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March 26, 2026 Get Citation Alerts Download PDF Add Note

Kenedy County Wide School District v. Kelly Hancock, Texas Comptroller of Public Accounts, in His Official and Individual Capacity

Texas Court of Appeals, 15th District

• Citations: None known
• Docket Number: 15-24-00079-CV
• Nature of Suit: Administrative Law - Tax

• Disposition: AFFIRMED

• Opinion

• Authorities (5)

• Cited By (0)

• Summaries (0)

• Similar Cases (1.5K)

• PDF

Disposition

AFFIRMED

Lead Opinion

Affirmed and Memorandum Opinion filed March 26, 2026

In The

Fifteenth Court of Appeals

NO. 15-24-00079-CV

KENEDY COUNTY WIDE SCHOOL DISTRICT, Appellant

V.

KELLY HANCOCK, TEXAS COMPTROLLER OF PUBLIC ACCOUNTS,
IN HIS OFFICIAL AND INDIVIDUAL CAPACITY, Appellee

On Appeal from the 353rd District Court
Travis County, Texas
Trial Court Cause No. D-1-GN-23-002042

OPINION

Texas law requires statewide equity in the collection of school taxes and
the distribution of school funding. Yet property appraisals for tax purposes are
generally set at the local level by a county appraisal district (CAD) and a county
appraisal review board (ARB).1 If local officials set appraisals too low, that

1
See TEX. TAX CODE §§ 6.01, 6.41.
directly reduces local revenues, but can unfairly increase state funding intended to aid
“property-poor” districts.
To ensure that local appraisals do not inequitably shift the burdens or benefits
of school funding from one county to others, Texas law requires the Comptroller2 to
conduct a study to review different levels of property appraisal across all school
districts in Texas. The statute at issue here requires that study to “ensur[e] that
different levels of appraisal resulting from protests” decided by a local ARB “are
appropriately adjusted in the study.”3
In response to protests filed in 2021 by owners of large ranches covering most
of Kenedy County, the local ARB adopted substantially lower appraisals for native
pasture land than did the local CAD. The Comptroller disagreed, and his study
adopted a substantially higher appraisal. The only school district in the county
objected, arguing that unless the state appraisal figures were reduced to the local ARB
figures, it would be penalized by lower local revenues and lower state funding.
But the express purpose of the Comptroller’s study is to discourage unfairly
low ARB appraisals by requiring that they be “appropriately adjusted” to figures the
Comptroller determines are more realistic. Discretion to determine whether such an
adjustment is “appropriate” is delegated to the Comptroller, and is dispositive if
supported by substantial evidence. As the Comptroller’s study meets that standard
here, we affirm the district court’s judgment in favor of the Comptroller.

2
Kelly Hancock was automatically substituted as a defendant when his predecessor, Glenn
Hegar, ceased to hold office. See Tex. R. App. P. 7.2(a). “Comptroller” in this opinion refers
generally both the previous and current state officials and their actions.
3
TEX. GOV’T CODE § 403.302(b)(4).

2
BACKGROUND
The unique aspects of property appraisals in Kenedy County
Kenedy County is one of the most sparsely populated counties in the United
States. About 350 people live within its 1,458 square miles of land—roughly 4
square miles for each man, woman, and child.4 The great majority of the county is
private ranchland, including fabled ranches like the King Ranch and other famous
and historic properties.5
Appellant Kenedy County Wide Common School District (“the District”) is a
public school district covering almost all of Kenedy County, with a single
elementary school campus serving about 100 students in the primary grades.6 Like
other public schools in Texas, it is funded largely by local property taxes, with
supplemental state funding available for property-poor districts.7 While lower local
appraisals can unfairly shift school funding from local taxpayers to the State, in the
case of Kenedy County two unique constraints—one legal and one practical—
complicate these appraisals.
First, there is very little commercial, residential, or industrial property. As one
witness testified: “There is not a gas station [or] a store in Kenedy County.” The

