Opinion
01-20-00835-CV
12-29-2022
PROVIDENCE TOWN SQUARE HOUSING, LTD., Appellant v. HARRIS COUNTY APPRAISAL DISTRICT, Appellee
On Appeal from the 151st District Court Harris County, Texas Trial Court Case No. 2018-55293
Panel consists of Justices Kelly, Rivas-Molloy, and Guerra.
MEMORANDUM OPINION
Veronica Rivas-Molloy Justice
This appeal stems from a property tax dispute between Providence Town Square Housing, Ltd. ("Providence") and the Harris County Appraisal District ("HCAD"). Providence disputed the tax value HCAD assigned to its property in tax year 2018. After exhausting its administrative remedies before the Harris County Appraisal Review Board, Providence filed a petition for de novo judicial review challenging the appraised value of its property. Providence argued that the value was excessive and that HCAD failed to provide substantial evidence supporting the value. Following a bench trial, the trial court entered a take nothing judgment holding neither party had met the applicable burden of proof.
Providence appeals the take nothing judgment rendered against it. In one issue, Providence argues the trial court erred by finding that Section 23.01(e) of the Texas Property Tax Code is inapplicable to judicial proceedings before district courts under Chapter 42 of the Texas Property Tax Code.
We affirm the trial court's judgment.
Background
Providence owns a 188-unit senior living apartment complex in Deer Park, Texas ("Property"). After HCAD appraised the Property at $6,318,419 for tax year 2017, Providence protested the appraised value to the Harris County Appraisal Review Board ("ARB") under Chapter 41 of the Tax Code. The ARB issued a written "Order Determining Protest" denying Providence's protest and holding that the $6,318,419 appraised value for the Property would remain unchanged. Providence then filed a petition with the district court for de novo judicial review under Chapter 42 of the Tax Code arguing that the $6,318,419 appraised value was excessive and alternatively, that the value was unequal. Providence and HCAD settled that case and on June 26, 2018, the district court entered an agreed final judgment setting the Property's value for tax year 2017 at $5,000,000.
See TEX. TAX CODE § 41.41(a) (authorizing property owner to protest property's appraised value before appraisal review board); see id. § 41.47(a) (requiring appraisal review board to determine protest and make decision by written order).
See TEX. TAX CODE § 42.01 (authorizing property owner to seek judicial review of appraisal review board's order determining "a protest by the property owner" under Chapter 41, subchapter C of the Tax Code); see also id. § 42.25 (providing judicial remedy for excessive appraisals); id. § 42.26 (providing judicial remedy for unequal appraisals).
The following year, HCAD valued the Property at $7,015,046 for tax year 2018. Providence disputed the appraised value and filed a protest before the ARB. The ARB issued a written decision reducing the Property's tax value to $6,833,142. Unsatisfied with the reduced value, Providence filed a petition in district court for de novo judicial review under Chapter 42 of the Tax Code, arguing that the $6,833,142 appraised value was excessive and requesting a reduced value and attorneys' fees. Providence pleaded that Section 23.01(e) of the Tax Code was applicable and imposed on HCAD the burden of proof to support the appraised value with substantial evidence. Providence "invoked" Section 23.01(e) "to establish a 'ceiling' on the Property's value" pleading that the 2017 tax year valuation of $5,000,000 could "not be exceeded [in tax year 2018] unless [HCAD] me[t] its burden of proof" to support the increased value with substantial evidence.
Providence also argued that the appraised value of the Property was unequal, but it later abandoned that challenge. During the bench trial, HCAD moved for a directed verdict on Providence's claim that the Property's tax value was unequal pursuant to Section 42.26 of the Tax Code, to which Providence responded, "We stipulate that 42.26 is a cause that we have abandoned."
Section 23.01(e) of the Tax Code states:
TEX. TAX CODE § 23.01(e) (emphasis added).(e) Notwithstanding any provision of this subchapter {Chapter 23, Subchapter A - "Appraisals Generally"} to the contrary, if the appraised value of property in a tax year is lowered under Subtitle F {"Remedies" Chapter 41-43}, the appraised value of the property as finally determined under that subtitle is considered to be the appraised value of the property for that tax year. In the following tax year, the chief appraiser may not increase the appraised value of the property unless the increase by the chief appraiser is reasonably supported by substantial evidence when all of the reliable and probative evidence in the record is considered as a whole. If the appraised value is finally determined in a protest under Section 41.41(a)(2) or an appeal under Section 42.26, the chief appraiser may satisfy the requirement to reasonably support by substantial evidence an increase in the appraised value of the property in the following tax year by presenting evidence showing that the inequality in the appraisal of property has been corrected with regard to the properties that were considered in determining the value of the subject property. The burden of proof is on the chief appraiser to support an increase in the appraised value of property under the circumstances described by this subsection.
The day before trial, HCAD filed a trial brief addressing the burden of proof applicable in Chapter 42 trials de novo. In its brief, HCAD argued that Section 23.01(e) is inapplicable in Chapter 42 judicial proceedings and therefore, Providence bore the burden of proving the market value of its Property at trial. Citing to Tax Code Section 41.43(a), (a-1), &(b), HCAD asserted that the chief appraiser generally bears the burden of proof at appraisal review board hearings and "Subsection 23.01(e) raises the chief appraiser's burden of proof to a 'substantial evidence' standard if the appraised value is increased from the prior year." HCAD argued that "[n]one of these subsections are contained within Chapter 42 of the Tax Code pertaining to judicial appeals." HCAD further asserted:
HCAD also filed a trial brief addressing the nature of trials de novo under Chapter 42 of the Tax Code. In its brief, HCAD asserted that in a Chapter 42 trial de novo, "[t]he value of the property is to be determined anew; HCAD's value and the ARB value are not in issue" and "[a]ny attempts by [Providence] to litigate an ARB or HCAD value would be in violation of the trial de novo sought by [Providence]."
While a Chapter 41 protest is a complaint to an appraisal review board about the actions of the chief appraiser, a Chapter 42 appeal is a complaint to a district court about the results of the appraisal review board's order. Section 23.01(e) of the Tax Code relating to the chief appraiser's valuation does not apply to a Chapter 42 appeal to the district court of the appraisal review board's valuation.
According to HCAD, "[b]y pleading for relief under Section 23.01(e), [Providence] is attempting to create a judicial cause of action that is not provided by the exclusive and jurisdictional provisions of Chapter 42 of the Tax Code."
At trial, Providence presented expert testimony valuing the Property's market value for tax year 2018 at $4,179,000, whereas HCAD's expert witness testified that the Property's market value for tax year 2018 was $10,140,000. In its closing argument, Providence argued that even if the court rejected Providence's evidence setting the Property's value at $4,179,000, the trial court could not, under Section 23.01(e) of the Tax Code, hold that the Property's value for the 2018 tax year exceeded $5,000,000 because HCAD had provided no evidence to support its increase of the Property's value over the 2017 appraised value of $5,000,000.
