Tex. Disposal Sys. Landfill, Inc. v. Travis Cent. Appraisal Dist.

• Court: Texas Supreme Court
• Writing for the Court: Justice Bland delivered the opinion of the Court
• Citation: Tex. Disposal Sys. Landfill, Inc. v. Travis Cent. Appraisal Dist., 694 S.W.3d 752 (Tex. 2024)
• Docket Number: 22-0620
• Decision Date: 22 February 2024
• Parties: 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
• topic: Administrative Law,Tax Law,Civil Procedure

694 S.W.3d 752

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

No. 22-0620

Supreme Court of Texas.

Argued February 22, 2024

On Petition for Review from the Court of Appeals for the Third District of Texas

Elizabeth Conry Davidson, for Amicus Curiae Bexar Appraisal District.

Eric C. Farrar, Christopher Scott Jackson, Austin, for Amicus Curiae Denton Central Appraisal District, El Paso Central Appraisal District, and Williamson Central Appraisal District.

D. Kirk Swinney, Leander, for Amici Curiae Shelby County Appraisal District, Gillespie Central Appraisal District, Gonzalez County Central Appraisal District, Henderson County Central Appraisal Distric, Matagorda County Central Appraisal District.

Sandy Hoy, for Amicus Curiae Texas Apartment Association.

Sarah Lacy, Austin, for Amicus Curiae Texas Building Owners and Managers Association.

Robert E. Henneke, Kerrville, Chance D. Weldon, Austin, Autumn Patterson, for Amicus Curiae Texas Public Policy Foundation.

Stephen Grant, Daniel Richard Smith, Mark Stephen Hutcheson, for Amici Curiae Texas Realtors, Walgreen Co.

Alexandra W. Albright, Wallace B. Jefferson, Austin, Melanie Plowman, Houston, Lorri Michel, Shane Rogers, for Petitioner.

Janet Jennings-Doyle, for Amicus Curiae Jennings-Doyle, Janet.

Melanie Plowman, Houston, Hugh Shine, for Amicus Curiae Shine, Hugh.

Paul A. Jorge, for Amicus Curiae Omni Hotels & Resorts.

George S. Christian, for Amicus Curiae Texas Taxpayers and Research Association.

Jeffrey Nanson, Dallas, David Michael Hugin, Austin, Sara Barfield, for Amicus Curiae Valero Refining - Texas, LP.

James D. Robinson, for Amicus Curiae Harris Central Appraisal District (HCAD).

Joseph M. Harrison IV, San Antonio, for Amicus Curiae Texas Association of Property Tax Professionals.

Steven Jackson, for Amicus Curiae Texas Association of Manufacturers.

Ryan Pitts, Mark R. Trachtenberg, Houston, Karen Evertson, Austin, Mary Sanchez, for Respondent.

Daniel Myrick, for Amicus Curiae Christopher Investment Company.

Sonya Aston, Houston, for Amicus Curiae Bettencourt, Paul.

Justice Bland delivered the opinion of the Court, in which Chief Justice Hecht, Justice Lehrmann, Justice Blacklock, Justice Busby, Justice Huddle, and Justice Young joined.

In this tax appraisal dispute, we decide whether limits placed on a taxing authority’s claim in an appeal from an appraisal review board decision also confine the trial court’s subject matter jurisdiction. We conclude that the limits the Tax Code imposes on bringing such an appeal are not jurisdictional. A trial court must nonetheless evaluate compliance with Tax Code mandates in deciding the subject property’s appraised value. The court of appeals concluded that the trial court had jurisdiction over the taxing authority’s challenge, albeit for a different reason. We therefore affirm its judgment.

I

A

[1] The Texas Constitution provides that "[a]ll real property and tangible personal property in this State … shall be taxed in proportion to its value, which shall be ascertained as may be provided by law."¹ Any calculation of property tax in Texas thus begins with an assessment of the property’s value. Under laws implementing this constitutional provision, a subject property is appraised at its "market value."²

The Tax Code provides guidance for conducting this appraisal. Appraisers must use "generally accepted appraisal methods," and the Code endorses specific kinds of appraisal methods for determining market value.³ Regardless of the method, the overarching goal is to fix a market value for the subject property. Market value is "the price at which a property would transfer for cash or its equivalent under prevailing market conditions" in an informed, arms-length transaction.⁴ From there, one calculates the property tax owed by applying exemptions and multiplying the appraised value by the applicable tax rate.

