Resolving Disputes and Approving Appraisal Records
ARBs do most of their work in early summer. The ARB should begin its work by May 15 and is required by statute to substantially complete its work by July 20. The board of directors of an appraisal district in a county with a population of at least 1 million may, by resolution, extend the deadline to Aug. 30. During this time, ARB members hear and make determinations on taxpayer protests and taxing unit challenges.
The ARB's review process generally involves the following six steps:
Step 1. Chief appraiser submits the appraisal records to the ARB;
Step 2. ARB hears and determines taxing unit challenges;
Step 3. ARB hears and determines taxpayer protests;
Step 4. ARB issues orders determining protests or challenges and sends these to the chief appraiser and to parties;
Step 5. ARB approves the appraisal records; and
Step 6. Chief appraiser certifies an appraisal roll to each taxing unit.
Chief appraiser submits records to the ARB
The chief appraiser begins the review process by formally transferring the appraisal records to the ARB by May 15. The chief appraiser may submit all records at once, or may submit them in groups. The chief appraiser submits a sworn statement with the appraisal records (Exhibit 9).
Sworn Statement for Certifying Appraisal Records
Source: Texas Comptroller of Public Accounts.
If the chief appraiser has not delivered a required notice to a taxpayer, that taxpayer may be able to bring a late protest before the ARB.
ARB hears taxing unit challenges
The ARB hears any taxing unit's formal objections to the records. The Tax Code calls a taxing unit hearing a challenge; the taxpayer's hearing is called a protest.
Taxing unit challenges are limited. Taxing units cannot dispute the appraised value placed on a particular property for review; but, they may challenge the following:
- the level of appraisal of any category of property or geographical area in the district (but not the appraised value of a single parcel of property);
- exclusion of property from the appraisal records for the unit or the district;
- a grant in whole or in part of a partial exemption;
- a determination that land qualifies for special appraisals; and
- failure to identify a taxing unit in which a property is taxable.
Appraisal level challenges can have a significant impact on the appraisal roll. If improper appraisal methods have affected a group of similar properties or a particular area, the taxing unit may challenge the appraisal district's overall appraisal level of that group or area.
For example, a taxing unit may believe that the chief appraiser has appraised single-family residences in the appraisal district below market value. In a challenge hearing, the unit attempts to prove it by presenting relevant evidence. If a taxing unit's evidence shows a group of properties is undervalued, the ARB should direct the chief appraiser to reappraise the property within the category or within the specified territory. The ARB can also direct the chief appraiser to make corrections to the appraisal records that are necessary to make them conform to the requirements of law.
Taxing units must file challenges before June 1, or within 15 days after the chief appraiser submits the appraisal records, whichever is later. Exhibit 10 is an example of a challenge petition.
Petition Challenging Appraisal Records
Form 50-215, Petition Challenging Arraisal Records (PDF, 22 KB)
The ARB must notify the taxing unit in writing of the date, time and place of its challenge hearing. The ARB sends the notice by first-class mail at least 10 days before the hearing date. The ARB's secretary also must deliver notice of the date, time and place for the challenge hearing to each taxing unit in which the property involved in the challenge is or may be taxable. Each taxing unit may attend to offer evidence or argument.
When the challenge includes property involving taxable leasehold or other type of interest in property owned by the state or a taxing unit, the state or unit also receives notice of the ARB hearing. The state or taxing unit may appear at the ARB hearing to offer evidence and arguments. If an ARB correction increases a property owner's tax liability, the affected owner must be sent a correction order and given 30 days from the date of mailing to file a protest and request a hearing.
ARB hears property owner protests
The usual last day for filing a protest is May 31. Although the Tax Code sets a deadline of April 30 for a single-family residence that qualifies for a residence homestead exemption, the deadline may be extended to May 31 if the protest is filed before the ARB has approved the appraisal records. Other exceptions to the normal deadline are discussed later in this section.