HCAD originally valued the Property at $7,015,046 for tax year 2018. Following Providence's protest before the ARB, the ARB reduced the Property's tax value to $6,833,142. Providence then filed its Chapter 42 petition for judicial review de novo.
Providence requested permission to file a post-trial brief to address HCAD's argument that Section 23.01(e) of the Tax Code is inapplicable to Chapter 42 trials de novo and thus Providence bore the burden to prove the value of the Property at trial. Providence argued that under Section 23.01(e), when the taxpayer lowers a property's value through Subtitle F of the Tax Code, "the burden shifts to the appraisal district to prove that there is a reason justifying" any increase in the appraised value of the property the following year. According to Providence, Section "23.01(e) contains a shifting burden" that "is in the nature of an affirmative defense." Providence further argued:
You've heard no evidence to suggest that there should have been a change from the prior year. As the result, that play of the statute works as a cap on the appraised value for this property, which the taxpayer can protest, nevertheless, to seek a further reduction from.
....
This is supposed to be a de novo review of all matters that could have been raised before the ARB. And there's no reason why this decision cannot also be reviewed by this Court to determine whether or not the district met its burden.
HCAD argued that the trial court should issue a take nothing judgment against Providence because Providence failed to prove the Property's market value by a preponderance of the evidence, or alternatively, enter a judgment for $10,140,000 in favor of HCAD.
After hearing closing arguments, the trial court asked the parties to submit letter briefs addressing the applicability of Section 23.01(e). In its post-trial letter brief, Providence argued that "trial de novo retries the entire case, as though there were no first trial" and, thus, the district court can "independently consider the entire case as if there were no ARB proceeding and to require the District to meet its burden under section 23.01(e)." According to Providence, "[S]ection 23.01(e) functions as an affirmative defense throughout the Taxpayer's protest, not simply before the ARB."
In its post-trial letter brief, HCAD responded that Section 23.01(e) "does not control appeals brought pursuant to Chapter 42." According to HCAD, "Section 42.23 of the Tax Code requires that the case be tried de novo and in a manner consistent with civil trials generally." Citing to this Court's opinion in Cypress Creek Faye Ridge v. Harris County Appraisal District, No. 01-16-00003-CV, 2016 WL 7164032, at *4 (Tex. App-Houston [1st Dist.] Dec. 8, 2016, no pet.) (mem. op.) and others, HCAD argued that the taxpayer, as the plaintiff, bears the burden of proof in trials de novo under Chapter 42. HCAD argued:
[HCAD] has made no claim for affirmative relief or defense, only a general denial. In that regard, [Providence] cannot bootstrap Section 23.01(e) into a "reverse affirmative defense" to cap the value in this case. [Providence] cannot claim that they have the burden of proof to
prove a lower value, but failing that, [HCAD] must prove up a value that does not exist any longer.
HCAD also argued that the plain language of Section 23.01(e) applies to the chief appraiser's initial valuation of property and that the appraisal review board, as the party responsible for reviewing the chief appraiser's initial valuation in the event of a protest, applies that standard during a protest hearing. HCAD specifically argued:
The plain language of section 23.01(e) expressly addresses the chief appraiser. If the conditions of Section 23.01(e) are met, "the chief appraiser may not increase the appraised value of the property unless the increase by the chief appraiser is reasonably supported by substantial evidence . . ." Tex. Tax Code Ann. § 23.01(e). If an owner protests the chief appraiser's valuation, it is the appraisal review board that sits in judgment of the value.
Presumably, the appraisal review board applied this standard at the hearing it held on [Providence's] protest. That was then, this is now. Now this Court is charged with review of the quasi-judicial appraisal review board's valuation, not the chief appraiser's. Id. § 42.01 (property owner entitled to appeal "an order of the appraisal review board determining: (A) a protest by the property owner ....") (emphasis added). The district court's review of the value determination by the quasi-judicial appraisal review board is by trial de novo which means, "a complete new trial without reference to any procedural errors that may have occurred in the lower court [appraisal review board] or in the agency subject to appellate review [appraisal district]." Lamar County Appraisal Dist. v. Campbell Soup Co., 93 S.W.3d 642, 645 (Tex. App.-Texarkana 2002, no pet.) (emphasis added). The chief appraiser is not a party to this appeal and the chief appraiser's valuation is not the subject of this proceeding. The appraisal review board's valuation is the subject.
After considering the evidence and arguments presented at trial and the parties' post-trial letter briefs, the trial court entered a take nothing judgment against Providence, finding neither party met "any applicable burden of proof." Providence then filed a motion asking the trial court to take judicial notice of the following facts based on certified copies of four records from the Harris County District Clerk's Office (Exhibits 1-4):
Providence contends that it filed this motion because HCAD had suggested there was no evidence supporting the application of Section 23.01(e) because Providence had not brought forth evidence establishing that the Property's 2017 value had been lowered under Subtitle F of the Tax Code.
1. [Providence] filed a petition for judicial review, a Subtitle F proceeding, in 2017, to protest Defendant's 2017 appraised value of its Property (Exhibit 1)
2. the 2017 Final [ARB] Order states that, after the ARB hearing, the "value of the property remains" $6,318,419 (Exhibit 2)
3. the finally-determined tax value for the Property in 2017 after judicial review was $5 million (Exhibit 3); and
4. [Providence] filed an amended petition for judicial review and further sought relief under [S]ection 23.01(e) in the instant case (Exhibit 4).
The trial court issued Findings of Fact and Conclusions of Law at Providence's request. Among other things, the trial court found that the Property's market value as of January 1, 2018 "was not proven by a preponderance of the evidence" and "[n]either Plaintiff nor Defendant provided persuasive testimony by either a preponderance of the evidence nor clear and convincing evidence regarding value." The trial court also concluded:
2. [Providence] did not prevail on its claim under Section 42.25 of the Texas Property Tax Code. The Court concludes that Section 23.01(e) only applies at the ARB stage of the taxpayer's protest.
3. [Providence's] claims brought under Texas Property Tax Code Section 42.26 were dismissed by agreement pursuant to [HCAD's] Motion for Directed Judgment.
4. [Providence] did not prevail on its claim under Section 42.29 of the Texas Property Tax Code.
...
6. The appraised value of the [Property] shall remain the value determined by Harris County Appraisal Review Board for January 1, 2018.
The numbering in this block quote corresponds with the trial court's numbered fact findings.
Tax Code Section 42.25 provides a judicial remedy for excessive appraisals. TEX. TAX CODE § 42.25.