[2, 3] The Constitution enshrines two limits on property taxes. First, "Taxation shall be equal and uniform."⁵ An appraiser must use similar appraisal methods and techniques for similar properties and must arrive at a value proportionate to the appraisals of similar properties.⁶ A taxpayer may challenge a taxing authority’s appraised value on the ground that the value is not equal and uniform when compared with similarly situated properties.⁷

[4] Second, a property appraisal must not be set at "a greater value than [the property’s] fair cash market value."⁸ A market value determination is a constitutional ceiling: under the Constitution, property is to be appraised in proportion to its value, but it must never be appraised at more than market value.

The Tax Code secures these constitutional rights to fair taxation through a robust protest procedure. A taxpayer may challenge a taxing district’s proposed appraised value on grounds that the appraised value is greater than the property’s market value. The taxpayer may also claim that the appraised value results in taxation that is not equal and uniform. Such challenges are first brought before a local appraisal review board.⁹ If a taxpayer is dissatisfied with the board’s determination, then the taxpayer may seek judicial review.¹⁰ Once in court, the parties start from scratch, without any deference to the board’s decision. The trial court conducts a trial de novo of the protest, setting an appraised value for the subject property based on the evidence it hears.¹¹

Rarely, the appraisal district is the party dissatisfied with the board’s decision. In such a case, the Tax Code gives appraisal districts the right to seek judicial review.¹² But the Tax Code places different limits on the district’s claim for relief than it does the taxpayer’s. Before an appraisal district may appeal, the chief appraiser must obtain permission to appeal from the board of directors of the appraisal district.¹³ And a district cannot challenge an appraised value under $1 million unless the district first establishes fraud.¹⁴ Finally, pertinent here, a district’s appeal is confined to an appeal from "an order of the appraisal review board determining … a taxpayer protest."¹⁵

B

Petitioner Texas Disposal Systems Landfill, Inc. owns 344 acres of land in Travis County, which it operates as a landfill. In 2019, Respondent Travis County Central Appraisal District appraised the market value of the landfill at $21,714,939. The Landfill protested this amount under the Tax Code provision requiring equal and uniform taxation.¹⁶ The Landfill did not, however, claim that the District’s appraised value was higher than the market value of the property.

The Landfill won its challenge. The appraisal review board reduced the appraised value of the subject property by nearly ninety percent. The board concluded: "The subject property was unequally appraised, and the appraisal records should be adjusted to reflect a value of $2,800,000."

The District appealed to the trial court, claiming that the board erred in concluding that the District’s appraised value was not equal and uniform when compared with similarly situated properties. The District also claimed that the board’s appraised value was lower than the subject property’s true market value:

The market value of [the landfill] is greater than the determination of the [Appraisal Review Board] and the value set by the ARB results in unequal appraisal of the subject property. The ARB’s value determination was arbitrary, erroneous, unjust, and unlawful and violated the requirements of Tex. Tax Code §§ 1.04(7) and 23.01. The result of the ARB’s determination is an appraisal of the subject property below market value and unequal appraised value.

The Landfill answered and filed a plea to the jurisdiction. In its jurisdictional plea, the Landfill argued that the challenge it made before the appraisal review board was an equal-and-uniform challenge, not one based on market value. Thus, the trial court lacked jurisdiction to consider market value. The trial court granted the Landfill’s plea.

The court of appeals reversed.¹⁷ The court held that a trial court’s review of an appraisal review board’s decision is not confined to the grounds the taxpayer asserted before the board.¹⁸ The court of appeals further concluded that an appraisal district has no obligation to raise reasons justifying its appraised value in response to a taxpayer protest; therefore, the statute permits appraisal districts to support their claimed appraised value for reasons the appraisal review board did not consider.¹⁹ We granted the Landfill’s petition for review.

II

A

[5–8] Whether a court has subject matter jurisdiction is a question of law we review de novo.²⁰ If the Legislature assigns exclusive or original jurisdiction to an administrative body, then no right to judicial review exists "unless a statute provides a right or unless the order adversely affects a vested property right or otherwise violates a constitutional right."²¹ Even when such a statute provides judicial review, ordinarily the trial court does not acquire jurisdiction until the party exhausts its administrative remedies.²²

The Tax Code grants appraisal districts the right to judicial review of an appraisal review board’s orders. "On written approval of the board of directors of the appraisal district, the chief appraiser is entitled to appeal an order of the appraisal review board determining … a taxpayer protest as provided by" certain tax code provisions permitting a protest.²³ The parties dispute whether the appeal, granted from "an order of the appraisal review board determining … a taxpayer protest," restricts judicial review to the protest grounds the property owner presented before the appraisal review board.

The Landfill argues that the trial court decides only the taxpayer’s protest. To open the door to matters the taxpayer did not raise in protest...