4
UNITED STATES CENSUS BUREAU, QuickFacts: Kenedy County, Texas (population estimate
as of July 1, 2024), https://www.census.gov/quickfacts/fact/table/kenedycountytexas/INT100223.
5
SOAH-004829 (“There’s six or seven ranches that make up well over 72–3, 75 percent of
the total land mass of this county … they include people that are historically known across Texas,
the Kenedy Foundation, the Kenedy Trust, the King Ranch, the Bass Ranch, the Armstrong
Ranch.”).
6
KENEDY COUNTY-WIDE COMMON SCHOOL DISTRICT, District Information, https://www.
saritaschool.net/our-district-home (last visited Mar. 17, 2026). Graduates move on to secondary
schools in the Riviera Independent School District area. KAUFER EARLY COLLEGE HIGH SCHOOL,
Recruitment Plan, Events, and Timeline, https://web.archive.org/web/20220628043507/https:
//www.rivieraisd.us/site/handlers/filedownload.ashx?moduleinstanceid=332&dataid=884&FileN
ame=KECHS%20Recruitment%20Plan%20Events%20and%20Timeline.pdf.
7
See Morath v. Sterling City Indep. Sch. Dist., 499 S.W.3d 407, 408 (Tex. 2016).

3
parties agree that all 556,840 acres in dispute here—representing 70 percent or more
of the County—represent “qualified open-space land” devoted to grazing and
hunting,8 and are administratively categorized as “native pasture” rather than
“irrigated cropland, dry cropland, improved pasture, orchard, [or] waste.”9 The
Texas Constitution and Tax Code limit appraisals of such lands for tax purposes to
their productive capacity, not market value.10 This protects farms and ranches from
taxation based on what the land would sell for rather than how it is actually used,
but at the same time reduces the revenues schools receive from local taxes.11
Second, property is appraised by local people. County appraisal districts
(CAD) issue initial assessments,12 and county Appraisal Review Boards (ARBs)
decide protests about them.13 Officers of both these government entities must be
local residents.14 With fewer than 400 residents in Kenedy County, and with “the
largest employers in the county” being the large ranches and the school district, the
work of local appraisal officials is particularly challenging here since they will likely
know everyone who pays the ranches’ school taxes and the students and school staff
who rely on them.15

8
TEX. TAX. CODE § 23.51(1).
9
Id. § 23.51(3) (“In classifying land according to categories, the chief appraiser shall
distinguish between irrigated cropland, dry cropland, improved pasture, native pasture, orchard,
and waste.”).
10
TEX. CONST. art. VIII, § 1-d-1 (“To promote the preservation of open-space land, the
legislature shall provide by general law for taxation of open-space land devoted to farm, ranch, or
wildlife management purposes on the basis of its productive capacity.”); see also TEX. TAX CODE
§ 23.41(a) (“Land designated for agricultural use is appraised at its value based on the land’s
capacity to produce agricultural products.”).
11
For example, the Kenedy County ARB found the market value of the Armstrong Ranch
was over $30 million, but its taxable productive value was less than $3 million.
12
TEX. TAX. CODE § 6.01.
13
Id. § 6.41.
14
See id. §§ 6.03(a-1), 6.0301(d), 6.41(d).
15
By comparison Harris County has 190 ARB members as of January 1, 2026, reducing the
4
The Property Value Study required by state law
It is state policy that the burden of school taxes and the benefit of state
financial aid must be equitably distributed.16 To implement that policy, state law
requires the Comptroller to conduct a “Study of School District Property Values”
(“the Study”) to determine “the total taxable value of all property in each school
district.”17 With over 1,200 school districts in the state, this daunting task must be
conducted every two years for districts whose appraisals were found valid in the
most recent Study, and annually for those where they were not.18 If local appraisals
vary more than five percent from the Comptroller’s appraisal in the Study, a series
of administrative and judicial procedures ensue to reconcile them.19 If local
appraisals continue too low through a two-year grace period (as was the case here),
the Comptroller’s higher values are certified to the commissioner of education and
may reduce state supplemental funding.20
Consistent with the constitutional restrictions, the Study appraises open-space
land based on productivity value.21 State law requires valuation using an income
approach looking at the five years before the taxing year, and “capitalizing the
average net income the land would have yielded under prudent management from
production of agricultural products.”22 Net income of each farm, ranch, or pasture is

