Chapter 2
ARB General Operations
Before discussing the operations of the ARB, it may be helpful to cover a couple of appraisal district functions that are generally performed prior to the ARB beginning its hearings.
By April 1, or as soon thereafter as practicable, if the property is a single-family residence that qualifies for a residential exemption, or by May 1, or as soon thereafter as practicable, in connection with any other property, the chief appraiser must deliver a clear and understandable written notice to a property owner of the appraised value of the property owner's property.[29] This notice is required if any of the following applies:
- the appraised value of the property is greater than it was in the preceding year;
- the appraised value of the property is greater than the value rendered by the property owner; or
- the property was not on the appraisal roll in the preceding year.
The law also requires the chief appraiser to publish notice of the manner in which a protest before the ARB may be brought by a property owner. The notice must describe how to initiate a protest and must set out the deadlines for filing a protest. It must also explain the manner in which an order of the ARB may be appealed (Exhibit 6).
Exhibit 6
Notice of Manner to Protest Before the ARB
Form 50-195, Property Tax Protest and Appeal Procedures (PDF, 180 KB)
The notice must appear in a one-quarter-page ad in a newspaper having general circulation in the county for which the appraisal district is established. The notice may not be published in the part of the paper in which legal notices and classified advertisements appear.[30]
While the property owner has up to 15 days to prepare for a hearing, the property owner may waive this right and ask to meet with the ARB sooner (Exhibit 7).[31]
Exhibit 7
Waiver of 15-Day Notice of Protesting Hearing
Form 50-217, Waiver of 15-Day Notice of Protesting Hearing (PDF, 96 KB)
Customer service
A taxpayer's protest hearing is the ARB's most important opportunity for promoting 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 should make every effort to ensure that it conducts the hearings in such a manner. The ARB should conduct its business professionally and consider how the public perceives it. It should make every effort to make the hearings welcoming.
Hearing location
The ARB can choose the location where it will conduct its hearings and conduct its business. While budgetary considerations usually limit the meeting choice to the appraisal district offices, consideration should be given for alternative locations for some hearings, in order to demonstrate independence and impartiality.
Hearing procedures
The ARB must adopt protest and challenge hearing procedures. [32] The ARB may also adopt procedures or rules of order for its meetings, or it may use Robert's Rules of Order, Uniform Code of Parliamentary Procedures or other recognized sets of procedures.
The Tax Code directs that hearing procedures "to the greatest extent practicable shall be informal." Except for a few instances, the law does not specify procedures. Instead, the ARB may decide how it wishes to conduct its business. Hearing procedures are legally required, and well-designed procedures will help the board do its work. [33]
The law requires 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 hearing rights of property owners.[34]
The ARB must adopt a procedure that provides for protest hearings during evening hours or on a Saturday or Sunday.[35] The ARB's procedures should inform property owners of these times.
The procedures must be made available to the public. The ARB must post written ARB hearing procedures in a prominent place in each room in which it holds hearings. In addition, the ARB must provide its hearing procedures to a protesting property owner.[36]
ARB members should review their current written procedures, preferably at the first meeting after Jan. 1, when terms of office for new members begin. A group review helps ensure 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 procedure. Additionally, the ARB should make it a practice to review its procedures at its first meeting to make certain they incorporate any changes the Legislature may have made that impact ARB operations and property owner remedies.
Hearings
In conducting taxpayer protests or taxing unit challenges, the ARB should address several administrative matters. The members should also prepare for the legal and appraisal issues that will arise during the hearings.
Scheduling
The ARB, through the clerical staff assigned to it, 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 protests or challenges on a hearing schedule. The schedule states the date and time of each hearing, the nature of each protest or challenge, a property description and other information. The ARB may not schedule a hearing on a property value before a property owner has filed a protest.
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 interest. These include mineral properties. Similarly, the ARB should consider consolidated hearings for protests involving an inventory of residential real property.[37]
Time limits
The ARB procedures 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. This helps ensure that protests and challenges are completed in a timely manner. Any limit should be reasonable and flexible.
The hearing procedures may give the presiding officer the authority to extend the hearing. Property owners are entitled to a reasonable amount of time to present relevant evidence and argument. What is reasonable depends on the circumstances of each protest. A protest about a residential property usually requires less presentation time than a complex protest involving a large industrial property, for example.
Support staff and legal counsel
Some appraisal district budgets fund a separate ARB staff, but generally the ARB relies on appraisal district staff for clerical assistance.[38] The staff is responsible for scheduling and posting hearings, mailing notices and administering the ARB's operations generally.
The ARB may hire its own attorney if the appraisal district budget provides funds for one, or the ARB may use the services of the county attorney.[39]
Open Meetings Act and Public Information Act
The Office of the Attorney General (OAG) interprets the open meetings and public information laws. None of the following information should be interpreted as legal advice from the Comptroller's office. ARBs should seek legal advice from their attorneys or county attorneys regarding compliance with these laws. For more information about the Open Meetings Act and Public Information Act, an ARB member may call the OAG's Open Government Section at (512) 478-6736 or (800) 252-5476, or visit the OAG's Web site at www.oag.state.tx.us/open/requestors.shtml.