Tax Code Section 42.26 provides a judicial remedy for unequal appraisals. TEX. TAX CODE § 42.26.
Tax Code Section 42.29 authorizes an award of attorney's fees to a property owner "who prevails in an appeal to the court under Section 42.25 or 42.26." TEX. TAX CODE § 42.29(a).
On the same day the trial court entered its Findings of Fact and Conclusions of Law, Providence filed a Motion to Amend the Final Judgment, arguing its expert witness testimony established that the Property's market value was $4,179,000 by a preponderance of the evidence. Alternatively, Providence argued that Section 23.01(e) applies both to Chapter 41 administrative hearings before an appraisal review board and Chapter 42 petitions for de novo judicial review of appraisal review board filed in district courts. Thus, according to Providence, the trial court was required to evaluate HCAD's evidence and determine independently whether HCAD had presented substantial evidence to support its 40% increase in value over the 2017 $5,000,000 final value pursuant to Section 23.01(e). Providence further contended that because HCAD had presented no evidence to support its 2018 appraisal value, the trial court was required to enter judgment setting the Property's value for the 2018 tax year at the same $5,000,000 appraised value set for the 2017 tax year. Providence also asked the court to award it its reasonable and necessary legal fees, subject to the limits set by Section 42.29 of the Tax Code, provided that either the trial court or the court of appeals ultimately lowered the Property's 2018 tax value to $5,000,000 million or less. Providence later filed a Supplement to its Motion to Amend the Final Judgment in which it asserted that HCAD had conceded, in an unrelated case, that Section 23.01(e) of the Tax Code applies to Chapter 42 petitions for de novo judicial review filed in district court.
In its motion, Providence asserted HCAD "agreed section 23.01(e) applies to Chapter 41 Local Review proceedings."
The trial court entered an order entitled "Order Granting Motion to Take Judicial Notice of Adjudicative Facts and Motion to Amend." With respect to Providence's Motion to Take Judicial Notice of Adjudicative Facts, the trial court granted the motion in part and denied it in part. The order states:
ORDERED that the JUDICIAL NOTICE MOTION is GRANTED as to Exhibit 1. The Court takes judicial notice of Exhibit 1. It is further,
ORDERED that the JUDICIAL NOTICE MOTION is GRANTED as to Exhibit 2. The Court takes judicial notice of Exhibit 2. It is further,
ORDERED that the JUDICIAL NOTICE MOTION is GRANTED as to Exhibit 3. The Court takes judicial notice of Exhibit 3.
The trial court also granted Providence's Motion to Amend the Final Judgment in part and denied it in part. The order states:
ORDERED the Court hereby awards the Plaintiff reasonable and necessary attorney's fees of $40,000 conditioned on A FINAL ORDER, EITHER BY THIS COURT OR ON APPEAL, WHICH LOWERS THE PROPERTY VALUE TO $5 MILLION OR LESS, AND PROVIDED FURTHER THAT ANY SUCH AWARD is subject to the limits of §42.29 of Texas Property Tax Code.
This appeal followed. In one issue, Providence argues the trial court erred by finding that Section 23.01(e) of the Texas Property Tax Code is inapplicable to judicial proceedings for de novo review filed in district court under Chapter 42.
HCAD is not appealing the trial court's judgment.
Property Tax Valuation Process
The Texas Property Tax Code ("Tax Code") establishes an appraisal district for each county. Tex. Tax Code § 6.01(a). Each appraisal district is "responsible for appraising property in the district for ad valorem tax purposes of each taxing unit that imposes ad valorem taxes on property in the district." Id. § 6.01(b). To accomplish its directive, appraisal districts are required to establish an appraisal office. The chief appraiser, who is "appointed by and serves at the pleasure of the appraisal district board of directors," is "the chief administrator of the appraisal office." Id. § 6.05(c).
A. Appraisal and Assessment
The chief appraiser is tasked with "preparing] appraisal records listing all property that is taxable in the district and stating the appraised value of each." Tex. Tax Code § 25.01(a). Tax Code, Subtitle D, entitled "Appraisal and Assessment," governs the methods and procedures for conducting property appraisals. The chief appraiser is required to "deliver a clear and understandable written notice" to a property owner if the appraised value of the property for that tax year "is greater than it was in the preceding year." TEX. TAX CODE § 25.19(a)(1).
If the property owner disagrees with the appraised value, the property owner may file an administrative protest before the appraisal review board under Chapter 41 of the Tax Code. Tex. Tax Code § 41.41(a); see also Willacy Cnty. Appraisal Dist. v. Sebastian Cotton &Grain, Ltd., 555 S.W.3d 29, 40 (Tex. 2018) ("Chapter 41 gives property owners the right to protest a number of actions before the ARB, including the appraised value of their property, a determination of ownership, or 'any other action of the chief appraiser, appraisal district, or appraisal review board that applies to and adversely affects the property owner.'" (quoting Tex. Tax Code § 41.41(a)).
B. Chapter 41 of the Tax Code: Local Review and Taxpayer Protests
Tax Code, Subtitle F, entitled Remedies, sets forth the available procedures and remedies to contest property valuations. Subtitle F, Chapter 41, Subchapter C of the Tax Code, entitled "Taxpayer Protest," governs administrative protests filed by property owners before the appraisal review board. After receiving a written protest from a property owner, the appraisal review board schedules a hearing and gives notice of the date, time, and place of the hearing to the property owner and the chief appraiser. See TEX. TAX CODE §§ 41.44, 41.45, 41.46. The chief appraiser is required to attend the protest hearing before the appraisal review board "to represent the appraisal office." Id. § 41.45(c); see also id. § 6.05(e) (stating "chief appraiser may delegate authority to his employees"); Kelly v. Harris Cnty. Appraisal Dist., No. 01-09-00996-CV, 2011 WL 497032, at *4 (Tex. App.-Houston [1st Dist.] Feb. 10, 2011, no pet.) (mem. op.) (observing "HCAD representative appeared on behalf of the chief appraiser"). The appraisal district generally "has the burden of establishing the value of the property by a preponderance of the evidence presented at the hearing." Tex. Tax Code § 41.43(a); see also Willacy Cnty. Appraisal Dist., 555 S.W.3d at 40 ("Chapter 41 protests are broad in scope and weigh in favor of the property owner, placing the burden of establishing the value of the property on the appraisal district."). In some cases, however, the burden is on the appraisal district to establish the value by "clear and convincing" evidence. See TEX. TAX CODE §§ 41.43(A-1), (A-3).
