Texas Disposal Systems Landfill, Inc. v. Travis Central Appraisal District, by and Through Marya Crigler, Acting in Her Official Capacity as Chief Appraiser of Travis Central Appraisal District ( 2024 )

Supreme Court of Texas
══════════
No. 22-0620
══════════
Texas Disposal Systems Landfill, Inc.,
Petitioner,
v.
Travis Central Appraisal District, by and through Marya Crigler,
acting in her official capacity as Chief Appraiser of Travis
Central Appraisal District,
Respondent
═══════════════════════════════════════
On Petition for Review from the
Court of Appeals for the Third District of Texas
═══════════════════════════════════════
JUSTICE BOYD, joined by Justice Devine, dissenting in part.
Section 42.02(a)(1) of the Texas Tax Code authorizes an appraisal
district’s chief appraiser to appeal an appraisal review board’s order
determining a property owner’s protest by filing suit against the
property owner in district court. The parties here dispute the scope of
the district court’s authority over that appeal. Agreeing with the
property owner, the Court concludes the statute “narrows” the trial
court’s review “to the protest the appraisal review board heard.” Ante at
10. Because the property owner protested and prevailed only on the
ground that the appraisal was not equal and uniform, the Court
concludes the chief appraiser cannot appeal the appraisal review board’s
new appraisal on the ground that it fails to reflect the property’s market
value. Id. The Court also holds, however, that this limitation is not
jurisdictional. Id. at 12. Because the chief appraiser appealed and
asserted a ground the property owner did not raise in the protest, the
district court must dismiss that claim, but not because it lacks
jurisdiction. Id. at 15.
I disagree with the Court on both points. Section 42.02(a)(1)
delineates a district court’s jurisdiction because it establishes and
defines a chief appraiser’s right to seek judicial review of an
administrative agency’s order. It does not merely constitute or impose a
“procedural” prerequisite or requirement for pursuing the appeal. But it
does not restrict the district court’s jurisdiction to grounds the property
owner raised in the protest. It authorizes an appeal from the appraisal
review board’s order, not from the property owner’s protest. And other
provisions—of both the Tax Code and the Texas Constitution—require
the district court to resolve all issues raised in the pleadings and ensure
that the appraised value is both equal and uniform and based on the
property’s market value.
I thus join the Court’s judgment to the extent it affirms the court
of appeals’ judgment. But to the extent the Court’s judgment prohibits
the district court from addressing the chief appraiser’s claim that the
2
appraisal review board’s appraisal fails to reflect the property’s market
value, I respectfully dissent.1
I.
Jurisdictional Limitation
The chief appraiser of each Texas appraisal district is responsible
for appraising all taxable property within the district for ad valorem tax
purposes. TEX. TAX. CODE §§ 6.01, 25.01(a). A property owner who
disagrees with the chief appraiser’s appraisal may file a protest before
the local appraisal review board (ARB). Id. § 41.41(a). A protest may
challenge the “appraised or market value,” an “unequal appraisal,” or
1 The trial court granted the property owner’s plea to the jurisdiction in
this case because the court concluded that (1) any limit the Tax Code places on
a trial court’s authority over an appeal from an appraisal review board’s order
is jurisdictional, and (2) the Tax Code limits a trial court’s authority over such
an appeal to the ground the property owner raised in the protest. The court of
appeals reversed and remanded the case to the trial court, agreeing that (1)
any limit the Tax Code places on the trial court’s authority is jurisdictional,
but concluding that (2) the Tax Code does not limit judicial review to the
ground the property owner asserted in the protest. See 684 S.W.3d 470, 477–
78 (Tex. App.—Austin 2022). The Court today affirms the court of appeal’s
judgment but disagrees with its reasoning. It disagrees with both lower courts’
conclusion that the Code’s limit is jurisdictional, but it agrees with the trial
court that the Code limits review to the ground asserted in the protest. Ante at
19. I agree with the court of appeals on both points.
Importantly, however, the Court ultimately concedes that, although the
Code limits the trial court’s authority to a review of the ground asserted in the
protest, it must nevertheless accept evidence of fair market value and consider
and address “all issues of fact” and all “new arguments and evidence” to arrive
at a de novo determination of the proper appraised value. Id. at 17 n.58. And
the Court further acknowledges that the property’s equal and uniform value
must “approach the property’s market value,” id. at 16, so a constitutionally
permissible de novo valuation necessarily must consider both. The parties and
lower courts should be careful not to miss this point on remand and in future
cases.
