Duties after Records Approval
When the ARB approves the appraisal records for the year, the ARB loses most of its authority to change the records. However, an ARB’s duties do not end after it approves the appraisal records. The board may need to address other matters throughout the tax year, including late-filed residence homestead exemptions, supplemental records, appraisal roll corrections, failure to deliver notice, cases of substantial error, and joint motions on incorrect values.
Late-filed homestead exemptions
Section 11.431, Tax Code, allows property owners to file homestead exemption applications after the May 1 deadline for filing has passed. Homeowners must apply for the exemption no later than one year after the taxes on the homestead were paid or became delinquent, whichever is earlier. Section 11.43 allows over-65 homeowners to file an application for the over-65 homestead exemption up to one year after the date the person turns 65. The chief appraiser approves, denies, or modifies the exemption as appropriate and submits the proposed change to the records to the ARB.
After the ARB approves the appraisal records and the late-filed homestead exemption, the chief appraiser notifies the collector for each taxing unit in which the home is located. The collector then calculates the new lower tax and sends the property owner a refund or new bill as appropriate.
It would be difficult, if not impossible, for the ARB to meet and review each late-filed homestead exemption individually. The chief appraiser may act on the applications and periodically submit accumulated changes to the ARB for approval.
If the chief appraiser denies a late-filed homestead exemption application, the property owner may file a notice of protest and request an ARB hearing.
The chief appraiser often prepares and submits supplemental records to the ARB after approval of the initial appraisal records. Supplemental records list property that the chief appraiser discovers was not included in the initial records submission. They also include property that was omitted from the appraisal roll in an earlier year.
The ARB reviews and approves supplemental records by the same process used for the original appraisal records. However, the time deadlines for a property owner to protest are different. A property owner has 30 days after the chief appraiser submits the supplemental records to file a notice of protest. The ARB has 30 days after the property owner files the protest to hear and determine it or as soon after that date as possible.
Corrections after approval
There is an important difference between corrections to the appraisal records before approval and corrections after approval. Before approval, the ARB may reconsider any order it has already issued, provided it gives interested parties notice of the reconsideration. After approval, the ARB has limited authority to order changes.
Sections 25.25 and 41.411, Property Tax Code, give the ARB and the chief appraiser authority to correct certain errors in approved appraisal records. Correction procedures vary, depending on the type of correction. The ARB may correct some errors up to five years after the year of the error and may correct other errors only if the property owner acts before the delinquency date. The filing deadlines and types of corrections are discussed below.
Section 25.25 provides that a person who acquires a property after the January 1 of the tax year in question has the same rights to file a motion to correct the property’s record as the January 1 owner had. The new owner must meet the same deadline for filing the motion. In addition, the new owner may continue any motion filed by the January 1 owner.
Changes by the chief appraiser. Section 25.25(b) provides that the chief appraiser may change the appraisal roll at any time to correct a name or address, determination of ownership, a description of property, multiple appraisals of the property, a clerical error, or other inaccuracy as prescribed by ARB rule that does not increase a person’s tax liability. The chief appraiser does not need to consult the ARB before making these changes. The ARB, however, must adopt written rules setting out the circumstances under which the chief appraiser may correct errors that affect a person’s tax liability. The ARB may wish to consult with its attorney on drafting rules giving the chief appraiser authority to correct the appraisal rolls. Once adopted, these rules should become part of the ARB’s written protest and hearing procedures.
Each quarter, the chief appraiser will submit a report to the ARB and appraisal district board of directors showing any changes to the appraisal rolls under Section 25.25(b). The report must include the property owner’s name, address, property description, and type of clerical error or other inaccuracy that caused an error on the appraisal rolls.
The failure or refusal of a chief appraiser to make a clerical error change to an appraisal roll under Section 25.25(b) is not subject to an ARB action or a taxpayer lawsuit.
Changes by ARB. On the motion of the chief appraiser or a property owner, the ARB may order changes to the appraisal roll to correct three different types of errors: (1) clerical errors that affect a property owner’s liability for a tax; (2) multiple appraisals of a property in a single tax year; or (3) the inclusion of property that does not exist, either in the form described on the appraisal roll or at the location described on the appraisal roll. The time in which an ARB may correct these errors is limited. The ARB must correct the error any of the five preceding years in which the error occurred.
If the chief appraiser and property owner do not agree on a motion to correct the appraisal records under Section 25.25(c) within 15 days after the property owner files the motion, the property owner is entitled to a hearing on the motion if requested. The property owner is entitled to a hearing regardless of whether he or she protested the property value in a prior year. At least 15 days before the hearing, the ARB must deliver a written notice with the date, time, and place of the hearing to the property owner, chief appraiser, and presiding officer of the governing body of each taxing unit in which the property is located. The ARB should conduct hearings on Section 25.25(c) motions the same way it conducts regular protest hearings. A person forfeits the right to file a Section 25.25(c) motion if taxes are delinquent in a year for which the person seeks a correction.