After considering the evidence and arguments presented by the property owner and chief appraiser at the hearing, the appraisal review board is required to "determine the protest and make its decision by written order." Id. § 41.47(a). If the protest concerns the appraised value of property, the order must state the appraised value of the property as "shown in the appraisal records submitted to the board by the chief appraiser" and "as finally determined by the board." Id. § 41.47(c). The final written determination issued by the appraisal review board concludes the administrative process for a property owner's protest under Chapter 41.
C. Chapter 42 of the Tax Code: Judicial Review
A property owner has the right to appeal the final determination of the appraisal review board by filing a petition for judicial review against the appraisal district in district court. Id. §§ 42.01(a), 42.21(b). Tax Code, Subtitle F, Chapter 42, entitled "Judicial Review," governs such proceedings. Section 42.23(a) provides that judicial review in such proceedings is by trial de novo and the trial court "shall try all issues of fact and law raised by the pleadings in the manner applicable to civil suits generally." Id. § 42.23(a). Relevant here, if the district court determines that the value of the property exceeds the value required by law based on the evidence presented at trial, "the property owner is entitled to a reduction of the appraised value." See id. § 42.25; see also id. § 41.42.09(a) ("Except as provided by Subsection (b) of this section, procedures prescribed by this title for adjudication of the grounds of protest authorized by this title are exclusive. . .").
Although not relevant here, the chief appraiser also has a right to appeal an appraisal review board's decision. TEX. TAX CODE § 42.02; see also Harris Cnty. Appraisal Dist. v. Houston 8th Wonder Prop., L.P., 395 S.W.3d 245, 251 & n.3 (Tex. App.- Houston [1st Dist.] 2012, pet. denied) (stating "both the property owner and the chief appraiser have distinct rights to appeal the ARB order determining the protest" under Tax Code Sections 42.01 and 42.02, respectively); Travis Cent. Appraisal Dist. by & Through Crigler v. Tex. Disposal Sys. Landfill, Inc., No. 03-20-00122-CV, 2022 WL 2236109, at *1 (Tex. App.-Austin June 22, 2022, pet. Filed) (observing appraisal district "through its chief appraiser, appealed to the district court for a trial de novo").
Providence does not challenge the district court's finding that Providence failed to prove by a preponderance of the evidence or clear and convincing evidence the Property's value for the 2018 tax year. Rather, Providence contends that because it was able to lower the Property's appraised value in tax year 2017 from $6,318,419 to $5,000,000 pursuant to Subtitle F of the Tax Code (Chapters 41-43), Section 23.01(e) applied and shifted the burden to HCAD to prove at trial that the chief appraiser's decision in tax year 2018 to increase the Property's appraised value above $5,000,000 was "reasonably supported by substantial evidence." TEX. TAX CODE § 23.01(E). Providence argues that because HCAD Did not present evidence to support the chief appraiser's increased valuation of the Property for tax year 2018 at trial, section 23.01(e) capped the appraised value of the Property at the 2017 $5,000,000 assessed value, and thus, the trial court was prohibited from setting the Property's 2018 value above $5,000,000.
The parties agree that the question before us on appeal is whether the burden of proof set forth under Section 23.01(e) applies to Chapter 42 de novo judicial proceedings filed in district court.
A. Standard of Review
This appeal presents questions of statutory construction, which we review de novo. Brazos Elec. Power Coop., Inc. v. Tex. Comm'n on Envtl. Quality, 576 S.W.3d 374, 383 (Tex. 2019). In construing any statute, including statutory language within the Tax Code, this court seeks to ascertain and give effect to the Legislature's intent, "which we ascertain from the plain meaning of the words used in the statute" because the best indicator of what the Legislature intended is what it enacted. Id. at 383-84 (quoting Sw. Royalties, Inc. v. Hegar, 500 S.W.3d 400, 404 (Tex. 2016)). Therefore, if the "text is clear," then the "text is determinative of that intent." Brazos Elec. Power Coop., 576 S.W.3d at 384 (quoting Entergy Gulf States, Inc. v. Summers, 282 S.W.3d 433, 437 (Tex. 2009)). We presume lawmakers chose statutory language "with care and that every word or phrase was used with a purpose in mind." Brazos Elec. Power Coop., 576 S.W.3d at 384 (quoting Tex. Lottery Comm 'n v. First State Bank of DeQueen, 325 S.W.3d 628, 635 (Tex. 2010)). In doing so, we focus on the statute as a cohesive, contextual whole, rather than isolated words or phrases. Tex. Student Hous. Auth. v. Brazos Cty. Appraisal Dist., 460 S.W.3d 137, 141 (Tex. 2015); TIC Energy &Chem., Inc. v. Martin, 498 S.W.3d 68, 74 (Tex. 2016) (stating courts do not consider words and phrases in isolation, but rather "we consider the statute as a whole, giving effect to each provision so that none is rendered meaningless or mere surplusage").
B. Arguments of the Parties
In its trial brief, HCAD argued to the trial court that Section 23.01(e) applies to Chapter 41 hearings before the appraisal review board because it "raises the chief appraiser's burden of proof [during the proceeding] to a 'substantial evidence' standard if the appraised value is increased from the prior year." According to HCAD, Section 23.01(e) does not apply to Chapter 42 judicial proceedings because that section is not included in Chapter 42. HCAD explained that "a Chapter 42 appeal is a complaint to a district court about the results of the appraisal review board's order," whereas "a Chapter 41 protest is a complaint to an appraisal review board about the actions of the chief appraiser," and, thus, the district court only reviews the "appraisal review board's valuation, not the chief appraiser's." HCAD took the same position in its post-trial letter brief.
Addressing HCAD's arguments to the trial court, Providence argues in its opening appellate brief that the burden of proof under Section 23.01(e) applies to Chapter 42 judicial proceedings before a district court because (1) interpreting Section 23.01(e) to apply only to appraisal review board proceedings under Chapter 41 would render Section 23.01(e) or Section 41.43(a-3) of the Tax Code superfluous or in conflict, (2) applying Section 23.01(e) to proceedings before the district court is consistent with, and required by, the trial de novo standard applicable to such judicial proceedings under Tax Code Section 42.23(a), and (3) applying Section 23.01(e) to district court proceedings gives effect to the Legislature's intent to reduce repeat litigation on the same facts, as expressed by the plain language of the statute and its legislative history.
