Untitled Texas Attorney General Opinion

The Attorney General of Texas
JIM MATTOX Dectmber 20. 1984
tttorney General
``,emCo&BuIIdlq Eonorable Sten Schlueter Opinion No. JM-285
chairman
4;*m,Tx. 78711-2548 Ways and Means Comictee Re: Applicability of 15% pen-
s12/47!9501 Texas Eouae of Representatives alty provided by section 33.07
Telex 910/874-1267
P. 0. Box 2910 of the Tax Code
lelecopier 51214750266
Austin, Texas 78769
714 Jackson. Suite 700 Dear Representative Schluetcr:
LIelIes, TX. 752024506
2141742.9944
letter to UB asks:
3824 AlBerta AW.. Suite 160 (1) Does the 15% penalty allowed by section
El PIW, TX. 799052783 33.07 of the Texas Property Tax Code apply to all
91E&XM494 tax years chr is it limited to years subsequent to
the enactment of the code?
1001 Texas, SuIta 700
Hounon.Tx. 77W2Jlll (2) I3 the July 1st date of section 33.07
7131222-5886 mandatory or directory? That is to say, is the
taxing enl::,ty prevented from availing itself of
section 33.07 after this date in the initial year
806 Broadway. Suite 312
Lubbock, TX. 794013479
of adoptd.oa or does the date establish the
0OU747.5228 earliest possible date a taxing unit can add a
penalty?
4209 N. Tmth. Sulle 6
The section of the Tex Code tb which you refer was added by the
McAllen. TX. 78501-1683
512l6824547
Sixty-seventh Legiakture in 1981. to become effective January 1,
1982. It reads:
m MaIn Plaza. suits 400 (a) taxing unit or appraisal
A district may
San Antonio.TX. 7820~2707
provide. in the manner required by law for
512ms-4191
official action by the body, that taxes that
remain del.inquent on July 1 of the year in which
An Equal Op,MtU~llYl they beconE delinquent incur an additional penalty
Afllrmatlve Actlon Employer to defray coats of collection, if the unit or
district or another unit that collects taxes for
the unit has contracted with an attorney pursuant
to Section 6.30 of this code. The amount of the
penalty mt.y not exceed 15 percent of the amount of
taxes. per,a,lty. and interest due.
(b) A tax lien attaches to the property on
which the tax is imposed to secure payment of the
penalty.
p. 1264
ilonorable Stan Schlueter - Page 2 (JM-285)
(c) If a penalty is imposed pursuant to this
section, a taxing un:it may not recover attorney’s
fees in a suit to collect delinquent taxes subject
to the penalty.
(d) If a taxing unit or appraisal district
Erovidea for a per&y under this section. the
collector shall delj;er a notice of delinquency
and of the penalty t; the property owner at least
30 and not more t&n 60 days before July 1.
(Emphasis added).
Acts 1981. 67th Leg., 1st C.S., ch. 13. $130, at 168.
The stated purpose of tha! statutory penalty under discussion is
to “defray costs of collection” and it may be assessed only if the
collecting unit has contractelI with a private attorney to represent
the unit. Tax Code 533.07(a). -See Tax Code 16.30; Attorney General
Opinion JM-14 (1983).
Statutes impoaiag penaltim are to be strictly construed. Hatch
v. Davis. 621 S.W.Zd 443 (Tex. App. - Corpus Christ1 1981. writ ref’d
n. It is hinhlv
-_ aianificant
- that. accordina to the atatutom
language, the penalty may be applied only to those taxes “that remain
.dellnquent on July 1 of the yg:ar in which they become delinquent” --
and not then unless “the colle’?:or” has delivered a notice of delinqu-
ency and of the penalty to the property owner “at least 30 and dot
more than 60 days before July I.” In other words, the section 33.07
penalty can attach only after z;e notice has been given and during the
year the taxes first become delinquent.
