Review in state district court
Taxing units and property owners may appeal decisions of the ARB to district court. 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. 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.
A lessee – a person who is contractually obligated to reimburse the lessor (property owner) for property taxes – may 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. The chief appraiser 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 60 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.
The Tax Code 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 property qualifies as the owner's residence homestead or the appraised or market value, as applicable, of other real or personal property as determined by the order is $1 million or less.
An ARB that delivers to a property owner an order determining a protest concerning a person's residence homestead or property that qualifies for binding arbitration 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 or $250, if the property owner requests expedited arbitration. A property owner of contiguous land that has two or more ARB orders of determination only needs to pay a single arbitration deposit. The appraisal district will forward the deposit and application for arbitration to the Comptroller's office. The Comptroller's office 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 appraisal district cannot agree on a particular arbitrator, the Comptroller's office will randomly select the arbitrator.
If the arbitrator's value decision is closer to the value the property owner claims to be correct, then 90 percent of the deposit is returned to the property owner, and the appraisal district pays the arbitrator's fee. The Comptroller will retain 10 percent of the deposit 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 addresses the administration of this process and the form needed to Request for Binding Arbitration (Exhibit 28).
Request for Binding Arbitration
Appeal to State Office of Administrative Hearings (SOAH)
The 81st Legislature, Regular Session, approved a pilot program in which property owners in selected counties may appeal an ARB decision to SOAH. The program became effective on Jan. 1, 2010. The program will apply to no more than 3,000 appeals from the counties of Bexar, Cameron, El Paso, Harris, Tarrant and Travis and will run for a three-year period beginning with the 2010 tax year. The ARB in a county in the pilot program must deliver a notice of issuance of an order pertaining to affected property and a copy of the order to the property owner which includes a notice of the property owner's rights and copy of the notice of appeal prescribed.
Under this program, a property owner may appeal to SOAH an ARB order determining a protest concerning the appraised or market value of property brought under Tex. Tax Code §41.41(a)(1) or (2) if the appraised or market value, as applicable, is more than $1 million. The pilot program will be applicable to a determination of the appraised or market value made by an ARB in connection with real or personal property other than industrial property or minerals.
To appeal an ARB order to SOAH, a property owner must file with the chief appraiser of the appraisal district not later than the 30th day after the date the property owner receives notice of the order a completed notice of appeal to SOAH in the form prescribed and a $300 filing fee payable to SOAH. The chief administrative law judge will prescribe the form of notice of appeal. The form must require the property owner to provide a copy of the order of the ARB; a brief statement that explains the basis for the property owner 's appeal of the order; and a statement of the property owner 's opinion of the appraised or market value, as applicable, of the property that is the subject of the appeal.
As soon as practicable after receipt of a notice of appeal, the chief appraiser for the appraisal district must indicate, where appropriate, those entries in the records that are subject to the appeal; submit the notice of appeal and filing fee to SOAH; and request the appointment of a qualified administrative law judge to hear the appeal.