June 21, 1988

Honorable Stan Schlueter Opinion No. JM-919 Chairman Ways andMeans Committee Re: Whether the directors Texas House ofRepresentatives of ataxing unit are perP. 0. Box 2910 mitted to waive interest Austin, Texas 78769 andpenalties on atax payment delinquent by reason ofa central appraisal district error (RQ-1173)

Dear Representative Schlueter:

you have asked us todetermine

[wlhether a central appraisal district is an agent of ataxing unitwhich utilizes the central appraisal district so that an error or omission ofthe central appraisal district would allow theboard of the taxing unit to waive interest andpenalties on a delinquent tax payment under section 33.011 of the Tax Code.

The Tax Codeprovision towhich you refer reads:

The governing body of ataxing unitmay provide for thewaiver ofpenalties and interest
on adelinquent tax ifanact or omission of
an officer, employee, oragent of the taxing p~j& caused the taxpayer's failure topay the taxbefore delinquency and ifthe tax ispaid within 21days after the taxpayer knows of or should know of the delinquency. (Emphasis added.)

A county isa "taxing unit" within themeaning of the statute, but acentral appraisal district isnot. Section 1.04(12) of the Tax Codeprovides:

(12) 'Taxingunit' means a county, an incorporated city or town (including a homeP- 4599Honorable Stan Schlueter -Page 2 (JM-919)

rule city), a school district or authority district, a special (including a junior college district, a hospital district, a district created by orpursuant to the Water Code, a mosquito control district, a fire prevention district, or a noxious weed control district), or any unit of this state, other political whether created by or pursuant to the constitution or a local, special, orgeneral law, that is authorized to imoose and is imoosinu advalorem taxes on property even if another political the governing body of unit determines the tax rate for the unit or otherwise governs its affairs. (Emphasis added.)

An appraisal district does not fitthis definition because it isnot authorized to "imposel'taxes onproperty: it is responsible only for appraising property inthe district. See Barclav v. Ochiltree **ADDraiSal** District Board, **730** S.W.2d 878 (Tex.App. -Amarillo 1987, nowrit). Cf. Tax Code 5§171.2021(~)(2), 311.002(4).

Another statutory provision alsomakes it clear that an appraisal district isnot a "taxing unit." Section 1.15 of the Tax Code, enacted in 1983 tobecome effective October 1, 1985,l prohibits a taxing unit from employing "any person forthe purpose of appraising property for taxation purposes except to the extent necessary Section 6.05(b) of toperform a contract under 

### [the1 code" (section 6.05(b) allows appraisal districts to contract with a taxing unit to perform the duties ofan appraisal office forthe district). On the other hand, an appraisaldistrict is responsible for appraising property statutorily forthe advalorem tax purposes of each taxing unit inthe district --which necessitates employing appraisers. Tax Code 56.01(b). See Tax Code 56.05(d). Cf. Tex. Con&. art. VIII, 518;Wilson v. Galveston County Central Annraisal District, 713 S.W.2d 98 (Tex. 1986).

1. Section 1.15 of the Tax Code was codified as section 1.13 until 1987. See Acts 1983, 68th Leg., ch. **1028,** at 5463; Acts 1987, 70th Leg., ch. 167, §5.01(a)50, at 1360.

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It has been suggested that because an appraisal district isnot itself ataxing unit, and because it is a "political subdivision ofthe state," Tax Code 56.01(c), an error caused by an officer, employee or agent of the appraisal district would not be an error caused by an officer, employee, or agent of the taxins unit so as to allow the taxing unit to waive penalties and interest on delinquent taxes under section 33.011 of the code. In our opinion, however, acentral appraisal district, within the meaning of section 33.011, acts as the agent of the taxing units forwhich itmakes appraisals.

The argument that the appraisal district cannot be the agent of the taxing unit rests on the familiar rule that l"agencyrl

isa legal relationship founded upon an express or implied contract whereby the agent acts forand onbehalf of theprincipal andunder his control. See 3Tex. Jur. 3d, Asency 51, at 13. The relationship between an appraisal unit and ataxing unit forwhich itmakes appraisals is said tobe neither consensual nor one inwhich the .appraisal district is subject to the control of the taxing unit, since the duties of the appraisal district are established independently by statute.