In our opinion, the ad(.i,tioaal penalty authorized by section
33.07(a) of the Tax Code cannot be applied to taxes that first became
delinquent in a year prior to t,he year in which section 33.07. having
already become effective as law, is adopted by a taxing unit or
appraisal district, even thott$:h sucii taxes might remain delinquent
thereafter. The legislative :Lutent, we believe, was to allow the
imposition of the additional penalty only after the property owner had
been specially warned of its Imoapective attachment (and in time to
avoid its imposition). If the, additional penalty were to attach to
back taxes because the taxes had remained delinquent past July 1 in a
previous year -- i.e.. the year during which they had first become
delinquent -- then warning; could be effective and it would be
impossible for the property owuer, by paying the delinquent taxes, to
avoid the additional penalty.
Indeed, under the section 33.07(a) “year in which they become
delinquent” language, if applied to taxes which became delinquent in
prior years and remained so past July 1 of those years, the section
33.07 penalty would apply ever! If the delinquent taxes were &prior
to the enactment of section Yi3.07. We cannot and do not ascribe to
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Bonorable Stan Schlueter - Page 3 (~21-285)
the leeislature an intent that would raise the mecter of an unconsti-
tutionally retrospective law. See Tex. Const. art. I. 516; French v.
Insurance Company of North Am?::=. 591 S.W.2d 620 (Tex. Civ. App. -
Austin 1979, no writ). See a:Lzalder v. Bull, 3 Dall. (3 U.S) 386,
391 (1798) (dictum) (Chase. 3.) (“Every law that takes away, or
impairs, rights
. - vested;
. agree;lbly to existing laws, is retrospective,
and is generally unjust.“) XC: should be noted, however, that even if
this additional penalty does not attach, regular penalties may be
recovered when delinquent taxes for past years are collected. Tax
Code S33.01.
In addition to these arguments against a retrospective
application of the statute, ssction 3.02 of the Code Construction Act
(V.T.C.S. art. 5429b-2) requ:lres a statute to be construed to have
only a prospective effect un!.r:ss It is made expressly retrospective.
Section 1.03 of the Tax Code requires that this rule of construction
be followed In interpreting the code. Not only does section 33.07
lack any express language requiring retrospective construction; there
are examples of tax statutes having such language, showing that the
legislature knows how to requj.re a retrospective application when it
so desires. See, e.g., Acts 1981, 67th Leg., 1st C.S.. ch. 13. 1159,
at 176.
In answer to your first question, we advise therefore that the
15% additional penalty allowemi by section 33.07 of the Tax Code cannot
be applied to taxes that first became delinquent in years prior to the
date that section 33.07 and its procedures are adopted by a taxing
unit.
You inform us that, with your second question, you wish to know
whether a taxing unit or an ap,?raisal district which seeks to impose a
section 33.07 penalty may extend the July 1 date set forth in the
statute for the imposition OF the penalty to. say, August 1 instead.
It is suggested that the July 1 date set forth in section 33.07(s) is
directory only, not mandatory, and that a taxing unit or appraisal
district may properly designate another date at which time the penalty
1s imposed just so long as the notice requirements of subsection (d)
are met. We disagree. We c:cnclude for two reasons that the July 1
date is mandatory; section 3X.07 does not provide any means whereby a
taxing unit or an appraisal district may extend the July 1 date.
First, in support of the proposition that the July 1 date is
merely directory. it is argued that statutory provisions which regu-
late the duty of public offi:ers and specify the time for performance
of such duties are directory unless the statute forbids the exercise
of such power after that tfne. Markowsky v. Newman, 136 S.W.2d 808
(Tex. 1940); Federal Cntde D:;!. Cc. v. Yount-Lee Oil Co., 52 S.W.Zd 56
(Tex. 1932). As the Texas Supreme Court declared in Chisholm v.
Bewley Mills, 287 S.W.2d 943, 945 (Tex. 1956):
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Ronorable Stan Schlueter - Page 4 (JM-283)
There is no absolute test by which it may be
determined whether a statutory provision is
mandatory or directory. . . . In determining
whether the Legisl``ture intended the particular
provision to be mandatory or merely directory.
consideration should be given to the entire act,
its nature and object. and the consequences that
would follow from- each construction. Provisions
which are not of the essence of the thing to be
done, but which ara[ included for the purpose of
promoting the propez, orderly and prompt conduct
of business, are not generally regarded as
mandatory. (Emphas!~: added).
