Attorney General Opinions
Rulings Look at Water Districts, Appraisal InformationAttorney General John Cornyn issued two rulings that addressed property taxes, one dealing with water district taxes and services and the other on a property owner’s access to appraisal information.
Water district taxes
On October 3, Attorney General Cornyn released Opinion No. JC-0419 dealing with business users of city water and sanitary sewer services that have paid property taxes to a water district. Cornyn held that while a business owner was not a “household user” of water and sewer services, the business owner may own taxable property. Accordingly, Local Government Code Section 43.0761 required the water district to pay the city the total annual amount of property taxes paid to the water district by these properties.
Senator David Sibley, Senate Business and Commerce Committee Chair, asked the Attorney General to interpret the Local Government Code Section 43.0761 and its references to “household users” of water and sanitary utility service and to “owners of taxable property within the district.” The district at issue was a conservation and reclamation district of more than 10,000 acres that provided some water and sanitary sewer utility service to households, parts of which are located in two or more cities.
Specifically, a restaurant and bar owner was not a “household user” of the water district’s water and sewer services but the restaurant was taxable property in the district. The owner paid water and sewer taxes to the water district, but received no services from it. The owner paid the city for such services, and the city passed a resolution providing for a rebate to the relevant taxpayers of certain funds paid to it by the water district. The water district had not paid the city the amount it received from the restaurant owner on the apparent ground that a restaurant was not a household user. Consequently, the owner paid twice for the same service.
Local Government Code Section 43.0761 addresses a district existing on September 1, 1997, that, within 10 years after its creation, has not provided water and sanitary sewer services from its facilities to all household users in its territory. One of the provisions requires that the district pay a municipality that does provide those services. The district pays either (1) the total annual cost to the municipality of providing the water and sanitary sewer services, or (2) the total annual amount of maintenance and operation taxes and debt service taxes paid to the district by the owners of taxable property within the district that receive water and sanitary sewer services from the municipality.
The opinion stated that a “household user” of water and sewer services would, accordingly, be a residential user of such services, rather than a commercial establishment such as a restaurant. But since the phrase “household user” occurred in subsection (a) of the statute, the district’s failure to carry out that function triggered its repayment obligations under subsection (b). “For that subsection, the legislature has chosen not to limit the obligation to payments made by household users, but has used a more expansive term,” the opinion held.
The opinion found that the water district’s obligation, according to the plain language of the statute, was to pay the municipality the total amount of taxes paid to the district by “owners of taxable property,” not by “household users.”
Thus, the opinion said that if the restaurant owner in question is an owner of taxable property and has in fact paid such taxes to the district for water and sewer services, and those services have been provided not by the district but by the city, then under Section 43.076 (b)(2) the district owes the city the total annual amount of such tax payments.
According to Opinion No. JC-0424, issued October 19, neither Utilities Code Section 39.001 nor any other provision enacted in the 1999 legislation deregulating the electric utility industry affects a property owner’s right of access to appraisal information under Tax Code Section 25.195. The Attorney General cautioned that this opinion discussed a property owner’s right of access under Section 25.195 as amended in general terms. It did not decide what information might be available to a property owner in a particular case.
Tax Code Section 25.195(a) grants a property owner a right of access to information about the owner’s property prepared by a private appraisal firm and obtained by the appraisal district from the appraisal firm. Section 25.195(c), a provision recently enacted by Senate Bill (S.B.) 1737 in 2001, gives a property owner access to information in the possession of a private appraisal firm that may not be in the possession of the appraisal district.
Senator David Sibley also asked for this opinion about a property owner’s right under Section 25.195. In his request, Senator Sibley stated that a private appraisal firm refused to provide complete appraisals of electric utility property to the appraisal districts that it served, providing instead a summary of the conclusions reached in the appraisals and the major economic assumptions used to arrive at the results. He indicated that the electric utility property owners were denied access to the appraisals of their property performed by the firm, despite the fact that the appraisal districts relied on those results in setting appraised values.
Senator Sibley asked the following questions about Section 25.195:
The opinion found that while Section 25.01(c) provides that certain information used or created by an appraisal firm must be made available to the appraisal district and deems that information public, Section 25.195 addresses a property owner’s right of access to information relating to the appraisal of his or her property. This right of access is separate and apart from the public’s right of access. It said that Section 25.195 was substantially amended in the last legislative session in S.B. 1737.
- Is a property owner’s access to appraisal information regarding the owner’s property, as set forth in Section 25.195(a), circumscribed by Section 25.01(c) which governs what information must be made available by a private appraisal firm to an appraisal district and which limits what constitutes supporting data?
- Is a property owner entitled to copies of all appraisal material and information regarding the owner’s property pursuant to Section 25.195(a)?
The opinion also looked at Section 22.27 confidential provisions for the limited release of information provided by property owners to an appraisal district.