In its appellate brief, HCAD argues that Section 23.01(e) does not apply to Chapter 42 judicial proceedings, but it presents a slightly different argument than the one it made before the district court. According to HCAD, "the ad valorem appraisal process involves three separate and distinct determinations of value by different and independent actors based on separate and distinct information and evidence" and "[t]he Tax Code (and case law) establish different criteria for weighing evidence at each of the three stages." HCAD argues that while "Section 23.01(e) most clearly addresses decision-making by the chief appraiser at the initial stage," "Section 41.43 (a-3) sets out a corresponding provision for the appraisal review board hearing where the property's value was lowered under Subtitle F in the preceding year." With respect to the third valuation stage, HCAD argues that Tax Code Section 42.23(a) expressly provides that judicial review of appraisal review board determinations before district courts are to be conducted by "trial de novo . . . in the same manner applicable to civil suits generally." Tex. Tax Code § 42.23(a). It further argues that Section 23.01(e) applies only to a chief appraiser's initial valuation and is nowhere mentioned nor incorporated in Chapter 42.
C. Analysis
The question before us is whether the burden of proof set forth under Tax Code Section 23.01(e) applies to Chapter 42 petitions for de novo judicial review filed in district court under Chapter 42. As with any statutory interpretation matter, we begin with the plain language of the statute. Section 23.01(e) states:
Section 23.01(e) was amended in 2019 and became effective January 1, 2020. All references to Section 23.01(e) in this opinion are to the prior version unless otherwise noted. Unlike the previous version addressed in this opinion which requires the chief appraiser to demonstrate that its initial decision to increase the appraised value of property is reasonably supported by "substantial evidence," the amended version of Section 23.01(e) requires the chief appraiser to prove that its initial decision is supported by "clear and convincing" evidence.
Providence argues that Section 23.01(e)'s burden of proof applies both under Chapter 41 and Chapter 42. Although HCAD argued to the trial court that Section 23.01(e) applies to Chapter 41 proceedings, it now appears to argue on appeal, although not entirely clear, that Section 23.01(e) does not apply under Chapter 41 or Chapter 42.
(e) Notwithstanding any provision of this subchapter {Chapter 23, Subchapter A, "Appraisals Generally"} to the contrary, if the appraised value of property in a tax year is lowered under Subtitle F [Chapter 41 -
43], the appraised value of the property as finally determined under that submle is considered to be the appraised value of the property for that tax year. In the following tax year, the chief appraiser may not increase the appraised value of the property unless the increase by the chief appraiser is reasonably supported by substantial evidence when all of the reliable and probative evidence in the record is considered as a whole. If the appraised value is finally determined in a protest under Section 41.41(a)(2) or an appeal under Section 42.26, the chief appraiser may satisfy the requirement to reasonably support by substantial evidence an increase in the appraised value of the property in the following tax year by presenting evidence showing that the inequality in the appraisal of property has been corrected with regard to the properties that were considered in determining the value of the subject property. The burden of proof is on the chief appraiser to support an increase in the appraised value of property under the circumstances described by this subsection.
TEX. TAX CODE § 41.41(a)(2) (stating "property owner is entitled to protest before the appraisal review board [an] unequal appraisal of the owner's property").
TEX. TAX CODE § 42.26(a) (providing remedy for unequal appraisal and stating "district court shall grant relief on the ground that a property is appraised unequally" under specific circumstances).
TEX. TAX CODE § 23.01(E) (Emphasis Added).
Providence protested the Property's appraised value for tax year 2017 under Chapter 41 and, after exhausting its administrative remedies before the ARB, it filed a petition for de novo judicial review in district court under Chapter 42. After Providence and HCAD settled their dispute, the district court entered an agreed final judgment setting the Property's 2017 tax value at $5,000,000, which was roughly $1,300,000 less than the initial appraised value of $6,318,419. Providence thus successfully lowered the Property's appraised value for tax year 2017 under Subtitle F of the Tax Code.
The following year, for tax year 2018, HCAD valued the Property at $7,015,046. Providence disputed the appraised value and filed a protest before the ARB. The ARB issued a written decision reducing the Property's tax value to $6,833,142. Unsatisfied with the reduced value, Providence filed a petition in district court for de novo judicial review under Chapter 42 of the Tax Code.
HCAD does not dispute that Section 23.01(e) was applicable to the chief appraiser's 2018 valuation of the Property. Rather, the dispute centers on the applicability of Section 23.01(e) to Providence's Chapter 42 proceeding. HCAD argues that the burden of proof under Section 23.01(e) does not apply to Chapter 42 de novo judicial proceedings, while Providence argues that it does and that it imposed on HCAD the burden of proof at trial to set forth substantial evidence supporting its valuation of the Property.
Neither Section 23.01(e) nor any other provision in the Tax Code expressly states that Section 23.01(e) applies to Chapter 41 protest hearings before the appraisal review board, Chapter 42 appeals to the district court from the appraisal review board's order determining such protests, or both. The plain language of Section 23.01(e) suggests that it applies to appraisal review board protest hearings governed by Chapter 41, as the trial court concluded ("The Court concludes that Section 23.01(e) only applies at the ARB stage of the taxpayer's protest."). We need not decide that issue, however, because even if Providence is correct that Section 23.01(e) applies to appraisal review board protest hearings under Chapter 41, we hold that Section 23.01(e) does not apply to Chapter 42 de novo judicial proceedings challenging the appraisal review board's order determining such protests-the sole issue before this Court.
As previously mentioned, Section 23.01(e) was amended in 2019. The amended version, which became effective January 1, 2020, requires the chief appraiser to demonstrate that its initial decision to increase the appraised value of a property is reasonably supported by "clear and convincing" evidence, as opposed to the previous version at issue here which required the chief appraiser to prove that its initial decision is reasonably supported by "substantial evidence." We note that the current version's "clear and convincing" evidence requirement is consistent with Tax Code Section 41.43, which increases the appraisal district's burden of establishing the value of the property from a preponderance of the evidence to clear and convincing evidence under certain circumstances. See TEX. TAX CODE § 41.43.
Providence's interpretation of Section 23.01(e) suggests that any burden or statutory obligation imposed on the chief appraiser in making its initial valuation is necessarily imputed to the appraisal district in defending a property owner's appeal from an appraisal review board's order under Chapter 42. The Tax Code does not support this interpretation.
The Legislature's use of the term "chief appraiser," as opposed to "appraisal district," in Section 23.01(e) is noteworthy because the terms "chief appraiser" and "appraisal district" are not used interchangeably in the Tax Code. Under the Tax Code, the chief appraiser is required to attend appraisal review board protest hearings on behalf of the appraisal district. Tex. Tax Code § 41.45(c). The chief appraiser's role is limited to attending the protest hearing to defend the chief appraiser's initial appraised value and filing an appeal from the appraisal review board's order on behalf of the appraisal district. Unlike the appraisal district, the chief appraiser is not a party to a Chapter 42 petition for de novo judicial review in district court. See SPX Corp. v. Altinger, 614 S.W.3d 362, 374-75 (Tex. App.- Houston [14th Dist.] 2020, no pet.) (citing Tex. Tax Code § 42.21(b) and stating "the Property Tax Code does not authorize a petition for judicial review to be brought against the Chief Appraiser, and the Property Tax Code affirmatively bars such a suit against the ARB"). Moreover, in a trial de novo before a district court, the appraisal district is not required to defend the chief appraiser's initial appraised value, or the value set by the appraisal review board. In this case, for example, HCAD presented expert testimony that the Property's market value for the 2018 tax year was $10,140,000, which is almost $3,000,000 more than the chief appraiser's initial 2018 appraised value of $7,015,046, which the ARB subsequently reduced to $6,833,142 in the Chapter 41 protest hearing.