3
several other specified errors. Id. § 41.41(a).2 When an owner protests
an appraisal, the ARB must conduct an evidentiary hearing and then
announce its determination through a written order. Id. §§ 41.45, .47(a).
If the ARB “finds that the appraisal records are incorrect in some respect
raised by the protest,” it must “correct the appraisal records by changing
the appraised value” or by making “other changes in the appraisal
records that are necessary to conform the records to the requirements of
law.” Id. § 41.47(b).
Both the property owner and the chief appraiser are “entitled to
appeal . . . an order of the [ARB] determining” a property owner’s
“protest.” Id. §§ 42.01(a)(1)(A), .02(a)(1). To appeal, the party must file a
petition for review in a local district court. Id. §§ 42.21, .22. The district
court must review the ARB order “by trial de novo,” resolving “all issues
of fact and law raised by the pleadings in the manner applicable to civil
suits generally.” Id. § 42.23(a).
Texas Disposal Systems Landfill (TDS Landfill) and Travis
Central Appraisal District (Travis CAD) dispute the extent to which
Section 42.02(a)(1)—which, to repeat, entitles a chief appraiser “to
appeal an order of the [ARB] determining” a property owner’s
2 A protest may also challenge the property’s inclusion on the appraisal
records, the denial of a partial exemption, a determination that the property
does not qualify for certain appraisal limitations, a determination that the
property does not qualify for appraisal, the identification of the taxing units in
which the property is taxable, a determination of who owns the property, a
determination that the use of land has changed, a failure to give the property
owner a notice the owner is entitled to receive, or “any other action of the chief
appraiser, appraisal district, or appraisal review board that applies to and
adversely affects the property owner.” TEX. TAX CODE §§ 41.41(a), .411.
4
“protest”—limits the scope of the appeal it permits.3 But they agree that
the limits—whatever they are—are jurisdictional.4 So did the trial court
and the court of appeals in this case, and so do the twenty-four
interested parties who submitted amicus curiae briefs, including eleven
other appraisal districts,5 eight property owners or entities representing
property owners,6 three tax-policy research organizations,7 and two
Texas legislators.8 Despite the fact that no one in this case has raised
3 Because this case involves a chief appraiser’s (as opposed to a property
owner’s) appeal from an ARB order, the parties here disagree about the extent
to which Section 42.02 limits the scope of the appeal. But Sections 42.01 (which
grants a property owner a right to appeal) and 42.02 (which grants a chief
appraiser a right to appeal) use identical language to describe the scope of the
authorized appeal: an “appeal” from “an order of the [ARB] determining a
[property owner’s] protest.” Id. §§ 42.01(a)(1)(A), .02(a)(1). So whatever limit
this language imposes would apply to an appeal by a property owner as well as
an appeal by a chief appraiser.
4 Both parties agree that Section 42.02(a) establishes and defines the
scope of the district court’s jurisdiction.
5 Bexar Appraisal District, Denton Central Appraisal District, El Paso
Central Appraisal District, Gillespie County Central Appraisal District,
Gonzalez County Appraisal District, Harris Central Appraisal District,
Henderson County Appraisal District, Matagorda County Appraisal District,
Montgomery Central Appraisal District (through its Chief Appraiser, Janet
Jennings-Doyle), San Patricio County Appraisal District, and Williamson
Central Appraisal District.
Christopher Investment Company, Omni Hotels & Resorts, Texas
6
Apartment Association, Texas Association of Manufacturers, Texas Building
Owners and Managers Association, Texas Realtors, Valero Refining-Texas, LP,
and Walgreen Co.
Texas Taxpayers and Research Association, Texas Public Policy
7
Foundation, and Texas Association of Property Tax Professionals.
8 Texas Senator Paul Bettencourt and Texas Representative Hugh D.
Shine.
5
the issue, the Court holds sua sponte that “the limits the Tax Code
imposes” on an appeal from an ARB’s order determining a protest “are
not jurisdictional.” Ante at 1–2. I agree with the parties, lower courts,
and amici.