potential for conflicts. Board of Directors of the Harris Central Appraisal District Resolution No.
2025-09 (2025), https://hcad.org/assets/uploads/pdf/resources/2025/Boardbook-September-17-
2025-meeting.pdf.
16
TEX. GOV’T CODE § 403.301.
17
Id. § 403.302(a) (emphasis added).
18
Id. § 403.302(a-1).
19
Id. § 403.303.
20
Id. § 403.302(c), (g), (h), (j).
21
Id. § 403.302(a).
22
TEX. TAX CODE § 23.41(a).

5
not easily gathered, and in any event the relevant figures are not actual net income
but estimated net income “under prudent management”; thus such appraisals involve
some judgment and discretion. State law authorizes the comptroller to “promulgate
rules specifying the methods to apply and the procedures to use in appraising land
designated for agricultural use,”23 and provides for the necessary data by authorizing
“an annual farm and ranch survey for purposes of estimating the productivity value
of qualified open-space land.”24 School districts, appraisal districts, and other
governmental entities must “promptly comply with an oral or written request from
the comptroller for information to be used in conducting” the Study.25

The Procedural Background in Kenedy County for 2021
The parties largely agree on the facts here. In 2021, the local CAD assessed
the productivity value of native pasture in Kenedy County at $100 per acre. Nine
ranch owners representing 556,840 of the 642,971 total acres of native pasture in the
County (86.60%) filed protests with the local ARB, which reduced those appraisals
by 15.31% overall to $84.69 per acre.
The Comptroller’s 2021 Study for Kenedy County disagreed with both the
CAD and the ARB, appraising native pasture in the county at $105.20 per acre. The
District filed a protest asking the Comptroller to reduce his appraisals in the Study
to match those ordered by the ARB.26 The Comptroller referred the case to the State
Office of Administrative Hearings (“SOAH”) for a hearing,27 and an Administrative
Law Judge entered a proposal for decision that recommended the Comptroller
reduce the values in the Study to match the ARB’s $84.69 per acre.

23
Id. § 23.41(b).
24
TEX. GOV’T CODE § 403.3022.
25
Id. § 403.304(a).
26
See id. § 403.303.
27
See id. § 403.303(e).

6
The Comptroller rejected that recommendation, redlining the ALJ’s proposal
to delete several findings and affirming the Study’s appraised values instead. The
District filed this administrative appeal in Travis County district court,28 alleging the
Comptroller’s order was arbitrary and not supported by substantial evidence.
Following a hearing on the matter, the trial court agreed with the Comptroller and
affirmed the finding of values in the state Study. This appeal followed.

DISCUSSION
Section 403.302(a) of the Texas Government Code requires the comptroller
to conduct the Study “to determine the total taxable value of all property in each
school district.” With 1,200 school districts, 11 million housing units, and hundreds
of thousands of business and mineral interests in the state as of 2020,29 a
comprehensive individual appraisal of all property in each school district is
physically impossible. Instead, subsection (b) of the same statute includes four
subdivisions authorizing the Comptroller to use standard appraisal techniques like
sampling and statistical analysis to ensure the Study’s accuracy and address different
levels of appraisal that may distort its results.30 The sole dispute in this case concerns
subdivision (b)(4), which states:
(b) In conducting the study, the comptroller shall determine the taxable
value of property in each school district: … (4) ensuring that different
levels of appraisal resulting from protests determined under Section
41.43, Tax Code, are appropriately adjusted in the study.

