Update: Waco Court of appeals holds Property Owners’ Claim—That Current Chief Appraiser Acted Outside the Scope of His Authority When Appraising Rural Homestead Property—May Proceed Under the Texas Uniform Declaratory Judgments Act
By Natalie A. Maloney | October 12, 2022
Falls County Appraisal District v. Burns, No. 10-21-00119-CV, 2022 WL 866687 (Tex. App.—Waco March 23, 2022, pet. filed)
This is a case to watch as it continues to develop. The Supreme Court of Texas requested briefs on the merits on September 30, 2022 for the appraisal district’s pending petition for review.
This case is important, and controversial, because it addresses remedies available to property owners beyond those found in the Texas Property Tax Code (the “Code”). The Texas Uniform Declaratory Judgments Act (“UDJA”) is a powerful statute. Under the Waco Court of Appeals’ opinion, the UDJA may be used by property owners in certain circumstances to hold employees of appraisal districts accountable if they act outside the scope of their legal authority. The UDJA authorizes a court to award reasonable and necessary attorney’s fees.
- Chief appraiser must comply with generally accepted appraisal methods and techniques pursuant to Section 23.01(b) of the Code when determining market value;
- Chief appraiser’s discretion in determining market value is not absolute; and
- Chief appraiser who is a current employee of the appraisal district and fails to follow the Code’s requirements may be sued under the UDJA in an ultra vires (without legal authority) claim
Here, rural homestead property owners discovered an improvement value of $6,000 for homestead utilities included in their appraisal for the 2019 tax year. This was the first time the utilities appeared on the appraisal—even though they were not new and did not meet the definition of a new improvement under Section 23.23(e) of the Code. The property owners attempted to address the issue out of court but were unsuccessful. They alleged a “flat value” of $6,000 was essentially “made up” and added only to rural homestead property, not homestead property located within the incorporated areas of the county. The property owners argued this action was arbitrary, not equally applied, and not based on the requirements of the Code.
The property owners sued the former chief appraiser who initially imposed the $6,000 homestead utilities value in 2019 and the current chief appraiser who continued to impose it in 2020. They also sued the appraisal district. The property owners filed their lawsuit under the UDJA and the Texas Property Tax Code as to the 2020 tax year. The government moved for summary judgment and dismissal on the grounds of governmental immunity, official immunity, and lack of jurisdiction. The trial court denied the motion. The government appealed.
The Court of Appeals affirmed in part and reversed in part. In its opinion, it discussed that the Code is “a pervasive regulatory scheme” and the remedies under it are exclusive. But an ultra vires (without legal authority) claim under the UDJA may be maintained where it is alleged a government employee in his official capacity violated the law by acting without legal authority. There are limits on ultra vires actions—the remedy sought must be something other than monetary damages for an injury that has already occurred.
Based on this analysis and the allegations of the property owners—that the homestead utilities value was essentially “made up” and arbitrarily assigned—the Court of Appeals concluded the trial court lacked jurisdiction over the UDJA claims against the appraisal district and the former chief appraiser. The Court of Appeals reasoned that the appraisal district is a political subdivision of the state and therefore protected by governmental immunity. Further, the injury caused by the former chief appraiser had already occurred and the only remedy would be monetary damages. Conversely, the Court of Appeals concluded the trial court had jurisdiction over the UDJA claims against the current chief appraiser because the remedy would be something more than monetary damages.
The Court of Appeals also addressed and rejected the government’s argument that the tax year 2020 claims brought under the Code did not invoke the trial court’s jurisdiction because they challenged only a component of value—the $6,000 homestead utilities—not the entire value. The Court of Appeals noted Section 42.21(h) of the Code gives the trial court jurisdiction over an appeal if the property was the subject of an appraisal review board order, the petition was timely filed, and it provides sufficient information to identify the property. Whether the property needs further identification is a matter of re-pleading, not jurisdiction, pursuant to Section 42.21(h) of the Code.
Stay tuned as this case continues to develop.
To follow this case at the Supreme Court of Texas, click the following link (or copy and paste): https://search.txcourts.gov/Case.aspx?cn=22-0367&coa=cossup.
Key Sections of Texas Property Tax Code:
§ 23.01, Appraisals Generally
§ 42.09, Remedies Exclusive
§ 42.21, Petition for Review
 To review the text of The Texas Uniform Declaratory Judgments Act, click the following link (or copy and paste): https://statutes.capitol.texas.gov/Docs/CP/htm/CP.37.htm.
 To review the text of Texas Property Tax Code Section 23.23, click the following link (or copy and paste): https://codes.findlaw.com/tx/tax-code/tax-sect-23-23.html.