34 TAC §9.109
The Comptroller of Public Accounts adopts new §9.109
concerning procedures for protesting preliminary findings of taxable value,
with changes to the proposed text as published in the November 12, 1996,
issue of the
Texas Register
(21 TexReg 11089).
This new section replaces 34 TAC §9.1 through §9.14, concerning
the same subject matters, which are being repealed in order that they can
be adopted under Title 34, Part I, Chapter 9, Subchapter A. The new section
is being adopted to make the rules easier to use, to conform to current agency
practice, and to make changes in appeal procedures.
The new section sets forth how the Comptroller of Public Accounts shall
provide procedures for protesting preliminary findings of taxable value as
provided by the Government Code, §403.302(f) or (g) and §403.303,
and the Tax Code, §5.10, in the manner required by law.
Comments were received from an attorney suggesting the deletion of the
five-day advance submission requirement for requesting an extension of time
to file a petition in subsection (d)(2) of this section and for requesting
the postponement of a hearing in subsection (h)(4) of this section. The comptroller
is adding language to both subsections to allow a waiver of the five-day
requirement on a case by case basis for good cause, such as serious illness
or other circumstances not within the petitioner's control.
This attorney also commented that the rule should not make admissions,
proposals, and offers made in the compromise of disputed issues, inadmissible
in a protest hearing. The comptroller did not make this change because this
provision is commonly used in administrative hearings to promote the settlement
process.
The attorney and two school districts commented that the comptroller should
establish a discovery process for use in its property value study protest
hearings. The comptroller did not make the requested change because the property
value study protest process takes place within a very short time frame. The
protest period starts February 1 of each year and must end before July 1
of the same year. This time frame is too short to provide for a discovery
process. The comptroller routinely provides summary evidence supporting the
study to the independent school districts (ISDs) and county appraisal districts
(CADs) on or before February 1. In addition, the comptroller routinely makes
evidence available for inspection at a preliminary resolution conference.
The attorney also commented that the proposed rule should not require the
protest petition to specify requested changes and state how the changes would
improve the property value study's accuracy because the statute does not
require this degree of specificity. The law governing property value study
protest hearings charges the comptroller with the responsibility to adopt
procedural rules governing the conduct of protest hearings, "the rules shall
provide the requirements for submitting a petition initiating a protest"
(Government Code, §403.303(c)). Because the law gives the comptroller
the authority to specify the contents of a protest petition and the comptroller
has the burden to prove the accuracy of the findings (Government Code, §403.303(b)),
it is reasonable to require the petitioner to state specifically how the
requested changes will make the study findings more accurate. The comptroller
did not make the suggested changes.
An attorney and two independent school districts commented that changes
to the number of days to file an exception from working days to calendar
days in subsection (k)(1) of this section would be adverse to the school
districts and suggested changing the rule to provide more time. To accommodate
the independent school districts and county appraisal districts and still
certify the changes to the preliminary findings to the commissioner of education
in a timely manner, the comptroller is changing subsection (j)(2) of this
section to provide that the comptroller will either fax the decision to the
petitioner's agent or have it delivered to the agent by overnight mail. This
change will insure that the petitioner's time to respond to the decision
is not shortened by postal service delays, while also insuring that the comptroller
is able to certify its final findings to the commissioner of education in
a timely manner.
Two independent school districts commented that the comptroller should
permit a school district to protest the denial of an audit request. The comptroller
declines to make the suggested change because the law gives the comptroller
discretion to accept or deny an audit request. The section as proposed retains
the discretion allowed the comptroller by law.
The new section is adopted under the Government Code, §403.303(e),
which provides the comptroller the authority to adopt rules governing protests
of preliminary findings of taxable value.
The new section implements the Government Code, §403.302 and §403.303,
and the Tax Code, §5.10.
§9.109. Procedures for Protesting Preliminary Findings of Taxable Value.
(a)
Definitions. The following words and terms, when used in
this subchapter, shall have the following meanings, unless the context clearly
indicates otherwise.
(1)
Agent - The individual that the petitioner is required
to designate in the petition to perform the following activities on behalf
of the petitioner:
(A)
receive and act on all notices, orders, decisions, exceptions,
replies to exceptions, and any other communications regarding the petitioner's
protest;
(B)
resolve any matter raised in petitioner's petition;
(C)
argue and present evidence timely submitted with the petition
at petitioner's protest hearing, unless agent designates in writing another
individual to argue and present timely submitted evidence; and
(D)
any other action required of petitioner.
(2)
Appraisal district measures - The comptroller's
measures of the degree of uniformity and median level of appraisal of an
appraisal district made under the Tax Code, §5.10.