Section 41.43 of the Tax Code governs tax appraisal protests that property owners file
with a local ARB. The question is what—if anything—§ 403.302(b)(4) requires the

28
See id. § 403.303(d).
29
UNITED STATES CENSUS BUREAU, Texas Added Almost 4 Million People in Last Decade
(Aug 25, 2021), https://www.census.gov/library/stories/state-by-state/texas.html.
30
See TEX. GOV’T CODE § 403.302(b)(1)–(4).

7
Comptroller to do to “appropriately adjust” property values in the Study when ARB
orders produce “different levels of appraisal.” The parties cite no caselaw construing
this 30-year-old statute, so this is a case of first impression.31
A specific standard of review applies when a school district challenges the
findings in the Study in court:
The court shall remand the determination to the comptroller if on the
review the court discovers that substantial rights of the school district
have been prejudiced, and that: (1) the comptroller has acted
arbitrarily and without regard to the facts; or (2) the finding of the
comptroller is not reasonably supported by substantial evidence
introduced before the court.32
Potential prejudice to the District’s substantial rights is not disputed, as the
Study’s values would reduce the District’s state funding by about $250,000,
cutting it in half. Nor does the District contest the calculations in the Study,
having stipulated below that they were “accurately calculated and would
otherwise reflect the correct value” but for the failure to adjust them for
substantially lower appraisals found by the local ARB. Specifically, the District
asserts the Comptroller (1) must reduce the open-space productivity values in the
Study “to account for value reductions ordered by the ARB”; and if not, (2) the
Comptroller’s appraisal of $105.20 is not supported by substantial evidence.
These are questions of law we review de novo.33

31
The only case addressing the section was dismissed for lack of standing. See Morath v. La
Feria ISD, 2018 WL 6729850, at *7 (Tex. App.—Austin Dec. 21, 2018, no pet.).
32
TEX. GOV’T CODE § 403.303(d).
33
See Baumgardner v. Brazos River Auth., 714 S.W.3d 597, 601 (Tex. 2025) (statutory
construction); Save Our Springs All., Inc. v. Tex. Comm’n on Env’tl Quality, 713 S.W.3d 308,
320 (Tex. 2025) (substantial evidence). Under the facts here, the standards in the statute do not
appear to differ from the general standards governing statutory construction and substantial
evidence review.

8
I. Must productivity values in the Study be adjusted for ARB orders?
The District argues that the ALJ correctly interpreted the statute: the
Comptroller must reduce the value of native pasture land included in the Study by
15.31% to match the ARB’s overall reduction on native pasture land in the 91 property-
specific orders it issued here. The Comptroller rejected that proposal, finding
subdivision (b)(4)’s instruction to make adjustments resulting from ARB orders applies
only to appraisals based on market value, and cannot apply to appraisals based on
productivity value like those here. We agree with the District that the text of the statute
does not support any such exception. That text provides:
(a) The comptroller shall conduct a study using comparable sales and
generally accepted auditing and sampling techniques to determine the total
taxable value of all property in each school district. The study shall determine
the taxable value of all property and of each category of property in the district
and the productivity value of all land that qualifies for appraisal on the basis
of its productive capacity and for which the owner has applied for and
received a productivity appraisal . . .
(b) In conducting the study, the comptroller shall determine the taxable value
of property in each school district:
(1) using, if appropriate, samples selected through generally accepted
sampling techniques;
(2) according to generally accepted standard valuation, statistical
compilation, and analysis techniques;
(3) ensuring that different levels of appraisal on sold and unsold property
do not adversely affect the accuracy of the study; and
(4) ensuring that different levels of appraisal resulting from protests
determined under Section 41.43, Tax Code are appropriately adjusted in
the study.

Nothing in (b)(4) says that open-space land is to be treated any differently than any
other type of property. As this case shows, owners can appeal productive-value
appraisals to an ARB just like market-value appraisals, and (b)(4) does not suggest
that appeals of one should be treated differently than appeals of the other.

