Untitled Texas Attorney General Opinion ( 1985 )

The Attorney General of Texas
April 23, 1985
JIM MATTOX
Attorney General
Supreme Court Building Honorable Stan Schlwter Opinion No.JM-311
P. 0. BOX 12549
Austin. TX. 79.711. 2548
Chairman
5121475-2501 Ways and Means Commitwe Ret Constitutionality of House
Telex 910/974-1397 Texas Rouse of Representatives Bill No. 1751, Acts 1985. Sixty-
Telecopier 51214750286 P. 0. Box 2910 ninth Legislature
Austin, Texas 78763
714 Jackson. Suite 700
Dallas. TX. 75202&B Dear Representative S'chluetet:
214l74289u
You ask about the constitutionality of House Bill No. 1751. Acts
1985, Sixty-ninth L~eSislature. which provides for an amnesty period
4824 Alberta Ave., Suite 180
El Paso, TX. 799052793
for the payment of tielinquentproperty and local sales taxes without
9151533-3494 the imposition of a penalty. Specifically, you wish to know whether
House Bill No. 1751 violates either article VIII, section 10 of the
Texas Constitution which forbids the legislature from releasing any
1001 Texas, Suite 700 taxpayer from the payment of state or county taxes unless specifically
Houston, TX. 77002-3111
permitted therein, or article III, section 55 of the Texas
71312255886
Constitution which prohibits the release or extinguishment of an
"indebtedness, liability or obligation of any corporation or
806 Broadway, Suite 312 individual to this State . . ." or any other political subdivision.
Lubbock. TX. 79401.3479 We conclude that it violates neither.
8081747.5239
House Bill No. 1751 contains the following in pertinent part:
4309 N. Tenth. Suite S
McAllsn, TX. 795Ol~tSS5 ARTICLE 1. AMNESTT FOR PROPFXTY TAX PENALTIES
5t2lSS2-4547
SECTION 1. PROPERTY TAX AMNESTY PROGRAM
200 Main Plaza, Suite 400 (a) If a property owner pays in full a delinquent
San Antonio. TX. 78205-2797 property tax and all outstanding interest on the
51212254191 tax during the period beginning September 1, 1985,
and ending; November 30, 1985, all penalties
An Equal Opportunityl
incurred by the delinquent tax under Sections
Affirmative Action Employer 33.01 and 23.07, Tax Code, are extinguished.
. . . .
SECTIOK' 2. PENALTIES IN LITIGATION OR REDUCED
TO JDDGNENT NOT AFFECTED. Section 1 of this
article dcsesnot apply to:
p. 1417
.
Honorable Stan Schlueter - Paw! 2 (JM-311)
\
(1) penalty aincurred by a delinquent
property tax if a suit to collect the tax is
pending on September 1, 1985; or
(2) a penalty jocluded in a judgment rendered
before September 1, 1985, in a suit to collect a
delinquent property tax.
. . . .
ARTICLE 2. AMNEST!! FOR LOCAL SALES AND USE TAX
PENALTIES
SECTION 1. LOCK SALES AND USE TAX AMNESTY
PROGRAM. (a) If ZI person pays in full a delin-
quent sakes and we tax imposed under the Local
Sales and Use Tax Act (Article 1066~. Vernon's
Texas Civil Statutes), Section 11B. Chapter 141,
Acts of the 63rd Legislature, Regular Session,
1973 (Article 1118x, Vernon's Texas Civil
Statutes), or Sect1.m 16, Chapter 683, Acts of the
66th Legislature, Regular Session, 1979 (Article
1118~. Vernon's Texas Civil Statutes) and all
outstanding intermt on the tax during the period
beginning September 1, 1985, and ending November
30, 1985, all pensl.t:ies
incurred by the delinquent
tax under those lam: are extinguished.
. * . .
SECTION 2. PEEtSLTIESIN LITIGATION OR REDUCED
TO JUDGMENT NOT AFFECTED. Section 1 of this
article does not apply to:
(1) a penalty j~ncurred by a delinquent sales
and use tax if II suit to collect the tax is
pending on Septe&?:r 1. 1985; or
(2) a penalty included in a judgment rendered
before September 1, 1985. in a suit to collect a
delinquent sales and use tax.
. . . .
SECTION 4. CERTAIN PENALTIES NOT AFFECTH).
This article does not affect penalties on
delinquent taxes kposed under the Limited Ssles,
Excise, and Use T.z:rAct (Chapter 151. Tax Code).
(Emphasis added).
p. 1418
Aonorable Stan Schlueter - Page 3 (JM-311)
,
Article VITI, section 10 of the Texas Constitution provides the
following:
110. Release from payment of taxes
Sec. 10. The Legislature shall have no power
to release the inhabitants of, or property in. any
county, city or tom from the payment of taxes
levied for State XC county purposes, unless in
case of great public calamity in any such county,
city or town, when such release may be made by a
vote of two-thirds of each House of the
Legislsture.
Article III, section 55 of the Texas Constitution provides the
following:
555. Release or er.tinguishmentof indebtedness to
state, county, subdivision or municipal corpora-
tion
Sec. 55. The Legislature shall have no power
to release or exl:inguish. or to authorize the
releasing or extinguishing, in whole or in part,
the indebtedness, liability or obligation of any
corporation or indjkdual, to this State or to any
county or defined subdivision thereof, or other
municipal corporation therein, except delinquent
taxes which have been due for a period of at least
ten years. (Emphasis added).