Who may file
Normally, the person who owned the property Jan. 1 or the person's agent files a protest. A taxpayer who acquires property between Jan. 1 and the protest deadline may file a protest in the place of the owner on Jan. 1. A taxpayer who acquires property while a protest is pending may apply to the ARB to continue the protest in the place of the owner who filed the protest. A person who claims an interest in the property may file a protest even if the person is not shown as the owner on the appraisal district records. Both previous and current property owners can file. The ARB should hold a joint hearing for both.
The Tax Code allows a lessee who is contractually obligated to reimburse the lessor (property owner) for property taxes to protest to the ARB the appraised value of the leased property. The lessee may protest only if the lessor does not protest; the protest is limited to a single protest by either the property owner or the lessee. The lessee's right to protest exists for leased personal or real property. The lessee assumes all rights to receive notices from the ARB relating to the protest because the lessee is considered the property owner for the protest. The person bringing a protest under these provisions of law is considered the owner of the property for purposes of the protest.
The usual deadlines for filing protests are April 30 and May 31, as previously stated. The filing deadline, however, is postponed until the next business day if the deadline falls on a Saturday, Sunday or a legal state or national holiday.
The usual deadline may be postponed in a number of cases. If the appraisal district mails a notice of appraised value after the delivery deadline of April 1 for residence homesteads and May 1 for other properties, the deadline is 30 days from the mailing date. The deadline to protest a change of use determination for agricultural land is 30 days after notice is delivered to the property owner.
A property owner who misses the original deadline for good cause may still file a protest. The deadline in this case is the day before the ARB approves the appraisal records. In such a case, the property owner receives a two-step hearing. First, the ARB decides whether the property owner had good cause for missing the deadline. Second, if the ARB determines the owner had good cause, the ARB hears the protest. A good cause is usually something not within the taxpayer's control. ARB policies should address the issue of what constitutes good cause.
The deadline to protest changes the ARB makes to the appraisal records under Tax Code Chapter 25 is within 30 days of the date notice of the ARB change is delivered to the owner.
The deadline for filing a protest may be contested if the property owner claims the appraisal district or ARB did not mail a required notice. The deadline to file the protest is the tax delinquency date.
If a lessee is contractually obligated to reimburse the owner for property taxes, the lessor is required to send to the lessee a copy of the property's notice of appraised value. However, failure to do so does not affect the protest deadline for the property in question.
The law also allows property owners working offshore or on full-time active military duty out of the country on the date of the deadline to file a late protest. The owner or his or her agent must file the protest before taxes on the property become delinquent. A person working offshore would have to be continuously employed in the Gulf of Mexico for a period of at least 20 days during which the protest deadline passed. The owner may provide evidence of their offshore employment by furnishing the ARB a letter from their employer or supervisor or, if the owner is self-employed, a sworn affidavit. For active duty military personnel, the property owner must provide a valid military identification card and a deployment order.
Notice of protest
A property owner's written notice of protest may take any form, but must be in writing and show at least the following three elements: the property owner's identification, the property's identification and an indication of the owner's dissatisfaction with some determination by the appraisal district.
The Comptroller's office has adopted a model notice of protest form that ARBs and appraisal districts must make easily accessible to the public and deliver to an owner who requests the form. The Comptroller's model form (Exhibit 11) permits the property owner to request a copy of the ARB's hearing procedures and allows space for a lessee's name and address.
Notice of Protest
Exhibit 11 (cont.)
Notice of Protest (page 2)
Form 50-132, Notice of Protest (PDF, 197 KB)
Property owners who live in a county with a population of more than 250,000 and are protesting the determination of the appraised value or an unequal appraisal of a home designated as a residential homestead may file their protests electronically. An electronic notice of protest must include a statement that the protest is brought under Tax Code Sections 41.41(a)(1) or 41.41(a)(2); statement of the property owner's good faith estimate of the value of the property; and an e-mail address that the appraisal district may use to communicate electronically with the property owner in connection with the protest. The appraisal district is required to maintain the e-mail address in confidence. Electronic filing will be available for all counties by Jan. 1, 2013.