Furthermore, we note that when the Legislature has intended to assign a burden of proof to appraisal districts, it has expressly done so. Compare TEX. TAX CODE § 41.43(A) (Stating "the appraisal district has the burden of establishing the value of the property by a preponderance of the evidence presented at the hearing") and id. § 41.43(a-3) (stating "the appraisal district has the burden of establishing the value of the property by clear and convincing evidence presented at the hearing") with id. § 23.01(e) (stating "[t]he burden of proof is on the chief appraiser to support an increase in the appraised value of property under the circumstances described by this subsection"). Thus, the Legislature's decision, under Section 23.01(e), to impose upon the chief appraiser the duty to defend its decision to increase the appraised value of property whose value was lowered in the previous year under Subtitle F, as opposed to placing the burden on the appraisal district, indicates that the Legislature did not intend to impose this obligation on the appraisal district, which unlike the chief appraiser and appraisal review board is a proper defendant in a Chapter 42 de novo judicial proceeding in district court. See SPX Corp., 614 S.W.3d at 374-75 (citing Tex. Tax Code § 42.21(b) and stating "the Property Tax Code does not authorize a petition for judicial review to be brought against the Chief Appraiser, and the Property Tax Code affirmatively bars such a suit against the ARB").
Section 23.01(e)'s reference to an appeal under Section 42.26 of the Tax Code to the district court from an appraisal review board's order does not alter our conclusion. Although Section 23.01(e) references proceedings before the district court, the statute is referring to the manner in which a property's appraised value was lowered in the prior year. Specifically, Section 23.01(e) explains how the chief appraiser can meet its burden for the current tax year when the property's appraised value for the previous tax year was finally determined in a Chapter 41 protest to the appraisal review board or under Chapter 42 in a petition for judicial de novo review in district court. See id. § 23.01(e) ("If the appraised value is finally determined in a protest under Section 41.41(a)(2) or an appeal under Section 42.26 , the chief appraiser may satisfy the requirement . . .") (emphasis added); id. § 41.41(a)(2) (stating "property owner is entitled to protest before the appraisal review board [an] unequal appraisal of the owner's property"); id. § 42.26(a) (providing judicial remedy for unequal appraisal and stating "district court shall grant relief on the ground that a property is appraised unequally" under specific circumstances).
Providence also argues that applying Section 23.01(e) to Chapter 42 judicial proceedings is consistent with, and required by, the trial de novo standard applicable to such judicial proceedings under Section 42.23(a) of the Tax Code. Section 42.23(a) states that judicial review in such proceedings "is by trial de novo" and the trial court "shall try all issues of fact and law raised by the pleadings in the manner applicable to civil suits generally." Id. § 42.23(a). Trying issues of fact and law as if they had not been previously decided in an administrative proceeding, however, does not mean that the district court must employ the same procedures and burdens applicable at the administrative stage. See generally Patients Med. Ctr. v. Facility Ins. Corp., 623 S.W.3d 336, 342-43 (Tex. 2021) (stating legal authority addressing "parameters of judicial review of a final agency decision" are "irrelevant to the issue at hand, which relates to the procedures and burdens governing an administrative contested case hearing, not the procedures and burdens governing judicial review of the decision resulting from that hearing").
To the extent Providence suggests that Section 23.01(e) creates a new cause of action or ground for relief, as HCAD argues, such an argument is not persuasive. Chapter 42 sets forth the exclusive procedures and remedies for judicial proceedings. See TEX. TAX CODE § 41.42.09(a) ("Except as provided by Subsection (b) of this section, procedures prescribed by this title for adjudication of the grounds of protest authorized by this title are exclusive. . ."); id. § 42.09(b) (creating affirmative defense in suit to collect delinquent property tax).
Providence argues that if Section 23.01(e) applies only to appraisal review board hearings under Chapter 41, and not Chapter 42, as HCAD argued to the trial court, then Section 23.01(e) or Section 41.43(a-3) of the Tax Code is rendered surplusage or the two sections conflict with one another. But holding that Section 23.01(e) is inapplicable to Chapter 42 de novo judicial proceedings in district court does not render Section 23.01(e) or Section 41.43(a-3) surplusage or create a conflict between the two because these statutes address different, but related, issues with respect to the burden of proof.
Section 41.43 addresses the appraisal district's burden of proof at a Chapter 41 protest hearing with respect to the ultimate issue-the value of the property for that tax year. Section 41.43(a) states:
Except as provided by Subsections (a-1), (a-3), and (d), in a protest authorized by Section 41.41(a)(1) or (2), the appraisal district has the burden of establishing the value of the property by a preponderance of the evidence presented at the hearing. If the appraisal district fails to meet that standard, the protest shall be determined in favor of the property owner.
Subsection (a-1) increases the appraisal district's burden to clear and convincing evidence under some circumstances and Subsection (d) shifts the burden of proof to the property owner to establish the value of the property by a preponderance of the evidence if the property owner fails timely to deliver a rendition statement, property report, or response to the chief appraiser's request for information. TEX. TAX CODE § 41.43(a-1), (d).
TEX. TAX CODE § 41.43(A). Subsection (a-3) increases the appraisal district's burden of proof with respect to the value of the property from preponderance of the evidence to clear and convincing evidence if:
(1) the appraised value of the property was lowered under this subtitle in the preceding tax year;
(2) the appraised value of the property in the preceding tax year was not established as a result of a written agreement between the property owner or the owner's agent and the appraisal district under Section 1.111(e); and
(3) not later than the 14th day before the date of the first day of the hearing, the property owner files with the appraisal review board and delivers to the chief appraiser:
(A) information, such as income and expense statements or information regarding comparable sales, that is sufficient to allow for a determination of the appraised or market value of the property if the protest is authorized by Section 41.41(a)(1); or
(B) information that is sufficient to allow for a determination of whether the property was appraised unequally if the protest is authorized by Section 41.41(a)(2).
TEX. TAX CODE § 41.43(A-3).
