### QBffice of tfy Bttornep dbmerat

DAN MORALES ATTORNEY GENERAL 

## &ate of Qexae April26,1993

HonorableTom Craddick Chairman Committeeon PublicHe&b Texas House ofRepresentatives P.O. Box 2910 Austin,Texas 78768-2910 Option No. DM-218

Re: wllether an additional sales and use tax under section 321.101(b) of the Tax Code may be used to finance a homestead exemption, whethex an eligible city may simultatlMusly adopt sales and use taxes under both sections 4A and 4B of V.T.C.S. article 5190.6, and dated questions (RQ-466) DetKRepresentativecraddick:

On behalfof the city of Cedar Hill (the “city”),you have asked several questions about sales and use taxes. Pii you ask whether an additional sates and use tax under section 321.101(b) of the Tax Code may be-used to tlnance a homestead exemption instead of reducingthe property tax rate.

Section 321.101(b)providesthat certainmunicipalities “may,by a majorityvote of the quahied voters.

. . adopt an additional sales and use tax for the benefit of the mtmicipality in accordattm with this chapter...

.“I The 1~ has expressly prescrii the use of revemre collected under section 321.101(b). Revenues from an additional sales and use tax under this chapter must first be used to reduce the property tax rate. See Tax Code 8 321.404(a) (mquking that a ballot in an election to adopt an ~dltionalsales~dwetaxJpecifythatthetaxwill”beusedtoreduccthepropcrtytax rate”); see also id. 5 321.507 (citing Tax Code. 58 26.04(c) and 26.041(d), and providing that excessfunds must be depositedin an “excesssalestax revenue fund” and a “municipal salestax debt servicetimd,”whichmay onlybe expendedfor limitedpurposes); 8 321.506 (goveming the use of any remain@ funds).2

p. 1144Honorable Tom Craddick - Page. 2 (nu-218)

Whenagovaningbodylldoptsahomest~aanption,itacanptsfromrd u&rent taxation a prcmtqe of the appraised value of residence homesteads. See Tax Code 0 11.13. A homestead exemption does not reduce the prop@ tar rate. The memorandum submitted with your request suggests~that this distinction is immaterial because the purpose of the additional sales and use ULX under section 321.101(b) is to reduce the tax burden on property owners. It contends that cities should have the authority to determine how to achieve that end, idding adopting a homestead exemptionin lieu ofredueingthe property tax rate. We dimgree.

While a homestead exemptionreduces the tax burden on residential property by exemptinga portion ofthe appraisedvahre ofresidencesfrom taxation, it does not reduce the tax burden on non-residential property. See id. The legislature has specifically provided that the purpose ofthe additional sales and use tax under section 321.101(b) is to reduce the property tax rite, and has set fbrtb a number of provisions which explicitly govern the use of these revenues. See Tax Code, 5 321404(a); see CrLao id. $8 26.04(c). 26.041(d). 321.506, and 321.507. None of these provisions permits a city to use an additionalsalesanduse~toreduccthetaxbPlrdmofresideatialpropatyumilenot reducing the.tax burdemof non-residentialproper@ Because a homestead exemption doesnotreducethepropatytaxnteasnquindbytheseprovisions,wecwclude~a municipalityisnotauthorizedtousean~~tio~saluMdusetaxundasection 321.101(b)oftheTaxCodetofinanceahomesteadexemption. Second,youexplainthatin~~onto~o~aonahallcent~uMdusetax tmder section 4B of article 5190.6, V.T.C.S., e&et.& July 1. 1993, the city would also liLetoadoptacombined~hafcaapslesudurtraundasection4Aofthat~~e and section 321.101(b) of the Tax Code, efktive October 1, 1993, for an overall one centsalestax3 ThecitywouldholdMelectionto~optasaesMdusetaxundaeachof these provisions on the same day.4 You ask ifthe city is authorizedto do so. Section 4A and section 4B separately authorize an ‘eligible city” to adopt a sales and use tax. Assumingthatacityiseligibleunderbothprovisions,weseenothingin~~e5190.6that would suggest that the city may not simultaneouslyadopt sales and use taxes under both section4A and section4B.

You point out that subsection (f) of section4B provides that “[u@r the e@ctiw ~eoIthPtmceSinpavdunda~~on,theadoptionofasalesandusetaxorthe

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Ina~~question,youaJ;whethaaproposaltoadoptasalesaadusetra mder section 4B of article 5190.6, on the one hand, and a combmed sales and use tax undersection4Aoftbatarticleandsection321.10l(b)oftheTaxCode,ontheother,may appedronaballotasasingleballotproposit.ion. Section4A(p)attthbsacitytoimpose asalesandusetPruadathat~~aadtoimpo~eanrdditionalsalesMd~taxunder section 321.101(b) of the Tax Code “at tbe sametime and on the sameballot.” See aku V.T.C.S. art. 5190.6, 84A(e). It is clear fkomthe ballot hnguage set forth in section 4A@)~thetwo~~~ontbeballotinthesameproposition. Section 4A(p) provides in perhent part:

The city must follow, in relation to tbe imposition.

. . of the additional sales and use tax imposedunder Section 321.101@),Tax code,theproozduresofthatchapter,exepttllatinaneleuionto impose...thetaxunderthisrection~theldditional~~~~ taxthebpllotsMIbeprintedtoprovideforvotiagfororclgainsttbe proposition: “Theadoptionofasalesandusetaxwithinthecityfor tbepromotionanddevelopmattofnewaudexpandedbushess extterprises

at the rate of.