Notice of hearing
The ARB must provide a protesting taxpayer with written notice of the time, date and place of the protest hearing and of the taxpayer's entitlement to a postponement of the hearing (Exhibit 12). The ARB must deliver the notice by first-class mail at least 15 days before the scheduled hearing date. A property owner, however, may waive in writing his or her right to the hearing notice (Exhibit 7). Additionally, the chief appraiser is entitled to advance notice of the hearing, but the law does not specify how far in advance.
Notice of Protest Hearing
Form 50-216, Notice of Protest Hearing (PDF, 113 KB)
When the protest hearing is for property involving taxable leasehold or other type of interest in property owned by the state or a taxing unit, the state or unit also receives notice of the ARB hearing. The state or taxing unit may appear at the ARB hearing to offer evidence and arguments.
Delivery of protest information
The chief appraiser must deliver certain materials and information to a property owner at least 14 days before a protest hearing, including the following:
- a copy of the Comptroller's office publication Property Taxpayer Remedies to the property owner or to the owner's agent (on agent request);
- a copy of the ARB's hearing procedures; and
- notification that the owner has a right to inspect and copy the data, schedules, formulas and any other material the chief appraiser plans to introduce at the hearing.
A taxpayer filing a protest online is also entitled to receive electronically comparable sales data and other evidence that the chief appraiser intends to use at the protest hearing before the board. These materials must be available to a protesting property owner 14 days before the scheduled hearing.
Amendments to the Public Information Act excluding real property sales data given to appraisal districts from public disclosure do not affect the availability of evidence to be provided to a protesting property owner. A property owner has a right to obtain copies of sales and other data the chief appraiser used to establish the owner's appraised or market value.
The owner or agent may also ask for and receive a copy of each item of information the chief appraiser took into consideration but does not plan to introduce at the protest hearing. In addition, the protesting party may ask for and receive from the chief appraiser comparable sales data from a reasonable number of sales that is relevant to any matter to be determined by the ARB at the owner's protest. Once the property owner or agent has this information it remains confidential and cannot be disclosed or used except at the protest hearing.
The chief appraiser may not charge more than $15 for copies of material related to a residential property protest. The charge for materials related to one non-residential property is limited to $25. If the charge is less than these limits, the appraisal district must only charge the amount permitted by the Public Information Act.
The ARB's protest procedures must also be delivered to a protesting property owner upon request. The ARB must ensure that this information is provided. The requested ARB hearing procedures must be delivered at least 10 days before the scheduled hearing. The law requires that the notice of protest have a space for the property owner to accept or decline delivery of the procedures.
The ARB and chief appraiser may deliver the pamphlet Property Taxpayer Remedies, hearing procedures and information about the availability of data at the same time the ARB delivers the notice of hearing. The ARB must deliver the notice at least 15 days before the hearing, so if the notice of hearing is delivered on time, the materials and information will be delivered ahead of schedule. One mailing thus ensures compliance with both laws.
Property owners and their agents are entitled to inspect and copy appraisal records relating to their property, along with supporting data, schedules and other information – including confidential information if the property is residential or vacant land. They also have the right to inspect and copy appraisal firm information used or considered in the owner's appraisal at the offices of an appraisal firm under contract with the appraisal district to appraise property. The appraisal firm must make the information available for inspection and copying not later than the 15th day after delivery of a written request to inspect the information.
If denied the information, the owner or agent may take the denial to the ARB for a special hearing. Failure by the appraisal firm to provide the requested information may result in an ARB decision not to approve the appraisal records relating to the property until the requested information is made available.
Waiver of protest
Many appraisal districts encourage a property owner to meet with an appraisal district staff member to try to resolve the dispute before the formal hearing. Residence homestead owners may reach a settlement with the appraisal district by electronic exchange of data. Appraisal districts with a population of more than 250,000 and that have a Web site must offer this electronic submission capability by Jan. 1, 2011; all other appraisal districts must comply by Jan. 1, 2013. This process is not available to an owner represented by a tax agent.
If the property owner and appraisal district reach a settlement agreement to the owner's protest at the informal meeting or by electronic exchange, both parties may sign a settlement and waiver of protest form (Exhibit 13).
