The Honorable Tom Creighton Opinion No. H- 720 

Chairman, Senate Committee on Economic 

Development Re: Constitutionality of article 

Senate Chambers, Capitol Building 1. 07, Taxation-General. 

Austin, Texas 78711 

Dear Senator Creighton: 

You have requested our opinion concerning the constitutionality of article 

1.07, Taxation-General, which establishes a state tax lien and provides: 

(l)(f)(ii) No bank or savings and loan institution 

shall be required to recognize the claim 

of the State to any deposit or withhold payment of any deposit to the depositor or to 

his order unless and until it is served by 

the Comptroller with notice of the State’s 

claim. 

In our view article 1. 07 contemplates that upon proper notice a bank will, 

withhold payment of deposits in the sum of the lien. You ask whether such 

freezing of a person’s deoosits on the basis of an administrative decision by the 

Comptroller is constitutional. You have referred us to Fuentes v. Shevin, 407 

U.S. 67 (1972) and Sni>Jach v. Family Finance Corp., 395 U. S. 337 (1969). Sniadach involved a Wisconsin wage garnishment statute which allowed private creditors 

to garnish a defendant’s wages without a prior hearing. In ruling the statute unconstitutional the Court indicated that such summary procedures would meet the 

requirements of due process only in “extraordinary circumstances” 395 U. S. at 

339. 

These extraordinary situations were more fully discussed in Fuentes, a case 

which involved the summary seizure, without prior notice or hearing, of household 

goods under a writ of replevin issued by the State on application of a private creditor. 

In holding the statute before it unconstitutional the Court stated: 

. . . Only in a few limited situations has this Court 

allowed outright seizure without opportunity for a 

prior hearing. First, in each case, the seizure has 

been directly necessary to secure an important governmental or general public interest. Second, there has 

p. 3004 
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The Honorable Tom Creighton - page 2 (H-720) 

been a special need for very prompt action. Third, 

the State has kept strict control over its monopoly 

of legitimate force: the person initiating the seizure 

has been a government official responsible for determining under the standards of a narrowly drawn 

statute, that it was necessary and justified in the 

particular instance. Thus, the Court has allowed 

summary seizure of property to collect the internal 

revenue of the United States, to meet the needs of a 

national war effort, to protect against the economic 

disaster of a bank failure, and to protect the public 

from misbranded drugs and contaminated food. 407 

U. S. at 90-92. 

Regarding the collection of internal revenue, the Court cited Phillips v. 

Commissioner, 283 U.S. 589 (1931), in which summary administrative proceedings 

were upheld. The Court stated: 

Where only property rights are involved, mere p~ostponement of the judicial inquiry is not a denial of due 

process if the opportunity given for ultimate judicial 

determination of liability is adequate. 283 U.S. at 

596-597. 

This la.nguage was quoted and Phillips cited without criticism in Mitchell v. 

W. T. Grant Co., 416 U.S. 600, a-73). 

In Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663 (1973), the 

Court upheld the summary seizure of a boat upon which contraband had been discovered, stating: 

. . . unlike the situation in Fuentes, [the] seizure 

is not initiated by self interested private parties; 

rather [government] officials determine whether 

seizure is appropriate under the provisions of the 

. . statutes. 416 U.S. at 679 

We believe our courts probably would hold that article 1.07 (l)(f)(ii) satisfies 

the criteria presented in Phillips and Calero-Toledo. The, State has an important 

governmental interest in securing revenues, the seizure is initiated by a responsible 

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The Honorable Tom Creighton - page 3 (H-720) 

government official under specific statutory authority and the taxpayer has 

opportunity to bring any dispute before the courts. Taxation-General, articles 

1. 032(c), 1. 05, 1. 07B. Accordingly, in our opinion article 1. 07 probably would 

be held constitutional under the present case law. 

SUMMARY 

Article 1. 07, Taxation-General authorizing a 

state tax lien is constitutional. 

i Very truly yours, 

u Attorney General of Texas 

First Assistant 

C. ROBERT HEATH, Chairman 

Opinion Committee 

jad: 

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