Before delinquency date. On a motion by the chief appraiser or the property owner, the ARB may order changes to correct certain appraisal errors in the appraisal roll. The deadline for such a motion is before taxes on the property become delinquent.
On joint motion of the property owner and the chief appraiser, the ARB must approve an error that resulted in an incorrect appraised value for the owner’s property. The deadline for filing this motion is before the taxes on the property become delinquent.
Finally, a taxpayer may file a protest after the normal protest deadline alleging failure of the ARB or the chief appraiser to provide or deliver a notice required by law. If the taxpayer can show that a notice was never delivered, the ARB must hear any protest the taxpayer wishes to bring on the property affected by the notice. The taxpayer must file before the delinquency date.
Types of corrections
Clerical errors that affect tax liability. A clerical error is defined by law. (See Section 1.04 for the exact definition.) Generally, a clerical error is defined as an error caused by a mistake in writing, copying, transcribing, computer data entry or retrieval, or a mathematical error that prevents the appraisal or tax roll from correctly showing what the chief appraiser, ARB, or tax assessor said or did. A clerical error is not a mistake in reasoning or judgment in making a finding or determination.
For example, if a field appraiser appraises a residence at $50,000 but the value is keypunched as $5,000, the error is clerical. If, on the other hand the field appraiser mistakenly values the house at $5,000 rather than $50,000, the error is not clerical.
If such errors are brought to the ARB’s attention within the proper five-year time frame after it approved the roll, the ARB may correct the clerical error in the first instance. However, it may not correct the judgment in the second instance unless it is the subject of a one-third over-appraisal error motion, a protest of failure to deliver notice, or a joint motion by the property owner and chief appraiser on an incorrect value. Taxes may not be delinquent for the years corrected.
Multiple appraisals. A multiple appraisal occurs when a property is listed in the appraisal records more than once for the same year. On the timely motion of the chief appraiser or of the property owner, the ARB may order a correction to the appraisal roll for a multiple appraisal. The five-year filing deadline applies. Taxes may not be delinquent for the years corrected.
Non-existent property. Non-existent property included on the appraisal roll is property that doesn’t exist either in the form or at the location described on the appraisal roll. On the motion of the chief appraiser or the property owner, the ARB may correct, before the end of five years after January 1 of the tax year, any errors involving non-existent property. Again, taxes may not be delinquent for the years corrected.
The Dallas Court of Appeals ruled that the term “form” refers to the property’s physical description, not to the property’s use.
The Houston Court of Appeals ruled that the apportionment of value for use in other states met the definition of “does not exist at the location described” provision of Section 25.25(c)(3).
One-third over-appraisal error. The chief appraiser or a property owner may file a motion to correct an appraisal error that results in a wrongly appraised value for the owner’s property. If the chief appraiser and property owner do not agree on a motion to correct the appraisal records under Section 25.25(d) within 15 days after the property owner files the motion, the property owner is entitled to a hearing on the motion if requested.
Section 25.25(d) provides that the error may be corrected only if the appraised value exceeds the correct value by more than one-third. The ARB should determine the correct value. It may wish to include its calculation method for the one-third difference in its administrative procedures.
The correction motion must be brought before taxes on the property become delinquent. The property owner must comply with Section 42.08 (payment of taxes – see next section on tax payment during an appeal). The ARB may correct the value if the property was not the subject of a protest for the year under Chapter 41, Property Tax Code, or a written agreement. Section 25.25(d) prohibits the ARB from making a requested appraisal roll correction if (1) the owner's property was the subject of an ARB hearing in which the owner appeared and offered evidence or argument and the ARB made a determination on the merits or (2) the appraised value was the result of a written agreement between the owner (or agent) and the appraisal district.
The law’s language requires the ARB to grant a hearing to correct a one-third over-appraisal error. The only limitation on filing a motion is the delinquency date. Otherwise, the ARB should hold a hearing to determine whether the property was the subject of the owner’s protest or written agreement setting value. If the property was not, then the ARB hears the evidence and determines whether the correct value has been exceeded by more than one-third. If so, the value may be corrected. Sample forms for making a correction motion appear in Appendices S and T.
After a motion is filed and a hearing granted, the ARB must deliver a 15-day notice of the time, date, and place of the hearing to the chief appraiser, the property owner, and presiding officer of the governing body of each taxing unit in which the property is located. Each party is entitled to present evidence and argument at the hearing and to receive written notice of the board’s determination. The property owner or the chief appraiser may file a suit to compel the ARB to make a change required by law.