Settlement and Wavier of Protest
Form 50-218, Settlement and Wavier of Protest (PDF, 175 KB)
By signing this form, the property owner agrees on a settlement with the appraisal district and drops the protest on the matter. If the owner's agent signs the form, the agreement between the agent and the appraisal district is final. The ARB may not review or reject agreements between an owner and the appraisal district.
If the property owner rejects a settlement offer, made in person or electronically, the ARB must hear and determine the property owner's protest, provided the owner filed a timely notice of protest.
Grounds for protest
The Tax Code permits a property owner to protest any of the following issues:
- appraisal that exceeds the appraised or market value of the property;
- unequal appraisal;
- inclusion of the property on the appraisal records;
- denial in whole or in part of a partial exemption;
- determination that the property does not qualify for special appraisal;
- identification of the taxing units in which the property is taxable;
- determination of the property's ownership;
- determination that the use of agricultural or timber land has changed; or
- any other action of the appraisal district, chief appraiser or ARB that applies to and adversely affects the property owner.
Property owner representation
A property owner may have an agent present his or her protest, provided the owner, a property manager or other person who has legal authority to act for the property owner in naming tax agents authorizes the agent's appointment in writing in a form prescribed by the Comptroller's office. The agent cannot sign the form on behalf of the owner. The property owner must use Comptroller Forms 50-162 or 50-241 for designating an agent (Exhibits 14 and 15).
Appointment of Agent for Property Taxes
Appointment of Agent for Property Taxes (page 2)
Form 50-162, Appointment of Agent for Property Taxes (PDF, 181 KB)
Appointment of Agent for Single Family Residential Property Tax Matters
Exhibit 15 (cont.)
Appointment of Agent for Single Family Residential Property Tax Matters
Form 50-162 addresses designating an agent for property other than a single-family residence in which the owner resides. The second form – Form 50-241 – is for designating an agent for a single-family residence and states in boldface type that a taxpayer may wish to contact the appraisal office or taxing units for free information or forms. Use of the form is required unless the property owner filed a valid designation before Jan. 1, 1990. The ARB may not require a property owner to designate an agent in any other manner. An owner does not have to file a form for an attorney, mortgage lender, an owner's employee or a person who simply acts as a courier.
If the property owner filed a valid agent appointment form, the agent must use Form 50-163 to update the appraisal district's agent records for that property owner. It must include all the requested information and the agent must attach a copy of the previously filed agent appointment form (Exhibit 16).
Account Update For Agent-Represented Property
Granting a hearing
The ARB determines whether or not it will hear a protest. The ARB decides if the protest notice is timely filed and the notice has the necessary elements that make up a protest. Carefully determining whether the property owner is entitled to a hearing protects the owner's right to protest. Also, the ARB may find itself defending a lawsuit if it denies a hearing to which a property owner was entitled.
A property owner who is denied a hearing has the right to bring suit directly to district court; the owner may sue directly by filing a petition or an application to force the ARB to provide the hearing. If the court finds that the owner was wrongfully denied a hearing, it will order the ARB to hold the hearing. In addition, the court may award the property owner court costs and attorney's fees.
A property owner with pooled or unitized mineral interests may file protests with the ARBs of more than one appraisal district. The ARB for the county where the production site is located must hear and decide on the protest before another ARB in the other appraisal district(s) may hold a hearing on a protest filed with that ARB(s). If there are two or more production sites for the pooled or unitized mineral interests, the ARB in the county where at least two-thirds of the area of the mineral interest is located hears and decides the protest before the other ARB(s).
ARB orders changes resulting from hearings
The ARB may rule on a protest at the conclusion of the protest hearing or may postpone the decision to a later date. If the ARB divides into panels to hear separate cases, a hearings panel cannot make a final decision. An ARB's decision is not final until a majority of the entire ARB approves the panel's recommendation.
The ARB's procedures should address how the ARB will handle panel recommendations. The procedures should include if and how the ARB will handle requests by property owners or the chief appraiser to offer new or additional evidence, to rehear a taxpayer's protest before the full ARB or to limit issues to those presented to the panel.
