'I'bis is the back-up information for I?xecutive Session, Ilenl :~.~1. • Lcon Ilarrell has rcducslcd a lax refund I~ronr Kcrr County I~or the years 1985, 1986, 1987, and 1988. The following information is for your information. • 1985 -Ilarrell sleet with the Kerr County Appraisal District (KCADj, requested, and was granted, in writing, an /lgricultural I:xcnlption on his rural acreage. No improvements; cattle and horses graze the property. • For whatever reason the Agricultural Lxentption did not t;et updated into the KCAD computer. Appraisal notices were mailed to Ilarrell with no changes in the appraised value.. An employee of Mr. llarrell's paid the amounts on the notices with no questions being asked. The overpayment of taxes continued for a total of four (~I) years. Due to rc- financing, the overpayment of taxes was discovered and Ilarrell initiated the process of requesting a refund for the overpayments. • 'T'axing entities involved are Kerr County, Upper Guadalupe River Authority, City of Kerrville, and Kerrville I.S.ll. 'I'bis request is for Kerr County only. It is my understanding that we can approve refunds for the vther entities for which we collect taxes (K.1.S.D. is not included.) A question has now arisen as to what properties are located within the Clty llrnlts. • It is estimated that the refund from Kerr County only will be between $1,500 and $2,000. The other entities will be more. • See letter from the KCAU aUorney, dated 19 llecember 1c~89, stating that Ilarrell is not entitled to a refund. • See "Refund policies......", Statement, January 1989. Up to three (3) years to apply for a refund for overpayment of taxes. • A definite 'Catch 22' exists - If we want to consider the refund we need accurate nuulbers. • Attached are the numbers used in this presentation. LAw orr•tc-:S CALAMI?, LiNEBARGEk & CJan~tnM 1949 St~U7H i.H. 35 P.CI. DOX 174ZN AIrSTh-. TEXAS 187fU 512 447.56 i5 FAX 512 443•J494 December 19, 1989 Ms. Juanita Reeves Maples Chief 1lppra~ser Kerr County l~ppraisal District F'. O. Hox 1685 Re~rrville, Texas 78U29 RE: Leon Harrell Dear Juanita: This letter ie in responBe to your recent ~nqul.ry.regard~.ng Leon Harr4~11's request for a refund for tax years 1985 through 1988. In my opinion Mr. Harrell is~ not entitled ko a refund. nccordinc~ tc~ the facto you provided me, in 1.985 the taxpayer filed art application for open-space valuation, which was approved l.ilr l~ttrGi Ltwu tli.y 3LYYidl~nl bl:sLt1_~:L. !'vi~ r~uiu~ tN~~rvct, l~vwev~r, op4yn~space value was not reflected on t}ie open-space designation was later removed from the record, and lte was notified of such removal in the 1905 notice of appraised valuE. It therefore L-eca~tiltS in.cuif-bent upon him to protest the failure to receive open-space value. By failing to do so, Mr. Eiarrell has waived his right to complain of the fail_rire to receive open-rspace value for prior years. Dallas County~ppraisal _pietric:t v. Lal, 701 S.W.2d 44 (Tex.App.~--Dallas 195, writ ref'd. n.r.e.). Furthermore, the fact that taxes were paid based on market value for the years 1985 through 1988 precludes the taxpaypr'B recovery of those taxes tas a result of the volur~L-ary payment rule, which stetcs that: a person who voluntarily pays even act illegal_ tax has no claim for rept~ymertt. Texas Natiortal_I3ank vs. I[arria County, 7G5 S.W.7.d 823 (Tex.App.-wI~nu:~tr~n 1988, writ der~ier~) . I~P.Catr$P. Mr.. Ilurrell ya.lurtttrx.~il~* paid tho ta~rc~a aa~a~cocl ott tltr~ market valut~ o£ the property for ttte yg~rrss in quar~tion', and did tot protest during those years, he has waived his right to a redetez'rnirtation of. those taxes. Please let me know .if i can be of any further assistance irr this matter. Sincerely, i^ ~ J dith A. Krties Attorney at Law JAR/cjr TRI.1?