The Open Meetings Act requires a governmental body to hold its meetings where anyone may attend. The Open Meetings Act applies any time a quorum of the ARB members meet. Members may attend social occasions and seminars without violating the law, provided they do not discuss their ARB business. Violation of the Open Meetings Act is a misdemeanor.
The Open Meetings Act also allows individuals to photograph or make audio or video recordings of all or any part of open meetings. The ARB may impose reasonable restrictions, such as requiring video cameras to be placed at a certain location so they do not physically interfere with the proceedings.
The law requires posting information about meetings in advance. 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. The Open Meetings Act should be consulted regarding the places for 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 was not properly listed in the open meetings notice.
Generally, a quorum of members cannot meet and discuss or conduct business in a closed or executive session. 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 a staff. If the ARB wants to have a closed or executive session, it should consult its attorney concerning what is permissible and how to do so.
The Tax Code prohibits the ARB from holding a closed protest hearing. All protest hearings must be open to the public. The Tax Code also prohibits the ARB from receiving or considering evidence concerning a protest outside of the protest hearing.[40]
The Public Information Act, also known as the Open Records Act, gives the public the right to see records and documents of government agencies. Property tax records are public records and must be available for inspection or copying upon request unless the law clearly makes the record confidential. The following four main classes of property tax records are confidential according to law:
- renditions, attachments to renditions and property reports such as reports of decreased value, 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 land to be designated for agricultural use; and
- income and expense information filed with an appraisal office.[41]
Records that are normally confidential can be disclosed under the following conditions:
- when a court or administrative body lawfully subpoenas the information;
- to the person who gave the information;
- to a PTAD staff person authorized in writing by the Comptroller to receive the information (the Comptroller has provided authorization to PTAD staff to receive such information);
- in a judicial or administrative hearing when the person who filed the information or the owner of the property is a party;
- for statistical purposes in a form that does not 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;
- to an employee or agent of a taxing unit reviewing district operations; or
- to an employee or agent of a school district preparing a property value study protest.[42]
Unauthorized disclosure of confidential information may be a Class B misdemeanor. Failure to disclose information legally open to the public may also be a Class B misdemeanor under certain circumstances.
ARB records
The ARB should keep good records of proceedings. It should establish procedures to ensure 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 litigation. As an example, if the owner was required to file a notice of his or her appeal and did not file within the deadline, the owner has not met legal requirements for the district court to hear the case. Additionally, statements made by a witness at the protest may be used to challenge the witness's honesty or credibility if statements change at trial.
At a minimum, Comptroller Rule 9.803 requires the ARB to keep the following records of the hearing:
- names of the ARB members present and the date of the hearing or proceeding;
- name and residence address of the property owner, or his or her agent, if applicable, or the challenging taxing unit;
- description of the property subject to protest or challenge;
- summaries of the nature of the case;
- summary of testimony
- documents or physical evidence (or reference numbers for the evidence) admitted as evidence;
- name and residence address of every witness and a statement that the witness testified under oath;
- formal motions made and the ARB's ruling on the motions;
- ex parte affidavits signed by the ARB;
- final order or a reference number of final order the ARB issued; and
- the date of any final order and the date the notice is placed in the mail.
Conflicts of interest
ARB members must comply with all conflict of interest laws. The Local Government Code requires ARB members to abstain in any case in which they or one of their close relatives has a substantial interest.[43] Under this law, one must not only abstain in such a case, but must also file an affidavit stating the person's interest. The Tax Code bars ARB members from taking part in any taxpayer protest in which they or one of their close relatives has an interest.[44] The ARB member cannot participate in the protest hearing or determination and must recuse him or herself from the proceeding.
Substantial interest is defined as the following interest:
- in a business, if one owns 10 percent or more of its voting stock or shares, or owns either 10 percent or more or $15,000 or more of its fair market value or received more than 10 percent of one's gross income from it in the previous year; or
- in real property, if one owns $2,500 or more of the fair market value of the property, whether title is legal or equitable.
Such ownership by a person related to an ARB member in the first degree by blood or marriage also constitutes a substantial interest. Service on the board of directors of private, nonprofit corporations for no compensation or other benefit does not create a conflict of interest.
When an ARB member determines he or she has a substantial interest, the ARB member must abstain from joining in any discussions or votes on the issue. An affidavit made under oath must be filed with the ARB's secretary that states the nature and extent of the interest. The affidavit must be filed before the ARB takes any votes on the matter (Exhibit 8).
Exhibit 8
Conflict of Interest Affidavit
Form 50-229, Conflict of Interest Affidavit (PDF, 196 KB)
The Tax Code bars an ARB member from participating in a taxpayer protest in which an ARB member or certain relatives of a member has an interest, even if the interest is too small to be considered a substantial interest under provisions of the Local Government Code. One 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 the ARB member does not believe he or she would actually be influenced, the Comptroller's office recommends that the ARB member 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.
ARB members should take great care to avoid conflicts of interest or the appearance of improper actions.
If a court finds a violation of the law, it may nullify the ARB decision. A violation of Local Government Code Chapter 171 could result in the commission of a Class A misdemeanor.