Can the Texas appraiser board regulate 'uniform and equal' studies done by property tax appraisers?

Plain-English summary

Douglas Oldmixon, the commissioner of the Texas Appraiser Licensing and Certification Board, asked the Attorney General whether his board has authority over a particular kind of work product. A property owner who thinks a home is appraised too high compared with similar homes might pay an appraiser to do a "uniform and equal" (U&E) study comparing the appraised values. The Board had received complaints that appraisers were doing these studies improperly, but some people doubted the Board could act, because chapter 1103 of the Occupations Code defines "appraisal," and a U&E study might not be one.

The opinion reframed the question. Chapter 1103 does not regulate only appraisals; it regulates the licensing and certification of appraisers. Licensed appraisers must comply with the Uniform Standards of Professional Appraisal Practice (USPAP) and with Board rules that are at least as stringent as the USPAP. So the relevant question is not whether a U&E study is technically an "appraisal," but whether the USPAP or Board rules regulate that task. If they do, chapter 1103 requires the appraiser to comply, and the Board can review, investigate, and resolve complaints, impose penalties, and adopt rules.

The opinion declined to decide whether a U&E study is itself an appraisal, appraisal consulting, or appraisal review, noting that AG opinions answer only the questions actually asked. But it concluded that the Board, as the agency charged with enforcing chapter 1103, may determine whether the USPAP or its rules reach particular tasks, subject to administrative and judicial review, and that a court would give the Board's reasonable reading serious consideration. On the follow-up questions, the opinion said neither an appraiser putting a license number on a report nor a property owner hiring someone because that person is an appraiser would change the analysis, and that Board rules cannot drop below the USPAP.

Currency note

This opinion was issued in 2012. Subsequent statutory amendments, court decisions, or later Attorney General 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 Appraiser Licensing and Certification Board (as the opinion held for them): The opinion read the Board's authority as reaching the licensing and certification of appraisers and the tasks the USPAP and Board rules cover. It recognized the Board's power to determine, subject to administrative and judicial review, whether those standards regulate uniform-and-equal studies.

Appraisers (as the opinion described it): The opinion explained that compliance obligations under chapter 1103 turn on whether the USPAP or Board rules regulate the task performed, not on whether the task carries the label "appraisal."

Property owners and others who commission U&E studies (as the opinion described it): The opinion did not decide whether a uniform-and-equal study is an appraisal, leaving that determination to the Board in particular instances.

Common questions

Does the Texas appraiser board only regulate appraisals?
According to the opinion, no. Chapter 1103 regulates the licensing and certification of appraisers, who must comply with the USPAP and Board rules, not just the performance of appraisals.

Can the board act on a flawed uniform-and-equal study?
The opinion concluded that if the USPAP or Board rules regulate that task, chapter 1103 requires the appraiser to comply, and the Board may determine whether those standards reach the task, subject to review.

Did the Attorney General say a U&E study is an appraisal?
No. The opinion expressly declined to opine on whether a uniform-and-equal study is a kind of appraisal, appraisal consulting, or appraisal review.

Can the Board's rules be weaker than the USPAP?
The opinion explained that Board rules must be at least as stringent as the USPAP, so a rule reducing USPAP requirements would not be valid, while a rule increasing them would be permissible within the Board's authority.

Background and statutory framework

The Texas Constitution requires that taxation be uniform and equal. Tex. Const. art. VIII, § 1. Chapter 1103 of the Occupations Code regulates the licensing and certification of real estate appraisers, see Tex. Occ. Code Ann. §§ 1103.001-.5545 (West 2004 & Supp. 2011), bars unlicensed appraising, id. § 1103.201 (West Supp. 2011), and requires appraisers to comply with the USPAP and Board rules at least as stringent as the USPAP, id. § 1103.405 (West Supp. 2011). A separate provision bars misleading the public about a person's ability to perform an appraisal service. Id. § 1103.401(a)-(b) (West 2004).

The opinion read the word "stringent" by its common meaning, see Tex. Gov't Code Ann. § 311.011(a) (West 2005), and relied on the principles that courts give serious consideration to an enforcing agency's reasonable construction of its statute, Tarrant Appraisal Dist. v. Moore, 845 S.W.2d 820, 823 (Tex. 1993), and that an agency has the powers reasonably necessary to perform its statutory duties, Pub. Util. Comm'n of Tex. v. GTE-Southwest, Inc., 901 S.W.2d 401, 407 (Tex. 1995).

