The Attorney General of Texas 

March 13, 1979 

MARK WHITE 

Utomey Geneml 

Honorable Tim Von Dohlen 

Chairman 

House Committee cn Regions, 

Compacts and Districts 

State Capitol 

Austin, Texas 

Dear Representative Von Dohlen: 

Opinion No. Ml+4 

Re: Whether tax exemptions 

authorized by tax relief amendment may he effective as of 

January l,1979. 

You ask the following question concerning enabling legislation to 

implement the Tax Relief Amendment: 

In passing enabling legislation to implement the ad 

valorem tax exemptions authorized in the “Tax Relief 

Amendment,” may the Legislature make such 

exemptions effective as of January l,1979? 

The ‘l’ax Relief Amendmentv took effect January l,l979. It provides that 

the Legislature shall exempt from ad valorem taxation household goods and 

personal effects not, held or used for the production of income and may 

exempt all or part of the personal property homestead of a family or single 

adult It shall provide for taxation of farm or ranch land on the ‘basis of 

productive capacity and may provide for taxation of timberland on the same 

bask. It may exempt an amount not to exceed $10,000 of the homestead of a 

person who is disabled or over 65 from ad valorem taxation for public 

schools. However, the exemption may not be implemented where ad 

valorem tax has been pledged for payment of a debt if cessation of the levy 

would impair the obligation of contract. 

These exemptions will not become effective in the sbsence of 

1egIsIation. See Attorney General Opinion H-68 (1973) (implementation of 

article 8, S 2mof the Texas Constitution). Whether or not the leglslature 

may make these exemptions effective January l, 1979, depends on the 

application of several other constitutional provisions 

Article 1, section 16 forbids the enactment of retroactive laws, but this 

prohibition does not extend to all statutes. The legislature may enact 

retrospective legislation where no impairment of vested rights results. 

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Honorable Tim Van Dohlen - Page Two (m-4 1 

Deacon v. City of Euless, 405 S.W.fd 59, 62 (Tex. 1966); Cox v. Rcbiin, 1SO SW. 1149 

rex. 1912); Attorney General Opinions H-634 (l975), H-14 (l973). Where private rights are 

not involved, the legislature may impose retroactive legislation on political subdivisions. 

Descon v. City of Euless, m at 62; $ Love v. City of Dallas, 40 SW.2d 20 (Tex. 1930 

&tstitution protects property which pohtical subdivision holds ht trust for people). The 

vested rights of taxpayers will not be injured by the grant of tax exemptions effective 

January I, 1979, since it creates rather than destroys a right. See Attorney General 

opinion M-413 (1969); 2 Sutherland, Statutory Construction S4LO2qth ed. C.D. Sands 

1973). Although statutes are generally presumed to operate prospectively, they will be 

given retrospective effect where the legislative intention is clear, and where no 

impairment of vested rights results. Deacon v. City of Eules, s at 61; s Code 

Construction Act, V.T.C.S. art. 5429b-2, S 3.02 (statute presumed to operate 

prospectively unless expressly made retrospective). 

Other constitutional provisions prohibit the state from applying a tax exemption 

retroactively when the tax liability has matured. Article 3, section 55 of the Texas 

Constitution provides as follows: 

The Legtslature shall have no power to release or extinguish, or to 

authorize the releasing or extinguishiig, in whole or in part, the 

indebtedness, liability oc &ligation of any corporation cr 

individual, to thii State or to any county or defied subdivision 

thereof, or other municipal corporation therein, except delinquent 

taxes which have been due for a period of at least ten years. 

A delinquent tax is a liability ‘within thii provision. State v. Pioneer oil 61 Refining Co., 

292 S.W. 869 (Tex. Corn. App. 1927, jdgmt adopted). Once a. tax becomes a liability article 

3, section 55 makes it irrevocable, end the legislature cannot extinguish it by repealing 

the statute which enacted it. See also Sloan v. Calve& 497 S.W.td 125 (Tex. Civ. App. - 

Austin 1973, no writ)i Smith v. State, 420 S.W.2d 204 (Tex. Civ. App. - Austin 1967), aff’d, 

434 S.W.2d 342 (Tex 1968); Attorney General Gpiions M-34 U967), C-200 (1963). 

addition, article 8, section LO prohibits the legislature from releasing the inhabitants of 

any county, city or town from the payment of taxes &vied for State or county purposes 

unless in case of great public calamity. See Bass v. Aransas County LS.D., 389 S.W.Od 165 

(Tex. Civ. App. - Corpus Christi lS65, w%?ef’d n.r.e.j (dicta). 