The Texas Constitution broadly grants district courts jurisdiction
over all “actions, proceedings, and remedies” unless the Constitution or
“other law” confers jurisdiction on “some other court, tribunal, or
administrative body.” TEX. CONST. art. V, § 8. The Texas Tax Code is an
“other law” that authorizes actions to challenge a chief appraiser’s tax
appraisal, and it grants ARBs exclusive, original jurisdiction over such
actions. Cameron Appraisal Dist. v. Rourk, 194 S.W.3d 501, 502 (Tex.
2006) (per curiam).
When a statute grants exclusive, original jurisdiction over an
action to an administrative agency, district courts lack jurisdiction to
address the claims unless, and only to the extent that, a statute grants
them such jurisdiction. See City of Amarillo v. Hancock, 239 S.W.2d 788,
791 (Tex. 1951). Parties have “no right to judicial review of an
administrative order unless a statute explicitly provides that right or
the order violates a constitutional right.” Hous. Mun. Emps. Pension
Sys. v. Ferrell, 248 S.W.3d 151, 158 (Tex. 2007). A statute that provides
a right to judicial review of an administrative order governs the scope of
that right and of the court’s jurisdiction to decide the dispute. See id. at
159.
As the Court explains today, we have increasingly “embraced the
modern trend of declining to read statutory mandates to be
jurisdictional prohibitions, absent clear indication that failure to comply
6
with the mandate also deprives a court of the power to decide the claim.”
Ante at 10 (emphasis added) (citing Dubai Petroleum Co. v. Kazi, 12
S.W.3d 71, 76 (Tex. 2000)). Construing particular statutes, for example,
we have held that some procedural prerequisites and requirements—
like notice requirements, filing deadlines, venue requirements, and
dismissal deadlines—although mandatory, are not jurisdictional. See,
e.g., Tex. Mut. Ins. Co. v. Chicas, 593 S.W.3d 284, 289 (Tex. 2019); In re
United Servs. Auto. Ass’n, 307 S.W.3d 299, 306–07 (Tex. 2010); City of
DeSoto v. White, 288 S.W.3d 389, 398 (Tex. 2009).
In addressing these types of procedural prerequisites,
requirements, and mandates, we have preferred to hold that they are
not jurisdictional because that holding “strengthen[s] finality and
reduce[s] the possibility of delayed attacks on judgments.” City of
DeSoto, 288 S.W.3d at 394. But in each case, we have acknowledged that
we must construe a statutory provision to be jurisdictional when the
statute demonstrates “that was the Legislature’s clear intent.” Id.; see
In re United Servs. Auto Ass’n, 307 S.W.3d at 304 (“[W]e have been
‘reluctant to conclude that a provision is jurisdictional, absent clear
legislative intent to that effect.’” (emphasis added) (quoting DeSoto, 288
S.W.3d at 393)).
Chapter 42 of the Texas Tax Code imposes numerous procedural
prerequisites, requirements, and mandates on parties who desire to
appeal an ARB order. The chapter also explicitly addresses whether
some (but not all) of these requirements are jurisdictional. As one
example, a property owner who appeals an ARB order must nevertheless
pay the taxes due before the delinquency deadline, in an amount that is
7
the lesser of (1) the amount the owner does not dispute is due, (2) the
amount due under the ARB order being appealed, or (3) the amount that
was due for the preceding tax year. TEX. TAX. CODE § 42.08(b).9 And an
owner who pays under the first option (the amount the owner does not
dispute is due) must file with the appeal a written statement “of the
amount of taxes the property owner proposes to pay.” Id. § 42.08(b-1).
An owner who fails to timely pay the required amount “forfeits the right
to proceed to a final determination of the appeal.” Id. § 42.08(b). But the
statute expressly provides that “[t]he failure to provide” the written
statement of the amount the owner proposes to pay “is not a
jurisdictional error.” Id. § 42.08(b-1) (emphasis added).
As a second example, a party who wishes to appeal an ARB order
must file a petition for review in the district court no later than sixty
days after the party received notice of the ARB’s order. Id. § 42.21(a).
An appeal filed by a chief appraiser must be brought against the
property owner, and an appeal filed by the property owner must be
brought against the appraisal district. Id. § 42.21(b). A party’s failure
“to timely file a petition bars any appeal” under Chapter 42. Id.