Citations

Cases:

• Tarrant Appraisal Dist. v. Moore, 845 S.W.2d 820, 823 (Tex. 1993)
• Pub. Util. Comm'n of Tex. v. GTE-Southwest, Inc., 901 S.W.2d 401, 407 (Tex. 1995)

Statutes:

• Tex. Const. art. VIII, § 1
• Tex. Occ. Code Ann. §§ 1103.001-.5545 (West 2004 & Supp. 2011)
• Tex. Occ. Code Ann. § 1103.201 (West Supp. 2011)
• Tex. Occ. Code Ann. § 1103.405 (West Supp. 2011)
• Tex. Occ. Code Ann. § 1103.401(a)-(b) (West 2004)
• Tex. Gov't Code Ann. § 311.011(a) (West 2005)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/greg-abbott/ga-0911
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2012/ga0911.pdf

Original opinion text

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

ATTORNEY GENERAL OF TEXAS
GREG ABBOTT

February 7, 2012

Mr. Douglas Oldmixon, Commissioner Opinion No. GA-0911
Texas Appraiser Licensing and
Certification Board Re: Jurisdiction of the Appraiser Licensing and
Post Office Box 12188 Certification Board over a property tax appraiser's
Austin, Texas 78711 uniform and equal analysis (RQ-0992-GA)

Dear Commissioner Oldmixon:

The Texas Constitution requires that taxation in Texas be uniform and equal. TEX. CONST. art. VIII, § 1. You explain that a real property owner who thinks his or her property's appraised value is higher than that of similar properties might commission a "uniform and equal" ("U&E") study to compare the property's appraised value with those of similar properties.[1] You note that the Texas Appraiser Licensing and Certification Board (the "Board") has received several complaints alleging that appraisers have conducted improper U&E studies. Request Letter at 2. However, you inform us that some people think the Board lacks statutory authority to handle those complaints. Id. Accordingly, you ask three questions about the Board's authority to regulate appraisers' U&E studies. Id. at 3.

Your first question is whether chapter 1103 of the Occupations Code grants the Board such authority. Id. This question is premised on the idea that, because chapter 1103 defines the term "appraisal" but does not define a term like "U&E studies," and because U&E studies might not be appraisals, chapter 1103 might not grant the Board authority to regulate U&E studies. Id. at 2. However, you suggest that, even if a U&E study is not an "appraisal" for purposes of chapter 1103, "it may still be within the Board's jurisdiction if that jurisdiction is broader than simply regulating the performance of appraisals." Id.

Indeed, chapter 1103 does not provide that the chapter regulates only appraisals. See generally TEX. OCC. CODE ANN. §§ 1103.001-.5545 (West 2004 & Supp. 2011). Instead, chapter 1103 provides that it regulates the licensing and certification of appraisers. See, e.g., id. §§ 1103.001 (West 2004) (providing that chapter 1103 "may be cited as the Texas Appraiser Licensing and Certification Act"), 1103.002 (West Supp. 2011) (explaining that the purpose of chapter 1103 is to "conform state law relating to the regulation of real estate appraisers to the requirements adopted under" federal law), 1103.201 (West Supp. 2011) ("A person may not perform an appraisal of real estate unless the person is licensed or certified as an appraiser under this chapter ...."). One of the ways chapter 1103 regulates the licensing and certification of appraisers is by requiring them to comply with the Uniform Standards of Professional Appraisal Practice ("USPAP"), a set of rules defining activities and processes like "appraisal consulting" and "appraisal review" that, you suggest, might include U&E studies. See id. §§ 1103.405(1) (West Supp. 2011) (requiring appraisers to comply with the USPAP), 1103.405(2) (requiring appraisers to comply with Board rules); Request Letter at 2 (noting that USPAP definitions might describe U&E studies).

