Who pays for a disaster property reappraisal in Texas, and must owners be notified when their value goes down?

Plain-English summary

After Hurricane Harvey, the Governor declared a disaster for sixty Texas counties, and many local taxing units (cities, counties, school districts) authorized a special "disaster reappraisal" of damaged property. Tax Code section 23.02 lets the governing body of a taxing unit in a declared disaster area have all property damaged in the disaster reappraised at its market value immediately after the disaster. The Galveston County Auditor asked the AG two practical questions about how that works: who pays for the reappraisal, and does the appraisal district have to tell owners when a reappraisal lowers their value.

On cost, the statute says a taxing unit that authorizes a reappraisal "must pay the appraisal district all the costs of making the reappraisal." The AG explained that appraisal districts already reappraise property on a regular cycle (every property at least once every three years), and those routine appraisals are normal operating costs funded through each taxing unit's annual budget share. A district cannot use a disaster to charge taxing units extra for work it would have done anyway. So the taxing unit is on the hook only for the additional, extraordinary costs that the disaster reappraisal adds on top of the district's ordinary operations.

On notice, the AG read the Tax Code's plain words. Section 25.19(a) lists four situations where the chief appraiser must notify an owner, and a value decrease is not one of them. But section 25.19(g) separately requires the chief appraiser to deliver written notice to the owner of any property that was reappraised in the current tax year, and the Legislature wrote no exception for disaster reappraisals. Because that notice starts the clock on the owner's right to protest the new value, the AG concluded a court would likely require notice even when the disaster reappraisal lowers the value. The opinion also pointed out that, under Government Code section 418.016(e), the Governor may suspend or waive statutory deadlines (like the protest deadline) at a political subdivision's request when reasonably necessary to cope with a disaster.

Currency note

This opinion was issued in 2018. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

What the opinion meant for those who asked

The Galveston County Auditor and other taxing-unit officials (who requested the opinion): The opinion told them that authorizing a disaster reappraisal obligated the taxing unit to pay the appraisal district's costs of making it, but only the extra costs the disaster generated, not a share of routine cyclical reappraisal the district would have performed regardless. It also told them to expect the chief appraiser to send statutory notices to reappraised owners, including those whose values fell.

Appraisal districts and chief appraisers (as the opinion described them): The opinion read section 23.02(c) to let a district recover its additional disaster-reappraisal expenses from the requesting taxing units, while barring it from capitalizing on the disaster to fund ordinary operations. It read section 25.19(g) to require written notice to every owner of property reappraised that tax year, with no carve-out for disaster reappraisals or for value decreases.

Property owners in the disaster area (as the opinion described them): The opinion treated owners as entitled to the section 25.19(g) notice when their property was reappraised, and explained that the notice triggers the deadlines for protesting the new value. It noted that those deadlines could be hard for disaster victims to meet, and that the Governor could be asked to suspend them under Government Code section 418.016(e).

Common questions

If a Texas city or county orders a disaster reappraisal, what does it have to pay?
Under section 23.02(c), the taxing unit must pay the appraisal district all the costs of making the reappraisal. The AG read that as the extra costs caused by the disaster reappraisal. A district may not charge taxing units for routine, cyclical reappraisal work it would have done anyway.

Does the appraisal district have to notify me if a disaster reappraisal lowers my home's value?
The AG concluded a court would likely say yes. Section 25.19(g) requires the chief appraiser to send written notice to the owner of any property reappraised in the current tax year, and the Legislature made no exception for disaster reappraisals, even ones that decrease value.

Why does the notice matter if my value went down?
Because the notice starts the formal protest process and the deadlines that go with it. The notice has to include an explanation of how and when to protest the new value, so getting it is what preserves an owner's chance to challenge the appraisal.

What if a disaster victim can't meet the protest deadline?
The opinion pointed to Government Code section 418.016(e), which lets the Governor waive or suspend a statutory deadline at a political subdivision's request when reasonably necessary to cope with a disaster. It noted the Governor had already issued broad suspension language tied to Harvey.

Background and statutory framework

The Tax Code organizes property appraisal around county appraisal districts, which are separate political subdivisions (Tex. Tax Code § 6.01(a), (c)). Each district's board of directors approves an annual budget prepared by the chief appraiser (§ 6.06(a), (b)), and each participating taxing unit funds a share of that budget proportional to its taxes imposed in the district (§ 6.06(d)), with any overpayment credited back the following year (§ 6.06(j)). The board must adopt a biennial reappraisal plan (§ 6.05(i)), and the district must reappraise all property at least once every three years through physical inspection or other reliable means (§ 25.18(b), (b)(1), (b)(7)).

