JIM MATTOX Attorney General

Supreme Cowl Building P.0. Box 12548 Austin. TX. 78711. 2549 5121475.2501 Telex 9101874.1367 Telecopier 512l475-0256

714Jackson, Sulle 700 Dallas. TX. 752024506 21417428944

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An Equal Opportunity1 Affirmative Action Employer 

# TheAttorney General ofTexas
hagust 21. 1986

Honorable GaryGar:::tson Ector CountyAttor:rey Courthouse, Room2’13 Odessa, Texas 79761 Opinion No. .JK-536 Re: Validity of a“tax clearance” account for excess property tax payments DearMr. Garrison: Pou askus the following questions:

Are there any legal objections to the Tax Assessor-Collector of Ector County, Texas, having a ‘tax el,earance’ account into which are deposited excess llroperty tax payments and from which are withdrawn amounts necessary to make up property tax paynents which are short? If there are no legal oljectlons, does the TaxAssessor-Collector have the authority to create such an account or does thJs require approval from anyone -- ‘such as the Ectcr CountyCommissioners Court? By your use of the phrase “tax clearance” account and the authorities which you cite in the brief accompanying your request, we understand you to ask whether such an account maybe established that would serve to satisfy, from the overpayments of taxpayers, the tax liabilities of those taxpayers whofall to tender sufficient payxent. Weconclude that no such account maybe established. Because we do so, weneed not answeryour second question. You have provided us with the following information relevant to your request:

The ‘tax clearance’ account concept is used by four ccunties’ tax officials whomI contacted. They sa:Ltl that it is justified by convenience, the moneyaid effort spent to return overage/shortage checks, and revenue lost from not immediately deposlt:lug tax payments into the county treasury. Theamomt of excess might be noted for audit and account,Lng purposes. Each county set a monetary limit, such as $10.00, below which a refund would

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be sent only upon taxpayer request. Apparently, under the Properi:y Tax Code, a refund of excess payment is not required unless and until a taxpayer requests it. The excess amount would be deposited into !:he tax clearance account. Tax payments which are ‘short’ by nomore than a set amount, such as $2.00. are acceptad. Theshortage is noted for auditing and accounting purposes. Money is trans:iarred from the tax clearance account to make upthe shortage. Article VIII, section 10, of the Texas Constitution provides the : following: 910. Release’ from paymentof taxes

Sec. 10. The Legislature shall have no power to release the inhabitants of, or property in, any county, city or town from the payment of taxes levied for Stats or county purposes, unless in case of great public calamity in any such county, city or town, whensuch release maybe madeby a vote of two-thirds of each Rouse of the Legislature.
Article III, section 55, of the Texas Constitution provides the following: $55. Release or extinguishment of indebtedness to

state, county, subdivision or municipal corporation Sec. 55. The Legislature shall have no power to release or extinguish, or to authorize the releasing or sxt:lnguishing. in whole or in part. the indebtednesri,, liability or obligation of any corporation orjadividual. to this State or to any county or defired subdivision thereof, or other municipal corporation therein, except delinquent taxes which have!been duefor aperiod of at least ten years. While penalty andinterest owedondelinquent taxes maybewaived if it is so provided by l~aw.Jones v. Williams, 45 S.W.2d 130 (Tex. 1931); Attorney General Dpinion JM-311 (1985), taxes themselves, whether current or delinquent. clearly maynot be. Smith v. State, 420 S.W.2d 204 (Tex. Civ. App. - Austin 1967). aff ’d. 434 S.W.2d 342 (Tex. 1968). State v. Pkneer Oils Refining Co., 292 S.W. 869 (Tex. 1927). Byutillaing any&ess tax monies paid to the taxing units to

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offset the shortage of tho!re whofail to tender the full amount, the tax assessor-collector would be impermissibly waiving or releasing the debts owedby those whofa!.led to tender the sufficient amount. The legislature Is clearly prohibited from authorizing such a practice by article III. section 55, and article VIII, section 10. of the Texas Constitution. Since the legislature maynot authorize the practice, it follows that neither the commissioners court *or the tax assessor-collector maydo so. Even if the practice about which you inquire were established only for purposes of more efficient accounting, &, if no attempt were made to release or extinguish the tax liabilities of those taxpayers who tendered an insufficient amount, the practice would still be statutorily impermissible. In your letter, you state that tenders of payment which are less than the amount imposed by, for example, $2.00 are acceptoil. There are only two means by which a tender of less than the amount imposed may be accepted~. First, section 31.03 of the Tax C,odeauthorizes a split payment whereby a taxpayer.who tenders one-half of the taxes owed by December 1 may tender the remaining half by July 1 with no accrual of penalty or interest. Second, section 31.05 of the TaxCode authorizes discounts of certain specified percer.tages for payments tendered before January. There is no other provision which permits acceptance of any amount tendered that is less than the amountof taxes imposed. Accordingly, we,conclude that the county tax assessor-collector maynot establish a “tax c,learance” account in which excess property tax payments may be depo,;:Lted and then withdrawn to offset those property tax paymentswhich are less than the amountimposed. SUMMARY Acounty tax assessor-collector maynot establish a “tax cl,carance” account in which excess property tax payments maybe deposited and then withdrawn to offeiet those property tax payments which are less thamthe amountimposed.

JIM HATTOX Attorney General of Texas JACKHIGHTOWER First Assistant Attorney General

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NARY KELLER Executive Assistant Attorney General RICKGILPIN chairman, opinion Cdttee Prepared byJimMoellinger Assistant Attorney General

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