**JOEN I..**  ***lLL** 

### AXWI-XN. **TEXAR %TPT?~Z** 

***-- o-al.**  November 29, 1973

The Honorable J. W. Edgar Opinion No. H- 162 Commissioner of Education Texas Education Agency Re: Determining amount of 201 E. 11thStreet homestead exemption Austin, Texas 78701 for persons over 

### 65 and related questions under Article 8, $l-b(b), Texas Dear Dr. Edgar: Constitution Your questions concerning the interpretation and implementation of Subsection (b), §l-b. Article 8ofthe Constitution of Texas, adopted by Texas citizens inNovember of 1972, are:

1. “Legally, does Subsection (b) of Section l-b of Article VIII, Constitution ofTexas, require that the $3,000 exemption, ifandwhen adopted by a school district, shall be based upon the district’s fixed (market) value of the residence homestead, or upon the district’s assessed value of residence homesteads based upon a ratio, percentage of true value?” 

### 2. “May a school district board, pursuant to Section l-b(b) ofArticle VIII, Constitution of Texas, exempt from district advalorem taxation any amount of assessed value ofthe residence homestead ofpersons age 65 or older, provided that the amount it exempts exceeds $3,000 valuations? ” 

### 3. “Is an exemption amount once fixed or determined this year (a) permissably. subject to alteration by the same board this year, and/or (b) by future school boards - - the law reading to permit exemption of an amount certain from all advalorem taxes thereafter levied by the political subdivision? ” 

### 4. “If an amendment to the amount of exemption (but not less than $3,000) is permitted, how would the amendment apply?’’



### p. 749The Honorable J. W. Edgar, page 2 (H-162)

The 1972 amendment to $l-b, Article 8, added subsection (b):

“(b) From and after January 1, 1973, the governing body of any county, city, town, school district, or other political subdivision ofthe State may exempt by its own action not less than Three Thousand Dollars ($3, 000) of the assessed value of residence homesteads ofpersons sixty-five 

### (65) years of age or older from all advalorem taxes thereafter levied by the political subdivision

. . . .” The form inwhich the Legislature authorized that Subsection (b) be submitted to the electorate was:

“The constitutional amendment providing that the various political subdivisions ofthe State may exempt not less than Three Thousand Dollars ($3, 000) of the value of residence homesteads ofall persons sixty-five years of age or older from advalorem taxes under certain conditions. ” (Emphasis added) Section 2, S.J.R. No. 7, Acts 1971, b2nd Leg., R.S., p.4126. The term “assessed value”, has been uniformly construed by the courts to mean fair market value or any proportion thereof. Smith v. Davis, 

### 426 S.W-2&821., 834 (Tex. 1968). See also Richardson v. State, 53S.W. 2d 508 (Tex. Civ. App. , Eastland, 1932), affirmed 84 S.W. 2d

### 1076 (Tex. 1935); Slaughter v- Sundown Independent School Dist. , 41S.W. 2d 478 (Tex. Civ. App., Amarillo, 1931); Lively v. Missouri, K. &T. Ry. Co. ofTexas, 120 S.W. 8.52 (Tex. 1909); Attorney General Opinion No. C-402 

### (1965). The Legislature used the term “value” inits submission tothe voters of Subsection (b). The discretion granted the Legislature in submitting a constitutional amendment to the electorate is exceedingly broad:

1’

. . . the language ofthe proposition submitted is not material, provided it substantially submits the question which the law authorizes with such definiteness and certainty that the voters are not misled. ” Turner v. Lewie, 201 S.W. 2d 

### 86, 91 (Tex. Civ.App., Ft. Worth, 1947, writ dis’m. )(Emphasis added)

p. 750The Honorable J. W. E&w, page 3 (H-162)

