Honorable Robert S. Calvert Opinion No. M-1190 

Comptroller of Public Accounts 

State of Texas Re: Legality of refunds or 

Austin, Texas credits .for taxnverpayment made.prior to 

July 1, 1967, to .be 

issued after August.31, 

1972, under stated.facts 

Dear Mr. Calvert: and circumstances? 

Your request presents two questions both concerning 

Article 3..045, Title 122A, Taxation-General, V;C.S. The first 

question hereinafter considered states in part: 

"Under the provisions of Article 1.045, Title 

122A, Revised Civil Statutes of 1925, as amended, 

the seven-year limitation period on the.issuanae 

of franchise tax assessments becomes operative on 

September 1, 1972, on and after which date the 

Comptroller is proscribed from issuing a franchise 

tax assessment for delinquent taxeswhich were.due 

pri.or to.July l., 1967. However, Section .(C) *of. 

the statute prescribes an exception thereto whereunder assessment and collection procedures are 

authorized after expiration-of the 'I-year period 

..if-prior to such expiration the Comptrollzer.(or 

his.representative) and the taxpayer have,.consented in writing to an-assessment after that 

time. . . . 

*Your official opinion is respectfully reques‘ted 

wnether, pursuant to a written agreement with 

eachstaxpayer for extension of the time within 

which an assessmentmay be issued, a refund or 

credit may be issued by the Comptroller after 

August 31;1972 for overpayments made~prior to 

July 1, 1967, . ..* 

-5810- 
The Honorable Robert S. Calvert, page 2 (M-1190) -' 

Section (C), of Article 1.045, provides that the 

limitation period on assessments and collections may be 

extended by written consent of the taxpayer and the Comptroller prior to the expiration of said initial limitation 

period as follows: 

"If, before the expiration of the period of 

time prescribed in this Article for the 

assessment and collection of any tax imposed 

by this Title, or before the expiration of 

any shorter period of time as may be otherwise provided in this Title, the Comptroller, 

or his representative, and the taxpayer have 

consented in writing to an assessment after 

such time, the tax may be assessed and 

collected, and an action may be commenced 

in any court to collect the amount delinquent, 

at any time prior to the expiration of the 

period agreed upon. The period so agreed 

upon may be extended by subsequent agreements in writing made before the expiration 

of the period previously agreed upon." 

Section (G) provides: 

"Limitation for Refunds and Credits. Notwithstanding any provision of this Title, the 

period of time during which the Comptroller 

may refund any werpayment of tax or issue a 

credit for overpayment of any tax imposed 

by this Title shall.not expire prior to the 

expiration of the period of time within which 

the Comptroller may assess a deficiency with 

respect to such tax. The Ccmptroller shall 

not issue any such refund or credit after the 

time for assessment of a deficiency has 

expired unless such tax was paid under protest 

and such refund or credit is made under court 

order.' 

The two Sections (C) and (G) taken together allow tax 

refunds or credits during any period in which a tax deficiency 

could be assessed for the same tax period for which the refund 

or credit is sought. 

. -5811- 
The Honorable Robert S. Calvert, page 3 (M-1190) 

Section (A) provides the seven-year limitations period 

on franchise tax assessments and on claims for refunds or credits 

by virtue of Section (G). 

Section (C) provides a method of extending this period 

at the discretion of the Comptroller and the taxpayer and 

therefore, a constitutional question arises of whether this 

provision allows .for an exercise of discretion without any 

accompanying standards or guidelines which are necessary to 

the constitutional delegation of such power. 

of University Park, 278 S.W.Zd 912 (Tex.Civ.App. Mref. n.r.e.). Article 2, Section 1, Texas Constitution. 

Section (C) contains 30 standards to-guide the Comptroller in the exercise of this discretion to enter into 

agreements affecting an extension of the statutory limitations 

period. In the Ml4 case, supra, the Court of Civil Appeals 

sets out the principle* of law as follows: 

*Applicable to the foregoing grant of authority, 

by both Legislature and ordinance, are the 

following rleneral principles: (1) On the 

question of constitutionality or not of the . . 

delegated power, the inquiry is of whether 

the legislature has prescribed sufficient 

standards to guide the discretion conferred. 

If so, the power is not 'legislative' and 

its delegation is lawful: Davis, Admiikistrative law. p. 44; Housing Authority of City 

of Dallas v. Higginbotham, 135 Tex. 158, 143 

S.W.2d 79, 130 A.&R. 1053; Railroad Commission v. Shell Oil Co., 139 Tex. 66, 161 S.W. 

