HonorableRobert S. Calvert OpinionNo. M-1190

Comptrollerof PublicAccounts State of Texas Re: Legality of refunds or Austin, Texas credits .fortaxnverpaymentmade.prior to July 1, 1967, to .be issued after August.31, 1972, under stated.facts Dear Mr. Calvert: and circumstances?

Your requestpresents two questionsboth concerning Article 3..045,

Title 122A, Taxation-General,V;C.S. The first question hereinafterconsidered states in part:

"Under the provisions of Article 1.045, Title 122A, Revised Civil Statutes of 1925, as amended, the seven-year limitationperiod on the.issuanae of franchise tax assessmentsbecomes operativeon 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 statuteprescribes an exception theretowhereunder assessment and collectionprocedures are authorizedafter 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-assessmentafter that time.

... *Your official opinion is respectfully reques‘ted wnether, pursuant to a written agreementwith eachstaxpayer for extension of the time within which an assessmentmay be issued, a refund or creditmay be issued by the Comptroller after August 31;1972 for overpaymentsmade~prior to July 1, 1967,

...*

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

Section (C),of Article 1.045, provides that the limitationperiod on assessments and collectionsmay be extendedby written consent of the taxpayer and the Comptrollerprior 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 assessmentand collection of any tax imposed by this Title, or before the expiration of any shorterperiod of time as may be otherwise provided in this Title, the Comptroller,
or his representative, and the taxpayerhave consented in writing to an assessment after such time, the tax may be assessed and collected,and an actionmay be commenced in any court to collect the amount delinquent, at any time prior to the expiration of the 

### periodagreed upon. The period so agreed uponmay be extended by subsequentagreements in writing made before the expiration of the period previously agreed upon."
Section (G)provides:
"Limitation

### for Refunds and Credits. Notwithstandingany 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 expirationof the period of time within which the Comptrollermay assess a deficiencywith respect to such tax. The Ccmptroller shall not issue any such refund or credit after the time for assessmentof a deficiencyhas 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 creditsduring any period in which a tax deficiency could be assessed for the same tax period forwhich the refund 

### or credit is sought.

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

Section (A)provides the seven-year limitationsperiod
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 taxpayerand therefore, a constitutionalquestion arises **of** whether this provision allows .foran exercise of discretionwithout any accompanying standardsor guidelineswhich are necessary to the constitutionaldelegation of such power. Mof University Park, 278 S.W.Zd 912 (Tex.Civ.App. ref. 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: *Applicableto the foregoinggrant **of** authority, by both Legislature and ordinance,are the following rleneral principles: (1)On the question of constitutionalityor not **of the** 

**. .**  delegatedpower, the inquiry is of whether the legislaturehas 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; HousingAuthority 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 fundamentalthat a legislative body may not delegate unlimited legislativepowers and functions to an administrative ageny. Whenever the legislative body vests any administrativeagency, such as a zoning board, with the power to exercise discretion. it must spell out the limits of that discretionby the establishment of scme standard to guide the agency. Such a standardmay 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 (Clto suspend the law 

### of limitationmay not be granted by the Legislature. 11 Am.Jur. 947, Constitutional Law, See. 334. As such, Section (C),isunconstitutional and invalid. Article 1.045 contains a~severability clause, and therefore, only the suspensionprovisions 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 Constitutionwhich 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 Constitutionof 1976 omits the 

### words *or its authority", and the authority of the Legislature to delegate its powers to suspend lawswas thereby repealed. See MaDonald
v. Uenton, 132 S.W. 023 (19101,

### errordenied104 Tex. 206 35 8.W. 11481 and Lyle v. State, 193 S.W. 680 tTex.Crim.' 1917)7 11 **Am.Jur.** 933-944 ConstZtutionalL&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 interpretationot Sections (Ip)

(11, (F) (3)and (F) (4)of Article 1.045 which provider
"(F)(1) Notwithstandingany provision of any

other Article ot #is Title, when any administrativeproceeding 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 

### theComptroller within sixty (60)days after becoming 

### tinal, with a statemsnt ot the masons for the ditterence in tax liability, in such detail as the Comptrollermay require."

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

"(F)(3; should such report or investigation disclosefanoverpayment of such tax liability, the Comptroller shall issue a refund or credit for such.overpaymentwithin the aforementioned one-year,.period

after receiving such report or discoveringsuch final determination."
"(F)(4) No actionmay be commenced to collect any.deficiencydisclosedby such final determanation after one year from the date the Comptrollerreceives such report or discovers such finai determinationunless the period prescribed **for** such an action by this Article
or any other Article of this Title has not -expired."

Your question.asks if:
*

...thereis any provision for extending the one-yearperiod (in Section (F)(4)]other than [for]that part of the deficiency or overpayment still-coveredby the seven years provided in Section (A)..."

In view-of.the.

tact that the Legislature may not constitutionallyempower 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 Legislaturemay 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)

Preparedby 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** 

-5815-