You do not ask, and we do not opine on, whether a U&E study is a kind of appraisal or appraisal consulting or review. Request Letter at 3. See also Tex. Att'y Gen. Op. No. GA-0762 (2010) at 4 n.5 (explaining that opinions of this office are limited to the questions asked by authorized requestors). We do note, however, that chapter 1103 might require the Board to answer those kinds of questions in particular instances, subject to administrative and judicial review, and that a court would likely give the Board's answer serious consideration. See TEX. OCC. CODE ANN. §§ 1103.451-.5545 (West 2004 & Supp. 2011) (requiring the Board to review, investigate, and resolve complaints against appraisers; establishing an administrative hearing process; and imposing penalties for chapter 1103 violations). See also Tarrant Appraisal Dist. v. Moore, 845 S.W.2d 820, 823 (Tex. 1993) ("Construction of a statute by the administrative agency charged with its enforcement is entitled to serious consideration, so long as the construction is reasonable and does not contradict the plain language of the statute."). We also advise you that chapter 1103 does not grant the Board authority to regulate only appraisals; it grants the Board authority to regulate the licensing and certification of appraisers, people who might perform tasks described in chapter 1103, the USPAP, and Board rules.

Your second question is whether our answer to the first question "[w]ould ... be different if (a) the appraiser included his or her appraiser number on a report or testified that he or she was an appraiser, or (b) the property owner hired the appraiser specifically because, and in reliance on the fact that, the person was an appraiser." Request Letter at 3. Part (a) of that question alludes to the chapter 1103 provision prohibiting a person from misleading the public about the person's legal ability to perform a certified or licensed "appraisal service." TEX. OCC. CODE ANN. § 1103.401(a)-(b) (West 2004). That provision limits who may perform an appraisal service, but does not itself limit the kinds of services a licensed or certified appraiser may perform. Id. Therefore, part (a) of your second question would not change our answer to the first. Nor would part (b) of your second question change our answer to your first: We do not rule out the possibility that, because of the extensive professional qualifications that chapter 1103 requires an appraiser to have, someone might hire an appraiser to perform many kinds of tasks—including, but not only, appraisals—that are related to the buying, selling, or holding of real estate. See Tex. Att'y Gen. Op. No. GA-0872 (2011) at 1 n.2 (declining to speculate about acts not discussed in a request letter).

Your third question is whether the Board has "authority to define its jurisdiction by rule in a way that would specifically include or exclude U&E" studies. Request Letter at 3. Chapter 1103 requires a person who holds a license, certification, or approval under the chapter to comply with Board rules that "are at least as stringent" as the USPAP. TEX. OCC. CODE ANN. § 1103.405(2) (West Supp. 2011). A Board rule purporting to reduce the number or strictness of USPAP requirements would be less stringent than the USPAP; a rule increasing them would be more stringent. XVI OXFORD ENGLISH DICTIONARY 926 (2d ed. 1989) (defining the word "stringent" to mean, "Of regulations, procedure, requirements, obligations, etc.: Rigorous, strict, thoroughgoing; rigorously binding or coercive."). See also TEX. GOV'T CODE ANN. § 311.011(a) (West 2005) (requiring that statutory words be read according to their common usage). Thus, if the USPAP regulates appraisers' U&E studies, Board rules could not free appraisers from such regulation, but if the USPAP does not regulate their U&E studies, Board rules could subject them to such regulation. See Pub. Util. Comm'n of Tex. v. GTE-Southwest, Inc., 901 S.W.2d 401, 407 (Tex. 1995) ("An agency may exercise only those specific powers that the law confers upon it in clear and express language. As a general rule, the legislature impliedly intends that an agency should have whatever power is reasonably necessary to fulfill a function or perform a duty that the legislature has expressly placed in the agency.").

SUMMARY

Chapter 1103 of the Texas Occupations Code regulates the licensing and certification of real estate appraisers. Chapter 1103 subjects appraisers to the Uniform Standards of Professional Appraisal Practice ("USPAP") and Texas Appraiser Licensing and Certification Board ("Board") rules. If the USPAP or Board rules regulate a particular task that appraisers might perform, chapter 1103 would require appraisers to comply with those regulations. Subject to administrative and judicial review, the Board may determine whether the USPAP or Board rules regulate particular tasks that appraisers might perform.

Very truly yours,

DANIEL T. HODGE
First Assistant Attorney General

DAVID J. SCHENCK
Deputy Attorney General for Legal Counsel

JASON BOATRIGHT
Chair, Opinion Committee

Jason Boatright
Assistant Attorney General, Opinion Committee

[1] Letter from Douglas Oldmixon, Commissioner, Texas Appraiser Licensing and Certification Board, to Honorable Greg Abbott, Attorney General of Texas at 1 (Aug. 19, 2011), https://www.oag.state.tx.us/opin/index_rq.shtml ("Request Letter").