There are, of course, situations where the ordinary definition and consequences of agency do not apply. Not all agencies are created by contract: some arise by operation of law. The administrator ofadecedent's estate, for example, has been termed a "statutory agent." See Roberts v. Kenna, 241 S.W.2d 680, 685 (Tex.Civ. App. - Beaumont 1951, no writ). Agencies can be created by estoppel. -3 Tex. Jur. 3d,Aoencv 547,at 77. And anagent whose power of attorney is coupled with an interest is not completely subject to the control of theprincipal. Id. 528, at 51.

An agent for apublic body isno less an agent because theduties of the agent are established by statutory law rather than by contract at common law. Apublic depository holds tax collections for the county as the trustee and agent of the county. See Fidelity and Deoosit Co.v. Farmers andMerchants National Bank, 121 S.W.2d 503 (Tex.Civ. APP.

-Fort Worth 1938,writ dism'd). InCallashan v.McGown, 90 S.W. 319, 327 (Tex.Civ.App. 1905,writ ref'd), the court, speaking ofpublic officials, said:

An officer is simply anagent of the public, whose power of attorney is the law, which prescribes his duties and limits his authority to such acts only as are necessary and

p. 4601Honorable Stan Schlueter -Page 4 (JM-919)

incidental to a proper discharge of such duties as it imposes.

An independent contractor engaged by a Public Utility District to readmeters and todetermine and collect water bills was held by this office to be the agent of the district in discharging those tasks. See Open Records Decision No. 437 (1986). We have also concluded that an independent governmental agency may be considered to be acting as the agent of another governmental entity even though no statute expressly denominates one as the agent of the other: yiz., inAttorney General Opinion JM-446 (1986), the State Purchasing and General Services Commission was said tobe the agent of the Supreme Court in collecting and abstracting information concerning the court.

Alternative concepts of "agency" need not be exhaustively explored. .Here, we need only demonstrate that a legislature could reasonably have intended touse the word "agent" in a broader legal sense. The. purpose of the legislative provision is clear and itsuse of "agent" in the suggested restrictive sensewould lead to incongruous results.

Section'1.15 of the Tax Code (previously section prohibiting taxing units from employing appraisers,1.13)
was passed in 1983but did not take effect until October 1, 1985. See Acts 1983, 68th Leg., ch. 1028, at 5463. Section 33.011 of the Tax Code (whichpermits the governing body of
ataxing unit toprovide forthewaiver ofpenalties and interest ondelinquent taxes "ifan act or omission of an officer, employee, oragent of the taxing unit" caused the delinquency) became effective more than three months earlier

-- onJune 14, enacting it. 1985, the day the Governor signed the bill

The billwaspassed by aunanimous senate and
aunanimous house, except for **one** house member present but notvoting.

Thus, when the waiver provision was enacted, the legislature was aware that itwould become effective at a timewhen employing not every taxing unit was yet prohibited from

appraisers and delinquencies caused by thewhen penalties resulting from
errors of such employees would bewaivable under section 33.011. intended that The legislature clearly

errors caused by RgNg appraisal personnel resulting indelinquency penalties would allow waiver under the statute.

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Though not all taxing units were prohibited from employing appraisers during theperiod fromJune 14, 1985 to October 1, 1985,m were. The same 1983bill which prohibited everv taxing unit from employing appraisers after October 1,1985 (except inacontract situation), prohibited
some (those located in appraisal districts that had not postponed their appraisal duties pursuant to a 1981 law) from employing appraisers after October 1, 1984. See Acts 1983, 68th Leg., ch. 1028, at 5463. The legislature, then,
was not only aware that penalties resulting from delinquencies caused by the errors of some appraisers -- those employed by taxing units at the time section 33.011 became law --would bewaivable; itwas also aware that some taxing units were then prohibited from employing appraisers themselves and were forced to rely upon appraisal districts for such appraisal services. See Driscoll v. Harris County Commissioners Court, 688 S.W.2d 569 (Tex. APP. - Houston [14thDist.] 1984,writ ref'd n.r.e.).