(3)
Decision.
(A)
Proposed decision - An official finding made by the hearing
examiner concerning a protest of preliminary findings of taxable value, subject
to filing of exceptions by any party.
(B)
Final decision - An official finding made by the hearing
examiner and signed by the Deputy Comptroller if a written exception is filed
by the petitioner. A proposed decision may also become final without the
Deputy Comptroller's signature, if no exceptions to that proposed decision
are timely filed.
(4)
District - A school district. District does not
include an appraisal district.
(5)
Person - Any individual, partnership, corporation,
association, governmental subdivision, or public or private organization.
(6)
Petition - The document and supporting evidence filed
by petitioner indicating disagreement with the comptroller's preliminary
findings or appraisal district measures.
(7)
Petitioner - A school superintendent, chief appraiser
or eligible property owner who submits a petition seeking redetermination
of the comptroller's preliminary findings or appraisal district measures.
(8)
Preliminary findings - The comptroller's findings
of district property value delivered to a district and certified to the commissioner
of education under the Government Code, §403.302(f) or (g).
(9)
Protest - A disagreement by a district, property owner,
or appraisal district with the comptroller's preliminary findings or appraisal
district measures initiated by timely filing the petition required by subsection
(f) of this section.
(10)
Ratio study - A study designed to evaluate appraisal
performance through a comparison of appraised values made for tax purposes
with independent estimates of market value based either on sales prices or
independent appraisals.
(b)
Intent and scope of protest rule. The protest rule is intended
to provide a petitioner with a clear process for resolving a disagreement
with the Comptroller of Public Account's preliminary findings of property
value certified to the commissioner of education pursuant to the Government
Code, §403.302(f) or (g), and the measures of degree of uniformity and
the median level of appraisal made pursuant to the Tax Code, §5.10.
This rule governs all aspects of a preliminary findings or appraisal district
measures protest.
(c)
Construction of protest rule. Rules concerning protests
of the preliminary findings of property value certified to the commissioner
of education pursuant to the Government Code, §403.302(f) or (g) and
the measures of degree of uniformity and the median level of appraisals made
pursuant to the Tax Code, §5.10, will be reasonably construed in the
rule's total context and in a manner providing a fair decision for every
protest. Unless the context clearly indicates otherwise, in this rule, the
term "petitioner" includes petitioner's agent.
(d)
General provisions.
(1)
All petitions and other documents related to a protest
of the comptroller's preliminary findings or appraisal district measures
shall be filed with the Comptroller of Public Accounts of the State of Texas,
Property Tax Division manager. No document or petition is filed until actually
received. However, any petition including supporting evidence is timely filed
if it is sent to the Property Tax Division manager by:
(A)
first-class United States mail in a properly addressed
and stamped envelope or wrapper, and the envelope or wrapper exhibits a legible
postmark affixed by the United States Postal Service showing that the petition
including supporting evidence was mailed on or before the last day for filing;
or
(B)
an express mail corporation in a properly addressed envelope
or wrapper, and the envelope or wrapper exhibits a legible date showing that
the petition including supporting evidence was delivered to the express mail
corporation for delivery on or before the last day for filing; or
(C)
fax received on or before the last day for filing if the
petition including supporting evidence, is under 10 pages in content, the
original is mailed within 3 days of the fax and all procedures for submitting
a protest have been followed.
(2)
An extension of time shall be requested in writing
five days in advance of the original deadline for which the extension is
requested. No more than one extension during an appeals period may be granted
for each petitioner. An extension may not extend the deadline for more than
ten days. An extension shall be granted only by the hearing examiner for
good cause shown, and if the reason for the extension is not the petitioner's
neglect, indifference, or lack of diligence. Good cause does not include
a claim that the time periods established in this rule are too short to meet
the deadline. If requested in writing by the petitioner and for good cause
shown, the hearing examiner may waive the requirement that the request for
the extension be made five days in advance of the deadline.
(3)
In computing a period of time, the period begins on
the day after the act or event in question and ends on the last day of the
time period. If the last day of the time period is a Saturday, Sunday, or
state or federal legal holiday, the period of time runs until the end of
the first day which is neither a Saturday, Sunday, or state or federal legal
holiday.
(4)
The protest hearing will be conducted by a hearing
examiner.
(5)
Before a scheduled protest hearing the comptroller
or a petitioner may request a preliminary conference to clarify the issues
or resolve the protest. If the request is accepted, the conference shall
be scheduled during business hours at the offices of the comptroller or at
a time mutually agreeable to the comptroller and the petitioner. Admissions,
proposals, or offers made in the compromise of disputed issues in a preliminary
conference may not be admitted in a hearing. A hearing examiner may not attend
a preliminary conference.
