A quorum—that is, a simple majority of review board members—must be present to conduct business. ARB’s with more than three members may conduct hearings on taxpayer protests in panels of not fewer than three members. However, the entire ARB must decide the final determination of a protest.
The provisions of the Open Meetings Act apply to hearings. The ARB should also approve procedures as to govern the proceedings.
If the entire ARB rejects a panel’s decision, a second panel may rehear the protest. The second panel must be composed of ARB members who did not hear the first protest. If three new members are not available, the full ARB determines the protest.
ARB ex parte contacts and affidavit
An ARB member must be very careful to maintain a truly unbiased approach to each property under protest. An ARB member may not communicate with another person about any matters related to a property under protest, including evidence, argument, facts and the case’s merits. A member may not communicate about the property under protest, unless the property is discussed in another protest or used before the board as a comparison or sample property in another protest or proceeding.
The affidavit form prescribed by the Comptroller’s office (Appendix X) states that the member has not communicated about the property under protest in the ways discussed above. If the member has communicated in violation of the law, the member cannot sign the form and must be recused—or removed—from the hearing. The removed member may not hear, discuss or vote on the protest.
The law requires that the appraisal district’s board of directors adopt a policy for temporarily replacing an ARB member who must be removed from a protest hearing. The policy may take many forms as previously discussed in this manual.
An ARB member who communicates with the chief appraiser or an appraisal district employee concerning a taxpayer protest outside of the hearing may be penalized. Likewise, the chief appraiser or appraisal district employee may not communicate with the ARB member about a protest. Both offenses are punishable as Class C misdemeanors. Even if an ARB member doesn’t sign the affidavit, if he or she has communicated outside the hearing the chief appraiser or appraisal district staff about a pending protest, the ARB member has violated the law.
The same penalty, however, doesn’t apply if an ARB member talks to a property owner outside of a hearing. The ARB member, however, cannot sign the sworn affidavit and cannot participate in that property owner’s hearing. The penalty also does not apply to discussions with the ARB’s attorney and other communications with the chief appraiser. Other communications would include meeting arrangements, training and general information that does not apply to a specific protested property or protesting property owner.
Appearance at the protest hearing
Most property owners will present their protests. Some property owners, however, may designate a lessee or agent to present the protest and perform other required actions. An attorney may represent a client without filing an agent designation, as can most mortgage lenders and authorized corporate employees.
Agent appointments aren’t binding until the form is filed with the appraisal district. The ARB should require the form before taking any action on the basis of information from one claiming to be the owner’s agent. The ARB also should study the form to determine whether the agent is authorized to receive all ARB communications.
The ARB must accept and consider a motion or protest filed by an owner’s agent if the agent’s authorization form is filed at or before the hearing begins on the motion or protest.
What if an agent appointed by a property owner has not registered with the Texas Department of Licensing and Regulation (TDLR)? Chapter 1152, Occupations Code, is the registration act for property tax consultants or agents. The law requires a person who provides property tax consulting services for compensation to be registered with the state and become certified. If a consultant or agent who is not registered as required by law appears before the ARB, the ARB should decide how best to report noncompliance with the registration act and seek legal advice. For more information about the licensing act, call TDLR at (512) 463-6599 or 1-800-803-9202. TDLR’s address is P.O. Box 12157, Austin, TX 78711 and fax number is (512) 475-2871.
A property owner need not appear at the hearing if the evidence is presented by affidavit. A property owner must file a notarized affidavit before the ARB hears the protest. In addition, the chief appraiser has a right to study and copy the affidavit. The property owner may use the Comptroller-prescribed affidavit, Form 50-283, in Appendix AA, available to owners without charge from the appraisal district. The owner, however, is not required to use this form. The owner may submit a notarized letter that includes (1) the owner’s name; (2) a property description; and (3) the owner’s statement specifying the appraisal district or ARB determination for which the owner seeks relief.
The Texas Supreme Court has held that a property owner must appear, either in person, by an attorney or agent or by an affidavit, before the owner may appeal the ARB’s decision to district court. An ARB should consult with its attorney to determine what to do if the property owner did not appear or to include in its written orders a space indicating if the owner appeared at the protest. In a related case, a Texas court of appeals held that the owner must be present but need not present evidence at the hearing. This court said that the owner may appeal to district court after the ARB issues its order. Again, the ARB should consult its attorney for legal advice.