And article III, section 56 sets forth the following in pertinent
part:
556. Local and special laws
Sec. 56. The Le:gislature shall not, except as
otherwise provided in this Constitution, pass x
local or special lm!, authorizing:
. . . .
Remitting fines, penalties and forfeitures. and
refunding moneys legally paid into the
treasury. . . . (:?nphasisadded).
The issue before us is whether a penalty imposed upon a taxpayer
for failing to pay a tax 181 itself a "tax" for purposes of article
VIII, section 10 or is an “indebtedness. liability or obligation" for
p. 1419
Honorable Stan Schlueter - Page 4 (JM-311)
.
purposes of article III. sect~lon55 and cannot thereby be released.
On the authority of Jones v. Williams, 45 S.W.2d 130 (Tex. 1931).
[hereinafter Jones] we con&& that it is not.
At issue in Jones was the?constitutionality of a statute which in
all material resz tracks Bouse Bill No. 1751. That statute
provided
[t]hst all interest:and penalties accrued and as
now fixed by law, D'D all . . . taxes . . . other
than [taxes of] in,corporated cities and towns,
delinquent up to and including October 20, 1931,
shall be, and the same are hereby released,
provided said taxes are paid on or before January
31, 1932.
Jones, supra, at 131. The court first rejected the assertion that the
statute could be sustained by reliance upon article VIII, section 10.
If such exactions imposed upon taxpayers for failing timely to tender
payment of accrued taxes are themselves "taxes!' for purposes of
article VIII, section 10, then the court, after concluding that the
statute at issue was not posed pursuant to the "great public calamity"
requirement, would perforce have struck down the statute. Because it
did not, it is clear that the court did not conclude that such
exactions constitute "taxes."
Nor did the court inJones
--- consider such exactions an instance of
an "indebtedness, liability, or obligation" for purposes of article
111, section 55. If the court had concluded that such exactions were
in reality interest eo nomine~imposed by the state as compensation for
the detention of its money rather than view such exactions as a form
of "penal interest," the statute would have run afoul of article III,
sections 51 and 55. The court set forth the history surrounding
attempts to enforce public revenue and tax collection procedures and
declared
[o]n the whole, we h,aveconcluded that the imposi-
tions made for deli,nquency in rendering property
for taxation, ani. for failure to pay taxes,
whether these impositions are denominated
'penalties,' 'intere,st,''forfeitures,' or whether
prescribed without definition or name, are all in
reality penalties imposed for delinquency or
failure of duty, ,nld all enacted in and of the
state's revenue, rather than as charges made by
the state for the use or detention of its money.
In other words, t!ae exactions are 'penalties'
rather than 'inte.cest' in the commercial or
statutory sense.
--ij:mphasis in original).
p. 1420
. (JM-311)
Aonorable Stan Schlueter - Pa&e 5
.
Jones, supra. et 133. The court concluded that
[v]e think the act is constitutional for the
reason that the [Ilegislature has the power to
release, cancel, annul, or suspend penalties
previously accrued for delinquent taxes, so long
as these penalties have not been reduced to final
judgment.
-Id.
And fiaally, in respd& to the claim that the statute at issue
vlolated article III, section :36,which prohibits the legislature from
passing certain local and spr:ciallaws remitting penalties, the court
concluded that the legislature by implication could remit such
penalties by general law.
The only express limitation on the right of the
Legislature to remit penalties is that specified
in section 56 of mrticle 3, which prohibits the
Legislature from ‘mmitting fines, penalties, and
forfeitures by seecial law.' The necessary
implication from the language used is that ‘fines,
penalties and forfeitures may be remitted by
general laws, suet. as the one before us. . . .
Nor do we think that the Legislature is pro-
hibited, either expressly or by necessary implica-
tion. by the langurge of any other sectioc of the
Constitution. If ,LI: be said that the'provisions
of sections 51 and 55 apply to penalties imposed
for tax delinquent?, then, for the same reason, we
would be compelled to say they apply to all
classes of penaltir:s.and to fines and forfeitu=
as well. Such 1; constnii would render
meaningless the pcraer clearly reserved to the
Legislature by the ‘termsof section 56 of article
3, to release ‘fines, penalties and forfeitures’
by general law. [Citations omitted). (Emphasis
in original).
Jones, s_upra,at 137.
Accordingly, we ‘conclude that House Bill No. 1751 providing an
amnesty period for the payment ,of delinquent property and local sales
taxes without the imposition of a penalty violates neither article
VIII, section 10 nor artic!.a III, sections 51 and 55 of the Texas
Constitution.
p. 1421
Eonorable Stan Schlueter - Paga 6 (JR-311)
.
House Bill No. 1751, Acts 1985, Sixty-ninth
Legislature, which provides an amnesty period for
the payment of delin,quentproperty and local sales
taxes without the imposition of a penalty, vio-
lates neither article VIII, section 10 nor article
III, sections 51 and 55 of the Texas Constitution.
J
Very truly yours
A,
JIM MATTOX
Attorney General of Texas
TOM GREEN
First Assistant Attorney General
DAVID R. RICRARDS
Executive Assistant Attorney %neral
ROBERT GRAY
Special Assistant Attorney Gentera
RICK GILPIN
Chairman, Opinion Committee
Prepared by Jim Moellinger
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Rick Gilpin, Chairman
Jon Bible
Colin Carl
Susan Garrison
Tony Guillory
Jim Noellinger
Jennifer Riggs
Nancy Sutton
Bruce Youngblood
p. 1422