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. 11th Street 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 8 of the Constitution of Texas, adopted 

by Texas citizens in November of 1972, are: 

1. “Legally, does Subsection (b) of Section l-b of 

Article VIII, Constitution of Texas, require that the 

$3,000 exemption, if and when 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) of Article VIII, Constitution of Texas, exempt from 

district ad valorem taxation any amount of assessed value 

of the residence homestead of persons 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 ad valorem 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. 749 
The 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 of the State may exempt by its own 

action not less than Three Thousand Dollars ($3, 000) of 

the assessed value of residence homesteads of persons 

sixty-five (65) years of age or older from all ad valorem 

taxes thereafter levied by the political subdivision . . . . ” 

The form in which the Legislature authorized that Subsection (b) be 

submitted to the electorate was: 

“The constitutional amendment providing that the 

various political subdivisions of the State may exempt not 

less than Three Thousand Dollars ($3, 000) of the value of 

residence homesteads of all persons sixty-five years of age 

or older from ad valorem 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, 53 S. W. 2d 508 

(Tex. Civ. App. , Eastland, 1932), affirmed 84 S. W. 2d 1076 (Tex. 1935); 

Slaughter v- Sundown Independent School Dist. , 41 S. W. 2d 478 (Tex. Civ. App., 

Amarillo, 1931); Lively v. Missouri, K. & T. Ry. Co. of Texas, 120 S. W. 8.52 

(Tex. 1909); Attorney General Opinion No. C-402 (1965). 

The Legislature used the term “value” in its submission to the voters of 

Subsection (b). 

The discretion granted the Legislature in submitting a constitutional amendment to the electorate is exceedingly broad: 

1’. . . the language of the 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. 750 
The 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, 214 S. W. 2d .844(Tex. Civ. App. , Austin, 1948, writ dism. ). The 

terms, in certain instances, haves identical meanings. “Value”, as used 

in Article 8, $1, of the Texas Constitution and elsewhere, has been held 

to mean the fair or reasonable market value at the time of assessment for 

tax purposes. See, for example, Articles 7211, 7149, V. T. C. S., and 

Rowland v. City of Tyler, 5 S. 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, in answer to your first question, we think the $3, 000 

exemption provided for in Article 8, $1-b(b) may be based upon whatever 

standard of fair 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 ad valorem tax has theretofore 

been pledged for the payment of any 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, if the~Cessation of the levy 

would impair the obligation of the contract by which the 

debt was created. ” 

The language of 5 l-b(b) clearly grants discretion to a taxing unit to 

exempt any amount “not less than $3, 000” up to the full amount of the 

assessed taxable value, except where ad valorem taxes havebeen pledged 

and the retirement of a pledge-secured debt would be jeopardized 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 on the maximum exemption that may be granted. 

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

In answering your third question, we note that you have underlined 

the word “thereafter“ in the amendment, indicating that you question 

whether the use of this 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. 

In answer to subparagraph (a) of your third question, we believe 

that once the property is assessed for a year during a time when such an 

exemption is applicable, the tax must be collected on that basis for that 

year. Accordingly, the amount of an exemption for a given tax year is 

not subject to alteration by the same Board in the year it is adopted. 

Subsection (b) of your third question concerns the right of future 

Boards to alter an exemption amount once granted. If the 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. It is not. Absent such expression, we are of the opinion that 

future Boards or electorates may alter or discontinue future exemptions. 

In answer 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. 752 
The 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 of Texas 

APPROVED: 

N RF-7 

LARRr/F.\YORK,\fir>t As\- 

-I”QfJ 

DAVID M. KENDALL, Chairman 

p. 753