The Honorable Raymond H. Reese DeWitt County Attorney 307 North Gonzales Street Cuero, Texas 77954 GREG ABBOTT

August 3,2007

Opinion No. GA-0559 Re: Calculation ofthe "base year" from which to impose a tax freeze adopted by county voters in November 2005 (RQ-0575-GA)
Dear Mr. Reese: You ask about implementing in DeWitt County the tax limitation authorized by Texas Constitution article VIII, section 1 -b(h).' This provision allows certainpolitical subdivisionsto limit increases in the amount of ad valorem taxes imposed onthe homesteads of persons with disabilities or persons sixty-five years of age or older. 

### See TEX. CONST. art. 

### VIII, 

## 5 1 -b(h). The constitutional provision reads as follows: (h) The governing body of a county, a city or town, or a junior college district by official action may provide that if a person who is disabled or is sixty-five (65) years of age or older receives a residence homestead exemption prescribed or authorized by this section, the total amount of ad valorem taxes imposed on that homestead by the county

. . . may not be increased while it remains the residence homestead of that person.



### . . 

### . As an alternative, on receipt of a petition signed byJive percent (5%) 

### of the registered voters ofthe county.

. . , 

### the governing body ofthe county.
. . 

### shall call an election to determine by majority vote whether to establish a tax limitation provided by this subsection. Id. (emphasis added). Tax Code section 11.261 sets out procedures for implementing the section I-b(h) tax limitation. 

### See TEX. TAX CODE ANN.

## 5 11.26

### 1(b) (Vernon Supp.2006). Theterm "base year" refers to the first tax year in which a taxpayer qualifies a residence homestead for the tax limitation. 

### See

'SeeLetter from Honorable Raymond H. Reese, DeWitt County Attorney, to Honorable Greg Abbott, Attorney General of Texas, at 1 (Mar.2,2007) (on file with the Opinion Committee,also available athttp://www.oag.state.tx.us) [hereinafter Request Letter].

### The Honorable Raymond H. Reese 

### - Page 2 (GA-0559)



### id.

## 5 11.261(b)(tax officials are to appraise property subject to the limitation and calculate taxes as on other property, but the tax may not exceed the 11.261(b) limitation); Tex. Att'y Gen. Op. No. GA-0222 (2004) at 4. The property taxes on a qualified residence homestead are limited in subsequent years to the amount of tax imposed in the taxpayer's base year, subject to certain exceptions. 

### See TEX. CONST. art. 

### VIII, 

### 5 1 -b(h); TEX. TAX CODE ANN. § 

### 11.261 (b) (Vernon Supp. 2006). DeWitt County voters adopted the tax limitation at an election held on November 8,2005. Request Letter, 

### supra note 1, at 

### 2. The ballot for the election read in part: Authorizing the County ofDeWitt to establish a limitation ("freeze") on the ad valorempropertytaxes imposed on the residence homestead of a person who is disabled or is sixty-five (65) years of age or older and receives a residence homestead exemption



### . . . . Id.at 1 (quoting ballot for Special Election, Dewitt County, Texas). You state that the election results were canvassed and certified by the DeWitt County Commissioners Court on November 2 1,2005,butthe commissioners court did not adopt aresolution to implement the tax freeze during 2005. 

### See 

### id. at 2. The DeWitt County Commissioners Court adopted the 2006 appraisal roll in July 2006, and the notices of appraised value were sent out in October 2006 without freezing the tax on any qualified homestead to the tax imposed in 2005.2No formal protests about the appraisal district's failure to use 2005 asthe base year were filed with the DeWitt County Appraisal District. 

### See Request Letter,

### supra note 1, at 2. The delinquency date for 2006 property taxes was February 1,2007. 

### See TEX. TAX CODE ANN.$ 3 1.02(a) (Vernon Supp. 2006). In connection with this background, you ask the following questions: 1. CantheDeWitt County Commissioners Court take formal action at this time to implement 2005 as the base year for the limitation causing the completed appraisal roll for 2006 to be changed? 2. If the answer to Question No 1 is "no," is 2006 an appropriate base year for the limitation based upon the facts? Request Letter, 

### supra note 1,at 2. Your questions relate to the first year that the section 1 -b(h) tax limitation will be available for qualified residence homesteads in your county.

