December 9, 1988

Honorable Lloyd Criss Chairman Committee on Labor and Employment Relations Texas House ofRepresentatives P. 0. Box 2910 Austin, Texas 78769

DearRepresentative **CriSS:** Opinion No. JM-991

Re: Taxation of ahomestead occupied by a surviving spouse (RQ-1416)

You askwhether an .amendment to article VIII, section l-b, of the Texas Constitution isapplicable only to homesteads occupied by surviving spouses whose husbands orwives died after the amendment took effect. The amendment limits the taxation of certain homesteads for school purposes.
Article VIII, section l-b, isone of several constitutional provisions concerning homesteads. Article XVI, section 51,defines ahomestead forpurposes of exemption from forced sale, and section 50of that article provides that t.hesale of ahomestead cannot be forced except to satisfy purchase-money liens, improvement liens, or tax liens. Section 52 of article XVI specifies that upon the death of a spouse, the homestead property is not to be distributed among the heirs of the deceased so long as it isused as a homestead by the surviving spouse or, aspermitted under court order, is used and occupied by the deceased's minor children.
Article VIII of the Texas Constitution deals with taxation and revenue. As amended in 1978, section 1thereof requires that taxation be equal and uniform, and that all realproperty and tangible personal property inthe state be taxed, except that it requires the exemption of certain household furnishings andpermits the exemption of "personal property homestead."
Until 1932, thehomestead was not excepted from the "equal and uniformI1taxation requirement. Jufkin v. Citv of Galveston, 58Tex. 545 (1883). Section l-a was added to article VIII inthat year and amended in 1933. As amended, the section provided that $3,000 of the assessed taxable

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value of residential homesteads should be exempt from all taxation "for state purposes." The amendment did not authorize an exemption from local taxes. Citv of Wichita Falls v. Coower, 170 S.W.2d 777 (Tex.Civ.App. -Fort Worth 1943,writ ref'd).
Fifteen years later, in 1948, section l-awas amended to abolish the levy of state ad valorem taxes for general
revenue purposes and topermit counties to levy ad valorem taxes on property for county purposes "except the first Three Thousand Dollars ($3,000) value of residential homesteads." Section l-bwas added to article VIII at the same time to exempt $3,000 of the assessed taxable value of all residence homesteads llfrom all taxation for all State purposes" (notmerely forgeneral revenue purposes).
Section l-a of article VIII has been amended only one .othertime. In1973 itwas amended to apply to "residential homesteads ofmarried or unmarried adults, male or female, including those living alone.1' Section l-b, on the other hand, has been amended five times since 1948. YOU inquire only about themost recent amendment, but an appreciation of those that preceded it isuseful to itsunderstanding.

In 1972, section l-bwas divided into subsections, and for the first time itwas provided, in subsection (b), that the governing body of anypolitical subdivision could exempt bv its own action "not less than" $3,000 of the assessed value of residence homesteads ofpersons 65years of age or older from all advalorem taxes "thereafter levied by the political subdivision." See S.J.R. No. 7, 62d Leg., 4126 (1972):Attorney General Opinion H-9 (1973). Ayear later, section l-b(b) wasmade applicable to residence homesteads "ofmarried or unmarried persons sixty-five (65)years of age or older, including those living alone.1' See S.J.R. No. 13, 63d Leg., 2469, at 2470 (1973).

An amendment adopted in 1978 changed section l-b(b) to include the homesteads of certain disabled persons and to base the amount of an exemption upon market value rather than assessed value. Italso added subsections (c)and Cd) to the section. See H.J.R. No. 1, 65th Leg., 2dC.S., 54 (1978). Subsection (c)generally exempted $5,000 of the market value of residence homesteads "forgeneral elementary and secondary school purposes" and authorized the legislature to exempt up to $10,000 ofahomestead's market value fordisabled persons andpersons aged 65 or older. Subsection (d)read:

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(d) Except as otherwise provided by this subsection, if aperson receives the residence homestead exemption prescribed by Subsection (c)of this section forhomesteads of persons sixty-five (65) years of age or older, the total amount of advalorem taxes Jmwosed on that homestead foraeneral elementar-vand secondarv wublic school wurnoses may not be increased while ,itremains the residence homestead of that werson or that person's swouse who receives the exemwtion. However, those taxesmay be increased to the extent the value of the homestead is increased by improvements other than repairs or improvements made to comply with governmental requirements. (Emphasis added.)