§ 42.21(a) (emphasis added). More specifically, the statute expressly
provides that the district court lacks “jurisdiction” over an appeal if
(1) the property was not “the subject of an [ARB] order,” (2) the party
failed to timely file the petition for review, or (3) the petition fails to
provide “sufficient information to identify the property that is the
9 A property owner may be excused from this payment obligation if he
adequately demonstrates that he is financially unable to pay. TEX. TAX. CODE
§ 42.08(b), (d).
8
subject of the petition.” Id. § 42.21(h). But “so long as” these
requirements are satisfied, the property owner’s failure to correctly
identify the plaintiff or describe the property in the petition does not
deprive the court of “jurisdiction” and “may not be the subject of a plea
to the jurisdiction.” Id.
As a third example, the Tax Code expressly recognizes that the
district court lacks “jurisdiction” if the property owner “failed to
exhaust” its administrative remedies before the ARB. Id. § 42.231(b).10
But it expressly permits (though it does not require) the district court to
remand the action to the ARB so that the owner can cure the failure, “in
lieu of dismissing the appeal for lack of jurisdiction.” Id. And if the court
decides to permit a remand to the ARB, the statute allows the parties to
agree to waive the need for remand, subject to the court’s approval, and
10 This is true for any statutorily authorized appeal to the courts from
an administrative agency’s order, absent some statutory provision to the
contrary. See, e.g., CPS Energy v. Elec. Reliability Council of Tex., 671 S.W.3d
605, 617–18 (Tex. 2023) (“If the agency’s exclusive jurisdiction is established,
the claimant must pursue and exhaust all available administrative remedies
before turning to the courts. ‘Until then, the trial court lacks subject-matter
jurisdiction’ and must dismiss the claims with issues that come within the
agency’s exclusive jurisdiction.”) (quoting Forest Oil Corp. v. El Rucio Land &
Cattle Co., 518 S.W.3d 422, 428 (Tex. 2017) (“As a rule, when an agency has
exclusive jurisdiction, a party must exhaust all administrative remedies before
seeking judicial review of the agency’s action. . . . Until then, the trial court
lacks subject-matter jurisdiction and must dismiss the claims within the
agency’s exclusive jurisdiction.”)); Subaru of Am., Inc. v. David McDavid
Nissan, Inc., 84 S.W.3d 212, 221 (Tex. 2002) (“Typically, if an agency has
exclusive jurisdiction, a party must exhaust all administrative remedies before
seeking judicial review of the agency’s action. Until then, the trial court lacks
subject matter jurisdiction and must dismiss the claims within the agency’s
exclusive jurisdiction.” (citing Cash Am. Int’l Inc. v. Bennett, 35 S.W.3d 12, 15
(Tex. 2000))).
9
elect to allow the court to resolve the appeal on the merits despite the
owner’s failure to exhaust its administrative remedies. Id. § 42.231(e).11
As a final example, Chapter 42 also provides that (1) a chief
appraiser may only appeal “[o]n written approval of the board of
directors of the appraisal district,” and (2) if “the protest involved a
determination of the [property’s] appraised or market value,” and the
ARB determined that the property’s value is less than $1 million, the
chief appraiser cannot appeal unless she alleges that the owner or his
representative “committed fraud, made a material misrepresentation,
or presented fraudulent evidence in the [ARB] hearing.” Id.
§ 42.02(a)(1), (b), (c). The statute does not explicitly address whether a
11 The Court suggests that this statutory grant of a right to waive the
exhaustion requirement “signals” that the exhaustion requirement is not
jurisdictional. Ante at 12. This suggestion misreads the statute. The statute
permits the district court to remand the action to the ARB, but if the court
chooses not to remand, it must “dismiss[] the appeal for lack of jurisdiction.”
TEX. TAX. CODE § 42.231(b) (emphasis added). If the court chooses instead to
permit the remand and the parties agree to waive the remand, the waiver is
effective only if the court approves it. Id. § 42.231(e). As the Court notes,
“parties cannot confer jurisdiction by agreement.” Ante at 12 (citing PR Invs.
& Specialty Retailers, Inc. v. State, 251 S.W.3d 472, 476 & n.17 (Tex. 2008)).