. . and the adoption of au additional sales md~~withinthccity~therateOf...tokusedtonduce.the propatytiSXnte”

.... The foregoing provision sets forth the language which must be used in a ballot proposition on the adoption of a combinedsales and use tax under section4A and section 321.101@). It does not authorize the city to include any other language in the ballot proposition. The&ore, we concludethat the city is not authorized to join a proposal to adopt a combmed sales and use tax under section 4A and section 321.101(b) and a proposal to adopt a sales and use tax under section 4B on the ballot as a single ballot proposition. See Wtight v. Bomd of T-es of Tar~mh&p. Sch. Da.., 520 S.W.2d 787, 792 (Tex. Cii. App.-Tyler 1975, writ dism’d w.o.j.) (“When a statute which authoriws a special election for the imposition of a tax prescribes the form in which the question shall be submitted to the popular vote, the statute shall be strictly complied With.“)

p. 1146Honorable Tom Craddick - Page 4 (DM-2 18)

You~rsk~meliSiblecitymryrdoptaralesradusetaxrtantelssr than one-halfof one percent under section 4B, article 5190.6. S§ion (e) of section 4Bprovides~“[i]f~~~~city~opssth~atmbimposedoatherecciptsfiom tbesrle~rrtailof~~~~withinthedigiblecityitanteequJtooaahalfofone

” Section 4A of article 5190.6 and section 321.101(b) of the Tax Code ~~.adoptiollofasslesturta*squdu,Dawiehtboabfounbthraeeigtnqor one-half of one percat. See V.T.C.S. att. 5190.6, #4A(d), (m), (p); Tax Code &j321.lOl(b). 321.103(b). Prior to 1991, both section 4A and section 321.101(b) providedonlyforaone-halfofonepercenttaxrate. lal99l,ho~mr,tbeSeventy- ~~r~unmdcdthere~torllowfor~~undaonahrlfofoae paccnt. Acts 1991,72d Leg., ch 184, 00 1,4. Siicantly, the legkture has not

- amended section 4B to provide for tax rites under one-half of one percent. Accwdu& weconclude~~on4Bdossnotruthoriteandisible~toldopta saksand&taxataratelessthanoabhaifofoneparcent. Pii,youaskwhethermembersofac@%municipaladvisoryboardsarecity officers for pwposes of article 5190.6, section 4B(c). Subsection (c) proides that the boanlofawrpontionestablisheduad~section4Bcon&sofswendktors,andthat

“[alt least four dkctors must be pemonswho are manbers of the gowning bodyofthe eligiile city, and the tEtMkgthnedifWtO~rhallbepWSOltSWhOUeWtemplOyees, offi- ormembuaofthe gover&gbodyoftheeligiilecity.” Youatatethatyou uadarturdthatmanycitiesiaclude~boardmanbasap”offi~“for~o~ purposesintheircitycharter!3andcod es. Thefactthatanadvisotyboardmemberis de6nedasacityofficcrinacitycodeorchmter,however, doesnotwcwwilymekehim
or her an offica fbr purposes of state law in gQleralor atticle 5190.6in particular. Under ~isw,rplblicoffi~genenllyhuafaedtamMd~benmmedwlyin accordance with the applicableprovisions of law. AkfineIn&p. SchooJDfst. v. S&r&y, 280 S.W.2d 578 (Tex. 1955). In addition, a public officeris someone upon whom some wvereignflmctionofthegovemmt isconfwedfbrthebeneiitoftbepublic,largely imkpendentofthewntrolofothus. Id.at583. Anindividualwhoservesinamereiy adviwry capacity does not exercisesowreign powexsindependentofthe wntrol of others andisthe&orenotanofficer. ThedetemGnationwhethermembersofaparticular mtmicipal advisory board are officers depends upon the foregoing factors and must be made on a case-by-casebasis. 

### SUMMARY

Acityisnotauthokzcdtouseanadditionalsalesandusetax under section 321.101(b) of the Tax Code to fmance a homestead CXMtptiOtt. Acitythuadoptsaonahalfcent~alwanduseturunder~on 4BofarticJe5190.6,V.T.C.S..mayalsoadoptinthesameelectiona wmbmed on&alf cent sales and use tax under section 4A of that articJe and section 321.101(b) of the Tax Code, asskng that the

p. 1147HonorableTom Cmddick - Page 5 (DM-218)

cityiseligibleto~~a~alesMd~tucundatheseprovirionsud theoveraUsalesandusetaxratewouldnotexceedatntutoryhits. Acityisnotauthorizedtojoiaaproposaltoldopta~~Mduse tsxundareaion4B,andaw~~~Mdusetaxunda~on 4A and section 321.101(b), on the ballot as a single ballot proposition. Acityisnotauthorizedtoadoptasalesa~~Iuutax tmder section4B at a rate lessthan one-half ofone percent. Thehctthatrmunicipalldvisoryboardmcmberisdeihdasa cityofficerinacitycodeor~dasnotnecessarilymakehimor beranofficerforpurposesofstatelawingeneralorazticle5190.6in particular. The determhation wh&er members of a particularrmrnicipaladvisoryboardarecityofficersmm%bemadeonacaseby-casebasis.

DAN MORALES Attorney Oeneralof Texas

WILLPRYOR PiiAuistMtAttomeyoweral

MARYKELLER DcputyAttomcyGenemlibrLitigation

RENEAHlcKs State Solicitor

MADELEINEB. JOHNSON Chairsopiion committee

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