### GENERAL 

## ~KEATII-ORN~Y

OF v?JcuAs

AUWTIN 11.TExAe


### February1.6, 1949



### Hon.WilliamN.Hensley Criminal District Attorney SanAntonio, Texas

Dear Mr. Bensleyr Opinion No. V-776 Rer Several questIons 

### relatingtorenditionandassessment of property for ad valorem taxation. You request the opinion of this office upon the questions set out below as follows:

“(1) What Is the percentage of the fair cash market value of property upon which a taxpayer maymakea sworn rendltion* In other words, can the taxpayer legally render his property at, say, Flg*percent of the fair cash mai%et

“(2) Should the TaxAssesso? advise persons makingrenditions th.:ctthe rendition must be on the true 

### andfull value marke i 

### thatIs 

### to say,the 

### faircash value of the property? Is It the duty of the TaxAssessor to tier to the Board of Equalization suchrendltions as are not madeat the fair cash market value?

“(3) At what percentage of fair cash market value maythe Tax Assessor assess unrendered properties 

### whenhemakes his assessment on such unrendered properties?

“(4) At what values can the Board of Equalization set the assessed values of property before them for consideration? Maythe Board of Equalization set a value of less than the fair cash market value?Hon. William N. Hensley, 

### Page2,v-776

What Is the effect of the ‘uniformity! provision of the statutes? In other words, maythe Board set a value ona particular piece of property at the fair cash market value while the standard for property assessments generally Is at forty percent of the fair cash market value?” Weshall not attempt to answer your questions categorically, for as weperceive your primary concern is: Whatsignificance is to be attached to the several constitutional and statutory provisions pertaining to the value at which property is to be assessed for ad valorem taxes?

Preliminary to our discussion of this question, it maybe observed that the duties of the taxthe Tax Assessor-Collector and the Board of gt%&ation have been definitely’deflned by statute. Anexcellent summaryfrom which maybe gathered the narrw function of an “assessment ‘I Is contained in the case of Cracker v. Santo Consolidated Independent School District, 

### 116S..W. (2d) 

### 750 (C.C.A.

. . . 1938) expressed in the following language:

“Some confusion Is manifest.

. . regard& ing the nature and functions of renditions of property and assessments of property, particularly mannerof listing or otherwise evidencing rendition and assessments.

“It should be borne in mindthat a taxpayer never assesses his property for taxas. Not even a commissionerst court has authority t0 a0 that. The assessment of property Is peculiarly the duty andresponsibility of a tax assessor. Thejurisdiction of the commissioners’ court with reference toassessments Is confined to raising or lowering assessments as incident to Its duties as a board of equalization. It has no power to add property to the tax rolls not previously assessed, nor to take property from them

. . .

‘#Thetaxpayer lists or Inventories property bydescribing it and placing a value upon same. Hemaymakethe list himself, or merely furnish the information to the assessor. If the assessor agrees to the rendered valuations he the assessor, makesthe rendered valua4ion the assessed valuation, or, If heHon. William N. Hensley, Page 3, v-776

does not agree, he Is required to note the assessed value on the samelist, subject in either case. to final action bv the board of equalization as to &sing or lowering it. B. S. 1925, Art. 7211. Thus the renditlon lists become also assessment lists. Whenafter legal levy such assessmentlists 

### arecorrected and approved by the board of equalization the liability of a taxpayer is thereby fixed.”

v. c. s., In addition to the provisions .of Article 7211,

other statutory provisions direct the Assessor-Collector to transmit to the Commissioners’ Court, sitting as a Board of Equalization, assessments of rendered and unrendered property which have been madeto him. After the .Board of: Equalization has equalized the values, the Assessor-Collector then proceeds to assess ;llcuniSendered property as required byArticle 7218,

. *to prepare rolls or books of all rendered or &rende&. real and personal property as required by Article 7218 and 7219, V. C. S.; on or before August 1 to transmit to the Board of Equalization his rolls or assessment books with his affidavit attached thereto in the form directed byArticle 7222, V. C. S.; and the Board of Equalization after it has examined and approved the rolls or assessment books trsnsmlt copies to the Comptroller, County Clerk and the AssessorCollector as prescribed in Article 7224. TheAssessorCollector’s tax rolls, as finally equalized and approved by the Board of Equalization anddelivered, constitute the assessment uponwhich the Tax Collector proceeds to collect the taxes assessed by the Assessor and as equalized by the Board of Equalization.,

Wenowpass to the question in which wethink you are primarily interested. That Is, the standard of fixing the value uponwhich taxes are ultimately assessed and collected. There are three constitutional provisions which should be noted. Article VIII, Section 1, of the. Constitution provides:

“Taxation shall be equal and unlform. All pr~operty.