The property owner must pay a late-correction penalty if the ARB makes a change. The amount of the penalty is 10 percent of the taxes due on the new value. The 10 percent penalty must be paid to each taxing unit affected by the change.
Joint motion on incorrect value. Section 25.25(h) requires the ARB—on a joint motion by the property owner and the chief appraiser—to correct an error that resulted in an incorrect appraised value for the owner’s property. The deadline for filing this joint motion is before the delinquency date. An agreement between the property owner or the owner’s agent and the appraisal district is final. The ARB may not review or reject the agreement.
Late protest based on failure to deliver notice. The Property Tax Code allows a property owner to file a late protest, after the normal deadline but before the delinquency date, alleging that the district or the ARB has not delivered or provided a notice required by law. If the ARB finds that the notice was required but was not delivered, it must hear any protest regarding the property that the property owner cares to present. The taxpayer must comply with Section 42.08. (See next section on payment.)
In the context of the law, “delivery” means that the appraisal district mailed the notice, correctly addressed to the property owner at the last address furnished by the property owner. Section 1.07 states that delivery is presumed unless the property owner provides some evidence that he or she did not receive the notice. In that case, the burden shifts to the appraisal district to show that the notice was properly mailed to the last correct address in its possession.
The courts have looked for the following evidence on delivery of a notice: (1) sufficient postage, (2) the notice was mailed, (3) the notice was sent by first class mail, and (4) the notice was sent to the most current address and not returned.
If the appraisal district can show proper mailing, then the taxpayer is not entitled to have the protest heard under this provision. If the taxpayer claims no receipt and the appraisal district can’t show proper mailing, then the property owner has shown failure of delivery. If the ARB determines that this is the case, the ARB must then hear and determine any and all protests the property owner wishes to make regarding the property that was the subject of the notice.
For a one-third over-appraisal, clerical, multiple appraisal, or non-existent property error; a late protest based on failure to deliver notice; or a district court appeal, the property owner must pay as required by Section 42.08, Tax Code. The owner must pay the lesser of the amount of taxes not in dispute or the amount of taxes due on the property based on the approved value that is being appealed. The owner must pay before the delinquency date.
On motion of a party to a district court appeal, the court shall hold a hearing to determine if the taxpayer complied with Section 42.08. The court may dismiss the pending action for failure to comply or may require full compliance if the owner has only substantially complied. The owner has 30 days from the court’s decision to fully comply.
Section 42.08 provides a procedure allowing a district court to excuse a property owner from the required payment of taxes to taxing units in a district court appeal. The property owner must file an oath of inability to pay the taxes in question and argue that the payment constitutes an unreasonable restraint on the right to obtain access to the courts to contest the matter. The court sets a hearing and determines reasonable terms or conditions for any relief from payment. The judge has the discretion to address the owner’s needs to seek legal redress versus the taxing units’ need for an adequate, reliable income stream.
Taxing units and property owners may appeal decisions of the ARB to district court. Judicial review is the subject of Chapter 42 of the Property Tax Code. In addition, a property owner who appeals an ARB decision has a right to non-binding arbitration. Binding arbitration is required if the appraisal district joins in the motion or consents to arbitration.
A property owner may appeal an ARB order determining a protest, including a protest filed under Section 25.25. The chief appraiser may appeal an ARB order determining a taxpayer protest if he or she has the written approval of the appraisal district board of directors. A taxing unit may appeal an ARB order determining a challenge.
Section 42.015 allows a lessee—person who is contractually obligated to reimburse the lessor (property owner) for property taxes—to appeal to district court an ARB order if the lessee protested the original property tax appraisal. The lessee is presumed to be the owner of the property for appeal purposes. The chief appraiser must send any written notice concerning the appeal to both the lessee and lessor.
To appeal, a party other than a property owner must file written notice within 15 days after receiving the notice of an order that the ARB issued. Taxing units must file this notice with the chief appraiser. If the chief appraiser appeals, he or she must file the notice with the ARB.
If the chief appraiser or a taxing unit initiates an appeal, the ARB must deliver a copy of the notice to the property owner involved within 10 days after the chief appraiser or taxing unit files the notice.
The party initiating the appeal then files a petition for review with the district court no more than 45 days after receiving the notice of the ARB’s order. A petition filed after the time limit bars district court appeal.
When a taxpayer appeals, the appraisal district is named as the defendant in the suit. The suit may also name the ARB. Normally the appraisal district’s attorney handles the case, but the ARB does have the right to participate.
In a district court appeal, the property owner must pay as required by Section 42.08, Property Tax Code. See the section Tax payment during an appeal.