The notice of protest hearing (see Appendix D) informs an owner that failure to appear may bar a court appeal. On the advice of its attorney, an ARB may also add an indication on its Order Determining Protest (see Appendix I) that the owner did not appear.
As a matter of procedure, the ARB chair calls the cases in the order scheduled and makes certain each party takes an oath promising the accuracy of the party’s testimony. See the sample oath on this page. People may either swear or affirm. If a property owner refuses to take an oath, the ARB should note the refusal in its hearing records. The ARB may take the refusal into account as it weighs the evidence. Appraisal district staff must take an oath. After consulting with its attorney, the ARB should adopt a policy about the requirement for sworn testimony.
The ARB is not a court, and most property owners do not bring attorneys to ARB hearings. For this reason, the law requires that ARB hearings be as informal as possible. The ARB should make every effort to help the property owner in the presentation of evidence, cross examination of witnesses, rebuttal testimony, and other procedural matters.
The ARB should follow its written hearing procedures. Property owners received these procedures before their hearings, and they expect that the hearings will progress based on what those procedures state.
The State of Texas
County of _______________
Affidavit of Sworn Testimony
I do solemnly swear or affirm that the testimony I shall present to the Appraisal Review Board for ______________ County Appraisal District is true and correct.
Subscribed and sworn to before me this the _____ day of __________________, ________.
Chair, Appraisal Review Board
After swearing in all witnesses, the ARB is ready to hear evidence about the protest or challenge. A property owner or taxing unit may present any evidence relevant to the issue being protested.
Tax Code Section 41.45(h) states that either before or after the hearing begins, the protesting party and the chief appraiser must provide each other with copies of any written materials that will be submitted to the ARB as evidence during the hearing.
As the ARB listens to the evidence, members should keep in mind the evidence presented by both sides, and the fact that the appraisal district has the burden of proof regarding protests related to appraised or market value, as well as unequal appraisal (see Section 41.43, Tax Code). The appraisal district must prove by a preponderance of the evidence that its value is correct.
The law prohibits the ARB from considering any evidence supplied by the appraisal district unless the evidence is presented at the protest hearing. Neither the appraisal district nor the property owner may provide information to an ARB member about the property except during the protest hearing. An ARB member who violates this rule cannot sign the required affidavit and must be removed from the hearing.
The ARB may not consider any evidence presented by the chief appraiser that was not made available to the property owner at least 14 days before the hearing. Section 41.67(d) states that information requested under Section 41.461 by the property owner that was not available at least 14 days before the hearing may not be used as evidence at the protest hearing.
The protesting party does not have 14 days to study the records made available by the appraisal district. But, if the owner could not gain access to all or part of the appraisal district’s evidence 14 days before the hearing, the ARB must exclude the unavailable evidence. For example, the owner appears at the appraisal district two days before the hearing to inspect the evidence, and it is made available. The evidence is admissible at the regularly scheduled protest hearing, even though the owner may not have had time to study the records. On the other hand, the owner appears 14 days before the hearing to inspect the evidence and some of it is not made available. The appraisal district can’t use that evidence at the hearing. The property owner may waive the right to see the evidence during the 14 days before the hearing. The ARB is required to postpone the hearing if the property owner requests additional time to prepare for the hearing and establishes to the board that the chief appraiser failed to provide the evidence. The board is not required to postpone a hearing more than one time.
Presentation of evidence. ARB procedures should establish the order of presenting evidence. Even though the appraisal district has the burden of proof, property owners may prefer to start with the presentation of their evidence and argument and should be allowed to do so by agreement of the appraisal district and according to ARB procedures. Rebuttal testimony must be allowed, and witnesses may be cross-examined by the parties. Values from prior years or the decisions of previous review boards do not bind the current ARB—each year and property must be considered individually.
The appraisal district may offer testimony and evidence concerning:
- property’s legal description and location;
- type of property and its use;
- property’s appraised value and the way it was appraised;
- description of any improvements to the land and their age, condition and appraised value;
- how the improvements were appraised;
- total value for each type of property considered;
- any information on sales of comparable properties in the neighborhood or elsewhere in the area;
- information about other appraisal methods considered;
- appraisal ratios and median appraisal levels of comparable properties, appropriately adjusted;
- reasons for denying exemption or special appraisal; and
- reasons for the decision by the chief appraiser concerning other matters under protest or challenge.