True enough, but the Legislature can confer it by statute, Fed. Underwriters
Exch. v. Pugh, 174 S.W.2d 598, 600 (Tex. 1943) (“Jurisdiction of the subject
matter exists by operation of law only. . . .”), and nothing prohibits the
Legislature from permitting parties to waive a prerequisite that would
otherwise constitute a jurisdictional hurdle. In other words, the Legislature—
exercising its constitutional authority to define the courts’ jurisdiction—has
granted jurisdiction to the district court only if (1) the appealing party
exhausted its administrative remedies before the ARB, (2) the district court
remands to allow a party to cure its failure to exhaust, or (3) the district court
approves the parties’ agreement to waive the necessity of a remand. If none of
these requirements is satisfied, the district court lacks jurisdiction.
10
chief appraiser’s failure to satisfy these procedural prerequisites
deprives the district court of jurisdiction.12
As these examples illustrate, Chapter 42 imposes numerous
procedural prerequisites, requirements, and mandates on a party who
desires to appeal an ARB order. But none of these procedural
prerequisites are at issue in this case. In fact, no procedural
prerequisites, requirements, or mandates are at issue in this case. What
is at issue is the meaning of Section 42.02(a)(1): A chief appraiser is
“entitled to appeal an order of the [ARB] determining” a property
owner’s “protest.” Id. § 42.02(a)(1). This provision does not impose
procedural requirements. It describes the “appeal” a chief appraiser is
“entitled” to take.
Chapter 42 indisputably defines and limits the scope of an appeal
the parties are entitled to take from an ARB order. Property owners, for
example, are “entitled to appeal” an “order of the [ARB] determining”:
(A) a protest by the property owner . . . ;
(B) a motion [to correct or change the appraisal roll]
filed under Section 25.25;
(C) that the property owner has forfeited the right to a
final determination [by] failing to comply with the
prepayment requirements . . . ;
12 The parties agree that these requirements are not at issue here as
TDS Landfill has abandoned any argument that the chief appraiser failed to
obtain written approval from the appraisal district’s board of directors and the
parties agree that the property at issue was appraised at an amount greater
than $1 million.
11
(D) eligibility for a refund requested under Section
23.1243; or
(E) that the [ARB] lacks jurisdiction . . . because the
property owner failed to comply with a requirement
of . . . Chapter 41, or Section 25.25 . . . .
Id. § 42.01(a)(1). Chief appraisers, by contrast, are only “entitled to
appeal an order of the [ARB] determining: (1) a taxpayer protest . . . ; or
(2) a taxpayer’s motion to change the appraisal roll filed under Section
25.25.” Id. § 42.02(a).
The statute limits the parties’ right to appeal to ARB orders that
determine these specific matters. But these limits are nothing like the
statute’s procedural prerequisites, requirements, and mandates.
Sections 42.01(a)(1)(A) and 42.02(a)(1) define a district court’s
jurisdiction over an appeal from an ARB order because they do not
merely govern “the manner of judicial review;” they “grant a right of
judicial review.” Cont’l Cas. Ins. Co. v. Functional Restoration Assocs.,
19 S.W.3d 393, 400 (Tex. 2000). Or as the United States Supreme Court
recently described the distinction, they do not merely seek “to promote
the orderly progress of litigation;” they “demarcate a court’s power.”
Harrow v. Dept. of Def., 144 S. Ct. 1178, 1183 (2024) (quoting Henderson
v. Shinseki, 562 U. S. 428, 435 (2011)).
Because Sections 42.01(a)(1)(A) and 42.02(a)(1) grant a right of
judicial review of an ARB order, define the types of appeals the parties
are permitted to take, and “demarcate a court’s power” over those
appeals, any limitation they place on the scope of a party’s right to
appeal an ARB order is a legislative limitation on the district court’s
jurisdiction over that appeal. Id.; see Cont’l Cas. Ins., 19 S.W.3d at 405
12
(“[B]ecause the Workers’ Compensation Act does not provide a right of
judicial review, the district court properly dismissed the suit for lack
of jurisdiction.”); Ferrell, 248 S.W.3d at 159 (“Because the Legislature
has not authorized the trial court to grant the relief sought, the trial
court lacks jurisdiction over the case.”). I thus agree with the parties,
lower courts, and amici that Section 42.02(a)(1)’s limitations are
jurisdictional.
II.
