Rules and Administrative Procedures
Duties of ARB officers
The ARB elects a chairperson and a secretary at its first meeting of the year. The chair sees that the rules of order are followed, that all witnesses giving evidence are sworn, and that all parties are treated fairly.
The secretary sends notices to taxpayers and taxing units. Examples of such notices are hearing notices and final notices of ARB determinations. The secretary also keeps the official minutes of the ARB proceedings. In practice, the ARB may delegate these duties to a member of the appraisal district staff, but it must still elect a secretary.
The ARB must adopt protest and challenge hearing procedures and may choose to adopt procedures or rules of order for its own meetings. The Property Tax Code requires the most informal hearing procedures that are practical.
Except for a few instances, the law does not specify what must be in the procedures. Instead, the board may decide for itself how it wishes to conduct its business. Hearing procedures are not only legally required, but well-designed procedures will help the board set specific policies ensuring smooth operation.
The ARB may use Roberts Rules of Order, Uniform Code of Parliamentary Procedures, or other recognized sets of procedures for its optional procedures. It may consider developing customized hearing procedures to meet its particular needs and local concerns. For example, the rules may include a provision limiting each protest hearing to a reasonable time that allows for full presentation of the taxpayer’s evidence, cross-examination and arguments, but also ensures that protests and challenges are completed in a timely manner.
The law does require certain ARB hearing practices. The ARB must give each party the right to offer evidence, examine and cross-examine witnesses, and present arguments on protest subjects. The ARB’s procedures should reflect these and other property owners’ hearing rights.
The ARB must adopt a rule that provides for hearing times on protests in the evening or on a Saturday or Sunday. The ARB does not have to conduct hearings both in the evening and on weekends, but must choose an evening or weekend day to schedule hearings. The ARB’s procedures should inform property owners of these times.
The ARB must post written ARB hearing procedures in a prominent place in each room in which it holds hearings. The procedures must be made available to the public. In addition, the ARB must actively provide its hearing procedures to a protesting property owner. (See Step 3)
All members should review the ARB’s procedures, preferably at the first meeting after January 1, when terms of office for new members begin. A group review ensures that all members understand the rules and provides a forum for discussion. Finally, remember that the ARB’s rules of order must provide for compliance with the Open Meetings Act and the Public Information Act.
For assistance in drafting or revising ARB hearing procedures, the Property Tax Division’s Technical Assistance staff can refer calls to ARBs that have revised their written hearing procedures. E-mail requests to firstname.lastname@example.org or call 1-800-252-9121. In Austin, call 512/305-9999.
In conducting its hearings on taxing unit challenges and taxpayer protests, the ARB needs to address several administrative matters. The members should also prepare for the legal and appraisal issues that will arise during the hearings.
Scheduling. The ARB or a staff member should assign a case number to each protest and challenge. A numbering system helps keep track of all records and evidence. The ARB then places the appeals on a hearing schedule. The schedule should state the date and time of each hearing. It should also state the nature of each protest or challenge.
The ARB may decide to use a schedule sheet with additional information as part of its permanent records. It may contain information regarding the date and time of hearings, parties involved, a description of the property involved, a brief statement of issues and notations of who appeared, and the final ARB order.
Time limits. The ARB’s hearing procedures may place a time limit on hearings, but any limit should be reasonable and flexible. The Comptroller’s office suggests that hearing procedures give each panel chair the authority to extend the hearing. Each property owner is entitled to a reasonable amount of time to present relevant evidence and argument. What is reasonable depends on the circumstances of each protest. A simple protest about a residential property may require less presentation time than a complex protest involving a large industrial property.
The ARB may also group hearings for similar types of property such as residential, commercial, or mineral on specified dates.
Combined hearings. If more than one protest is filed relating to the same property, the ARB must schedule a single hearing on all timely filed protests that relate to the property. The ARB must also schedule joint hearings for all owners of a property owned in fractional or undivided interests. These include mineral properties. If the ARB changes the appraised value of this type of property, it must adjust the value of each interest accordingly. The ARB must adjust the value for the owner of each interest, whether or not the owner appeared at the joint hearing.