Moreover, a statute which attempts to grant an exemption with respect to a tax 

liability accruing before its effective date might also violate artfcle 3, sectfon 51 of the 

Texas Constitution. This provision prevents the state from making or authorizing a grant 

of public fund3 to any individual, association of individuals or corporatio& in the absence 

of a public purpose or consideration moving to the state. State v. city of Austin, 331 

S.W.Zd 737 (Tex. 1960); Attorney General Opinion H-416 (19743. Article 3, section 52 also 

prevents the legislature ‘from authorizing political subdivisions to grant public money to 

individuals and corporations. In Morris v. Calvert, 329 S.W.2d ll7 (Tex. Civ. App. - 

Austin 1959, writ ref’d n.r.e.), the court held that a statute providing an inheritance tax 

exemption applied only to estates of persons dying after its effective date. Some 

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Honorable Tim Von Dohlen - Page Three (Mw-4) 

statutory language indicated that the legislature intended the exemptions to become 

effective when the governor signed the bill, but the court rejected this interpretation as 

raising a serious question of constitutionality. Inheritance tax k a lien upon property from 

the date of death, and to reduce it by a tax exemption that subsequently became effective 

would violate sections 51 and 55 of article 3 of the Texas Constitution. See In re Voorhees’ 

Estate, 196 A. 365 (N.J. Prerog. Ct. 1938); af 

A.2d51 (N.J. Ct. of Errors and Appeals 

3 A.2d 691 (N.J. Sup. Ct 1939); afTd, 16 

retroactively exempting taxes to 

which state’s right was fixed makes unconstitutional gift of public funds). See also m 

Skinker, 303 P.2d 745 (CaL 1956). 

In our opinion, sections Sl, 52, and 55 of article 3 will prevent the legislature from 

enacting a tax exemption applicable to tax liabilities which have already accrued or 

matured. Thus, the resolution to the issue you raise will require a determination of the 

date upon which ad valorem tax liabilities accrue, mature, or become fixed. 

The validity of an ad valorem tax rests upon levy and assessment. State v. Pioneer 

oil & Refining brYkr;e Co sura; Zglinski v. Hackett, 552 S.W.Bd 933 (Tex. Civ. App - Austin 

1977, writ reM h the absence of a valid assessment, there is no liability for the 

tax within article 3, section 55 of the constitution. State v. Pioneer Oil & Refining Co., 

supra; Clegg v. State, 42 Tex. 605 (1875); Republic Insurance Company v. Highland Park 

LS.D. of Dallas County, 57 S.WSd 627 (Tex. Civ. App. - Rl Paso 1933, writ dism’d w.o.j.). 

Article 8, section 15 provides that “ftlhe annual assessment made upon landed property 

shall bc a special lien thereon.. . . ” This lien does not exist until assessment k made in 

accordance with law. State v. Farmer, 59 S.W. 541 (Tex. 1900); Hoge v. Garcia, 296 S.W. 

982 (Tex. Civ. App. 7 San Antonio 1927, writ rePB; cf. C. R. Carswell & Co. v. 

Habbersettle, 87 S.W. 911 (Tex. Civ. App. - 1905, no at) (lien attaches January 1 

although the amount of taxes is not determined until sometime subsequent). Of coupse, 

once the tax liability is established, the lien becomes effective as of January L State of 

Texas v. Moody’s Estate, 156 F.2d 698 (5th Cir. 1946). 

The terms “levy” and “messment” are sometimes used interchangeably. See Kinney 

v. Zim leman, 36 Tex. 554 582 (1872) Amafmo v. Carter, 212 S.W.td 950, 9SS(Tex. civ. 