Another amendment adding subsection (e)to section l-b
was adopted in 1981. It required any general homestead exemption granted by apolitical subdivision tobe in the amount of at least $5,000. See H.J.R. No. 81, 67th Leg., 4222 (1981). Finally, in 1987, subsection (d)of section l-b (set out above) was amended by inserting a sentence reading:

Ifaperson sixty-five (65)years of age or older dies ina year inwhich the person received the exemption, the total amount of advalorem taxes imposed on thehomestead for general. elementary and secondary public school purposes may notbe increased while it remains the residence homestead of that person's surviving spouse if the spouse is fifty-five (55)years ofage or older at the time of the person's death, subject to any exceptions provided bygeneral law.

See H.J.R. No. 48, 70th Leg., 4124 (1987). You have asked
us to construe this 1987 amendment.

Amendments aremade pursuant to article XVII, section 1,of the Texas Constitution. In declaring the objective andmeaning of amendments, courts should give the words their natural, obvious, .and ordinary meaning as understood by the citizenry. Amendments should be construed with reference to all other provisions of the constitution and -- with aview to giving every provision effect -- they should be construed inaway thatwill carry out thebroad general

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principles ofgovernment. State v. Clements 319 S.W.2d 450 (Tex.Civ. App. -Texarkana 1958,writ ref'di.

Inarriving at the intent of the electorate and of the drafters, theprimary focusmust beupon the language used. See Booth v. Striwwleman, 61Tex. 378 (1884) (rules for constitutional construction analogous to rules for statutory construction); Duval Corooration v. Sadler, 407 S.W.2d 493 (Tex. 1966) (intentascertained from language used and its legal context): 12Tex. Jur.3d, Constitutional Law §§ 13-15. It ispresumed that thewords used were carefully selected. Leander Indewendent School District v. Cedar Park Water Suwwlv Corworation, 479 S.W.Zd 908 (Tex. 1972).

The initial portion of the 1987 amendment reads:

Ifaperson sixty-five

_ older dies

. . . (65)years of age or

This language connotes a future event, asdoes the entire constitutional passage. The final words of the provision decisively indicate that only deaths in the future are to trigger benefits that accrue

ifthe spouse &. fifty-five (55)years of age or older gt the time of thewerson's death subject to any exceptions provided by genera; law. (Emphasis added.)

Tex. Const. art. XVII, 5 l-b.

If theprovision had been intended to embrace past events, theunderscored word 'Iis"would have been written l'wast'

. The use of theverb ais,n together with the prepositional phrase "at the time of theperson's death," imparts clearly
anatural, obvious, and ordinary meaning that looks to future events.
Very great difficulties would accompany a different interpretation. If theword I1is.@' inthe foregoing sentence fragment were read 'lwas,@l the amendment might mean that a widow who was fifty-five at the time her husband died in 1975would receive thebenefit of a freeze, but awidow, now sixty-three,.whowas only fifty years oldwhen her husband died in the same year, would not. The latterwidow was not "fifty-five (55)years of age or older bt the time of h person's death". If the advantage of a l@freeze" wZrZ available to either of them,would the taxes be "frozen" at

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their levelwhen thehusband died in 1975? Would the excess taxes collected inthe interim have tobe returned?

There are no appellate cases construing the constitutionally mandated lNfreeze,**and only one attorney general opinion has dealt with it. Attorney General Opinion MW-265 (1980)equated the effect of a section l-b(b) tax freeze with atax exemption but differentiated the two. The opinion suggested that, absent constitutional authorization, both the freeze and the exemption would beviolative of the "equal anduniform@*command of article VIII, section 1, of the Texas Constitution.

