VIII. Post-ARB Review
Review in State District Court
Taxing units and property owners may appeal decisions of the ARB to district court. Judicial review is the subject of Tax Code Chapter 42. In addition, a property owner who appeals an ARB decision has a right to court-approved, non-binding arbitration. Binding arbitration is required if the appraisal district joins in the motion or consents to the court-approved 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 and the appraised or market value of the protested property is $1 million or more. The chief appraiser may appeal an ARB order on property valued at less than $1 million only when the board of directors has given written permission and the chief appraiser alleges the taxpayer or agent committed fraud or made material misrepresentations at the protest hearing. A taxing unit may appeal an ARB order determining a challenge.
Section 42.015 allows a lessee – a 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. These lawsuits are brought against the appraisal district – not the appraisal review board.
The law provides an alternative to filing an appeal in district court. A property owner has the right to appeal ARB decisions through binding arbitration, outside of the judicial system. A property owner may seek binding arbitration of an ARB order determining a protest on real property if:
- the appraised or market value, as applicable, of the property as determined by the order is $1 million or less; and
- the appeal does not involve any matter in dispute other than the determination of the appraised or market value of the property.
An ARB that delivers an order determining a protest concerning the appraised or market value of real property with a value of $1 million or less to a property owner must include with the order a notice of the property owner's right to binding arbitration and a copy of the form to request arbitration.
Within 45 days of receiving the notice of determination from the ARB, the owner must file a request for binding arbitration with the appraisal district and include a $500 deposit. The district will forward the deposit and application for arbitration to the Comptroller. The Comptroller will submit to the owner and the appraisal district a list of registered arbitrators who can hear the case so both parties can mutually choose an arbitrator. If the property owner and the district cannot agree on a particular arbitrator, the Comptroller will randomly select the arbitrator.
If the arbitrator's value decision is closer to the value the property owner claims to be correct, then $450 of the $500 deposit is returned to the property owner, and the appraisal district pays the arbitrator's fee. The Comptroller will retain $50 to cover administrative costs. If the arbitrator's value decision is closer to the value the ARB decided on the order determining protest, then the arbitrator's fee is paid from the owner's deposit and any balance is refunded to the property owner.
Comptroller Rule 9.804 concerning the administration of this process and the "Request for Binding Arbitration" can be found at the Comptroller's Web site at www.window.state.tx.us/taxinfo/proptax/info.html.