&mont l948. w& reM n.rle.L In the present context, however, “levy” refers 

tdihe legislative act which imposes a tax and ties its rate. Cle& v. State, 42 Tex. 605, 

610-R (l875); Amaimo v. Carter, su~ra; Sussex County v. Jarratt, 106 S.E. 384, 387 (Va. 

l92D. An order of the commissioners court That the following tax rates be levied” was 

held to be a valid tax levy. Victo v. Stat 

Gil ,Co. v. State. 54 SW.Zd + 813 Tex. Crv. Ano. - El Paso 1932. writxf’d): Attorney 

158 S.W.2d 760 (Tex. 1942); see Cranfill Bras. 

General Opinion 7 Fi-1235~ ti978,. “Assessment;‘refers to ~the administrative process of 

applying the tax rate to an individual’s property and thereby determining the amount he 

owes. Clemz v. State. suora Sussex County v. Jarratt. supra: “It includes the procedure 

on the part of the off&my which the property is ifs=, %lued. and. final& the pro 

rata ddared.” State v. Farmer, supp& See also Republic Insurance Co, v. Highland Park 

LSD., e 

The taxpayer’s liability’ is fixed when these two requirements are met: the 

assessment has been made and there has been a legal levy. Cracker v. Santo Consolidated 

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Honorable Tim Von Dohlen - Page Four (FfN-4) 

LS.D., sue Attorney General Gpmions C-457 (1965); V-943 (1949) (taxes do not accrue 

until there has been both an aessment and levy). In Bass v. Aransas County LS.D.,the 

court discussed article 73454 V.T.C.S., which authorieed the commissioners court to 

reconsider and adjust current or dalirquent assessments. It stated in dicta that it “would 

be inclined to hold the act unconstitutional insofar as it authorizes recpenkg and 

reconsideration of valid Basmentsw as violating article 3, sections 52 and 53 and article 

8, section 10 of thexas Constitution. It noted a series of Attorney General Gpmions 

ruling the statute void insofar as it applied to valid assessments. Attorney General 

Opinions V-1517 (1952); G-6257 (1944) (statute, violates article 3, section 55 and article 8, 

section 10); G-930 (1939). In our opinion, you may constitutionally provide tax exemptions 

from the current year’s taxes if the enabling legislation becomes effective before ad 

valorem tax liabilities sre lied by assessment and levy. However, the legislation may not 

constitutionally apply the tax exemptions to tax liabilities which have been fried by 

assessment and levy prior to the effective date, since the taxpayer would thereby receive 

a gift of public funds and a remission of taxes in violation of article 3, sections 52 52, and 

55, and article 8, section 10 of the Texas Constitution. 

Attorney General Gpinicn B-849 (1976) describes the timetable for assesment of 

county taxes See V.T.C.S. art. 7244~. The commissioners court meets as a hcsrd of 

equalization in MT or June. V.T.C,S arts. 7206, 7212, 7217,7218. This procedure affects 

other .taxing authorities which rely on the county’s tax rolls and assessments Attorney 

General Opinion H-649 (1976). However, all taxing authorities are not necessarily subject 

to the general taxation statutes Campbell v. City of Houston, 464 S.W.2d 372 (Tex. Civ. 

- Houston U4th Dkt.) 1971, no writ); Seguin LS.D. v. Blumberg, 402 S.W.2d 552 

&f&. Civ. App . - San Antonio 1966, writ ref’d n.r.e.). The relevant statutes or home rule 

charters must be consulted in individual cases, since the timetables may vary causing 

some jurisdictions to have tax liability mature before a statute can be enacted. 

SUMMARY 

Legislation implementing tax exemptions authorized by the 

Tax Relief Amendment may constitutionally apply to tax 

liabilities which have not been fiied by Levy and assessment 

as of the statute’s effective date. 

?iiizTz%, Attorney General of Texas 

JOHN W. FAINTER, JR. 

First Assistant Attorney Genera) 

TED L. HARTLEY 

Executive Assistant Attorney Genera) 

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Honorable Tim Van Dohlen - Page Five (m-4) 

Prepared by Susan Garrison 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

C. Robert Heath, Chairman 

David B. Brooks 

Rick Gilpin 

William G Reid 

Martha Smiley 

Bruce Yoongblood 

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