9
The Comptroller makes a different textual argument based on the term
“taxable value” used in the introductory phrase of subsection (b), claiming that it
incorporates a distinction stated in subsection (a). Subsection (a) requires the
Comptroller to “determine the taxable value of all property and of each category of
property in the district and the productivity value of all land that qualifies for
appraisal on the basis of its productive capacity.”34 The Comptroller argues that the
use of separate terms in (a) means that the term “taxable value” in (b) must exclude
land taxed on productive value.
“But the first rule of case law as well as statutory interpretation is: Read
on.”35 “Taxable value” is expressly defined in subsection (d) of the same statute
to mean “the market value of all taxable property” less a long list of exclusions
and exemptions where full market value is not taxable, such as residential
homesteads, reinvestment zones, and properties damaged by disasters.36 Among
those exclusions is subdivision (d)(7), which says that “taxable value” means
market value less “the difference between the comptroller’s estimate of the
market value and the productivity value of land.”37 By definition, subtracting any
difference between market value and productivity value will always make the two
the same.38 This is not surprising; while some property is appraised on its market
value and other property is appraised on its productivity value, in every case land
is appraised on the value at which it can be taxed. Owners of open-space land

34
TEX. GOV’T CODE § 403.302(a).
35
Arkansas Game & Fish Comm’n v. United States, 568 U.S. 23, 36 (2012).
36
TEX. GOV’T CODE § 403.302(d).
37
Id. § 403.302(d)(7).
38
This appears to be undisputed. See Comp. Br. at 18 n.9 (“This is a just another way of
saying that in these cases the taxable value is the productivity value.”); KCSD Br. at 4 (citing
“Appellee’s admission that taxable value of the properties at issue is their productivity value.”).

10
may appeal appraisals of the productivity value of land to a local ARB,39 and since
those protests are “determined under Section 41.43 [of the] Tax Code,”40
subdivision (b)(4) applies.
There may be good reasons to exclude open-space land from the
adjustments directed by (b)(4), but those reasons cannot overcome what the
statute says, or permit us to assign the law a meaning contrary to its text.41
Whether to remove open-space land from the Comptroller’s (b)(4) duty is a
question for the Legislature, which has shown more than usual interest in this
Study by amending § 403.302 and § 403.303 more than 40 times since 1995, fine-
tuning them in each of the previous 15 regular sessions and three special sessions
besides. We, accordingly, leave the legislating to the legislators.

II. What adjustment is “appropriate”?
While (b)(4) does not exclude open-space land from “appropriate
adjustment,” it does not require adjustment that matches any ARB order dollar-
for-dollar. The text of (b)(4) provides that if different levels of appraisal result
from ARB orders, they must be “appropriately adjusted” by the Comptroller in
the Study.42 While the passive voice used in (b)(4) obscures things a little, the
subjects that (b)(4) says must be “appropriately adjusted” are the “different levels
of appraisal,” not the state appraisals that the Comptroller’s data supports. How

39
See TEX. TAX CODE § 41.41(a)(1) (“A property owner is entitled to protest before the appraisal
review board … in the case of land appraised as provided by Subchapter C … determination of its
appraised or market value.”); id., Subchapter C, § 23.41(a) (“Land designated for agricultural use is
appraised at its value based on the land’s capacity to produce agricultural products.”).
40
See id. § 41.43(a) (providing rules for “a protest authorized by Section 41.41(a)(1)”).
41
See In re Jorden, 249 S.W.3d 416, 422 (Tex. 2008) (“If Parliament does not mean what it
says, it must say so.”).
42
TEX. GOV’T CODE § 403.302(b)(4).