(6)
An error in the comptroller's preliminary findings
caused by an error in a district's annual report of property value or by
a change in a district's certified tax roll may be corrected by timely filing
a petition and otherwise complying with the requirements of this section.
(7)
A district shall send notice of its protest to each
appraisal district that appraises property for the district. An appraisal
district shall send notice of its protest to each district that participates
in the appraisal district. The district's or appraisal district's petition
shall contain a certification that a copy of its petition was delivered as
required by this subsection.
(8)
A property owner may contact the Property Tax Division
manager for information concerning the districts or appraisal districts that
have filed a petition as required by this section. A district or appraisal
district may contact the Property Tax Division manager for information concerning
property owners that have filed a petition as required by this section.
(9)
During the conduct of a protest hearing, a petitioner
or a comptroller employee may present evidence not submitted prior to the
deadline for filing the protest petition if the evidence is requested and
obtained by a comptroller employee pursuant to subsection (i)(5) of this
section, after the deadline to file a petition has passed and before the
date set for the petitioner's protest hearing.
(10)
A comptroller employee may present evidence, gathered
during the conduct of the property value study or during the comptroller's
review of the petitioner's protest, during a hearing on the petitioner's
protest.
(11)
At any time before the date final changes in the
preliminary findings are certified to the commissioner of education, the
comptroller may certify to the commissioner of education amended preliminary
findings. If the comptroller certifies amended preliminary findings that
are adverse to the district, the appraisal district's, property owner's,
and district's time to protest begins to run on the date the amended preliminary
findings are certified. An amended preliminary finding is made when the comptroller's
finding of property value for a district is delivered to a district and certified
to the commissioner of education between the date preliminary findings for
the district are originally certified and final certification of changes
in preliminary findings.
(12)
A petition shall show the petitioner's name and address,
designate the petitioner's agent, and list for each category of property
the grounds for objection to the preliminary findings for that category.
The grounds for objection shall list by category specific changes that the
petitioner alleges would improve the accuracy of the taxable value finding
or appraisal district measures, and shall provide the reason that each change
will make the findings more accurate. A petition that does not clearly specify
by category of property the specific changes that petitioner alleges would
improve the accuracy of the taxable finding or appraisal district measures
does not adequately specify the grounds for objection as required by Government
Code, §403.303(a). The petition shall include the following information:
(A)
all documentary evidence, placed in order by category,
necessary to support the factual and legal contentions made in the petition;
and
(B)
the value petitioner claims is correct.
(13)
A petition must be signed by:
(A)
the superintendent of the district if it is a petition
filed by a school district; or
(B)
the property owner or the property owner's agent if it
is a petition filed by a property owner; or
(C)
the chief appraiser of the appraisal district, if it is
a petition filed by an appraisal district.
(14)
The petition must contain a statement by the
person signing the petition that, to the best of the person's knowledge,
the evidence contained in the petition is true and correct.
(15)
In a protest of the comptroller's preliminary findings,
the comptroller has the burden of proving by a preponderance of the evidence
that the comptroller used appraisal, statistical compilation, and analysis
techniques, generally accepted as an appropriate method for the conduct of
a ratio study by organizations setting recognized standards for the conduct
of a ratio study, to reach a correct value for a district included in the
property value study.
(16)
The comptroller may, on the comptroller's own motion,
grant an extension of time for the limited purpose of correcting technical
errors or omissions in a timely filed protest petition. Petitioner's failure
to submit grounds for objection or all documentary evidence necessary to
support the factual and legal contentions made in the petition is not a technical
error or omission.
(e)
Who may protest.
(1)
A district may protest the preliminary findings of its
taxable value.
(2)
A district may protest the preliminary findings of
taxable value of an audit within the district.
(3)
An owner of property included in a sample used by
the comptroller to determine the taxable value of a category of property
in a district may protest the comptroller's preliminary findings of value
if the total ad valorem tax liability on the owner's properties included
in the category sample for the district is $100,000 or more.
(4)
An appraisal district may protest the comptroller's
measures, made under the Tax Code, §5.10, of the level and uniformity
of property appraisals within the district.
(5)
A protest filed by a property owner or an appraisal
district will not be considered for any purposes to be a protest filed by
a district.