Grounds for Appeal
The issue the parties raise in this Court is not whether Section
42.02(a)(1)’s limitations are jurisdictional, but what those limitations
are. Specifically, TDS Landfill contends that, because the only ground it
advanced in its protest to the ARB was that the chief appraiser’s
appraisal was not “equal and uniform,” the chief appraiser cannot
appeal the ARB’s order resolving that protest on the ground that the
ARB’s appraisal does not reflect the property’s “market value.” The
Court agrees, ante at 15, but I do not.
In support of their position, the Court and TDS Landfill rely
primarily on Section 42.02(a)(1)’s reference to the taxpayer’s “protest.”
The Court, for example, states that “[t]he statute authorizes the trial
court to hear an appeal of the protest,” and grants “a de novo
determination of the taxpayer’s protest.” Id. at 10, 15. But that’s simply
not what the statute says. The statute says that a chief appraiser is
“entitled to appeal an order of the [ARB] determining . . . a taxpayer
protest.” TEX. TAX CODE § 42.02(a) (emphasis added). Section 42.02(a)’s
reference in subsection (1) to an ARB order “determining . . . a taxpayer
protest”—like its reference in subsection (2) to an ARB order
13
“determining . . . a taxpayer’s motion to change the appraisal roll”—
describes the types of ARB orders the chief appraiser is entitled to
appeal. It does not restrict the scope of the court’s power to review the
orders it describes.
We recently rejected a very similar contention involving the
permissive-interlocutory-appeal statute in Elephant Insurance Co. v.
Kenyon, 644 S.W.3d 137, 147 (Tex. 2022). That statute authorizes an
interlocutory appeal “from an order that is otherwise unappealable if
‘the order to be appealed involves a controlling question of law’ and if ‘an
immediate appeal from the order may materially advance the ultimate
termination of the litigation.’” Id. (quoting TEX. CIV. PRAC. & REM. CODE
§ 51.014(d)) (emphases added by the Court in Kenyon). Applying that
statute in Kenyon, the court of appeals concluded “that its only
obligation in the permissive appeal was to” decide the “controlling
question of law” by “ascertain[ing] whether” the defendant owed a legal
duty “in the abstract,” and it refused to consider “whether the duty is
applicable to or fairly implicated by the facts and circumstances
presented.” Id. at 143, 147.
We rejected the court’s “disconcertingly cramped view of its
jurisdiction over the appeal” and held that courts must decide
permissive appeals, like “any other appeal,” by “addressing all fairly
included subsidiary issues and ancillary issues pertinent to resolving
the controlling legal issue.” Id. at 147. We explained that, although
“‘involve[ment]’ of a controlling legal issue is essential to securing a
permissive appeal, the statute plainly provides that it is the order (or,
as the case may be, the relevant portion of the order) that is on appeal.”
14
Id. Like the permissive-appeal statute, Section 42.02(a)(1) permits an
appeal from an ARB order, not from a taxpayer’s protest. That the ARB
order “determin[es] . . . a taxpayer protest” is “essential to securing” an
appeal under Sections 42.01(a)(1)(a) and 42.02(a)(1) because that is one
of the types of ARB orders the statute entitles a party to appeal. But “the
statute plainly provides that it is the order,” and not the protest, “that
is on appeal.” Id.
If Section 42.02(a)(1)’s authorization of an “appeal from an [ARB]
order” were not clear enough, numerous other statutory and
constitutional provisions confirm that a district court’s authority to
decide an ARB appeal is not limited to the grounds asserted in the
taxpayer’s protest.
First, several provisions of the Tax Code confirm that the
“subject” of an appeal under Section 42.02(a)(1) is the “appraised value”
of the property at issue, not the grounds on which the property owner
may have protested the valuation. When a property owner protests “the
appraised value of the owner’s property,” and the ARB “finds that the
appraisal records are incorrect in some respect raised by the protest,”
the ARB’s order resolving that protest “must state in the order the
appraised value . . . as finally determined by the [ARB]” and must
“correct the appraisal records by changing the appraised value [as]
necessary to conform the records to the requirements of law.” TEX. TAX.