Similarly, the ARB should consider consolidated hearings for protests involving residential real property inventory. Section 23.12, Property Tax Code, requires the appraisal district to appraise a builder’s or developer’s unsold residential real property as inventory – at the price the parcels would sell for as a unit to another person in the same business. The builder or developer must request such appraisal.
Legal counsel. The ARB may need the services of an attorney. The ARB may hire its own attorney if the appraisal district budget provides funds for one. If not, the ARB may use the services of the county attorney.
Support staff. ARBs often rely on appraisal district staff for clerical assistance. Some appraisal district budgets fund a separate ARB staff.
The Open Meetings Act
(Chapter 551, Government Code)
The Open Meetings Act bars a governmental body from having closed or secret meetings except in very rare cases. It also requires posting information about meetings in advance.
Open meetings. The open meetings law imposes strict rules prohibiting secret meetings by governmental bodies. Generally, a quorum of members can’t meet and discuss or conduct business in a closed or executive session. For an ARB, the only exceptions to this rule are: (1) meetings with the ARB’s attorney to discuss pending litigation and (2) meetings to discuss personnel matters, if the ARB has its own staff.
When a governmental body holds a closed meeting, it must comply with strict procedural rules.
- It must post the meeting, just like any other meeting. (See below.)
- It must convene in open session. The chair must announce that the board is going into closed session and state the legal authority for entering a closed session.
- It may not take any action in the closed session. All formal action must be taken after returning to open session.
- It must come back into open session before the adjournment.
The ARB must keep a record of any closed session. The law allows either a tape recording or a certified agenda to be kept. The attorney general strongly recommends keeping a tape recording instead of a certified agenda. The ARB may keep both a tape recording and certified agenda. The certified agenda or tape must be kept for two years, or as long as litigation concerning the meeting is pending. If litigation about the legality of the meeting takes place, the judge can read the agenda or listen to the tape to determine whether or not the ARB violated the law. Otherwise, the certified agenda or tape of a closed meeting must be kept sealed.
The open meetings law applies any time a quorum of the ARB is together. Members may meet in less than a quorum. They may also meet in a quorum at social occasions and seminars without violating the law, provided they don’t discuss their ARB business. Violation of the Open Meetings Act is a misdemeanor.
The open meetings law also allows a person to record, photograph, or videotape all or any part of open meetings. The ARB may impose reasonable restrictions, such as requiring video cameras placed at a certain location so they don’t physically interfere with the proceedings.
The Property Tax Code adds three specific requirements for ARBs. First, the ARB can’t hold a closed protest hearing. The hearing must be open to the public. Second, the chief appraiser or an appraisal district representative must be present at all meetings. The ARB can’t exclude the chief appraiser or representative, even at the request of a taxpayer or taxing unit. Third, the ARB may not receive or consider evidence concerning a protest outside of the protest hearing.
Governmental bodies may conduct conference meetings—both open and closed meetings—only if (1) an emergency or public necessity exists, (2) the convening of a quorum at one location is impossible or (3) the meeting is held by an advisory board. Government Code Section 551.045 defines emergency or public necessity.
While it is highly unlikely that an ARB would conduct a conference meeting by telephone, the ARB must do the following if it does. The ARB must give notice of the telephone conference call meeting in the same manner as other meetings (see the next subsection). There must be two-way communication throughout the entire telephone meeting. The call must be audible to the public at the location specified in the notice of the meeting. The telephone meeting must be tape recorded. The recording is an open record.
For more information about telephone conference calls or the Open Meetings Act, call the Attorney General’s Open Government Section at 512/478-6736 or 1-800-252-5476.
Notice of meetings. The ARB must announce a meeting to the public at least 72 hours before the meeting takes place. The written announcement must state the time, date, place, and subject of the meeting. Post a copy of the meeting notice at the county clerk’s office in each county in which the appraisal district is located and at the appraisal district office(s).