(f)
Filing of a protest. A petition for a protest of the preliminary
findings of taxable value or measures of degree of uniformity or median level
of appraisal must be filed within 40 days after the date the comptroller
certifies preliminary findings of district taxable value to the commissioner
of education. A petition for a protest of the preliminary findings of taxable
value of an audit must be filed within 40 days of the date the district received
the preliminary findings of taxable value. Except as provided by subsection
(d)(10) or (i)(5) of this section, no additional evidence may be submitted
after the deadline for filing the petition.
(g)
Scheduling a protest hearing. The comptroller shall deliver
notice of the date, time, and place fixed for a hearing to each petitioner.
The notice must be delivered not later than ten days before the date of the
hearing.
(h)
Hearing examiner's powers.
(1)
The hearing examiner shall conduct a protest hearing in
a manner insuring fairness, the reliability of evidence, and the timely completion
of the hearing. The hearing examiner shall have the authority necessary to
receive and consider all evidence, propose decisions, consider exceptions
and replies to exceptions, and amend a proposed decision. The hearing examiner's
authority includes, but is not limited to, the following:
(A)
establish the comptroller's jurisdiction concerning the
protest, including whether a timely protest has been filed or whether an
extension of time should be granted;
(B)
set hearing dates;
(C)
rule on motions and the admissibility of evidence;
(D)
designate parties and establish the order of presentation
of evidence;
(E)
consolidate related protests;
(F)
conduct a single hearing that provides for:
(i)
participation by the affected district(s), appraisal district,
and any property owner that has filed a valid and timely petition, if the
hearing concerns preliminary findings of taxable value or the degree of uniformity
and median level of appraisal; or
(ii)
participation by the affected district(s) and the commissioner
of education, if the hearing concerns the preliminary findings of an audit
of a district's taxable property value;
(G)
conduct hearings in an orderly manner;
(H)
provide for hearings by written submission;
(I)
administer oaths to all persons presenting testimony;
(J)
examine witnesses and comment on the evidence;
(K)
insure that evidence, argument, and testimony are introduced
and presented expeditiously;
(L)
refuse to hear arguments that are repetitious, not confined
to matters raised in the petition, not related to the evidence or that constitute
mere personal criticism;
(M)
accept and note any petitioner's waiver of any right granted
by this rule;
(N)
limit each hearing to one hour for presentation of evidence
and argument or extend the one-hour time limit in the interest of a full
and fair hearing; and
(O)
exercise any other powers necessary or convenient to carry
out the hearing examiner's responsibilities and to insure timely certification
of changes in preliminary findings to the commissioner of education.
(2)
The hearing examiner may take official notice
of any matter that trial judges may judicially notice and of facts within
the hearing examiner's personal knowledge or specialized experience. Petitioners
in a protest in which official notice is taken shall have an opportunity
to contest the matter.
(3)
The hearing examiner may entertain motions for dismissal
at any time for any of the following reasons:
(A)
failure to prosecute;
(B)
unnecessary duplication of proceedings or res judicata;
(C)
withdrawal of protest;
(D)
moot questions or obsolete petition;
(E)
failure to certify that notice of protest was filed as
required by subsection (d)(1) of this section or failure to actually file
notice as required by subsection (d)(1) of this section; or
(F)
the result of an appraisal district protest is adverse
to a district.
(4)
The hearing examiner may grant a request to postpone
a protest hearing if good cause is shown and doing so would not prevent timely
certification of changes in the preliminary findings to the commissioner
of education. A request to postpone must be in writing, show good cause for
the postponement, and be delivered five days before the date the protest
hearing is scheduled to begin. Good cause does not include a claim that the
time periods established in this rule are too short to meet the deadline.
If requested in writing by the petitioner and for good cause shown, the hearing
examiner may waive the requirement that the request for postponement be made
five days in advance of the deadline.
(5)
The hearing examiner shall determine the admissibility
of the evidence. Any party may object to the admission of evidence and the
objection will be ruled on and noted on the record. The hearing examiner
may exclude irrelevant, immaterial, or unduly repetitious evidence. The hearing
examiner may receive any part of the evidence in writing.
(6)
The hearing examiner in a protest may not communicate
outside a protest hearing, directly or indirectly, with any agency, person,
petitioner or petitioner's agent regarding any issue of fact or law relating
to the protest unless all petitioners in the protest have notice and opportunity
to participate, except that the hearing examiner may communicate ex parte
with comptroller employees to use the comptroller's special skills to evaluate
the evidence if the employee will not participate in the protest hearing,
has not been involved in preparing for the hearing, and has not been involved
in conducting the particular property value study under protest.
(i)
Conduct of hearing.
(1)
The hearing examiner shall convene a hearing for a protest.
