THE 

### ATTORNEY GENERAL OP'hCXAS

The Honorable Hugh C. Yantis, Jr. Opinion No. H-833 Executive Director TexasWater Quality Board Re: Whether boat certi1700North CongressAvenue fication fees erroneously Austin, Texas 78701 collectedby the Water Quality Board can be refunded.
Dear Mr. Yantie:
InAttorney General Opinion H-716 (1975)this office advisedyou that a provision in the general appropriations act specifies that any money deposited into the State Treasury which is "subject to refund as provided by law" is appropriated for thatpurpose. We said the provisionwould apply to boat certification fee refunds "necessaryto reimbursepersons entitled by general law to refunds of money placed in,the special [boatcertification feel fund." See Acts 1975, 64th

at 2417;Water Code 9 21.09m). Lig., ch. 743
You have now asked if themoney in the boat certification fee fund is "subject to refund as provided by law" in four specific situations:

1. In the instance in which a local governmental entity is the designated certifying authority,an applicant already certified by that entitymistakenly applied for and remitted fees for certificationby this office. 2. Persons have sent in applications for certificationwhen they operate boats in saltwater only. The law and this Board's regulations apply only to boats operating on inland freshwaters.

p.3515.

The Honorable Hugh C. Yantis, Jr. - page 2 (H-833)

3. Persons have applied for certification when their boats have no permanent sleeping facilitiesand no marine sanitationdevice, in which case there is no need for certification. 4. Persons have submittedpayment in excess of the amount required for certification.
In the first three cases, certificationmay not be properly given, and in all four cases, the feeswere accepted and deposited before the error was discovered. Section 21.097(c)of the Water Code, which governs the collection of boat certification fees and the establishment of the fund intowhich they are paid, does not itself expressly authorize refunds for any reason, but in our opinion, refunds can be made if authorizedby common law. Cf. Attorney General Opinion H-716 (1975). We think the appropztion act proviso pfrmitting refunds as provided by law ismeant to square w th article 3, section '44of the Texas Constitution,which prohibits the Legislature from granting "by appropriation, or otherwise, any amount of money out of the Treasury of the State, to any individual;on a claim, real or pretended,when the same shallnot have been provided for by pre-existing law."
In explaining the constitutionalrestriction, it is said with ample support in 52 Tex. Jur.2d, State of Texas 6 40 at 750: [T]helegislaturemay not appropriate

statemoney to any individualunless, at the time the appropriation ismade, there is already in force somevalid law constituting the claim that the appropriation ismade to pay a legal obligation of the state. By that legal obligation is meant an obligation such as would form the basis of a judgment against the state in a court of competent jurisdiction in the event the state should permit itself to be sued. The term 'preexisting law' does not necessarilymean

p.3516The HonorableHugh C. Yantis, Jr. - page 3 W-833)

pre-existing statutory law.

. . .Hut it is held that a moral obligationwill not authorize an appropriationby the legislature,even where the statehas received the benefits of the unauthorized contracts of its officers or of unauthorized taxesvoluntarily paid into the treasury.
We discussed inAttorney General Opinion H-548 (1975) the rules applicable to the refund of taxeswhere no statute applies: (1)a person who voluntarilypays an

illegal tax has no claim for repayment: (2)a person paying an illegal tax under duress has a valid claim for repayment; (3)duress in the payment of an illegal tax may be either express or implied, and,a legal duty to refund exists in both cases: (4)a taxpayerneed not take the risk of incurring the threatenedpenalties or punishmentswhile the invalidity of the tax is being litigated in order to claim duress: and (5) in the absence of a statute to the contrary, it is immaterial to the taxpayer's right of repaymentwhether or not the tax was paid under protest. These rules, laid down by the Texas Supreme Court in National Biscuit Co. v. State, 135 S.W.Zd 687 (Tex.Sup. 1940),have been appmdTotherefund of fees, as well as of taxes. Crow v. City of Corpus Christi, 209 S.W.Zd 922 (Tex.Sup. m)TAttornz Generalans M-1048 (19721,WW-834 (19601, ww-749 (19591,O-6974 (1945). Cf. Attorney General Opinions M-576 (19701,WW-364 (19581,WWx8 (19571,O-7113 (19461, O-6282 (1945).

p.3517I

.

The Honorable Hugh C. Yantis, Jr. - page 4 (H-833)

In the above-described fact situations, themoney received has already been paid into the state treasury. Under the ational Biscuit Co. rules, the paymentsmust be considered voluntary and no=efundable~unless theywere made under duress, express or implied. The most,recent Supreme Court case on the duress necessary to entitle a payor to a refund is State v. ConnecticutGeneral Life Insurance&, **382** S.W=4r(Tex. Suo~.1964l.Smnvolved occuuation tax overpayments. The Court held that the taxes therewere paid under duress because an act of the Commissioner of Insurance caused or resulted in an overpayment'of taxesby the'insurante organization, the payment of which was necessary to avoid loss of the right of the insurance company to do business in this state. See also Crow,.:y. City of Corpus Christi, supra. --p

In the examplesyou have given all the paymentswere apparentlymade not,onlyytb' secure certification,but to avoid the legalpenalties attached to noncompliancewith the certification law. You'advise that,boat owners received mass mailings from your office which included an official letter explaining the certificationprogram, an application form for certification, a list of,Water Quality Board district offices, a copy of House Bill 1422,, enacting the certification law, and a copy **of** Board Order No. 74-0.521-4, implementing the law.
Boat owners were advisedby the letter sent them that persons failing to comply with the regulations contained in the Order might be found guilty of a misdemeanor and, upon conviction, fined from $25 to $200. It has been suggested that the letters sentwere confusing and ambiguous as to the boats for which certificationwas required, the particular certificationsnecessary, the governmentalunits which would perform necessary inspectionsand make certifications, and the fee payments necessary to avoid the penal provisions of the law. The definition of "duress"as a legal concept -- the question of what is necessary to legally constitute "duress" -- is a question of law. Statev. ConnecticutGeneral Life InsuranceCo., supra. But whether or not a particulat person in a particular transaction actually acted under legal duress, express or implied, is a question of fact.

p.3518The~Honorable Hugh C.

This office does Yantis,Jr. - page 5 (H-833)

not decide disputed questions
._ . _ of fact in the opinionprocess,but if the facts are as stated abOW and if the payments or overpaymentsdescribed in the four examplesyou give actually resulted from a misapprehension of fact or law inducedby the Water Quality Board or from a threat of penal prosecution upon failure to pay, then the cited authorities indicate there is pre-existing law to support refunds of boat certification fees improperly collected in themanner described. S UM~MARY Improperly collectedboat certification fees may be refunded if payment of the fees resulted from a misapprehension of fact or law inducedby the Water Quality Board or from a threat of penal prosecution upon a failure to pay.


# v Attorney General of Texas
APPROVED:

Opinion Committee jwb

p.3519