Court Opinion

ID: 9662835
Source: CourtListenerOpinion
Date Created: 2023-08-23 23:19:24.182968+00
Date Added: 2024-06-11T18:14:42.755692
License: Public Domain

RAY, Justice,
dissenting.
With due respect to my colleagues, I must respectfully register my dissent because the judgment in this ad valorem tax case was based on a constitutionally infirm appraisal. The appraisal was inherently flawed because the appraiser for Gregg County improperly ignored the requirements for real property tax appraisals conducted in Texas. TEX.TAX CODE § 23.01. This error violates fundamental rights afforded state and federal protection to taxpayers, who are guaranteed basic precepts under the Constitution of the State of Texas and the Due Process Clause of the 14th Amendment. To preserve those rights, the proper disposition of this case is to reverse and remand to the trial court for a trial consistent with this dissent.
The decision in this case is controlled by the Texas Tax Code § 23.01(b). In relevant part it provides:
The market value of property shall be determined by the application of generally accepted appraisal techniques, and the same or similar appraisal techniques shall be used in appraising the same or similar kinds of property.
(emphasis added.) This law limits a taxing entity’s appraisal methodology and requires it to be consistent and reliable.
The judgment of the trial court was based on the Gregg County appraisal, a focus of appropriate circumspection, and the appraisal fails to withstand statutory and constitutional scrutiny. A taxing unit that adopts a plan which dictates that the appraiser arbitrarily ignore some real characteristics of a subject and hypothesize others, manifestly violates the statute and the constitutions. An appraisal, conducted in this manner, does not constitute competent evidence and must be annulled. U.S. CONST, amend. XIV; TEX. CONST, art. VIII §§ 1, 18; TEX.JUR.3d, Taxation § 336. We are constitutionally bound by the proclamation that taxation must be equal and uniform, and any method of appraisal leading to discrimination in practice is inherently unacceptable. Id.
In this case, the record is uncontrovert-ed; the controlling appraisal did not comport with the statutory mandate requiring “the same or similar appraisal techniques” in appraising the same or similar properties. In contravention of this requirement, the subject was appraised according to criteria crafted by the appraisal district to achieve a pre-ordained result.
A valid ad valorem appraisal is bound by a two-prong test. The government’s valuation must accomplish uniform taxation, and the methodology it employs must produce a reliable result. In an attempt to achieve uniformity among facially similar properties under the first prong, Gregg County *879abandoned the second prong. Gregg County conditioned the appraisal on certain fic-tious factors in order to tap new funds. While capturing a newly found source of revenue may not offend a traditional sense of justice, situational ethics, where the end justifies the means, fails the test of consistency.
The purpose of a property appraisal is to objectively ascertain the value of a subject property; however, the Gregg County appraisal was conditioned on inaccurate factors, impermissibly engaging in a result-oriented approach. The appraiser was not objective since he was instructed to disregard all encumbrances and appraise the property as though none existed; furthermore, he was informed to fabricate other conditions. The most disturbing aspect is that the choice of factors to be included, ignored, or fabricated were dictated by Gregg County. These prejudicial instructions impermissibly polluted the appraisal.
Taxing units must not be granted unbridled freedom to justify valuations according to the exclusion of real factors and/or inclusion of mythical factors of their choice. Due process protections recognized that the taxpayer is, the one, in need of protection due to the formidable burden he must overcome to prevail in an appraisal contest. Curiously, the taxing authority is the only one protected under the majority’s decision, since it is unlikely that the judicial system will indulge a taxpayer the same latitude. A taxpayer will not be allowed to present evidence in the trial court where he, in his sole discretion, is permitted to ignore certain real characteristics and hypothesize others to successfully challenge the valuation. Yet, by affirming the hypo-theticals contended by the appraisal district in this case, the majority avails this liberty to the government while precluding a taxpayer the same indulgence.
The subject appraisal ignored the size of the property, encumbrances such as leaseholds, contracts, and long-term, hypotheti-cated, personal property structures. Fictitious characteristics were indulged, including appraising the property as fee simple, vacant, and ready for sale. The effect was to equate a singular, burdened estate with numerous, individual, fee estates ready for retail sale. Gregg County boldly admitted the appraisal was based on a fiction, but justified this fiction on situational ethics. If the current state of appraisal methodology is so infirm as to be unable to accurately contemplate size, long-term contracts, and leases, that Gregg County was compelled to instruct their appraiser to disregard these factors in order to reach a value it considered appropriate, then Gregg County’s argument is properly directly to MAI appraisal methodology. The judicial system is not the appropriate vehicle to vindicate the failures in valuation methods.
A significant issue to address is whether the majority’s decision will facilitate equal and uniform taxation of real property. An affirmative answer to this question appears impossible due to the latitude afforded the government. There is no authority to grant a taxing authority unlimited ability to fashion conditions in justification of a result.
Instead of promoting a framework for consistency, today’s majority decision is destined to create chaos. The resolution of the decision addressing which issues are to be permitted, ignored, or fabricated, when subsequent conflicts involving unequal valuations by two or more taxing jurisdictions arise, is likely to result in a judicial and procedural nightmare. The judicial system will be unnecessarily burdened in an effort to resolve valuation controversies. Furthermore, there are numerous procedural questions to be resolved: Which real or fabricated conditions are to be permitted to be superimposed on a particular property, and which real or pretend conditions will be ignored? The unpredictability to be generated is contrary to the constitutional mandate.
In order to promote uniform taxation, each appraisal district must adhere to the same requirements. The legislature recognized the importance of consistency in stan*880dards governing appraisals, and punctuated this recognition, in 1986, with an amendment which demands appraisals to contemplate all characteristics affecting a property. TEX.TAX CODE § 23.01(b) (as amended, 1986).
In making the required analysis, this non-utilitarian approach, in which the end justifies the means, cannot be tolerated. Such reasoning is tantamount to de facto taxation. It is the job of the legislature to write the laws, and the duty of this court to interpret those laws; this court has ' no license to ignore statutory mandates and engage in wholesale alteration of the statute.
In addition, contrary to token disclaimers, there is evidence that both the appraiser and the trial court impermissibly factored the value of intangible stock to arrive at the property values. If Gregg County objects because ownership of property, held in this manner, evades the reach of taxing authorities, Gregg should direct its dissatisfaction to the legislature. It is neither the duty nor the providence of this court to police the inequities of statutory loopholes.
In reference to Petitioner’s point of error objecting to the trial court’s putative authority to increase a property’s value, above the value set by the appraisal district, Cherokee, and other similarly situated taxpayers, must seek legislative redress. The vitality of this point of error is precluded by the statutory impediment requiring a trial de novo in an ad valorem appeal. Until the statute is changed, it appears that the trial court has discretion to fix any value supported by competent evidence.