We do not dispute the statemc:nt of the law; we merely think that its
application to this question :A contrary to the one suggested.
The “essence of the thing to be done” by a taxing unit or an
appraisal district in this instance is the adoption of the ordinance
or resolution imposing the sel:tion 33.07 penalty. Once the resolution
Is adopted, the penalty is imposed on July 1 by operation of law, and
the tax assessor-collector jior the unit is required to deliver a
notice of the delinquency and of the penalty to the property owner at
least 30 and not more than 60 days before July 1. The statute is
silent as to the date by whd.ch such ordinance or resolution must be
adopted in order to be effective. In other words, a taxing unit or
appraisal district is not empowered to impose a penalty as of July 1
or any other date which is deemed appropriate; a taxing unit or
appraisal district is empowe,K,d by section 33.07 to impose only the
penalty. The date on whicln the penalty automatically attaches
pursuant to a valid ordinance: or resolution is specifically set forth
In the statute.
We are required to construe a statute in such a way as to express
only the will of the makers of the law, not forced or strained, but
simply such as the words of the law in their plain sense fairly
sanction and will clearly sus:tain. Railroad Coxunission of Texas v.
Miller, 434 S.W.2d 670 (Tex. 1968). If the legislature had Intended
that a taxing unit or an appraisal district be empowered to extend the
July 1 date or adopt a new date on which the penalty attaches, it
could have done so and would have done so explicitly. See. e.g., Tax
Code 5131.02, 31.03, and 31.51 (providing for February 1 delinquency
date and for postponement of such date in certain instances).
Second, in light of the: traditional significance of the July 1
date in the ad valorem tax c.Aendar, it is doubtful that the legisla-
ture intended that the date on which the section 33.07 penalty be
imposed be chosen arbitrarily. Traditionally, July 1 is the last date
on which the second payment under a split payment plan may be tendered
without the taxpayer incurrirg a delinquent tax penalty. See Tax Code
631.03 and now-repealed V.T.C.S. art. 7336 (predecessorxatute .to
p. 1267
Honorable Stan Schlueter - Pal:t: 5 (JM-285)
section 31.03 of the code). July 1 was also the traditional date on
which taxing units compiled delinquent taxpayers lists and notified
each prior to the imposition of a foreclosure suit. See now-repealed
V.T.C.S. arts. 7324, 7325, Y326. And finally, July1 is also the
traditional date on which the penalty imposed upon delinquent taxes no
longer accrues on a per-month basis but rather is imposed as a flat
rate. See Tax Code 133.01 and now-repealed V.T.C.S. art. 7336
(predecessor to section 33.01 of the code).
Accordingly, we conclude that the July 1 date set forth in
section 33.07, on which date the penalty attaches, is mandatory.
Section 33.07 does not provik any means whereby a taxing unit or an
appraisal district may extend the July 1 deadline for payment without
incurring the penalty or select a different date on which the penalty
attaches.
The penalty provided by section 33.07 of the
Tax Code applies to ;a11 taxes currently delinquent
in the year in whi:h the penalty is imposed; its
application is limited to the years including and
subsequent to the z.doption of this code provision
by the appropriate taxing unit or appraisal
district. Tbe Jul:r 1 date set forth in section
33.07 of the Tax Code, the date on which the
penalty attaches, is mandatory; section 33.07 does
not provide any means whereby a taxing unit or an
appraisal district may extend the July 1 date or
select a differen’: date on which the penalty
attaches.
JIM HATTOX
Attorney General of Texas
TOMGREEN
First Assistant Attorney General
DAVID R. RICHARDS
Executive Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Robert Gray
Assistant Attorney General
p. 1268
RonorableStan Schlueter- Pags 6 (JM-265)
APPROVRD:
OPINIONCOMMIlTRE
Rick Gilpin. Chairman
Colin Carl
Susan Garrison
JenniferRiggs
p. 1269