2d 1022, also Id., 146 Tex. 286, 206 S.W.2d 

235. (2) 'It is fundamental that a legislative body may not delegate unlimited 

legislative powers and functions to an 

administrative ageny. Whenever the legislative body vests any administrative agency, 

such as a zoning board, with the power to 

exercise discretion. it must spell out the 

limits of that discretion by the establishment of scme standard to guide the agency. 

Such a standard may be general and at the 

same time be valid if it is capable of 

reasonable application.'" 

-5812- 
The Honorable Robert S. Calvert, page 4 (M-1190) 

The unlimited or unqualified power to exercise discretion 

granted in Section (Cl to suspend the law of limitation may 

not be granted by the Legislature. 11 Am.Jur. 947, Constitutional Law, See. 334. As such, Section (C) ,is unconstitutional and invalid. Article 1.045 contains a~ severability 

clause, and therefore, only the suspension provisions are 

invalidated. 

Although Section (C) is invalid for the reasons given, 

said provision may also be prohibited under Article 1, Section 

29, of the Texas Constitution which provides as follows: 

“Sec. 28. No power of suspending laws in 

this State shall be exercired except by the 

Legislature.Y 

Under former constitutions of the State, the suspension 

of laws could be exercised by the Legislature, *or Its 

authority*. The Constitution of 1976 omits the words *or its 

authority", and the authority of the Legislature to delegate 

its powers to suspend laws was thereby repealed. See MaDonald 

v. Uenton, 132 S.W. 023 (19101, error denied 104 Tex. 206 

35 8.W. 11481 and Lyle v. State, 193 S.W. 680 tTex.Crim.' 

1917)7 11 Am.Jur. 933-944 ConstZtutional L&w, Sea. 230. 

As Article 2, Section 1, of the State Constitution 

invalidates Seation (C), we do not reach the question of 

whether said provision is a grant of power to suspend a law 

and only hsre note the existence of this question. 

The second question conaerns the interpretation ot 

Sections (Ip) (11, (F) (3) and (F) (4) of Article 1.045 which 

provider 

"(F) (1) Notwithstanding any provision of any 

other Article ot #is Title, when any administrative proceeding before any local, state or 

federal regulatory agency or judiaial proceedinq 

arising therefrom, results in a tinal determination which attects the amount of tax liability 

imposed by any Article ot this Title, suah Final 

determination shall be reported to the Comptroller 

within sixty (60) days after becoming tinal, 

with a statemsnt ot the masons for the ditterence in tax liability, in such detail as the 

Comptroller may require." 

-5813- 
The Honorable Robert S. Calvert, page 5 (M-1190) 

"(F) (3; should such report or investigation 

disclose fan overpayment of such tax liability, 

the Comptroller shall issue a refund or credit 

for such.overpayment within the aforementioned 

one-year,.period after receiving such report or 

discovering such final determination." 

"(F)(4) No action may be commenced to collect 

any.deficiency disclosed by such final determanation after one year from the date the 

Comptroller receives such report or discovers 

such finai determination unless the period 

prescribed for such an action by this Article 

or any other Article of this Title has not 

-expired." 

Your question.asks if: 

* . ..there is any provision for extending the 

one-year period (in Section (F) (4)] other 

than [for] that part of the deficiency or 

overpayment still-covered by the seven years 

provided in Section (A)..." 

In view-of.the. tact that the Legislature may not 

constitutionally empower the Comptroller to extend in his 

discretion, the statutenf limitations, where there is no 

standard.or~.guideline provided for the exercise of that 

discretion, there-isnot any method to extend the limitation 

period in Section.'(F) (4). 

SUMMARY 

The Legislature may not constitutionally 

delegate its power to the Comptroller without 

any accompanying standards or guidelines. 

Article 2, Section 1, Texas Constitution. 

Section (C) of Article 1.045, Title 122A, 

Taxation-General, V.C.S., therefore, is an 

invalid delegation of power. Said provision 

may be invalid as a delegation of power to 

suspend the law under Article 1, Section 

28, of the Texas 

ey General of Texas 

-E&14- 
The Honorable Robert S. Calvert,page 6 [M-1190) 

Prepared by Wardlow Lane 

ABBiBt~t Attorney.Generdl 

APPROVED 

OPINION COMMITTEE 

Kerns Taylor, Chairman 

W. E. Allen, Co-Chairman 

Herschel Moore 

Rex White 

John Reeves 

Arthur Sandlin 

SAMUEL D. MCDANIEL 

St&t Legal ASSiStSIlt 

ALFRED WALXER 

EXWJUtiVS ASSiStant 

NOLA WHITE 

First ABBiBtallt 

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