If the appraisal district includes property in four or more counties, the ARB must post notice only at the county clerk’s office in which the district’s administrative office is located and at the appraisal district office. The ARB must also send notice to the Secretary of State. The 72-hour period begins from the date the county clerk or Secretary of State posts the notice. A sample notice appears in Appendix W.
It is critically important for the notice to state the subject of the meeting. The ARB must list the meeting’s subjects with enough detail that a person reading it would know what would be talked about or decided at the meeting. The notice may require more detail if the subject is one of great public interest. A court can void an ARB decision if the subject wasn’t properly listed in the open meetings notice. Many attorneys recommend including the schedule of hearings in each notice.
Depending on public interest, the ARB may want to post very specific notices that include the subject of the protest and the name of the property owner. The ARB should decide to include this information on a case-by-case basis.
The ARB should strive to create and sustain a good relationship with the public. Members should see that the public has information about its procedures and its hearing schedule. Sending required notices is one avenue for informing the public, but the ARB may also consider sending out news releases and posting meeting notices in public places. If the appraisal district has a taxpayer liaison officer, the ARB should give the officer up-to-date information.
The hearing itself is an ARB’s most accessible and perhaps most important avenue for conducting good public relations. Property owners may base their opinions of the property tax system in general, and the ARB in particular, on their experience at the hearing.
Each protesting property owner should get a hearing that not only is in fact fair and impartial, but that also looks fair and impartial. For example, if a property owner sees ARB members and appraisal district staff talking among themselves as if they were good, familiar friends, the owner’s confidence in his or her opportunity for a fair hearing is damaged.
Conflicts of interest
ARB members must comply with “conflict of interest” laws. Two conflict laws apply.
Chapter 171, Local Government Code, is a more general law that requires you to abstain in any case in which you or one of your close relatives has a “substantial” interest. Under this law, you must not only abstain in such a case; you must file an affidavit stating your interest.
Section 41.69, Property Tax Code, bars you from taking part in any taxpayer protest in which you or one of your close relatives has an interest.
In combination, these laws bar you from discussing or voting on a protest if you or one of your close relatives has an interest in the matter. They also require you to file an affidavit describing your interest if you or one of a smaller group of relatives has a “substantial” interest in a business or real property that is the subject of an ARB decision.
Chapter 171. Chapter 171 comes into play whenever you or one of your relatives has a “substantial” interest in a matter. Appendix Y lists the relatives affected.
Chapter 171 says that you or your relative has a substantial interest:
- in a business, if you own 10 percent or more of its voting stock or shares, own 10 percent or more or $15,000 or more of its fair market value, or received more than 10 percent of your gross income from it in the previous year;
- in real property, if you own $2,500 or more of the fair market value of the property, whether your title is legal or equitable.
A person related to you in the first degree by consanguinity or affinity is a relative under Chapter 171. Service on the board of directors of private, nonprofit corporations for no compensation or other benefit does not create a conflict of interest.
When you determine you have a substantial interest, you must do two things. You must abstain from joining in any discussions or votes on the issue. Second, you must file an affidavit (a statement made under oath) with the ARB’s secretary that states the nature and extent of your interest. You must file this affidavit before the ARB takes any votes on the matter. A sample affidavit is in Appendix Q.
There is an exception to this rule. If the matter you are voting on doesn’t confer any special benefit on the business or property apart from the benefit it confers on all businesses or properties, you may vote on it. For example, if the ARB considers a taxing unit challenge that would decrease values on all business inventories in a certain area and your business is in that area, the action confers no special benefit on your business different from that conferred on all. You can still vote, but you must file an affidavit disclosing your interest.
Section 41.69. Section 41.69 bars you from discussing or deciding a taxpayer protest in which you or one of a wide group of relatives has an interest. This provision prevents you from acting in a matter that involves you or one of your relatives even if your interest is too small to be considered a substantial interest under Chapter 171. Appendix Y lists the relatives affected by Section 41.69.
Generally, you have an “interest” in a protest if your family member’s personal stake in the outcome could keep you from acting strictly in the public’s interest. You must make your own decisions in gray areas, based on your own ethics and moral standards.