Section 23.02 authorizes a special disaster reappraisal: the governing body of a taxing unit in a Governor-declared disaster area may authorize reappraisal of all property damaged in the disaster at its market value immediately after the disaster (§ 23.02(a)), and the authorizing unit "must pay the appraisal district all the costs of making the reappraisal" (§ 23.02(c)). On the cost question, the AG reasoned that because districts already conduct periodic reappraisals as normal operating expenses, they may not bill taxing units for work they would perform regardless of the disaster; the taxing units fund only the additional disaster-driven costs.

On notice, the AG applied the plain-meaning rule (Abutahoun v. Dow Chem. Co., 463 S.W.3d 42, 46 (Tex. 2015); Crosstex Energy Servs., L.P. v. Pro Plus, Inc., 430 S.W.3d 384, 389 (Tex. 2014)) and the rule that courts will not read words into a statute the Legislature omitted (R.R. Comm'n of Tex. v. Miller, 434 S.W.2d 670, 672 (Tex. 1968)). Section 25.19(a) requires notice in four enumerated situations, none of which is a value decrease, but section 25.19(g) independently requires written notice to the owner of any property reappraised in the current tax year. Because that subsection contains no disaster exception and its notice (§ 25.19(g)(3)) begins the protest process and deadlines (§§ 41.44(a), (b)), the AG concluded a court would likely require notice of a disaster reappraisal even when value decreases. The opinion added that Government Code section 418.016(e) lets the Governor suspend such deadlines at a political subdivision's request.

Citations

Cases:

• Abutahoun v. Dow Chem. Co., 463 S.W.3d 42, 46 (Tex. 2015)
• Crosstex Energy Servs., L.P. v. Pro Plus, Inc., 430 S.W.3d 384, 389 (Tex. 2014)
• R.R. Comm'n of Tex. v. Miller, 434 S.W.2d 670, 672 (Tex. 1968)

Statutes:

• Tex. Tax Code §§ 1.04(13), 1.111, 6.01(a), (c), 6.05(i), 6.06(a), (b), (d), (j), 23.02(a), (c), 25.18(b), (b)(1), (b)(7), 25.19(a), (g), (g)(3), 41.44(a), (b)
• Tex. Gov't Code § 418.016(e)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/ken-paxton/kp-0192
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2018/kp0192.pdf

Original opinion text

Best-effort transcription from the official PDF. Minor extraction artifacts were corrected; the linked PDF is authoritative.

KEN PAXTON
ATTORNEY GENERAL OF TEXAS

April 23, 2018

Mr. Randall Rice Opinion No. KP-0192
Galveston County Auditor
Post Office Box 1418 Re: Procedures regarding reappraisal of
Galveston, Texas 77553 property after a disaster (RQ-0188-KP)

Dear Mr. Rice:

    You ask about the procedures for property reappraisal after a disaster. [1] Hurricane Harvey recently caused significant property damage resulting in a Governor-declared disaster for sixty counties. [2] Request Letter at 2. You explain that although multiple taxing jurisdictions in this area requested disaster reappraisal, some are reluctant to proceed due to unanswered questions about the process. Id. You therefore seek guidance on the costs and notice requirements of the disaster reappraisals.

    The governing body of a taxing unit in a Governor-declared disaster area "may authorize reappraisal of all property damaged in the disaster at its market value immediately after the disaster." TEX. TAX CODE § 23.02(a). A taxing unit that authorizes a reappraisal "must pay the appraisal district all the costs of making the reappraisal." Id. § 23.02(c). Related to this provision, you first ask "whether the taxing unit would be responsible only for the extraordinary additional and reasonable costs." Request Letter at 1.

    Answering your question first requires an understanding of an appraisal district's operations, budget, and financing. The Legislature established an appraisal district in each county, and the districts are separate political subdivisions of the State. TEX. TAX CODE § 6.01(a), (c). Each year, the board of directors of an appraisal district approves a budget prepared by the chief appraiser. Id. § 6.06(a), (b). Each taxing unit participating in the district is allocated a portion of the amount of the budget based on its proportion of taxes imposed in the district. [3] Id. § 6.06(d).

    The board of directors of an appraisal district must develop and approve biennially a written plan for the periodic reappraisal of all property within the boundaries of the district. [4] Id. § 6.05(i). The district must reappraise all property in the district "at least once every three years." Id. § 25.18(b). Appraisal districts operate under their own individualized plans. However, as one example, the Galveston Central Appraisal District 2017-2018 Reappraisal Plan requires the appraisal district to reappraise one-third of the district's eight independent school districts each year. Plan at 7. During the reappraisal, "[a]ppraisers drive the county and gather data about each home, commercial business or vacant tract. The appraisers walk from property to property measuring the structures and noting the condition of the property and noting any changes to the property since the last physical inspection." Id. at 4-5; see also TEX. TAX CODE § 25.18(b)(1) (requiring properties "to be appraised through physical inspection or by other reliable means of identification"). The appraisal district then uses the information gathered during these inspections along with other relevant property characteristics to determine the current value of the property. TEX. TAX CODE § 25.18(b)(7).

