Update: Zeon Chemicals, L.P. v. Harris County Appraisal District, a huge win for property tax consultants
By Raymond Gray | September 22, 2022
In a victory for the application of common sense, Lee Winston of Michel Gray & Rogers LLP and Laurie Ratliff of Laurie Ratliff LLC persuaded the Fourteenth Court of Appeals to reverse a lower court’s judgment in favor of Harris County Appraisal District. The Appellate Court’s decision reverses the District Court’s dismissal of a property owner’s lawsuit. That lawsuit challenged HCAD’s denial of the taxpayer’s motion to correct a clerical error in a freeport exemption application. The case is Zeon Chemicals, L.P. v. Harris County Appraisal District, 14-20-007980-CV (Tex. App.—Houston [14th Dist.] March 3, 2022). This decision is important to property tax consultants and owners because it clarifies both the definition of clerical error and the scope of settlement and waiver agreements.
In short, the tax consultant made a clerical error on an application for freeport exemption. The consultant attempted to correct the error under Section 25.25(c)(1) of the Texas Property Tax Code, but HCAD refused and asserted that any correction to the exemption application is precluded. To support, HCAD argued that a Section 1.111(e) informal settlement agreement regarding appraised value precluded the motion to correct. HCAD also argued that changes to a freeport exemption may not be made pursuant to Section 25.25 at all; instead, they must be brought under Section 41.41. The Fourteenth Court of Appeals disagreed with HCAD’s tortured reasoning.
This decision is a victory for property tax consultants and owners alike. It defines clerical errors and how they interact with Chapter 41 protests. There are times when consultants and owners inadvertently write, copy, or transcribe incorrect information in a form submitted to an appraisal district — renditions, exemption applications, etc. These clerical errors are often discovered after the traditional Section 41.41 protest deadline, which is why the legislature provided the remedy found in Section 25.25(c)(1). This decision affirms the taxpayer’s right to pursue that remedy.
The decision also clarifies the scope of Section 1.111(e) informal settlement agreements. Consultants and owners typically include multiple grounds for their property tax protests, and sometimes enter into a Section 1.111(e) informal settlement agreement on only one of those grounds. Then when the owner pursues the other protests, the CAD objects, claiming that the owner has waived the right to further relief under the Section 1.111(e) informal settlement agreement. This decision clarifies that informal settlement agreements must “relate” to the issues raised by a motion or protest.
Zeon Chemicals, L.P. was represented by appellate Counsel of Lee D. Winston of Michel Gray & Rogers LLP, and Laurie Ratliff of Laurie Ratliff LLC.
 Tex. Tax Code Ann. § 25.25(c)(1): “The appraisal review board, on motion of the chief appraiser or of a property owner, may direct by written order changes in the appraisal roll for any of the five preceding years to correct:  clerical errors that affect a property owner’s liability for a tax imposed in that year[.]”
 Tex. Tax Code Ann. § 1.111(e): “An agreement between a property owner or the owner’s agent and the chief appraiser is final if the agreement relates to a matter: (1) which may be protested to the appraisal review board or on which a protest has been filed but not determined by the board; or (2) which may be corrected under Section 25.25 (Correction of Appraisal Roll) or on which a motion for correction under that section has been filed but not determined by the board.”
 Tex. Tax Code Ann. § 25.25(c): “The appraisal review board, on motion of the chief appraiser or of a property owner, may direct by written order changes in the appraisal roll for any of the five preceding years to correct (1) clerical errors that affect a property owner’s liability for a tax imposed in that year; (2) multiple appraisals of a property in that tax year; (3) the inclusion of property that does not exist in the form or at the location described in the appraisal roll; or (4) an error in which property is shown as owned by a person who did not own the property on January 1 of that tax year.”
 Tex. Tax Code Ann. § 41.41(a): “A property owner is entitled to protest before the appraisal review board the following actions: (1) determination of the appraised value of the owner’s property or, in the case of land appraised as provided by Subchapter C, D, E, or H, Chapter 23 (Appraisal Methods and Procedures), determination of its appraised or market value; (2) unequal appraisal of the owner’s property; (3) inclusion of the owner’s property on the appraisal records; (4) denial to the property owner in whole or in part of a partial exemption; (5) determination that the owner’s land does not qualify for appraisal as provided by Subchapter C, D, E, or H, Chapter 23 (Appraisal Methods and Procedures); (6) identification of the taxing units in which the owner’s property is taxable in the case of the appraisal district’s appraisal roll; (7) determination that the property owner is the owner of property; (8) a determination that a change in use of land appraised under Subchapter C, D, E, or H, Chapter 23 (Appraisal Methods and Procedures), has occurred; or (9) any other action of the chief appraiser, appraisal district, or appraisal review board that applies to and adversely affects the property owner.”
 The deadline to file a protest pursuant to Section 41.41(a) of the Texas Property Tax Code is no later than May 15th or the 30th day after the date that notice to the property owner was delivered to the property owner as provided by Section 25.19 (Notice of Appraised Value), whichever is later. Tex. Tax Code Ann. § 41.44(a)(1).