11
much adjustment is appropriate will depend on what is needed to correct the
existing differences in levels of appraisal.
Any other construction would be inconsistent with the purpose of the Study,
which is expressly stated in the statute:
It is the policy of this state to ensure equity among taxpayers in the
burden of school district taxes and among school districts in the
distribution of state financial aid for public education. The purpose of
this subchapter is to promote that policy by providing for uniformity in
local property appraisal practices and procedures and in the
determination of property values for schools in order to distribute state
funding equitably.43
“When a statute expressly states a legislative purpose,” the statutory context
“necessarily includes the Legislature’s codified purpose.”44 Here, the Study will never
promote uniformity in determining property values for schools if it must incorporate,
instead of adjust, “different levels of appraisal resulting from [ARB] orders.”45
Section 403.302 does not define “appropriate,” but its ordinary meaning is
“especially suitable or compatible; fitting.”46 It implies discretion,47 and in the form
“appropriately adjusted” often appears in property appraisal laws,48 reflecting that

43
Id. § 403.301.
44
Malouf v. State ex rels. Ellis, 694 S.W.3d 712, 730 (Tex. 2024).
45
TEX. GOV’T CODE § 403.302(b)(4).
46
Appropriate, MERRIAM-WEBSTER’S COLLEGIATE DICTIONARY (11th ed. 2003).
47
See e.g., TEX. R. CIV. P. 13 (“If a pleading, motion or other paper is signed in violation of
this rule, the court, upon motion or upon its own initiative, after notice and hearing, shall impose
an appropriate sanction available under Rule 215-2b”); id. R. 42(c)(2)(A) (“For any class certified
under Rule 42(b)(1) or (2), the court may direct appropriate notice to the class.”); id. R 120a(4)
(providing that if the court sustains the objection to personal jurisdiction, “an appropriate order
shall be entered.”); id. R. 166 (providing for pre-trial conferences “[i]n an appropriate action”); id.
190.4(b)(3) (providing for “appropriate limits on the amount of discovery”).
48
See, e.g., TEX. GOV’T CODE § 403.302(j); TEX. TAX CODE §§ 23.013(c), 41.43(b)(3),
42.26(a)(3).

12
no two properties are exactly alike.49 By providing for the Comptroller to
“appropriately adjust” different levels of appraisal due to ARB orders, the
Legislature granted that discretion to the Comptroller and not to the courts, which
can step in only if that discretion is abused.50 Under the standard of review here,
we find that the values in the Study are reasonably supported by the following
substantial evidence appearing in the record.51
By law, productive capacity “is determined by capitalizing the average net
income the land would have yielded under prudent management from production
of agricultural products during the five years preceding the current year,”52 and
must use “accepted income capitalization methods applied to average net to
land.”53 It defines “net to land” as income that would be due to the owner under
a typical lease (including hunting leases) for the previous five years (2015–19
here), less expenses directly attributable to the use of the land.54 The Code defines
“income capitalization” as dividing this net-to-land amount “by the capitalization
rate to determine the appraised value.”55
The Comptroller presented evidence at SOAH from Kenedy County
appraisers that typical lease income countywide of native pasture was as follows:

49
See Valero Ref.-Tex., L.P. v. Galveston Cent. Appraisal Dist., 519 S.W.3d 66, 74 (Tex.
2017) (“[E]very piece of real estate is unique.”).
50
TEX. GOV’T CODE § 403.303(d).
51
Id. (“The court shall remand the determination to the comptroller if on the review the court
discovers that substantial rights of the school district have been prejudiced, and that: (1) the
comptroller has acted arbitrarily and without regard to the facts; or (2) the finding of the
comptroller is not reasonably supported by substantial evidence introduced before the court.”).
52
TEX. TAX CODE § 23.41(a).
53
Id. § 23.52(a).
54
Id. § 23.51(4).
55
See id. § 23.51(5) (“‘Income capitalization’ means the process of dividing net to land by
the capitalization rate to determine the appraised value.”).