(2)
All protests heard by the hearing examiner shall be
recorded on audio tape. A petitioner will be provided a copy of the recording
after a written request and payment of a cost-based fee. A petitioner may
at any time make arrangements for and bear the cost of having a hearing recorded
and transcribed by a court reporter, provided the comptroller's staff timely
receives a copy of the transcript.
(3)
All proceedings are open to the public and are held
in Austin, unless the hearing examiner designates another place for the hearing.
The hearing examiner may close a hearing, on the hearing examiner's own motion
or on the motion of any party, if confidential information may be disclosed
during the hearing.
(4)
A petitioner may designate in writing one or more
individuals to present argument and evidence timely submitted with the petition.
(5)
If a comptroller employee has requested in writing
information, materials, sales, or documentary evidence of any type from the
appraisal district, property owner, or district and any of these materials
are not provided to the comptroller's employee within ten working days of
the request, the materials that were not provided shall be inadmissible during
the conduct of a protest hearing for a petitioner who failed to provide the
materials. The comptroller may require that information requests be supplemented.
(6)
Each petitioner may present argument on any matter
raised by the petition. Each petitioner may offer oral argument at the hearing.
Argument shall be confined to the evidence and to arguments of other parties.
Admissions, proposals, or offers made in the compromise of disputed issues
in a preliminary conference may not be admitted in a hearing.
(7)
No more than one representative for each petitioner
or aligned group of petitioners shall be heard in the protest hearing on
any petition except on leave of the hearing examiner. An agent may designate,
and the hearing examiner may approve, a reasonable number of individuals
to present argument and timely submitted evidence. Nothing in this subsection
limits the presentation of evidence through witness testimony.
(8)
The hearing examiner shall establish the order of
proceeding, and is responsible for closing the record.
(j)
Proposed decision.
(1)
The hearing examiner, hearing examiner's designee, or a
comptroller employee who has read the record shall prepare a proposed decision,
which shall include a statement of the reasons for the proposed decision.
(2)
The hearing examiner shall serve the proposed decision
on the petitioner by facsimile machine, if available, or by using an overnight
mail delivery service.
(k)
Exceptions to proposed decision.
(1)
Unless the petitioner has waived the right of review of
the proposed decision, any party adversely affected by the proposal may,
within ten days after the date the proposed decision is sent by facsimile
machine or delivered to an overnight delivery service, file exceptions by
delivering the original documents to the hearing examiner. Replies to exceptions
shall be filed in the same manner within 20 days after the proposal for decision
is sent by facsimile machine or delivered to an overnight delivery service.
Copies of all exceptions and replies shall be served promptly on the examiner
and on all other parties in the protest with certification of service furnished
to the hearing examiner. Failure to provide copies to all other parties in
the protest and to the hearing examiner with certification of service is
grounds for withholding consideration of the written exceptions.
(2)
After consideration of the exceptions and replies,
the hearing examiner may issue an amended decision without again serving
the decision on the petitioner.
(l)
Final decision.
(1)
A proposed decision is final ten days after it is delivered
to the parties to the protest, unless exceptions to the proposed decision
are filed, in which case the decision becomes final, in either its original
or amended form, on the date signed by the Deputy Comptroller.
(2)
A final decision ordering changes to preliminary findings
made as a result of a school district's protest will change the preliminary
findings for the appraisal district in which the school district is located.
(3)
A final decision ordering changes to preliminary findings
made as a result of an appraisal district's protest will change the preliminary
findings for the school districts participating in the appraisal district.
(4)
A final decision ordering changes to preliminary values
made as a result of a property owner's or district's protest will change
the measures for an appraisal district.
(5)
A final decision ordering changes to preliminary findings
made as a result of a property owner's protest will change the preliminary
findings for the school district where the property which is the subject
of the protest is located. A property owner's preliminary value may be changed
by a protest brought by a school district or appraisal district.
(6)
A decision concerning a protest of preliminary findings
of taxable value of an audit must be decided by written order within 120
days of the date the school district received the preliminary findings.
(7)
The hearing examiner shall deliver written notice
of the final decision to each protesting petitioner.
(m)
Certification of changes to preliminary findings. Unless
the comptroller determines that circumstances require otherwise, the comptroller
shall certify to the commissioner of education all changes to the preliminary
findings on or before July 1 of the year following the year of the study.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Issued in Austin, Texas, on January 10, 1997.
TRD-9700447
Martin Cherry
Chief, General Law
Comptroller of Public Accounts
Effective date: January 31, 1997
Proposal publication date: November 12, 1996
For further information, please call: (512) 463-3699