Unlike Section 41.43, Section 23.01(e) places the burden of proof on the chief appraiser to demonstrate that its decision to increase the appraised value of property over the previous year's value is "reasonably supported by substantial evidence" when the property's value for the prior year was lowered under Subtitle F. Id. § 23.01(e). Section 23.01(e) does not change the fact that the appraisal district bears the burden of proving the value of the property for a given tax year. HCAD articulated this position in the trial court when it argued:
In most instances, the Tax Code places the burden of proof on the chief appraiser at the administrative hearing before the appraisal review board. For example, subsection 41.43(a) places a preponderance of the evidence burden of proof on the chief appraiser at hearings related to market value and equal and uniform protests. Subsection 41.43(a-l) places a clear and convincing burden of proof on the chief appraiser at appraisal review board hearings when the property's appraised value is equal to or less than one million dollars and the property owner provides a USPAP compliant appraisal to the appraisal review board. Subsection 41.43(b) mandates that unless the chief appraiser establishes by one of three methods that the property under protest is not unequally appraised, the protest will be determined in favor of the property owner. Subsection 23.01(e) raises the chief appraiser's burden of proof to a "substantial evidence" standard if the appraised value is increased from the prior year. Tex. Tax Code Ann. § 23.01(e). None of these subsections are contained within Chapter 42 of the Tax Code pertaining to judicial appeals.
In its reply brief, Providence argues "it is possible to give both § 23.01(e) and § 41.43(a-3) meaning" when applied to appraisal review board hearings, and it correctly notes that how these two statutes "would work at the ARB level is not before the Court." We agree that the relationship between Sections 23.01(e) and 41.43(a-3) is a question not before this Court and we express no opinion on this issue.
Thus, holding that Section 23.01(e) is not applicable to Chapter 42 judicial proceedings does not render either Section 41.43(a-1) or Section 23.01(e) surplusage.
Providence further contends that if Section 23.01(e) does not apply to Chapter 42 trials de novo, then Section 23.01(e)'s provision that the chief appraiser has the burden to demonstrate that its decision to increase the appraised value of the property over the previous year's value is reasonably supported by substantial evidence is "beyond judicial review" because "an owner cannot force the ARB to correctly apply § 23.01(e), precisely because owners are supposed to have an adequate remedy at law, i.e., a de novo trial on the whole case." The same can be said, however, for all such alleged procedural errors at the administrative level because the standard of review from an appraisal review board's decision is trial de novo, and as Providence acknowledges, "de novo review is not concerned with procedural errors like burdens of proof."
"Texas recognizes a range of standards for reviewing administrative decisions: (1) pure trial de novo; (2) pure substantial evidence; and (3) substantial evidence de novo." In re Edwards Aquifer Auth., 217 S.W.3d 581, 586 (Tex. App.- San Antonio 2006, no pet.) (citing G.E. Am. Commc'n v. Galveston Cent. Appraisal Dist., 979 S.W.2d 761, 764 (Tex. App.-Houston [14th Dist.] 1998, no pet.)). When reviewing an administrative decision using the pure trial de novo standard, the reviewing court conducts "an independent fact-finding proceeding in which new evidence is taken and all issues are determined anew." In re Edwards Aquifer Auth., 217 S.W.3d at 586 (citing G.E. Am. Commc'n, 979 S.W.2d at 764). Under the pure substantial evidence standard, the reviewing court considers only the factual record made before the administrative body and determines whether "its findings are reasonably supported by substantial evidence." In re Edwards Aquifer Auth., 217 S.W.3d at 586 (citing G.E. Am. Commc'n, 979 S.W.2d at 764). The substantial evidence de novo standard allows "the reviewing court to hear additional evidence in existence at the time of the administrative hearing, regardless of whether it was actually introduced at the administrative hearing." In re Edwards Aquifer Auth., 217 S.W.3d at 586 (citing G.E. Am. Comm 'n, 979 S.W.2d at 764-65). Under either the pure substantial evidence standard or substantial evidence de novo standard, the administrative decision "will be set aside only if it is arbitrary, capricious, unlawful or not reasonably supported by substantial evidence." G.E. Am. Commc'n, 979 S.W.2d at 765.
Had the Legislature intended for alleged errors in the appraisal review board's decision-making process to be reviewable by the district court under Chapter 42, it could have adopted a pure substantial evidence or substantial evidence de novo standard, both of which require the district court to evaluate whether the administrative body's decision is reasonably supported by substantial evidence. See In re Edwards Aquifer Auth., 217 S.W.3d at 586-87 (stating reviewing court's applying either pure substantial evidence standard or substantial evidence de novo standard determines whether administrative body's findings are reasonably supported by substantial evidence); see also G.E. Am. Commc'n, 979 S.W.2d at 765 (stating under pure substantial evidence and substantial evidence de novo standards, administrative body's decision "will be set aside only if it is arbitrary, capricious, unlawful or not reasonably supported by substantial evidence"). But it did not. Instead, the Legislature adopted the trial de novo standard under which the district court does not evaluate whether the appraisal review board's decision is correct, a question which necessarily includes whether the chief appraiser or appraisal district carried its burden of proof in the protest hearing. The Legislature expressly stated in Section 42.23(a) that judicial review in Chapter 42 proceedings is by trial de novo and that the "district court shall try all issues of fact and law raised by the pleadings in the manner applicable to civil suits generally." Tex. Tax Code §§ 42.23(a) (emphasis added). It further clarified that the "procedures prescribed by this title for adjudication of the grounds of protest authorized by this title are exclusive." Tex. TAX CODE § 42.09 (emphasis added).
We note that regardless of whether the chief appraiser's burden is by substantial evidence (the prior version of Section 23.01(e)) or clear and convincing evidence (the current version), the result is the same because in a trial de novo the district court does not evaluate whether the appraisal review board held the chief appraiser to the applicable burden of proof.
The issue before the district court under the trial de novo standard is whether the party with the burden of proof at the district court carried its burden to establish the value of the property. See Amelang v. Harris Cnty. Appraisal Dist.,__ S.W.3d__, No. 01-20-00623-CV, 2022 WL 4371518, at *5 (Tex. App.-Houston [1st Dist.] Sept. 22, 2022, no pet. h.) ("This Court has assigned the burden of proof to the taxpayer in tax appraisal suits.") (citing Cypress Creek Fayridge, L.P. v. Harris Cnty. Appraisal Dist., No. 01-16-00003-CV, 2016 WL 7164032, at *4 (Tex. App.-Houston [1st Dist.] Dec. 8, 2016, no pet.) (mem. op.) and others). This Court's recent opinion in Amelang v. Harris County Appraisal District, __S.W.3d__, No. 01-20-00623-CV, 2022 WL 4371518, (Tex. App.-Houston [1st Dist.] Sept. 22, 2022, no pet. h.) is instructive. In that case, Amelang, the property owner and plaintiff in a Chapter 42 de novo judicial proceeding, argued the trial court erred in concluding it had the burden of proof at trial. Amelang argued that Section 23.01(e) shifted the burden of proof to HCAD to establish the market value of the subject properties at trial because Amelang had protested the properties' appraised values for the previous tax year and settled those values in an agreed final judgment. Amelang argued that, under Section 23.01(e), "HCAD had the burden to support its increase in the appraised value of the properties for the [current] tax year with clear and convincing evidence." See id. at *6 (emphasis added). This Court noted that while "Section 23.01(e) governs the obligations of the chief appraiser in making the initial appraisal," the district court proceeding from which Amelang appealed was "not based on the chief appraiser's initial appraisal, nor is the chief appraiser a proper party to this appeal." Id. (citing Tex. Tax Code § 42.21(b)). "Nothing in the language of section 23.01(e) purports to address the burden of proof in de novo proceedings pursuant to chapter 42." Id.