    Given that the law requires periodic reappraisal of property and appraisal districts conduct property reappraisals throughout the year, some of the property the appraisal district will reappraise due to a disaster would be reappraised even without the disaster. The costs of standard, periodic appraisals are normal operating costs, and appraisal districts may not capitalize on a disaster by requesting additional funds from taxing units for expenses they would incur regardless of the disaster. However, subsection 23.02(c) requires taxing units requesting a reappraisal to pay all costs of making the post-disaster reappraisal. Id. § 23.02(c). Thus, to the extent that an appraisal district incurs additional costs resulting from a disaster reappraisal, participating taxing units must fund those extra expenses.

    You next ask whether the Tax Code requires a chief appraiser to provide notice to a property owner when the owner's property value decreases as a result of the disaster reappraisal. Request Letter at 1. In authorizing disaster reappraisal through section 23.02, the Legislature did not expressly address notice requirements related to that process. See TEX. TAX CODE § 23.02. Section 25.19 establishes general notice requirements for appraised property. Id. § 25.19.

    Subsection 25.19(a) requires the chief appraiser to deliver notice to a property owner in four specific circumstances:

             (1) the appraised value of the property is greater than it was in the preceding year;

             (2) the appraised value of the property is greater than the value rendered by the property owner;

             (3) the property was not on the appraisal roll in the preceding year; or

             (4) an exemption or partial exemption approved for the property for the preceding year was canceled or reduced for the current year.

Id. § 25.19(a). Except for these four unique circumstances, subsection (a) does not require a chief appraiser to provide notice to a property owner when a reappraisal results in a decrease in property value. However, subsection 25.19(g) provides:

              By April 1 or as soon thereafter as practicable if the property is a single-family residence that qualifies for [a homestead exemption], or by May 1 or as soon thereafter as practicable in connection with any other property, the chief appraiser shall deliver a written notice to the owner of each property not included in a notice required to be delivered under Subsection (a), if the property was reappraised in the current tax year, if the ownership of the property changed during the preceding year, or if the property owner or the agent of a property owner authorized under Section 1.111 makes a written request for the notice.

Id. § 25.19(g) (emphasis added). [5] The plain language of this provision requires the chief appraiser to provide written notice to a property owner in any year that property is reappraised, and the Legislature made no exception to this requirement for disaster reappraisals. See Abutahoun v. Dow Chem. Co., 463 S.W.3d 42, 46 (Tex. 2015) ("We look to the plain meaning of the words in a statute as an expression of legislative intent.").

    Notice provided pursuant to subsection 25.19(g) initiates the formal process for protesting the new appraised value. See TEX. TAX CODE § 25.19(g)(3) (requiring the notice to include "a detailed explanation of the time and procedure for protesting the value"). With that process comes certain deadlines by which a taxpayer must protest the appraised value or risk waiving the right to do so. [6] Such deadlines may pose significant burdens for disaster victims still working toward recovery, some of whom are still not able to move back into their damaged homes. [7] In construing statutes, courts rely first and foremost on the plain meaning of a statute. Crosstex Energy Servs., L.P. v. Pro Plus, Inc., 430 S.W.3d 384, 389 (Tex. 2014). They may not correct omissions in legislation by reading words into a statute that the Legislature did not include. R.R. Comm'n of Tex. v. Miller, 434 S.W.2d 670, 672 (Tex. 1968). Thus, a court would likely conclude that the Tax Code requires a chief appraiser to provide notice to a property owner of a reappraisal when the owner's property value decreases as a result of the disaster reappraisal. [8]

     To the extent that providing such notice creates a hardship for hurricane victims to exercise their rights to protest the new appraised value, taxing units should be advised of their ability to request a suspension of the statutory appraisal protest deadlines. Government Code section 418.016(e) provides:

             On request of a political subdivision, the governor may waive or suspend a deadline imposed by a statute or the orders or rules of a state agency on the political subdivision, including a deadline relating to a budget or ad valorem tax, if the waiver or suspension is reasonably necessary to cope with a disaster.