'SeeBrief from Honorable RaymondH.Reese, DeWitt County Attorney, to Honorable Greg Abbott, Attorney General of Texas, at 5 (Mar. 2,2007) (on file with the Opinion Committee).The Honorable Raymond 

### H. Reese 

### - Page 3 (GA-0559)

We address your questions by considering the language of Texas Constitution article VIII, section 1 -b(h) and Tax Code section 11.26 1. When construing a statute, the courts seekto determine the Legislature's intent which, when possible, is discerned from the plain meaning of the words chosen. See State v. Shumake, 199 S.W.3d 279, 284 (Tex. 2006). An interpretation of the Texas Constitution also relies on its literal text and gives effect to its plain language. See Doody v. Ameriquest Mortgage Co., 49 S.W.3d 342, 344 (Tex. 2001) (citing Stringer v. CendantMortgage Corp., 23 S.W.3d 353,355 (Tex. 2000)). We look carefully at the language ofthe constitutional provision. The first sentence allows the governing body of a county or certain other political subdivisions to provide for the tax freeze "by official action." TEX. CONST. art. VIII, § 1-b(h). The second sentence provides that "[als an alternative, onreceipt of a petition signedby fivepercent (5%) ofthe registered voters ofthe county,



### . . .the governing body ofthe county


### . . . shall call an election to determineby majority vote whether to establish a tax limitation provided by this subsection." 

### Id. An "alternative" is an "offer of two things of which either may be agreed to, but not both; permission to choose between two things." I OXFORD ENGLISH DICTIONARY 368 (2d ed. 1989). Thus, the tax freeze may be established in a county in one oftwo possible ways: the commissioners court may act to establish the tax freeze, or a majority of voters may decide at an election whether to establish it. Whilethecommissionerscourt generally exercises authority vested in the county, article VIII, section 1-b(h) provides an exception to this usual rule. See TEX.CONST. art. V, tj 18(b) ("[Tlhe County Commissioners Court



### . . . shall exercise such powers and jurisdiction over all county business, as is conferred by this Constitution and the laws of the State, or as may be hereafter prescribed."); City of Sun Antonio v. City of Boerne, 111 S.W.3d 22, 27 (Tex. 2003) (county commissioners court's primary duty is to administer the county's business affairs). Under article VIII, section 1 -b(h), the voters may decide to establishthe tax freeze for the county as an alternative to action by the commissioners court. The ballot in the DeWitt County election allowed the voters to vote for or against "[a]uthorizing the County of DeWitt to establish a limitation ("freeze")." Request Letter, supra note 1, at 1 (quoting ballot for Special Election, Dewitt County, Texas). By a favorable vote onthis proposition, the voters exercised DeWitt County's authority to establish the tax limitation, as an alternative to action by the commissioners court. No action by the DeWitt County Commissioners Court is necessary to implement the tax freeze authorized by the voters. 

### Aprior opinion ofthis office, Attorney General Opinion M- 1283 (1972) supportsour reading ofarticle VIII, section 1 -b(h). This opinion addressed Texas Constitution articleVIII, section 

### 1 -b(b), which authorized the governing body ofa county or other political subdivisionto "exempt by its own actionnot less than Three Thousand Dollars ($3,000) ofthe assessed value ofresidence homesteads of persons sixty-five (65) years of age or older" from ad valorem taxes. Tex. S.J. Res. 7, 1, 62d Leg., R.S., 197 1 Tex. Gen. Laws 4 126,4126. Like section 1 b(h), section 1 -b(b) authorized voters to adopt the tax freeze: "[als an alternative, upon receipt of a petition" signed by a certain percent ofthe voters "the governing body ofthe subdivision shall call an election to determine by majority vote" whether certain residence homesteads should have the exemption. 

### Id. Attorney General Opinion

### M- 1283 stated that if an election were called, "the majority vote would then be binding on the governing body of that political subdivision." Tex.Att'y Gen. Op. No. M-1283 (1972) at 

### 2. TheThe Honorable Raymond 

### H. Reese 

### - Page 

### 4 (GA-0559)

majority vote of the election in DeWitt County called pursuant to section 1-b(h) is binding on the DeWitt County Commissioners Court. The tax limitation is effective by vote ofthe people and the commissioners court has no authority to determine when or whether it will be implemented. Tax Code section 1 1.26 1 establishes the tax year whenthe limitation first becomes available to taxpayers with a qualified residence h~mestead.~ See TEX. TAX CODE ANN. 

## 5 1 1.261 (b) (Vernon Supp. 2006). It states as follows: (a) This section applies only to a county, municipality, or junior college district that has established a limitation on the total amount of taxes that may be imposed by the county



### . . . on the residence homestead of a disabled individual or an individual 65 years of age or older under Section 1-b(h), Article VIII, Texas Constitution. (b)



### . . . The county



### . . . may not increase the total annual amount of ad valorem taxes the county


### . . . imposes on the residence homestead of a disabled individual or an individual 65 years of age or older abovethe amount of the taxes the county


### . . .imposed on the residence homestead in the first tax year, other than a tax year preceding the tax year in which the county



### . . . established the limitation described by Subsection (a), in which the individual qualified that residence homestead for the exemption provided by Section 11.13(c)for a disabled individual or an individual 65years of age or older. 

