the prescribed audit with the Texas Department of Housing and Community Affairs.
  • Sections 34.02 and 34.03
    Bryan Independent School District and Brazos County v. Brad Cune, No. 14-09-00062-CV (Fourteenth Court of Appeals-Houston)
    - (June 24, 2010)
    This case involves the application of Tax Code Sections 34.02 and 34.03 concerning the two year requirement for claims for excess proceeds brought by former owners of property sold at a tax sale.
  • In re Jefferson County Central Appraisal District, No. 09-10-00074-CV (Ninth Court of Appeals-Beaumont) - (June 10, 2010)
    This case involves a writ of mandamus concerning a discovery order to compel the identity of a jury consultant.
  • Section 11.13
    Harris County Appraisal District and Harris County Appraisal Review Board v. James M. Wilkinson and Stephanie S. Wilkinson, No. 01-08-00547-CV (First Court of Appeals-Houston)
    -
    (June 3, 2010)
    This case involves the interpretation of "principal residence" for the purposes of Tax Code Section 11.13(j)(D).
  • Sections 41.45 and 42.08
    Hotel Corporation International, Appellant v. Harris County Appraisal District, No. 14-09-00006-CV (Fourteenth Court of Appeals-Houston)
    -
    (June 3, 2010)
    This case concerns the application of the provisions of Tax Code Section 41.45(f) providing for an appeal to the district court when a hearing has been denied by the appraisal review board and Section 42.08(b) requiring the timely payment of at least a portion of the taxes due as a condition for appeal to the district court.
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