[:;UPIt?n: (,17.) ?.57-2112 Refund policies essential wlieii reiiiibursing property owners for overpayiiieiit of taxes ~'~ "T'ax refunds are a bookkeeping chore for tax collectors and often an unexpected rev- cnucloss for taxing units. Nonetheless, taxing units are reyuircd to issue tax refunds when an incorrect amount of taxes has been paid. Because a refund can be triggered by a number of situations, appraisal districts, taxing units, and tax collectors need written refund policies. These policies can simplify the bookkeeping process and provide an audit trail. WI>Iat triggers a tax refund? Refunds are authorized by the Property Tax Code when overpayments or erroneous tax payments occur. Situations that result in an incorrect tax payment usually fail into orte of seven categories. Late homestead exemption: A homeowner who applies for a homestead exemption after the tiling deadline passes is entitled to a refund if the exemption is granted. Section 11.431, Property Tax Code, allows a property owner to file a homestead exemption application within a year after the taxes are paid or become delinquent, whichever is first. If both the chief appraiser and the AIZB approve the appraisal record change, then the chief appraiser notifies the collector in each taxing unit in which the residence is located. If the tax has been paid, the collector must refund the amount of tax levied on the newly exempted value. Mat)rematical errors: Section 26.15 allows a taxing unit to correct mathematical errors in its lax roll and issue any resulting refunds if a property owner's tax liahility dccrcascs. Corrections to the appraisal roll: Section 25.25 allows the chief appraiser and ARB to correct the appraisal roll if a clerical error affects a property owner's tax liability. Court appeals: Section 42.43 orders a !axing unit to issue a tax refund to any property owner whose lax liability decreases because of judicial review of an ARB ruling. Erroneous payments or overpayments: Section 31.1 I allows a property owner to apply for a tax refund of an overpayment or erroneous payment by filing a refund appli- cation with the taxing uniCs tax collector. Rollback elections: Section 26.07 governs the issuance of tax refunds after a successful tax rate rollback election. Natural disasler relief: Section 23.02 allows taxing units to prorate taxes in an area declared a natural disaster by the governor. If a disasler occurs and a taxing unit decides to prorate taxes, the appraisal district reap- praises the affected property. A property owner who has paid his taxes may be entitled to a refund if the property's value dccrcascs as a result of disaster-related dam- ages. (See the January 1988 S'1'A'I'EM EN'i'.) How do you get a refund? if a taxpayer believes an error of his own or of the tax collector caused him to pay too much property tax, he must apply for a refund within three years of making the incorrect payment. Examples of such errors could be that the tax collector made a clerical error on the tax hilt, or that the taxpayer simply wrote a check for the wrong amount. For a refund of this type that amounts to $500 or more, the tax collector must get his governing body's approval for the refund before preparing and Inalllllg tI1C ChCCk. I hC Property Tax Code doesn't require governing body approval for refunds of Icss than $500. The State Property 'Tax Board's Rule 155.39 lists the required contents of a tax refund application. The SP7B also provides a model form for refund applications. A late application far a homestead exemption can result in a refund if the homeowner paid taxes before receiving the exemption. In these cases, the homeowner does not apply for the refund. Once the late application is approval, the c:hicf appraiser must notify the altccted taxing units so that their tax collectors can refund the amount of tax that was paid on the exempted value of the home. 