The Texas Supreme Court will hear arguments next month in a landfill’s property valuation appeal that has attracted more than a dozen amicus filings from commercial and industrial property owners, public officials and business-oriented policy groups.
Arguments are set for Feb. 22 in a case that raises legal and policy issues central to the state’s ad valorem tax system, including the nondisclosure of property sales prices and whether real estate owned by large entities is valued at the same levels as residential taxpayers.
Texas Disposal System, which owns a 344-acre landfill, is challenging a decision from the Third Court of Appeals that held the trial court had jurisdiction over a lawsuit brought by the Travis Central Appraisal District after the Travis Appraisal Review Board determined the appraisal was unequal to similar properties and reduced the landfill’s 2019 valuation from $21.7 million to $2.8 million.
TCAD appealed to a district court, pleading that the lowered valuation was unequal and below market value. District Judge Catherine Mauzy dismissed the district’s market-value claim, finding the court did not have jurisdiction. The court of appeals reversed.
In its briefing, the landfill referenced the large number of amici urging the Supreme Court of Texas to take up the case. They include Valero Refining, Omni Hotels and Resorts, Texas Apartment Association, Texas Association of Realtors and Walgreen Co., Texas Association of Manufacturers, Texas Taxpayers and Research Association, Texas Public Policy Foundation, Sen. Paul Bettencourt and Rep. Hugh Shine.
“The court of appeals’ seismic change in property-tax appeals has kicked a hornet’s nest,” said the brief by Wallace Jefferson of Alexander Dubose & Jefferson.
The landfill and most of the amici argue that the Property Tax Code does not give an appraisal district a right to judicial review of a protest issue not raised by the taxpayer.
“By enlarging jurisdiction, the court of appeals permits appraisal districts to drag taxpayers into court to litigate new grounds that were not subject to administrative review, making a taxpayer’s protest a perilous, unpredictable exercise,” said Jefferson.
TCAD, in a brief by Mark Trachtenberg of Haynes Boone, said concerns about the burden of litigation do not bear on whether the statutes confer jurisdiction. The appraisal district countered with its own policy argument.
“TCAD owes an important duty to residents of Travis County to accurately and equitably appraise property so that all property owners shoulder their fair share, which helps to avoid tax-rate increases,” Trachtenberg said.
Several of the amici supporting the landfill say that permitting appraisal districts to sue property owners on market-value grounds never considered could result in sales price disclosures.
Daniel P. Myrick, an attorney for Christopher Investment Co., an Austin-based apartment holdings company, said the result “will effectively turn Texas from a non-disclosure state, where property owners have no duty to disclose sales prices to an appraisal district, into a mandatory sales price disclosure state.”
The appraisal district received support from one party in an amicus letter filed by Janet Jennings-Doyle, chief appraiser for Montgomery Central Appraisal District. She said TCAD deserves its day in court.
“I make no statement here concerning whether large corporations should pay a share of ad valorem taxes proportionate to other taxpayers. That is a policy decision,” Jennings-Doyle said. “But, if the people and their senators and representatives want to change the tax laws to benefit large companies owning highly valuable land, they need to do so through the legislature and not through the courts.”
Texas Disposal System is also represented by Melanie D. Plowman and Alexandra Wilson Albright of Alexander, Dubose & Jefferson and Lorri Michel and Shane Rogers of Michel Gray & Rogers.
The appraisal district is also represented by Ryan Philip Pitts of Haynes Boone and Karen Evertson and Mary Sanchez of Evertson & Sanchez.
The case is No. 22-0620.