Relevant evidence. Evidence is simply information that helps the ARB to decide what the facts are. Evidence may include data, schedules, formulas and other information. The ARB should consider only relevant evidence. Relevant evidence is information that has particular meaning in the hearing in which it is introduced. If information introduced in an ARB hearing does not meet the definition of evidence, or if it’s irrelevant, the ARB should disregard it even if it is heard.
For example, a homeowner may introduce information such as recent sales of similar properties to demonstrate too high of a home value. This is relevant evidence. A complaint that taxes are too high because a certain taxing unit’s governing body spends money carelessly is irrelevant, and the ARB should disregard it.
Burden of proof. In a protest on appraised or market value or unequal appraisal, the law states that the appraisal district has the burden of establishing the property’s value by a preponderance of the evidence presented at the hearing. Appraised values may not be presumed to be correct in protest hearings. The appraisal district is required to prove that values are correct at the hearings by a preponderance of evidence. If the appraisal district fails to meet the burden of proof, the ARB must determine the protest in the property owner’s favor.
In a protest of unequal appraisal, the ARB must determine a protest in favor of the protesting party unless the appraisal district establishes:
- the property’s appraisal ratio is equal to or less than the median level of appraisal of a reasonable and representative sample of other properties in the appraisal district;
- the property’s appraisal ratio is equal to or less than the median level of appraisal of a sample of properties, consisting of a reasonable number of other properties similarly situated to or of the same general kind or character; or
- the property’s appraised value is equal to or less than the median appraised value of a reasonable number of comparable properties appropriately adjusted.
This provision deals with a property owner who is claiming, “my value’s right but everyone around me is lower.” While a vast majority of protests to the ARB are about over-appraisal, unequal appraisal protests are numerous and require considerable attention to requirements of law in the calculations of median level of appraisal.
If an owner fails to deliver a required rendition, a property report, or information requested by the chief appraiser under Section 22.07(c) prior to the date of an ARB hearing, the owner has the burden of proving the property’s value to the ARB rather than the appraisal district. When the property owner has the burden of proof under this circumstance and fails to provide sufficient evidence that convinces the ARB that the value should be adjusted, the ARB should determine the protest in favor of the appraisal district.
Witnesses. Anyone is competent to appear as a witness and give testimony, except children and certain persons with mental impairment. Witnesses should have personal knowledge about the facts of the protest or should provide expert opinions concerning appraisal issues. The ARB should consider only testimony pertinent to the facts.
Appraisal often requires a high degree of specialized knowledge and training. Both sides may present the testimony of expert appraisers, both about value and about methods of appraisal. These are matters of opinion based on specialized knowledge rather than firsthand observation of the facts.
The ARB should ask about the experts’ qualifications and experience and be sure it understands the facts on which the experts base their opinions. Expert testimony may concern appraisal theory and methodology, and opinions provided by experts based on theory are admissible.
Above all, the ARB should ask expert witnesses whether they have any reservations about or qualifications to their opinions. As with any witness, the ARB is free to believe all, some or none of an expert’s testimony.
Hearsay testimony. Firsthand observation and expert testimony will have the witness testifying, “I saw it,” “I measured it,” “I did it.” When the witness says, “I heard it from someone else,” the testimony is hearsay. Hearsay is secondhand testimony. For example, in a protest over denial of a residence homestead exemption, the chief appraiser testifies, “The property owner’s neighbor told me the owner does not live in the house.” The statement is hearsay. Ideally, the neighbor should be at the hearing and under oath to substantiate the statement.
There may be cases where common sense tells you to consider hearsay testimony. The ARB should consider hearsay only if it is, in light of the facts, the sort of information upon which reliance is reasonable.
Appraiser testimony and evidence. Since appraisal often requires special knowledge and skills, appraisers are usually key witnesses in ARB hearings. Remember that such testimony is informed opinion, not necessarily verifiable fact. The ARB should ask about an appraiser’s qualifications, and it should have access to the data the appraiser used in the appraisal. Finally, it should be aware of any misgivings the appraiser has about the appraisal.
There could be many reasons for over-appraisal. The property could have hidden flaws that the appraiser didn’t consider, such as a cracked foundation or asbestos insulation. Some key measurement of the property might be wrong. Some property data might have been incorrectly transcribed. Or, the market value of the property might have fallen since the last appraisal.