13
• for 2015, $3.00 per acre to lease native pasture, $7.50 per acre for hunting
leases;
• for 2016, $4.00 per acre for native pasture, $12.50 per acre for hunting;
• for 2017, $5.00 per acre for native pasture, $12.50 per acre for hunting;
and
• for 2018 and 2019, $5.00 per acre for native pasture, and $13.50 per acre
for hunting.

The Comptroller also submitted over 1,300 pages of detailed spreadsheets listing
typical expenses for every county in Texas (including Kenedy) for five years, including
common expenses for native pasture like brush control (186 pages); fencing (190
pages); hunting lease expense (272 pages); water and irrigation (146 pages); and school,
county, and hospital district taxes (554 pages).
Total income and expenses per acre for 2015 through 2019 were then carried into
a summary for Kenedy County, each year’s expenses were subtracted from each year’s
income to yield “net to land” for each year, and all five were added together and divided
by 5 to yield an average net-to-land of $10.52 per acre for the five-year period.
Capitalizing that income using the statutory cap rate of 10 percent,56 the Comptroller
appraised the open-space land at issue in the County at $105.20 per acre.57
This is the only evidence on an “appropriate adjustment” in the record. The ARB
orders were offered in evidence, but they provide no figures or explanation to reduce
productivity values by 15 percent other than the statement: “The appraisal records are
not correct and should be changed.”58 Without any explanation, this “is conclusory and
no evidence.”59

56
See id. § 23.53.
57
See id. § 23.51(5) ($10.52 per acre ÷ 0.10 = $105.20 per acre).
58
See, e.g., SOAH-00370, -00374, -00378, -00382, -00386, -00390, -00394, -00398, -00402,
-00402, -00406, -00410, -00414, -00418, -00422, etc.
59
Nat. Gas Pipeline Co. of Am. v. Justiss, 397 S.W.3d 150, 161 (Tex. 2012).

14
The dissent would keep this case bouncing around the executive,
administrative, and judicial branches by remanding it back to the beginning after a
three-year trek. But when this odyssey began, the District voluntarily stipulated that
the Comptroller’s “assigned values were accurately calculated and would otherwise
reflect the correct value.” As the District presented no evidence of an “appropriate
adjustment” other than a mandatory reduction per the ARB orders, it failed to carry
its burden to prove that the Comptroller’s finding on value was made “without regard
to the facts” or “is not reasonably supported by substantial evidence introduced
before the court.”60

CONCLUSION
We recognize that the Study puts the District in a financial bind not of its
own making. The local CAD appraised the land here at $100 per acre, and the
District could not appeal that appraisal. It was the ranch owners that appealed to
the ARB, and won a reduction to $86.49 per acre, reducing their property taxes
more than $9 million in the aggregate. One of the District’s experts stated his
opinion that Kenedy County has “been held back by the people that own the big
ranches. And that’s not a negative, that’s just the way they wanted it and that’s
where it is.” But regardless of the cause or local effects, the only issue before us
is whether substantial evidence supports the Comptroller’s conclusion that the
ARB orders here represent “different levels of appraisal resulting from protests”
that he was required to appropriately adjust according to the Study. Accordingly,
we affirm the trial court’s judgment that the final Comptroller’s Decision dated
March 9, 2023 should be affirmed.

60
TEX. GOV’T CODE § 403.303(d).

15
/s/ Scott A. Brister
Scott A. Brister
Chief Justice

Before Chief Justice Brister and Justices Field and Farris.
Dissenting Opinion by Justice Farris.

16

Concurrence Opinion

Concurring and Dissenting Opinion filed March 26, 2026

                                  In The

                   Fifteenth Court of Appeals

                           NO. 15-24-00079-CV

     KENEDY COUNTY WIDE SCHOOL DISTRICT, Appellant

                                     V.