CODE § 41.47(b), (c). If a chief appraiser elects to appeal the ARB’s order
stating “the appraised value . . . as finally determined by the [ARB],” the
chief appraiser must “indicate where appropriate those entries on the
appraisal records that are subject to the appeal.” Id. § 42.06(d). The
15
“entries” that are “subject to the appeal” in such a case are the entries
that state the “appraised value” of the property at issue. Id. § 25.02
(describing entries included in appraisal records). The subject of the
chief appraiser’s appeal, in other words, is the appraised value as stated
in the ARB’s order, not the grounds on which the property owner
protested the chief appraiser’s appraised value.
Second, several provisions confirm that a district court that
decides a chief appraiser’s appeal must decide all issues raised in the
pleadings in order to determine the appraised value that Texas law
requires. The district court must review the ARB order “by trial de novo,”
resolving “all issues of fact and law raised by the pleadings in the
manner applicable to civil suits generally.” Id. § 42.23 (emphasis added).
As we recently explained, a “trial de novo is ‘[a] new trial on the entire
case—that is, on both questions of fact and issues of law—conducted as
if there had been no trial in the first instance.’” Willacy Cnty. Appraisal
Dist. v. Sebastian Cotton & Grain, Ltd., 555 S.W.3d 29, 50 (Tex. 2018)
(quoting Trial de novo, BLACK’S LAW DICTIONARY (10th ed. 2014)). “A
trial de novo is not confined to the same evidence that was presented
during the administrative phase,” and “in a trial de novo, a court may
consider arguments and evidence that are introduced afresh.” Id.(emphasis added).
The nature of the relief the district court grants after conducting
a de novo trial will vary depending on the issues the pleadings raise, but
in all cases the relief must comply with all requirements of Texas law.
See TEX. TAX. CODE § 42.24. If “the appraised value is at issue,” the
judgment may “fix the appraised value . . . in accordance with the
16
requirements of law.” Id. § 42.24(1). If “inequality in the appraisal . . . is
at issue,” the judgment may “enter the orders necessary to ensure equal
treatment under the law.” Id. § 42.24(2). And in any case, the court may
“enter other orders necessary to preserve rights protected by and impose
duties required by the law.” Id. § 42.24(3).
And third, the Texas Constitution and the Tax Code confirm that
Texas law requires that an appraised value must be both (1) “equal and
uniform,” and (2) based on the property’s “value.” As the Court notes,
ante at 3–4, the Constitution requires that all “[t]axation shall be equal
and uniform,” TEX. CONST. art. VIII, § 1(a), and further provides that
“[n]o property of any kind in this State shall ever be assessed for ad
valorem taxes at a greater value than its fair cash market value,” id.
§ 20. The Court believes that, to “harmonize[] the[se] cumulative
constitutional mandates,” we must conclude that if “the fair market
value of the subject property deviates from its equal and uniform
appraised value,” the property owner is entitled to the benefit of being
taxed at the “lower of the two amounts.” Ante at 16.
But as the Court also acknowledges (although as if only in
passing), see id. at 2, the Constitution does more than merely prohibit
taxation based on an appraisal that exceeds the property’s fair market
value. In addition to that protection, the Constitution affirmatively
requires that all property, “unless exempt as required or permitted by
this Constitution, . . . shall be taxed in proportion to its value, which
shall be ascertained as may be provided by law.” TEX. CONST. art. VIII,
§ 1(b) (emphasis added).
17
Section 1 of Article 8 thus requires that property must be taxed
based on appraisals that are both (1) “equal and uniform” and (2) based
on the property’s “value,” which must be ascertained as provided by law.
EXLP Leasing, LLC v. Galveston Cent. Appraisal Dist., 554 S.W.3d 572,
574 (Tex. 2018) (“The Texas Constitution requires that taxation ‘shall
be equal and uniform’ and that property ‘shall be taxed in
proportion to its value.’”).13 We have already rejected the Court’s
suggestion that the Constitution allows an appraisal that is less than
the property’s value so long as the appraisal is equal and uniform: “A
property tax is equal and uniform only if it is in proportion to property
value.” In re Nestle USA, Inc., 387 S.W.3d 610, 620 (Tex. 2012)
(emphasis added). The Constitution requires that TDS Landfill’s
property be taxed based on an appraisal that is both equal and uniform
and reflects the property’s market value. Bosque Disposal Sys., LLC v.