The most reliable indicators of market value are sales of comparable properties on or near the January 1 appraisal date. Information about sales should be confirmed for reliability. Ideally, affidavits from parties to a sale would verify the terms of a comparable sale. Getting such affidavits isn’t always possible, but there should be some basis for determining if sales information is correct.
Appraisals by chief appraiser and relatives. The Tax Code places a special restriction on appraisals made by the chief appraiser in a private capacity on behalf of a taxpayer or taxing unit. The ARB may not consider such an appraisal as evidence in a protest or challenge. Similarly, if a relative within the second degree of the chief appraiser makes an appraisal, the ARB may not consider that appraisal as evidence.
Documentary evidence. Documents and papers are important items of evidence before the ARB. In general, the ARB may consider any documents, provided a witness identifies them under oath or the owner of the original certifies them as copies of the original.
Tax Code Section 41.67(b) provides that a party must submit the original of a document unless the ARB determines that it’s not readily available. If a copy of a document is used, any party has the right to compare the copy with the original.
Documents submitted in evidence become a permanent part of the hearing record.
Official notice. As a general rule, the ARB must make its decision only on the evidence brought by the parties. However, the ARB may also consider certain kinds of basic facts that neither side presents as evidence. This is called “taking official notice” of the fact.
The ARB, like a judge, may take official notice of any fact that is reasonably certain, either because it is (1) generally known in the community or (2) capable of being easily confirmed by sources whose accuracy can’t reasonably be questioned. For example, an ARB may take official notice that a house borders a park that may affect its property value. If it takes official notice of a fact, the ARB must inform both parties and give them an opportunity to argue against this action.
Subpoenas and records. The Tax Code provides that the ARB and the parties involved in a hearing should gather all evidence relevant to the case. The property owner or a challenging taxing unit has a right to know the basis of the appraisal district’s determinations. Similarly, the appraisal district has the right to know relevant facts in the taxpayer’s possession.
To ensure these rights, the Tax Code gives the ARB the power to:
- subpoena witnesses, books, records or other documents;
- inspect the records or other materials of the appraisal office that are not made confidential under the Tax Code; and
- request the Comptroller to assist in determining the accuracy of appraisals or to provide other professional assistance.
The ARB may subpoena witnesses, books, records or other documents only after holding a hearing to determine whether good cause for issuing the subpoena exists. A subpoena may only be issued if a property is under protest and may be issued only to a party to the protest. The ARB may not subpoena books, records or documents that belong to persons other than the property owner or the appraisal district involved in the protest.
To inspect confidential records or other materials that the appraisal office has, the ARB must subpoena the information from the appraisal district. Such records include renditions, income and expense data filed with the appraisal district and sales information granted confidentiality by the appraisal office.
An ARB may not issue a subpoena unless it holds a hearing to determine that good cause exists for issuing the subpoena. The ARB must establish a procedure for a good cause hearing for issuing a subpoena. The procedures must require the ARB to deliver written notice—not later than the 5th day before the date of the hearing—to the party to be subpoenaed. The party has the right to be heard at the hearing. Appendix G is a sample subpoena.
Postponement of hearings
Three different incidents require the ARB to postpone a protest hearing. First, the ARB must postpone a hearing for 5-15 days if either the property owner or owner’s agent shows good cause or the chief appraiser consents to the owner’s request. The chief appraiser and the property owner may agree to a shorter or longer postponement. No additional notice is required.
Second, the ARB must postpone an ARB hearing if either the property owner or owner’s agent is scheduled for an ARB hearing in another appraisal district on the same date. To qualify for the postponement, the owner or agent must show that the postmark on the other ARB’s hearing notice is earlier than the postmark on the hearing notice delivered by the ARB in which the postponement is requested.
Third, the ARB must postpone a hearing if the property owner requests additional time to prepare for the hearing in a situation where the chief appraiser does not comply with the requirement to deliver at least 14 days before the hearing a copy of ARB hearing procedures and Remedies, and to inform the property owner that he/she may inspect and obtain a copy of the data schedules, formulas, and all other information planned to be introduced as evidence at the protest hearing. The owner must ask for additional time to prepare for the hearing and prove the chief appraiser’s failure to comply; only one postponement is permitted in this case. If the information is requested by the owner and is not made available at least 14 days before the scheduled or postponed hearing, it may not be used as evidence at the hearing.