KELLY HANCOCK, TEXAS COMPTROLLER OF PUBLIC ACCOUNTS,
IN HIS OFFICIAL AND INDIVIDUAL CAPACITY, Appellee

               On Appeal from the 353rd District Court
                        Travis County, Texas
               Trial Court Cause No. D-1-GN-23-002042

            CONCURRING AND DISSENTING OPINION
  The majority disagrees with the Comptroller’s conclusion that open space

land is excluded from Texas Government Code Section 403.302(b)(4)’s directive to
make adjustments resulting from county appraisal review board (ARB) orders. I
agree and join part I of the majority’s Discussion section. However, the majority
then goes on to address whether the Comptroller’s adjustment was “appropriate”
under subsection (b)(4). But this is a question that should first be addressed by the
Comptroller. Accordingly, I do not join part II of the Discussion section and
respectfully dissent from the judgment of the Court.

  Kenedy County Wide Common School District (“the District”) filed an

administrative appeal, alleging that the Comptroller “ignored the controlling law,”
including Texas Government Code section 403.302, “and placed a higher value on
the protesting properties than allowed by law . . . .” The District sought “an order
remanding the protest and overturning the determinations made by the Comptroller
. . . .” The Comptroller filed a general denial. In this Court, the District continues to
challenge the Comptroller’s statutory interpretation and requests a remand if this
Court agrees. I agree that having found the Comptroller incorrectly interpreted
section 403.302, this Court should remand for the Comptroller to decide what was
an “appropriate adjustment” based on the evidence in this case under a correct
statutory interpretation of section 403.302.

  “In the context of judicial review of administrative decisions, the separation-

of-powers doctrine ensures that discretionary functions delegated to administrative
agencies by the legislature are not usurped by the judicial branch.” Tex. Dep’t of
Transp. v. T. Brown Constructors, Inc., 947 S.W.2d 655, 659–60 (Tex. App.—
Austin 1997, pet. denied). I recognize that a reviewing court is obligated to sustain
an agency order on “any legal basis shown in the record.” Pub. Util. Comm’n of Tex.
v. Sw. Bell Tel. Co., 960 S.W.2d 116, 121 (Tex. App.—Austin 1997, no pet.)
(emphasis added). However, a reviewing court may not sustain an agency decision
“upon a factual basis not passed upon by the agency.” Id. at 121 n.7; see Barshop v.
Medina Cnty. Underground Water Conservation Dist., 925 S.W.2d 618, 635 (Tex.
1996) (“Administrative fact findings are a necessary aspect of administrative
discretion.”). The Comptroller did not make any factual findings regarding an
appropriate adjustment as related to the evidence relied on by the majority.

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  Where an agency has misinterpreted a statute, a remand for consideration

under the correct interpretation is appropriate. In State v. Public Utility Commission
of Texas for example, the Supreme Court considered under substantial evidence
review whether the Public Utility Commission (PUC) applied the correct statutory
method to determine the market value of a utility’s generation assets. 344 S.W.3d
349, 356 (Tex. 2011). The Court explained that Utilities Code section 39.262(h)
provided four methods for a power-generation company to establish the market
value. Id. (citing Tex. Util. Code § 39.262(h)). The Supreme Court rejected the
PUC’s interpretation of section 39.262(h) that none of the four methods applied in
the circumstances at issue, concluding that the PUC should have applied the “sale of
assets method.” The Court remanded for the PUC to determine market value under
the correct statutory interpretation. Id. at 361.

  By deciding an issue not yet decided by the Comptroller, the majority risks

intruding upon the Comptroller’s authority and discretion. See Pantera Energy Co.
v. R.R. Comm’n of Tex., 150 S.W.3d 466, 475 n.9 (Tex. App.—Austin 2004, no pet.)
(“The reviewing court may identify error but may not dictate how to correct the error
because to do so would usurp the authority and discretion delegated to the agency
by the legislature.”). Consistent with the District’s request, I would remand the case
to the Comptroller for it to address what is an appropriate adjustment. Because the
majority decides that issue in the first instance, I respectfully dissent.

                                            /s/ April Farris
                                            April Farris
                                            Justice

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