Another panel hearing will be conducted if the full ARB rejects a panel's decision. The second panel must be composed of ARB members who did not hear the first protest hearing. If three members are not available to make up a new panel, the full ARB may determine the protest. The ARB must notify the taxpayer of the new hearing in the same manner provided for a regular ARB hearing.
If the ARB postpones a decision, it must tell the parties when it will make the final decision. Any postponed decisions must be in open sessions.
The ARB's final orders come in two forms: an order determining a protest and an order determining a challenge. These are written orders issued to the chief appraiser, signed by the ARB chair and specifying the ARB's disposition of the protest or challenge. The ARB also issues notices of these orders. Exhibit 17 shows examples of these orders; these are examples and are not mandatory. It is important, however, that orders state specifically the issues being determined, such as excessive valuation or unequal appraisal.
Samples of ARB Final Orders
(Order Determining Challenge)
Form 50-220, Samples of ARB Final Orders (PDF, 116 KB)
Exhibit 17 (Cont.)
Samples of ARB Final Orders
(Order Determining Protest)
Form 50-221, Samples of ARB Final Orders (PDF, 132 KB)
Exhibit 17 (Cont.)
Samples of ARB Final Orders
(Notice of Final Order with Form for Notice of Appeal)
Exhibit 17 (Cont.)
Samples of ARB Final Orders
(Notice of Final Order with Form for Notice of Appeal - page 2)
Form 50-222, Samples of ARB Final Orders (PDF, 116 KB)
Exhibit 17 (Cont.)
Samples of ARB Final Orders
(Notice of Issuance of ARB Order to Taxing Unit and Order to Correct Appraisal Records )
Form 50-223, Notice of Issuance of ARB to Taxing Unit (PDF, 116 KB)
ARB approves appraisal records
The ARB should approve appraisal records by July 20. The board of directors of an appraisal district in a county with a population of at least 1 million may, by resolution, extend the deadline to Aug. 30.
Taxing units may sue the ARB or chief appraiser in district court for failure to meet the deadlines. If the court finds the deadline was missed for a good reason, it must set a new deadline. If the court finds there was not a good reason, the deadline becomes 10 days from the date the court signs the judgment. The court may enforce its deadlines by holding parties in contempt, or may make any other order necessary to ensure compliance.
It may be impossible or impractical to approve the appraisal records by the July 20 deadline. The ARB must substantially complete all protest hearings before approving the appraisal records. If the sum of appraised values of property on which taxpayers have filed protests but have not received determinations is more than 5 percent of the total appraised value of other properties in the appraisal district, the ARB cannot approve the appraisal records.
To help achieve 95 percent completion of the appraisal records, the ARB may wish to hear protests first on properties with larger appraised values before it hears protests on properties with lower appraised values.
The board of directors of an appraisal district in a county with a population of at least 1 million may change the threshold percentage from 95 percent to 90 percent. In other words, the value involved in pending protests at the time of appraisal record approval may not be more than 10 percent of the appraised value of properties that are not under protest in the appraisal district.
If the ARB believes it will not complete its review by July 20, or Aug. 30 in the larger counties, it should notify the chief appraiser and the taxing units of the earliest estimated date for completion and explain the reasons for the delay. However, the ARB should make every effort to meet the July 20 or Aug. 30 deadlines.
Chief appraiser certifies appraisal roll to each taxing unit
The appraisal records, as the ARB changes and approves them, constitute the appraisal roll for the appraisal district. July 25 is the deadline for the chief appraiser to prepare and certify each taxing unit's appraisal roll to its tax assessor.
When protests are still pending after certification, the chief appraiser gives each taxing unit a list of pending protests with the unit's certified appraisal roll.
The list must show each property and give two values for each – the value proposed by the appraisal district and the value claimed by the property owner. The chief appraiser must estimate a probable value for the property if the owner does not indicate a value in the protest. The taxing unit uses the lower of the two values in calculating its effective and rollback tax rates.
A taxing unit cannot levy a tax on a property under protest until the ARB approves a final value for that property. The Tax Code contains procedures for adding approved supplemental records to appraisal and tax rolls.