ARB Operations Generally
The ARB is often the first governmental body before which a property owner has appeared. As a result, the ARB must conduct its business professionally and must consider how it is perceived by the public. Every effort should be made to make the hearings welcoming. 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 officer can assist in developing a good relationship with the public.
The hearing itself is an ARB’s most accessible and 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. Fair and impartial hearings are required, and the ARB must make sure that the hearings are conducted in such a manner.
The ARB must adopt protest and challenge hearing procedures and may choose to adopt procedures or rules of order for its own meetings. Section 41.66(b), Tax Code, states that hearing procedures “to the great extent practicable shall be informal.”
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 in its work..
The ARB may use Robert’s Rules of Order, Uniform Code of Parliamentary Procedures or other recognized sets of procedures for its optional procedures. Developing customized hearing procedures to meet its particular needs and local concerns is a good idea. 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 during evening hours, or on a Saturday or Sunday so that all property owners have an opportunity to participate in the hearing process. 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.
All members should review the current written ARB 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. If the size of an ARB has changed from the prior year, with either fewer or more members, the ARB will need to review its hearing procedures to see if a decrease or increase in its size will affect any current procedures.
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 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 states the date and time of each hearing as well as the nature of each protest or challenge. The ARB may not schedule a hearing on a particular property value before a property owner has filed a protest.
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. The appraisal district is required 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—unless this special appraisal method is waived by the builder or developer who owns the property.
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.
Open Meetings Act (Chapter 551, Government Code)
The Texas Attorney General’s Office interprets the open meetings laws in Texas. None of the following information should be interpreted as legal advice from the Comptroller’s office. ARBs should seek legal advice from their attorneys regarding compliance with open meetings laws. For more information about the Open Meetings Act, call the Attorney General’s Open Government Section at (512) 478-6736 or 1-800-252-5476 or see the Attorney General’s Web site, http://www.oag.state.tx.us/opinopen/opengovt.shtml.
The Open Meetings Act requires a governmental body to hold its meetings where anyone may attend. A quorum of members must be present to discuss or conduct business. The Act requires posting information about meetings in advance and bars a governmental body from having closed or executive sessions except in very rare cases.
The open meetings law applies any time a quorum of the ARB members meet. Members may not conduct business with less than a quorum in attendance. Members may attend 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 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 exceptions to this rule include: meetings with the ARB’s attorney to discuss pending litigation and 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.
- 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. If the ARB chooses to keep a certified agenda, the matters considered in the meeting must be described clearly and accurately. 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 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.
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. Posting rules differ depending on the boundaries of the appraisal district between counties. The Open Meetings Act should be consulted regarding the place of posting notices of public meetings.
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.
Public Information Act (Chapter 552, Government Code)
The Texas Attorney General’s Office interprets the public information laws in Texas. None of the following information should be interpreted as legal advice from the Comptroller’s office. ARBs should seek legal advice from their attorneys regarding compliance with public information requirements. For more information about the Public Information Act, call the Attorney General’s Open Government Section at (512) 478-6736 or 1-800-252-5476 or see the Attorney General’s Web site, http://www.oag.state.tx.us/opinopen/opengovt.shtml.
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; or
- 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.
In keeping with the Public Information Act, the ARB should keep good records of proceedings. Procedures should be established to make sure that the evidence presented is identified, the procedural requirements of law are met, and other information is maintained.
Information maintained by the ARB may be used in future litigation. 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 lack of credibility 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.
Conflicts of interest
ARB members must comply with two “conflict of interest” laws that apply to them.
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, and you must file an affidavit stating your interest.
Section 41.69, Tax Code, bars you from taking part in any taxpayer protest in which you or one of your close relatives has an interest. No affidavit need be filed. The ARB member simply cannot participate in the protest hearing or determination and must recuse himself or herself from the proceeding.
Chapter 171. Chapter 171 comes into play whenever you or one of your relatives has a substantial interest in a matter.
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. You also 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.
You may have an interest in the outcome of a protest for many reasons. If there could be the appearance of favoritism or a conflict of interest, even if you do not believe you would actually be influenced, you should not participate in the hearing. The public must perceive the ARB as a fair and impartial body where no person, business or property is favored over another.
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.