. . shall betaxed in proportion to Its value, which shall be,,ascertained m~mav be Drovided bv law. Section 11 of the sameArticle provided:

“And all lands and other property,

. .Hon. William N. Bensley, Page 4, v-776

shall be assessed at Its fair value.” Section 20 of the sameArticle provides:

“Noproperty of any kind in this State shall ever be assessed for ad valorem taxes at arester value than wair cash &JJ~ nor shall any board of equalization of any county or political subdivision or taxing district within this state fix the value of any property at morethan its market-” The following statutory provisions also deal with the question of value.

Article 7149 provides in partz

“The term ,ltrue and full value fwher--. ever used shall be held to meanthe fair market value, in cash, at the place where the roperty to which the-m is applied shalPbe at the time of assessment being the price which could be obtained {herefor at private sale, and not at forced or auction sale

.‘I Article 7174 provides:

“Personal property of every description shall be valued at its true and full value In money.” Wethink that the apparent confusion as to value which would seemto arise by these numerous statutory provisions for the guidance of tax administrative officials is dispelled by the case of West Texas Hotel Companyv. City of El Paso, 83 S- W. (2d) 772 (C. C. A.) holding that there is no substantial difference In 4he terms (1) market value, (2) fair market value, (3) cash market value, (4) fair cash market value, (5) reasonable cash market value, and (6) true and fu3.1value in money, which terms appear In various constitutional and statutory provisions pertaining to value for the assessment of taxes. Since our courts have held that the various terms used in the Constitution and Statutes as a basis of value for assessing taxes are synonymous4we shall use for the purpose or this opinion the erm“fair,

Hon. William N. Hensley, Page 5, 

### v-776

cash market value" used in Section 20 of Article VIII of the Constitution, supra, andthe term used in Article 

### 7149,V. C. S., "fair market value in cash", which clearly are equivalent terms. Koprovision similar to Section 20 of ?rticle VIII was in the Constitution prior to its adoption ,$ugust 23, 

### 1937, and it did not become effective under its express terms until January 1, 1939.

Clearly, from the Constitutional and statutory provisions above mentioned, it is lawful for the TaxAssessor-Collector to assess and the Commissioners1 Court to equalize property assessments at the full cash market value. If there were not court interpretations to the contrary, onewould conclude from the above provisions that ,this was the only legal standard which could be used. However there have been numerous court decisions which hoid that the ,taxing authorities mayuse'8 lesser value if the standard is uniformly applied to all taxable property. Therefore, in the light of the court decisions, the taxing authorities are free to elect whether they will assess and equalize at the full cash market value or a lesser percentage thereof, so long as the percentage is uniformly applied to all taxable property. It is worthy to note that Section 20 of Article VIII of the Constitution, which became effective January 1, 1939, does not specifically forbid an assessment at less than the fair cash market value, but expressly forbids an assessment upon a valuation greater than such value. Uniformity of assessment is the end to be achieved the absence of which is forbidden by the Constitution. OurSupremeCourt so held in the case of Lively v. ?.fissouri ,KansasTexas Railway Companyof Texas, 120 S. W. 852, speakin:. through Justice r.::a;rn, in the following language:

"But, as stated before in this opinion the wrong which was inflicted upon the appellee was not in requiring it to pay taxes upon the full value of its property, but In denying to it the equality of taxa-

;hecConstitution, % i n n cessa ilv deD n 9 yoon yniformitv of assessment."

4n this case the Railroad Companyobjected to the 10 ovaluation upon its intangible assets for the purpose of assessing taxes against it in Dallas

:

.. 1

Ron. William N. Hensley, Page 

### 6,V-776

County, which county adopted a 

### 662/3$value applicable to property generally in the County, and in settling this difficulty, the SupremeCourt said:

nIn administering the remedy the court must take the course which 1s most practical to secure uniformity of valuation of the property to be taxed. This maybe done either by Increasing the assessment of each property owner in the county to its full value and to collect from each the taxes upon this full value, or to reduce the assessment of the intantible assets of the railroad companyto 

### 62/j per cent on the $100 of its assessed value. The court will adopt that plan which is most feasible and calculated to secure justice to the parties.

. . The Court is placed in a dilemma, from which it can only escape by taking that path which while it involves a nominal departure irom the letter of the law, does injury to no ane, and secures that uniformity of tax burden which was the sole end of the Constitv~tion. To hold otherwise is to makethe restrictions of the Constitution instruments for defeating the very purpose they were intended to subserve. It is to stick in the bark, andto be blind to the substance of things. It Is to sacrifice justice to it9incident :

“It would be utterly impracticable to increase the assessment of all other property owners in Dallas County to its full value, therefore a court of equity will adopt the other method--reducing the assessment madeby the state board tom the sameproportion of value as was placed uponthe masSof property in the county.