Thepenalties and interest exacted ofdelinquent taxpayers in Texas are considered "penalties,1' not taxes. Jones v. Williams, 45 S.W.2d 130 (Tex.1931). As such, their remission may be authorized by general law, though not by a special or local law, notwithstanding sections 51 and 55 of article III of the Texas Constitution, or section 10 of article VIII. Jones v. Williams, suora. Cf. Tex. Const. art. III, 556.

If, in its application to appraisers, section 33.011 applied only to those taxing units which onJune 14, 1985, could still employ appraisers (aclosed class), an argument might bemade that itconstituted unconstitutional local or special legislation, but wedo not soregard it. In our opinion, section 33.011 was intended to be a uniform, general law extending to all taxpayers thepossibility of relief from the consequences of atax delinquency caused by taxing authorities.

The consequences of tax delinquency are severe. Delinquency triggers the application of section 15 of article VIII of the Texas Constitution, which reads:

The annual assessment made upon landed property shall be a special lien thereon: and all oronertv. both real and personal, belonaina to anvdelinouent taxnaver shall be liable to seizure and sale forthe oavment of all the taxes andnenalties dueby such delinouent; and suchproperty may be sold for

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the payment of the taxes andpenalties due by such delinquent, under such regulations
as the Legislature may provide. (Emphasis added.)

See Tax Code title 1,ch. 33.

It isunreasonable to suppose that both the house and the senate would unanimouslv vote to permit relief of the constituents of m legislators, but not others, from burdens caused by tax appraisers exercising authority that, insofar as the taxpayer is concerned, is identical in nature, operation, and effect. The result would be even more incongruous in a %ontract" situation if the word "agent," as used in section 33.011, were given a narrow meaning. A central appraisal district is permitted by section 6.05(b) of the Tax Code to contract with a taxing unit within the district toperform the functions of an appraisal office. Under the narrow interpretation suggested, mistakes made by appraisers unit -- used by the contractinq taxing

ifdelinquencies resulted --would produce penalties waivable by the contracting taxing unit

but p& waivable by [caused by its agentI, other taxing units inthe district [notcaused by their agent], even thouah the delinauencies occurrina in all taxina units were caused bv the identical mistake of the identical anoraiser. We are confident that the legislature intended otherwise.

When taxes become delinquent as a result of errors committed by authorities charged with tax administration and not by reason of the taxpayer's fault, it isunjust, harsh and oppressive to visit upon the taxpayer apenalty which the taxpayer could nothave avoided by any action of his
own. While itmay bewithin thepower of the legislature to enact a statute having such an effect, it should not beheld that the legislature intended to do sounless the language of the statute compels such construction. SeeAustin v. Strong, 1 S.W.2d 872 (Tex. 1928). In ourpinion, the language of section 33.011 of the Tax Code does not compel such aconstruction.

The intention of the legislature in enacting legislation isthe essence of the law, and it isthe duty of courts togive effect to the legislative purpose. &S 53Tex. Jur. 2d, Statutes 5125 et sea., at 180. The purpose of section 33.011 isto allow the relief of taxpayers fromharsh and unjustified penalties resulting fromdelinquencies caused by
errors of taxing authorities which the taxpayers were powerless toprevent. Inorder to effectuate that purpose,

p. 4604. Honorable Stan Schlueter -Page 7 (JM-919)

it isnecessary section 33.011 district making We do so. tobroadly read the term VVagent,'l asused in of the Tax Code, to include an appraisal tax appraisals foruse by the taxing units.

SUMMARY

To effectuate the legislative intent, the term "agent," as used in section 33.011 of the Tax Code, istobe read as including a central appraisal district making appraisals foruse by the taxing unit. Therefore, the directors of ataxing unit arepermitted to waive interest andpenalties on atax payment which isdelinquent by reason ofan error of
a central.appraisal district.



# (--rb

MATTOX Attorney General ofTexas

MARY KELLER First Assistant Attorney General

MU MCCREARY Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY Special Assistant Attorney General

RICK GILPIN Chairman, opinion Committee
Prepared by Bruce Youngblood Assistant Attorney General

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