Parker Cnty. Appraisal Dist., 555 S.W.3d 92, 98 (Tex. 2018) (holding that
Article 8 Section 1(b) “obligated” appraisal district to account for
“market value added to the taxpayers’ real property”).14
13 Section 20 of Article 8, which prohibits taxation based on appraisals
that exceed the property’s fair cash market value, confirms that Section 1(b)
generally prohibits the taxation of property based on a value less than the
market value by expressly granting the Legislature the power to “pass
necessary laws” to authorize a “discount” on taxes owed if the owner pays the
taxes early. TEX. CONST. art VIII, § 1(b). This constitutional authorization of a
discount would not be necessary if the Constitution otherwise permitted the
Legislature to provide for taxation based on appraisals that are less than the
property’s value.
14 Although Section 1(b) does not necessarily require the Legislature to
equate “value” with “market value” for all purposes, see EXLP Leasing, 554
S.W.3d at 576, the Legislature has nevertheless declared that, with limited
18
In light of Section 1(b) of Article 8, Section 42.02(a)(1) would be
unconstitutional if it permitted a district court to fix an appraised value
that is equal and uniform but not based on the property’s market value.
To the extent Section 42.02(a)(1) is ambiguous as to whether it grants
such permission, the canon of constitutional avoidance requires us to
interpret the statute to avoid that constitutional infirmity. See Paxton
v. Longoria, 646 S.W.3d 532, 539 (Tex. 2022).
Fortunately, however, we need not rely on that canon here. By
authorizing an appeal from an ARB’s “order,” TEX. TAX. CODE § 42.02(a),
confirming that the “subject” of the appeal is the “appraised value” of
the property at issue, id. §§ 41.47(b), (c), 42.06(d), requiring the district
court to review the ARB order “by trial de novo,” id. § 42.23(a), and
requiring the district court to grant relief that complies with all
requirements of Texas law, id. § 42.24, the Tax Code can only be
reasonably construed to require the district court to do what the Code
expressly requires the court to do: “try all issues of fact and law raised
by the pleadings” and “fix the appraised value . . . in accordance with
the requirements of law.” Id. §§ 42.23(a), .24(1). Because the chief
exceptions not applicable here, “all taxable property” must be “appraised at its
market value.” TEX. TAX. CODE § 23.01(a). “The market value of property shall
be determined by the application of generally accepted appraisal methods and
techniques,” considering “the individual characteristics that affect the
property’s market value,” id. § 23.01(b), and using either the “cost,” “income,”
or “market data comparison” appraisal method, whichever is “most
appropriate.” Id. § 23.0101. Although the Constitution permits some
“discrepancy between the actual value of the property and the value at which
it is assessed for taxes,” any discrepancy must be “reasonable,” and any
“distinctions in the manner in which market value of property is determined”
must not be “unreasonable, arbitrary, or capricious.” Enron Corp. v. Spring
Indep. Sch. Dist., 922 S.W.2d 931, 935–36 (Tex. 1996).
19
appraiser’s pleadings challenged the ARB’s appraisal on the ground that
it fails to reflect the property’s market value, I conclude that the district
court must resolve that claim regardless of whether TDS Landfill
protested the chief appraiser’s appraisal on that ground.15
III.
Conclusion
For the reasons explained, I conclude that (1) any limitation that
Section 42.02(a)(1) imposes on the scope of a chief appraiser’s appeal
from an ARB order determining a property owner’s protest of an ad
valorem tax appraisal is jurisdictional, and (2) Section 42.02(a)(1) does
not limit the scope of a chief appraiser’s appeal to the grounds the
property owner asserted in its protest to the ARB. I thus concur in the
Court’s judgment affirming the court of appeals’ judgment remanding
the case to the district court, but I respectfully dissent to the extent the
Court’s judgment prohibits the district court from addressing and
resolving the market-value issue on remand.
Jeffrey S. Boyd
Justice
15 It seems worth noting that the chief appraiser’s pleadings in its
appeal to the district court provide the first and only opportunity for the chief
appraiser to raise the market-value issue. The chief appraiser initially
appraises the property at a value that—at least presumably—the chief
appraiser believes is both equal and uniform and based on the property’s
market value. If a property owner protests the appraisal only on the ground
that it is unequal, and the ARB agrees and fixes a value that is equal but
without regard to whether it is based on the property’s market value, the chief
appraiser has no reason or opportunity to complain about that appraisal until
it appeals the ARB’s order to the district court.
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OPINION FILED: June 21, 2024
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