. .” The principle laid downby Judge Brownin this case bas not been departed from but uniformly adhered to as will appear from quota1, ions from the following cases:

In city of El Paso et al. v. Howze, 

## 248 5. W. 

### 99 (writ of error denied), which dealt with a City Charter provision requiring rendition and assessment at a “fair market value”, the Court said:Hon. William N. Hensley, Page,7, v-776

“Thenassessor a@ ,collector oftthe city of El Paso is ~theoffice* tiji6riwhom is impo.sedthe duty of making’the ini- ;p;t;:;uatlon of property r~enderedfor

The.law,has established the ,~ basis o?‘the’ valuation td be “its true and full value in money” .(article ‘753’0, R. S.:) or as it is termed in article 7569. 6. S.,: “its reasonable cash market value. n

“in the valuation of property the function of the city council is limited to that of a board of equalization.. Whenexerci,siag such function, it has the authority not only to equalize values but to see that all property has been assegsed at its falr market:value. But before such board can increase the value of property theretofore~ assessed it must give notice to the owner and afford hima hearing.

.“In this case Howse.rendered his property to the asses’sor asd that officer approved and accepted the valuations placed thereon. This valuation by the assessor was a quasi judicial act andwaspnot subject to increase except by the board of equaliaation after notice and hearing. Nonotice was given, 90shearing was afforded, and without the consent of the taxpayer the valuation was changed and increased by the assessor, acting under the order of the city council madein i.ts legidatlve capacity, onAugust 14th. Weare of the opinion that such incregs,e was invalid.

. .

~“The~. edidence- shows that for a I’& t.ime,it. has been .the custom of the ..oltp.:t~oa&ss property. upon the basis oC.64 per cent, Ofit.%~ptual, or market ~. va$ue and the value which the assessor ‘, placed upon the plalnt$ffls property in the qriginal assessment was 6stimat.ed upon that basis.,, ‘But an assessment madeby the assessor upon ,that basis. . .

Hon. William N. Hensley, Page 8, 

### V-776

whenuniformly to all okE+h;nt;x.+L ;b$e FoRpert.: is not Invalid.

244

### u. s.499,37sup:ct: 

### 673'6iL: 

### Ed:'1280 Ann.Gas. 1917s 

## aaTaylor v. L. %N. R: R. Co., 88Fed.'305: 31 C. C. A. 

### 537;Cam Phosphate Co. v. Allen, 77Fla. 341, gl South. 503. "Onthe contrary it Is valid and must stand as madeu&l1 corrected by the proper reviewing authority and in the manner prescribed by law." See also the statement by the WacoCourt of Civil Appeals in Duvall v. Clark, 

### 158S. W. (26) 

### 565, from which wequote as follows:

"And It Is well settled that an assessment at less than actual or market value whenuniformly applied is valid." Tothe sameeffect, the SupremeCourt of the UniteilSEatg in the case of Greene v. Louisville R.R. co., ing la&go** u. S. 242, 1280, stated In the follow-,

"It Is equally plain that it makes no difference what basis of valuationthat Is what percentage of full value-i ma toLbe adopted,, provided it be applied 11 alike. The adoption of full value has no different effect in dlstrlbuti the burden than would be gained by ad7p$- lng 

### 75per cent< or 

### 50per cent, or even 10 per cent as he basis--so long as either was applied uniformly." It is therefore of fixing valua<ions at a apparent that the custom iercentage of the full lOO$ valne for the purpose of taxation is 1egaI If equally auu uniformly applied to all taxpayer8 

### and property of the County. Wedo not meanto Imply that we ap prove the percentage method.aa th&ons thaO.should be generally accepted by the -tie&or and Board of Equalization, if an assessment at less than the full "fair cash market value" seems adequate to meet the fiscal needs of the taxing authority, but merely hold that the sameIs not Illegal If equally anduniformly offered to all persons and property.

Ron. William N. Hensley, Page 

### 9,v-776

.
within the jurisdiction of the taxing authority. You ask whatremedial action can be taken by the Bexar County Commissioners' Court if it does not agree with the percentage assessments of the Tax AssessorCollector anddesired that they be raised to full cash market value. TheCourt, sitting as a Board of Equalization after due notice to each taxpayer affected has ihe authority under Article 

### 7206to raise the values not to exceed lOO$. Bythe samemethod, the Court has the authority to lower assessments so long as all are given equal anduniform treatment.

The Constitution and Statutes of this State rc::ulre uniformity of assessment of real and personal property at full cash market value, but the courts have held that assessments at a lower percentage of market value are valid if equally and uniformly applied to'all taxable property. Therefore, the taxing authority mayrequire all property to be assessed at 106 market value or any fraction thereof equally anduniformly applied. Lively v. Missouri Kansas Teras Railway Companyof Texas 120 S. W. 852. Duvall v. Clark, 158 S. 4. (2d) 

### 565;ci$y of El Paso w. v. Howze, 248 S. W. v. Louisville R w; Texas Con

ik tions 1, 11 and 20;...- Articles 

### 7149,7174,7211,7218, '7219, 7222 and 7224.Y.c.5 Yours very truly, ATTORNEY

GENERAL

OFTEXAS

LPL:

### 3mc