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Texas - Improving Accountability in Appeals

by Kenneth Graeber, Houston, November 2013


A new Texas law (House Bill 585) makes a variety of changes to the state Tax Code in hopes of improving accountability in the appraisal appeal system.


Specifically, HB 585 deals with how members of Appraisal Review Boards (ARB) are chosen in the state's largest counties. It spells out procedures that all ARBs must follow. And it put a higher burden of proof on appraisal districts after taxpayers win a previous-year appeal.


Appointments of ARB Members


In most Texas counties, ARB members are appointed by the appraisal district's Board of Directors. However, potential problems can arise when members feel beholden to the people who appointed them on the appraisal side.


HB 585 requires that ARB members be appointed by the local administrative district judge in counties with a population of more than 120,000. Sponsors say that since administrative judges are completely separate and independent of county appraisal districts, there can be no justifiable perception of bias when ARB appointments are made.


Harris and Fort Bend Counties have conducted pilot programs allowing judges to appoint ARB members. The tests in both counties were met with a positive response from taxpayers.


The new law also enacts criminal penalties for improper communication relating to the appointment of ARB members.


Model for Hearing Procedures


In order make appeal hearings more uniform throughout the state, HB 585 expands the comptroller's authority to develop a procedural model for ARBs to follow based on the county's population, number of protests filed, and other factors. This should create more consistency in how evidence is treated in appeals.


The comptroller will also develop procedures for taxpayers to register complaints about the system, which will be published in a report. Any public comments of repeated bias or misconduct can result in the removal of an ARB member.


Burden of Proof


Another issue addressed by HB 585 gives property owners, who successfully appeal their valuation, the upper hand in a subsequent appeal the following year.


If the property value is lowered on appeal and if the property owner delivers "sufficient information," the appraisal district must meet a higher standard of proof in a judicial review. Rather than just establishing the value by "a preponderance of evidence," the appraisal district must prove its case with "clear and convincing" evidence. When an appraisal district fails to meet this standard, the property owner wins.