In 2020, the Legislature amended Section 23.01 to raise the appliable burden of proof from substantial evidence to clear and convincing evidence. Amelang addressed the current version of Section 23.01(e) which, unlike the version in this appeal, required the chief appraiser to support the increase in value with clear and convincing evidence.
We further noted that the district court's review on appeal from an appraisal review board's order determining a property owner's protest is by trial de novo and that Chapter 42 requires the district court to "try all issues of fact and law raised by the pleadings in the manner applicable to civil suits generally." Id. (citing Tex. Tax Code § 42.23(a)). Generally, in civil suits, the party seeking relief bears the burden of proof. See TRO-X, L.P. v. Anadarko Petroleum Corp., 548 S.W.3d 458, 464-65 (Tex. 2018) (noting "well accepted postulate of the common law" that civil litigant asserting affirmative claim for relief has burden of proof). We also reiterated that this Court routinely has found that the burden of proof is on the property owner in tax appraisal suits. See Amelang, 2022 WL 4371518, at *5; see also Cypress Creek Fayridge, L.P., 2016 WL 7164032, at *4; Briggs Equip. Tr. v. Harris Cnty. Appraisal Dist., 294 S.W.3d 667, 670 (Tex. App.-Houston [1st Dist.] 2009, pet. denied) (stating taxpayer has burden to prove that market value of its inventory differed from district's appraisal); Starflight 50, L.L.C. v. Harris Cnty. Appraisal Dist., 287 S.W.3d 741, 745-46 (Tex. App.-Houston [1st Dist.] 2009, no pet.) (recognizing applying taxpayer had burden of proof in trial de novo). This Court held that Section 23.01(e) does not relieve the property owner of its burden to prove that the market value of its property differed from the taxing district's appraisal. Amelang, 2022 WL 4371518, at *6-7. Thus, Amelang supports the proposition that the property owner bears the burden of proof with respect to establishing the property's value at a trial de novo, and the chief appraiser's obligations under Section 23.01(e) do not shift the burden of proof to HCAD.
Providence does not appear to argue that it does not bear the initial burden of proof at a trial de novo, rather, Providence argues that Section 23.01(e) shifts the burden to HCAD once Providence proves that it successfully lowered the property's value the previous year under Subtitle F.
Providence argues that Amelang is distinguishable because that appeal addresses whether HCAD has the burden to prove a property's value in the district court, whereas this appeal concerns the narrower issue of whether HCAD must produce substantial evidence to support the decision to increase a property's value the year after it was lowered under Subtitle F of the Tax Code. We do not read Amelang so narrowly.
Pursuant to the Code Construction Act in the Texas Government Code, Providence argues that its interpretation of Section 23.01(e) is supported by the statute's legislative history, which we may consider when construing a statute regardless of whether the statute is ambiguous. See TEX. GOV'T CODE § 311.023(3) (allowing courts to consider extrinsic evidence, including "legislative history" when construing statutes "whether or not the statute is considered ambiguous on its face"). The Texas Supreme Court, however, cautions against the use of such extrinsic evidence when construing unambiguous statutes and routinely declines to consider such evidence. See Sullivan v. Abraham, 488 S.W.3d 294, 299 (Tex. 2016) (citing City of Round Rock v. Rodriguez, 399 S.W.3d 130, 137 (Tex. 2013)) (acknowledging Code Construction Act allows courts to consider extrinsic evidence, including legislative history, when construing statutes, regardless of whether statute is ambiguous, and stating, "We, however, do not resort to extrinsic aides, such as legislative history, to interpret a statute that is clear and unambiguous. . ."); City of Rockwall v. Hughes, 246 S.W.3d 621, 626 (Tex. 2008) ("When a statute's language is clear and unambiguous, it is inappropriate to resort to rules of construction or extrinsic aids to construe the language."); Alex Sheshunoff Mgmt. Servs., L.P. v. Johnson, 209 S.W.3d 644, 652 n.4 (Tex. 2006) (stating "over-reliance on secondary materials should be avoided, particularly where a statute's language is clear. If the text is unambiguous, we must take the Legislature at its word and not rummage around in legislative minutiae."); see also Hamid v. Lexus, 369 S.W.3d 291, 300 (Tex. App.-Houston [1st Dist.] 2011, no pet.) (declining to consider legislative history when construing unambiguous statute and stating that while Code Construction Act allows courts to consider legislative history when construing statutes, such "act is permissive, not mandatory"). This Court follows the Texas Supreme Court's approach with respect to the use of extrinsic evidence when construing an unambiguous statute. See Schlumberger Ltd. v. Rutherford, 472 S.W.3d 881, 888 (Tex. App.-Houston [1st Dist.] 2015, no pet.); Hamid, 369 S.W.3d at 300; Jones v. Harris Cnty., No. 01-20-00700-CV, 2022 WL 3722136, at *6 (Tex. App.-Houston [1st Dist.] Aug. 30, 2022, no pet.) (mem. op.); Metro Hosp. Mgmt., LLC v. Harris Cnty. Appraisal Dist., No. 01-13-00571-CV, 2014 WL 527536, at *4 (Tex. App.-Houston [1st Dist.] Feb. 6, 2014, no pet.) (mem. op.). Here, no ambiguity has been argued or identified in Section 23.01(e). Nor have we found any. Thus, consistent with the Supreme Court and this Court's prior precedent, we decline to consider the legislative history when construing this unambiguous statute.
We hold that Section 23.01(e) of the Tax Code does not apply to Chapter 42 de novo judicial proceedings before district court. Thus, the trial court did not err by holding that Section 23.01(e) was inapplicable and not applying Section 23.01(e) to cap the appraised value of the Property at $5,000,000.
We overrule Providence's sole issue.
Conclusion
We affirm the trial court's judgment.