TEX. GOV'T CODE § 418.016(e). Pursuant to his authority under section 418.016, the Governor already proclaimed "any regulatory statute prescribing the procedures for conduct of state business or any order or rule of a state agency that would in any way prevent, hinder or delay necessary action in coping with this disaster shall be suspended" on written approval of the Office of the Governor. [9] The Governor likewise may suspend statutory deadlines applicable to political subdivisions if reasonably necessary to cope with a disaster and if requested to do so by the political subdivisions.

                                  SUMMARY

                  Pursuant to subsection 23.02(c) of the Tax Code, a taxing unit authorizing a disaster reappraisal must pay the appraisal district all the costs of making the reappraisal. Appraisal districts may not capitalize on a disaster by requesting additional funds from taxing units for expenses the appraisal district would incur regardless of the disaster. To the extent that an appraisal district incurs additional costs resulting from a disaster reappraisal, it may require participating taxing units to fund those extraordinary expenses.

                  Section 25.19 of the Tax Code requires a chief appraiser to deliver a written notice to the owner of each property that was reappraised in the current tax year. The Legislature made no exception to this requirement for disaster reappraisals conducted pursuant to section 23.02 of the Tax Code. Thus, a court would likely conclude that a chief appraiser must provide notice to a property owner of a reappraisal when the owner's property value decreases as a result of the disaster reappraisal.

                                        Very truly yours,

                                        KEN PAXTON
                                        Attorney General of Texas

JEFFREY C. MATEER
First Assistant Attorney General

BRANTLEY STARR
Deputy First Assistant Attorney General

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

[1] Letter from Randall Rice, Galveston Cty. Auditor, to Honorable Ken Paxton, Tex. Att'y Gen. at 1 (Oct. 25, 2017), https://www.texasattorneygeneral.gov/opinion/requests-for-opinions-rqs ("Request Letter").

[2] The Governor issued a disaster proclamation on August 23, 2017, certifying that Hurricane Harvey posed a threat of imminent disaster for Aransas, Austin, Bee, Brazoria, Calhoun, Chambers, Colorado, DeWitt, Fayette, Fort Bend, Galveston, Goliad, Gonzales, Harris, Jackson, Jefferson, Jim Wells, Karnes, Kleberg, Lavaca, Liberty, Live Oak, Matagorda, Nueces, Refugio, San Patricio, Victoria, Waller, Wharton and Wilson counties. Tex. Gov. Proclamation No. 41-3548, 42 Tex. Reg. 4541. The Governor subsequently amended his proclamation to add additional counties, including Angelina, Atascosa, Bastrop, Burleson, Bexar, Brazos, Caldwell, Cameron, Comal, Grimes, Guadalupe, Hardin, Jasper, Kerr, Lee, Leon, Madison, Milam, Montgomery, Newton, Orange, Polk, Sabine, San Augustine, San Jacinto, Trinity, Tyler, Walker, Washington and Willacy counties, and he extended the disaster proclamation multiple times thereafter.

[3] See TEX. TAX CODE § 6.06(j) ("If the total amount of the payments made or due to be made by the taxing units participating in an appraisal district exceeds the amount actually spent or obligated to be spent during the fiscal year for which the payments were made, the chief appraiser shall credit the excess amount against each taxing unit's allocated payments for the following year in proportion to the amount of each unit's budget allocation for the fiscal year for which the payments were made.").

[4] The 2017-2018 Galveston County Reappraisal Plan (hereafter "Plan") is available at http://www.galvestontx.gov/AgendaCenter/ViewFile/Item/3143?fileID=10934.

[5] "Tax year" is defined as "the calendar year." TEX. TAX CODE § 1.04(13).

[6] In most cases, a property owner will "have until May 31 or 30 days from the date the appraisal district notice is delivered - whichever date is later" to file a notice of protest with the appraisal review board. See https://comptroller.texas.gov/taxes/property-tax/protests/index.php; see also TEX. TAX CODE § 41.44(a).

[7] Multiple briefs submitted in response to this request emphasize the hardship that property owners may have in attempting to protest their new appraisals while continuing their disaster recovery. See Letter from Rob Henneke, Gen. Counsel, Tex. Pub. Policy Found. at 3 (Nov. 17, 2017); Letter from Cheryl E. Johnson, Galveston Cty. Tax Assessor Collector at 3 (Nov. 13, 2017) (briefs on file with the Op. Comm.). In some instances, the appraisal review board will have discretion to accept protests after the deadline for filing has passed if the taxpayer shows good cause for failure to file the notice of protest within the deadline. TEX. TAX CODE § 41.44(b).

[8] Because you condition your third question on a negative answer to the second, we do not address it. See Request Letter at 1.

[9] Tex. Gov. Proclamation No. 41-3567, 42 Tex. Reg. 6851, 6852 (2017).