“Over ten years ago, this office construed Section 25.195 and Section 22.27 to give a property owner a special right of access to information filed by others and made confidential under section 22.27 that is used to appraise the property owner’s property (Open Records Decision Nos. 550 (1990) and 500 (1988). In 1997, however, the legislature amended Section 25.195 to include the express reference to Section 22.27 in subsection (a) of section 25.195 and to add subsection (b). The effect of these amendments appears to have been to limit the right of access to information filed by others and made confidential under Section 22.27 to owners of vacant land and residential real property, thus precluding owners of real property used for commercial purposes from obtaining such information,” the opinion noted.
Unlike Section 25.195 (a) and (b) which address access to information in the possession of an appraisal district, Subsections (c) through (e), newly added by S.B. 1737, address access to information held by a private appraisal firm, the opinion stated.
Under subsection (e), if an appraisal firm has not made the information available for inspection and copying, the appraisal review board may not conduct a hearing on the merits of any claim relating to the property and may not approve the appraisal records relating to that property.
As amended by S.B. 1737, a property owner has a right of access to information used to appraise the owner’s property in the possession of the appraisal district and in the possession of the private appraisal firm. The latter type of access, the opinion noted, makes available to a property owner an array of information, including information that the private appraisal firm is not required to provide to the appraisal district.
In answer to the question about the relationship between Sections 25.195(a) and 25.01(c), the opinion said that the recent S.B. 1737 amendment to subsection (a) makes it quite clear that a property owner is entitled to information prepared by a private appraisal firm “required by Section 25.01(c) to be provided to the appraisal district under a contract for appraisal services.” Section 25.01(c) provides that an appraisal district is entitled to receive from a private appraisal firm with which it contracts “copies of the appraisal, together with supporting data,” but expressly excludes “personal notes, correspondence, working papers, thought processes, or any other matters of a privileged or proprietary nature,” from the scope of “supporting data.” Therefore, information that a private appraisal firm is not required to provide to the appraisal district under Section 25.01(c), such as “personal notes, correspondence, working papers, thought processes, or any other matters of a privileged or proprietary nature,” and that the firm has not provided to the appraisal district, does not fall within the scope of a property owner’s right of access under Section 25.195(a).
Importantly, however, S.B. 1737’s addition of Section 25.195 (c) and (d) gives property owners a new right of access to information in the possession of a private appraisal firm, also expands the type of information to which a property owner has access, the opinion found. Under subsection (c), a property owner has a right of access to “all information pertaining to the property that the firm considered in appraising the property, including information showing each method of appraisal used to determine the value of the property and all calculations, personal notes, correspondence, and working papers used in appraising the property.” In addition, a property owner also has a right to inspect and copy information made confidential under Section 22.27 “relating to the owner’s property.”
Thus, in answer to questions about the Tax Code, the opinion held that a property owner’s right of access to information in the possession of an appraisal district under Section 25.195(a) may be limited by Section 25.01(c) to the extent Section 25.01(c) specifies information a private appraisal firm is not required to give the appraisal district, namely “personal notes, correspondence, working papers, thought processes, or any other matters of a privileged or proprietary nature,” because this information may not be in the possession of the appraisal district. Recently enacted Section 25.195 (c) and (d), however, give a property owner a right of access to information in the possession of a private appraisal firm that the firm used to appraise the owner’s property, including “calculations, personal notes, correspondence, and working papers.” This provision gives a property owner access to information that may not be in the possession of the appraisal district.
Finally, the opinion addressed implications of 1999 electric utility deregulation legislation for the right of access to information used to appraise electric utility property. The appraisal firm at issue also defended its refusal to give complete appraisals of electric utility property on the grounds that S.B. 7, enacted by the 76th Legislature in 1999, required that it protect “competitively sensitive information,” and that it was doing so by withholding the complete appraisals from the appraisal districts and from property owners. The opinion concluded that nothing in S.B. 7 affected a property owner’s right of access to appraisal information under Section 25.195.
The opinion said that S.B. 7 did not make any specific information confidential; rather, the finding explained the purpose of specific confidentiality provisions in Utilities Code Chapter 39 and that the Public Utility Commission keep confidential information collected for certain purposes. None of these provisions apply to information collected or used by a private appraisal firm or appraisal district in conjunction with the appraisal of property, the opinion held.
The opinion also held that Government Code Section 552.131, recently renumbered as Section 552.133(2) provided a new exception to the Public Information Act’s requirement that information be disclosed to the public for public power utility information and records reasonably related to a competitive matter. This provision appeared to address information in the possession of a public power utility rather than information relating to a utility in the possession of a private appraisal firm or appraisal district. Furthermore, it provided an exception to the public’s right of access under the Public Information Act; it did not address a property owner’s special right of access to information under Section 25.195.