We think the use of the term “value” rather than “assessed value” is sufficiently precise to convey the “intent, import, and subject matter” of the amendment so as not to mislead the voters. See Hill v. Evans, 414 S.W. 2d b84(Tex. Civ. App., Austin, 1967, ref., n.r. e.); Whit~eside v. Brown, 214S.W. 2d.844(Tex. Civ. App. , Austin, 1948, writ dism. ). The terms, in certain instances, havesidentical meanings. “Value”, as used inArticle 8, $1, of the Texas Constitution and elsewhere, has been held to mean the fair or reasonable market value atthe time of assessment for tax purposes. See, for example, Articles 7211, 7149, V. T. C.S., and Rowland v. City of Tyler, 5S.W. 2d 

### 756 (Tex. Comm.App., 1928); Harlingen Independent School Dist. v. Dunlap, 146 S.W. 2d 235 (Tex. Civ. App. , San Antonio, 1940, err. ref’d. );Atlantic Richfield Company v. Warren Independent School District, 453 S.W. 2d~190(Tex. Civ. App. , Beaumont, 1970, ref’d. , n.r. e. 1. Therefore, inanswer to your first question, we think the $3, 000 exemption provided for inArticle 8, $1-b(b) may be based upon whatever standard offair market value assessment is utilized by the individual taxing district. Your second question concerns the power of a school district to provide exemptions in excess of $3,000. 00 pursuant to $1-b(b). The final sentence of §l-b(b) reads as follows:

,I

. . . Where any advalorem tax has theretofore been pledged for the payment ofany debt, the taxing officers of the political subdivision shall have authority to continue to levy and collect the tax against the homestead property at the same rate as the tax so pledged until the debt is discharged, ifthe~Cessation of the levy would impair the obligation of the contract by which the debt was created. ” The language of 5l-b(b) clearly grants discretion to ataxing unit to exempt any amount “not less than $3, 000” upto the full amount of the assessed taxable value, except where ad valorem taxes havebeen pledged and the retirement ofapledge-secured debt would bejeopardized by allowing the exemption. Given the latter situation, no exemption granted would be operative until the debt was discharged. But otherwise there is no limit onthe maximum exemption that may be granted.

p. 751The Honorable J. W. Edgar, page 4 (H-162)

Inanswering your third question, we note that you have underlined the word “thereafter“ inthe amendment, indicating that you question whether the use ofthis word may have the effect of freezing exemptions once given. We believe the use of ‘*thereafter” merely denotes that the amendment and the exemption granted therein are not to apply retroactively. Inanswer to subparagraph (a) ofyour third question, we believe that once the property is assessed for ayear during atime when such an exemption is applicable, the tax must be collected onthat basis for that year. Accordingly, the amount of an exemption for agiven tax year is not subject to alteration by the same Board inthe year it is adopted. Subsection (b) ofyour third question concerns the right offuture Boards to alter an exemption amount once granted. Ifthe intention of the amendment had been to deny future governing bodies and electorates, once an exemption were allowed, the right to decrease an exemption to $3,000, or to eliminate it entirely, the denial would have been clearly expressed. Itis not. Absent such expression, we are of the opinion that future Boards or electorates may alter or discontinue future exemptions. Inanswer to your fourth question, it is our opinion that any alteration would have to operate prospectively. SUMMARY 1. The $3,000.00 exemption for persons over 

### 65 years of age, established by Subsection l-b(b), Article 8, of the Constitution of Texas, is to be based upon the assessed value of residence homesteads. 2. The minimum amount of such exemption is $3, 000. 00, if allowed at all, but the maximum amount is unlimited except by the need to protect the pledged security for debt. 3. An exemption amount once fixed cannot be altered during the year so as to modify the amount of

p. 752The Honorable J. W. Edgar, page 5 (H-162)

taxes assessed for that year against property subject to the exemption, but such exemptions may be abolished or changed prospectively. Very truly yours, x-\.

,&OHN L. HILL Attorney General ofTexas APPROVED:

N 

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# -I”QfJ DAVID M. KENDALL, Chairman

p. 753