'The other types of refunds require no application of any kind front the taxpayer, For example, if a court ruling lowers a property's taxable value after the owner has paid taxes on the higher value or if the taxing unit's voters pass a rollback election, then the collector should autonurtically prepare refund checks. How to handle reruiiZs after a successful rollback election A successful rollback election Corces a taxing unit to repeat many aspects of the year's tax collection process. A taxing unit that sent tax bills and collected taxes prior ro a successful election must issue new hills using the reduced tax rate. The collector must also prepare new statements to mail with tax refunds. This can be a tirnc- consuming, crstly project because the project will involve all of the unit's taxpayers. Voters in six taxing units approved roll- backs of 1987 tax rates. Most of these rollbacks occurred in smaller-sized taxing writs where employee manpower and computer facilities are limited. In one city, the rollback election affected 4,800 taxpayers. At the time of the election about 70 percent of this city's property owners had already paid their taxes. This meant the tax collector had hoth refunds and new bills to issue. This city prepared a tax statement listing both the old and new tax rates, the amount due, and the new delinquency date and charges. The statement was designed as both a tax bill and a refund notice, so that all the required information was on one form. The city's tax collector estimated the cost of issuing the refund was over $10,000 in labor, supplies, and related expenses. 'The following suggestions for issuing rollback refunds may help. • Undcrstandthccodcproceduresforissuing rollback refunds---the new delinquency date, the liability date and the day interest hcgins accruing. Plan your work with these dates in mind to avoid paying interest. • Based on your recordkeeping system, determine the hest method for recording and monitoring tax refunds. Some col- lectors recommend maintaining separate lists for each type of tax refund, showing the amount of the refund, when it was sent, and any subsequent action. Re- mcmbcr,you -nust create an audit trail for each transaction. • !f an outside agency is the taxing unit's collector, then that agency needs to keep the taxing writ informed of the refund process. "The unit may request a master list from the tax collector identifying all property owners and the status of their tax payments. 'This list provides a reference source when dealing with properly owners /'~ ~r who contact the taxing unit. The taxing unit should also monitor the tax collector's activities to make sure all refund checks 4 S'1'~1'I'EMENT/January 1989 Leon Harrell 1 A B C D E F 1 TOTAL 2 Parcellacres 5.38 7.33 21.8 138.19 172.7 4 88 taxes d $18.02 $218,60 $650.17 $154.22 1 041,01 5 87 taxes d $26.82 $262.24 $779.89 172.18 1 241,13 6 86 taxes d $25.73 269.33 $801.02 $165.23 $1,261,31 7 85 taxes d 23.42 $254.39 756.57 $150.35 $1 184,73 8 9 ~ 10 85 valuelacre $1,940.52 $5,000.00 $5,000.00 $485.06 11 87 valuelacre $1,940.52 $5,000.00 $5,000.00 $484.98 12 88 valuelacre $1,455.39 $4,000.00 4,000.00 484.98 13 14 15 88 A .value $7,830 29,320 87,200 $67,020 16 88 Co. rate 02619 0.2619 0.2619 0.26191 17 85 A .value $10,440 $36,650 $109,000 67,030 18 85 Co. rate 0.21 0.21 1 021 0.21 19 20 Est. A Value $398 $542 $1,613 $10,226 $8,635 21 Est. taxes w/A value $1.04 $1.42 1 $4.221 $26.781 22 Est. Refund! ear 19.47 1 75.27 1 224.161 148.751 501,11 Page 1 COMMISSIONERS' COURT AGENDA REQUEST ~ PLEASE FURNISH ONE ORIGINAL AND SEVEN COPIES OF THIS REOUESTAND DOCUM NTS TO BE REVIEWED BY CIE COURT. MADE BY: OFF ICE: ~~ ~ ~~ MEETING DATE: l ~~~ ~~ TIME PREFERRED: _. SUBJECT: (PLEASE BE SPECIFIC): ESTIMATED LENGTH OF PRESENTATION: IF PERSONNEL MATTER -NAME OF EMPLOYEE: NAME OF PERSON ADDRESSING THE COURT: Time for submitting this request for Court to assure that the matter Is posted In accordance with Article 6252- i 7 is as follows: • Meetings held on second Monday: 12:00 P. M. previous Wednesday • Meetings held on Thursdays: 5:00 P. M. previous Thursday. If preferable, Agenda Requests may be made on off Ice stationery with the above Information attached. THIS REQUEST RECEIVED BY: THIS REQUEST RECEIVED ON ~e All Agenda Requests will be screened by the County Judge's Office to determine If adequate information has been prepared for the Court's formal consideration and action at time of Court meetings. Your cooperation will be appreciated and contribute towards your request being addressed at the earliest opportunity. s~~~~~ ~~ ~~t~ (no aotion ~Ch .~ ~ 1g90