### Id. $ 11.261. Thus, articleVIII, section 1 -b(h),oftheTexas Constitution as implementedby section 1 1.26 1 of the Tax Code limits taxes imposed on the qualified homestead to "the amount of the taxes the county


### . . . imposed on the residence homestead in the first tax year, 

### . . . in which the individual qualified that residence homestead for the exemption provided by [Tax Code] Section 11.13(c)," except for a tax year before the tax year in which the county established the limitation. 

### Id. $ 1 1.26 1 (b). The county established the tax limitationby election in 2005. See Request Letter, supra note 1, at 2. The "base year" is "the first tax year 

### . . . in which the individual qualified [his] residence homestead for the exemption provided by Section 

### 11.13(c),"excepting a year preceding 2005. TEX.TAX CODE ANN.$ 11.261(b) (Vernon Supp. 2006). If a DeWitt County taxpayer qualified his homestead for the section 11.13(c)residence homestead exemption in 2005, his base year for the section 1-b(h)tax limitation is 2005.

3Thevoters' petition to the commissioners court and the ballot proposition did not identify a base year. See Request Letter, supra note 1, at 1-2.The Honorable Raymond 

### H. Reese - Page 5 (GA-0559)

We turn to section 11.13(c) of the Texas Tax Code, which provides that "an adult who is disabled or is 65 or older is entitled to an exemption from taxation by a school district of $10,000 of the appraised value ofhisresidencehomestead." 

### Id. 

## 5 11.13(c). Thetax exemption under section 11.13(c)is effective as of January 1ofthe tax year in whichthe person qualifies for it and it applies to the entire year. See 

### id. 

## 5 11.42(c). Accordingly,ataxpayer whose residence homestead qualified for the section 11.13(c)tax exemption in 2005 was entitled to have his homestead taxes frozen at the amount imposed in 2005, subject to exceptions found in section 11.261. The year 2005 is the base year for such taxpayers, and the commissioners court has no authority to establish 2006 as their base year. You argue that the DeWitt County Commissioners Court may not implement 2005 as the base year for the tax limitation becausethe 2006 tax roll has been completed and Tax Code section 26.15(a) states that "[elxcept as provided by Chapters41 and 42 ofthis code and in this section,the tax roll for a taxing unit may not be changed after it is completed." 

### Id. 

## 5 26.15(a) (Vernon 2001); see also 

### id. 

## $5 26.15(c) (authorizing changes in the tax roll to correct errors in the mathematical computation of a tax); 41.08-.10 (corrections by or on order of appraisal review board); 42.41 (Vernon Supp. 2006) (correction of records to reflect final determination ofan appeal to the courts). Whether the commissioners court may change the 2006 tax roll is irrelevant to determining the base year. As we have shown, the base year is established by statute, and the DeWitt County Commissioners Court has no authority to determine when the tax freeze will be implemented. The year 2005 is the base year for taxpayers whose homesteads qualified in that year for the tax freeze. Taxes on their homesteads will be frozen at 2005 levels as long as the homesteads qualify for the section 1-b(h)tax freeze. That is, 2005 willbe the base year for such taxpayersin 2007,2008,2009, and all subsequentyears as long as the homestead continues to qualify. The commissioners court's failure to recognize 2005 as the baseyear for these individuals does not permit the court to designate another year as the base year.4

4We do not consider whether a taxpayer whose base year is 2005 may receive a refund of a property tax overpayment made in 2006. See Dallas County Cmty. Coll. Dist, v. Bolton, 185 S.W.3d 868, 876-78 (Tex. 2005) (a person who has paid an illegal tax may receive a refund only upon a showing that the payment resulted from fraud, mutual mistake of fact, or duress).The Honorable Raymond 

### H. Reese 

### - Page 

### 6 (GA-0559)



### SUMMARY Texas Constitution article VIII, section 1 -b(h) authorizes counties to adopt a tax limitation or "freeze" applicable to the residence homesteads ofpersons who are disabled or sixty-five years of age or older. The property taxes on a qualified residence homestead are limited in subsequent years to the amount of tax imposed in the base year. In DeWitt County, where the voters adopted the tax limitation, the limitation became effective and the base year was established without actionby the commissioners court. For DeWitt County taxpayers whose residence homesteads qualified for the tax limitation in 2005, the base year is 2005. Very trdyyours,

~ttorne~weral of Texas

KENT C. SULLIVAN First Assistant Attorney General NANCY S. FULLER Chair, Opinion Committee Susan L. Garrison Assistant Attorney General, Opinion Committee