Moers v. Harris Cnty. Appraisal Dist., 469 S.W.3d 655 (Tex. App.—Houston [1st Dist.] 2015, pet. denied)
The Moerses owned land in Harris County which they utilized for an organic sheep-raising operation. They sought to have their property appraised as open-spaced land for tax years 2010 through 2012 by the Harris County Appraisal District (“HCAD”) which would require valuation based on productive capacity rather than market value and would result in a lower appraisal valuation. HCAD denied the Moerses’ applications on the basis of degree of intensity standards imposed by the chief appraiser requiring a minimum of seven acres of land sufficient to sustain at least 24 sheep. Evidence introduced showed that the Moerses always had less than 24 sheep on the property. After unsuccessfully protesting the determination to the Harris County Appraisal Review Board (the “ARB”), the Moerses filed suit against HCAD, the ARB, and the chief appraiser challenging the denial of their open-spaced land application. Alleging that the chief appraiser did not have the authority to adopt the standards, the Moerses sought a declaratory judgment invalidating HCAD’s degree of intensity standards and an injunction preventing HCAD and the chief appraiser from enforcing the standards. The chief appraiser filed a plea to the jurisdiction seeking dismissal of the declaratory judgment, ultra vires, and injunctive relief claims against the chief appraiser, which the trial court granted. HCAD filed a plea to the jurisdiction seeking dismissal of the 2012 tax year claims against HCAD on the basis of failure to exhaust administrative remedies, which the trial court also granted. HCAD filed a motion for summary judgment arguing that the Moerses conclusively could not meet the degree of intensity standards for open-spaced land, and the Moerses filed a motion for partial summary judgment on the same issue. The trial court granted HCAD’s motion and denied the Moerses’ motion, and the Moerses appealed. The court of appeals upheld the trial court’s judgment with one modification.
The court of appeals agreed with the trial court that HCAD was entitled to summary judgment on the issue of open-spaced land qualification. The court of appeals first laid out its interpretation of the law on open-spaced land appraisal. In order to qualify for valuation as open-spaced land, the Texas Property Tax Code requires a property owner to show that its property is currently devoted principally to agricultural use, that such use is to the degree of intensity generally accepted in the area, and that the property has been principally devoted to agricultural use or production of timber or forests for five of the preceding seven years. The Texas Legislature delegated the authority to develop eligibility standards to the Texas Comptroller of Public Accounts, who has in turn delegated to chief appraisers the determination of what the required land use and degree of intensity standards should be for qualifying land. In setting the degree of intensity standards generally accepted in the area, the chief appraiser is not necessarily limited to the county, but may look to a wider area for rarer agricultural use. After setting the standards, the chief appraiser then has the discretion to determine open-spaced land applications. In light of this interpretation of the law, the court of appeals limited its evaluation to whether the chief appraiser acted contrary to the authorizing statute by imposing a rule that contravened statutory language, ran counter to the objective of the statute, or imposed additional restrictions or conditions in excess of or inconsistent with the statutory provisions. The court of appeals described the evidence offered by the Moerses as limited to an argument that HCAD and the chief appraiser should apply a different degree of intensity standard, and the court of appeals concluded this was insufficient to raise a fact issue or demonstrate their entitlement to summary judgment. The court of appeals stated that the minimum land size requirement and minimum animal requirement were not contrary to the general legislative scheme. The court of appeals additionally rejected the Moerses’ argument that they fell within the drought exception to open-spaced land. While they introduced evidence of a drought during the relevant time period, the Moerses could not qualify for the exception because the court concluded they never met the degree of intensity standards during periods of non-drought.
The Moerses also challenged the trial court’s dismissal of its ultra vires claims against the chief appraiser. An ultra vires claim is a claim that the state official acted outside legal and/or statutory authority. The court of appeals agreed that the Moerses’ ultra vires claims must be dismissed because they amounted to complaints about the chief appraiser’s exercise of discretion and complaints that the chief appraiser failed to follow administrative procedure, neither of which amount to a proper ultra vires claim. Having upheld the dismissal of all claims against the chief appraiser, the court of appeals also upheld the dismissal of the declaratory judgment actions because the Moerses could not assert those claims against the remaining defendants who did not have the authority to and did not develop the degree of intensity standards. The court of appeals modified the trial court’s judgment to dismiss the 2012 tax year claims without prejudice because the dismissal for failure to exhaust administrative remedies did not go to the merits of the Moerses claim. Finally, the court of appeals held that it was within the trial court’s discretion to assess costs against the Moerses.