The same is true when the personal stake would cause the appearance of favoritism or a conflict of interest, even if you don’t believe you would actually be influenced. If the public would be likely to believe you have a conflict of interest, you should abstain from participating in the matter. The public must perceive the ARB as a fair and impartial body where no person, business, or property is favored over another.
The Texas Attorney General ruled in Opinion No. DM-259 (1993) that an ARB member may not represent a taxpayer involving the appraisal of land in the ARB member’s capacity as a court-appointed receiver of the land. The ARB member has a direct personal or pecuniary interest in the result.
This same 1993 attorney general opinion found that there is no law prohibiting a registered property tax consultant from serving as an ARB member. However, if the ARB member performs property tax consulting services in a taxpayer’s protest before the ARB, then the ARB member has a direct personal or pecuniary interest in that matter and is prevented from participating in the protest determination. No law prevents an ARB member from performing property tax consulting services before an ARB of another appraisal district. (In 1999, the Texas Legislature changed the law to provide that a person is ineligible to serve on the ARB of an appraisal district in a county with a population of more than 100,000 if the person has ever appeared before the ARB for compensation, such as a property tax consultant.)
You should take great care to avoid conflicts of interest or the appearance of improper actions. A court that finds you violated the law may nullify an important ARB decision. And, if you violate Chapter 171, you commit a Class A misdemeanor.
Good ARB records are important for a good defense to a court appeal of the ARB’s decision. Although the ARB may not be a defendant in each appeal, many legal issues involve ARB records. Additionally, the owner’s appeal may include the same issues presented at the hearing. Without complete, well-kept records, an attorney may find it difficult to prove important legal or factual points.
For example, if the owner was required to file a notice of his or her appeal and did not file within the 45-day deadline, the owner has not met legal requirements for the district court to hear the case. Or, for example, statements made by a witness at the protest may be used to prove the witness’ dishonesty or confusion if statements change at trial.
Comptroller Rule 9.803 requires the ARB to keep records of the hearing. These are minimum standards that require the records to include:
- the names of the ARB members present and the date of the hearing or proceeding;
- the name and residence address of the property owner, or his or her agent (if applicable), or the challenging taxing unit;
- a description of the property subject to protest or challenge;
- summaries of both the nature of the case and of the chief appraiser’s testimony;
- any documents or physical evidence (or reference numbers for the evidence) that the ARB admits;
- the name and residence address of every witness and a statement that the witness testified under oath;
- any formal motions made and the ARB’s ruling on them;
- the affidavits signed by the ARB members that they have not communicated about the property subject to protest before the time of the protest hearings; and
- the ARB’s final order or a reference number to it; actual testimony may be tape recorded and retained as part of the record.
Public Information Act
(Chapter 552, Government Code)
The Public Information Act, also known as the Open Records Act, gives the public the right to see records and documents of government agencies. Under this law, all ARB records are public records and must be available for inspection or copying upon request unless the law clearly makes the record confidential. Only four classes of property tax records are exempt from the law:
- renditions, attachments to renditions, and property reports (such as reports of decreased value and special inventory declaration and monthly statements);
- sales information that a person discloses to the appraisal district under a promise that the information will be kept confidential;
- applications for l-d agricultural appraisal; and
- income and expense information filed with an appraisal office.
Even records that are normally exempt from disclosure can be disclosed under the following conditions:
- when a court or the ARB subpoenas the information.
- to the person who gave the information.
- to the Comptroller or a Comptroller employee authorized in writing to receive the information.
- to an assessor or chief appraiser who requests the information in writing.
- for statistical purposes in a form that doesn’t identify a specific property or owner.
- to the extent the information is needed for inclusion in a public document or record that the appraisal district must maintain.
- to a taxing unit or its legal representative for the collection of delinquent taxes on the property.
- according to an attorney general’s opinion, confidential sales information can be disclosed to the property owner if the information was used in appraising that owner’s property.
Unauthorized disclosure of confidential information is a Class B misdemeanor. Failure to disclose information legally open to the public is also a Class B misdemeanor.