Those who argue foran "expansive" interpretation of the freeze language (tocover deaths occurring before the constitutional amendment took effect) urge that the expansive construction should be chosen because it "ismost fair to the greatest number ofpeople." However, that test leads to an opposite result. Taxes are fairer forthemost people when there areno tax exemptions at all. Expanding exemptions does not expand fairness. Aswe noted in Attorney General Opinion JM-612 (1986):

The law does not favor tax exemptions, since they are the antithesis of equality and uniformity. Hilltow Villaae. Inc.v. Kerrville Indewendent School District, 426 S.W.Zd 943 (Tex. 1968). Constitutional and statutory provisions creating them are to be construed narrowly with alldoubts resolved against granting the exemption. Citv of Lonoview v.Markham-McRee Municiwal Hoswital, 152 S.W.Zd 1112 (Tex. 1941).

A residence may be liberally classified as the homestead ofboth spouses for other constitutional purposes, but the "over 65 exemption" has not been read broadly. One spouse cannot claim the tax exemption ifthe constitution gives itonly to the other spouse. Riwlev v. Stewhens, 686 S.W.2d 757 (Tex.App. -Austin 1985,writ ref'd n.r.e.).

InRiwlev v. Stewhens, suwra, a couple claimed a section l-bhomestead exemption. Thewife was over the age of 65but the residence was owned as separate property by the husband (whowas notyet 65). Because the constitution authorized the legislature todefine "residence homestead" forpurposes of the section --and ithad done soby definingaresidence.homestead asproperty occupied "by an owner who qualifies for the exemption" -- the court said the

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couple could not claim the exemption from taxes. The wife
was not the owner of theproperty and the husband was not yet eligible for the exemption.
Shortly after the "over 65homestead exemption" was added to the constitution, this office found itnecessary to read into the constitutional language the same kind of Riwlev v. Stewhens restrictions later included by the legislature in its "residence homestead" definition. The interpretation was thought necessary in order to save the exemption from invalidity under the Equal Protection Clause of the Fourteenth Amendment to the Constitution of the United States. See Attorney General Opinion H-9 (1973). That restrictive interpretation was thought necessary because, without it, the constitutional language would have been too broad.

In the case of the 1987 amendment, broadening the "freeze" provision to include past deaths would not make it lessvulnerable to Equal Protection attacks. Itwould make entirely selective (and arbitrarily retroactive in its operation) the limitation that the surviving spouse must have been 55Years ormore at the time of the death to enjoy the benefit.l1. There are parallels between the "65 or older" homestead exemption of article VIII, section l-b, and the @'disabledveterans" homestead exemption allowed by section 2(b) of that article. In 1976, this office concluded in Attorney General Opinion H-894 that, as implemented by the legislature, constitutional permission to grant a veteran's surviving spouse and children an exemption equal to the exemption "towhich thedecedent was entitled at the tine he died I1Tex. Const. art. -I VIII, §2(b) (emphasis added), was not limited to the families of those who died after the tG!ffective date of the statutory implementation, even though no veteran could have been "entitled" to an exemption before that time. Attorney General Opinion H-894 (1976);see Attorney General Opinion H-88 (1973).

In our opinion, Attorney General Opinion H-894 was wrongly decided. The only justification for the opinion's conclusion was:

To restrict the statutory exemption

. . . only to (Footnote Continued)

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Attorney General Opinion H-9 said:

The Fourteenth Amendment does not prohibit
orprevent classification, provided classification isreasonable for thepurpose of the legislation: isbased onproper and justifiable distinctions, considering the purpose of the law; isnot clearly arbitrary; and isnot a subterfuge to shield one class and unduly burden another or to oppress unlawfully in its administration.
Attorney General Opinion H-9 (1973),at 4.
This continues to be the law. gee Western 8Southern Life Insurance Co.v. State Board ofEaualization, 451U.S. 648 (1981); Carrinaton v.Rash, 380U.S. 89 (1965); 16A Am. Jur.2d Constitutional Law 5 746. We are of the opinion that the 1987 constitutional amendment speaks prospectively and that its limitation of taxation. on exempted homesteads during the occupancy of surviving spouses isapplicable only ifthe non-surviving spouse died after the amendment took effect.

(Footnote Continued) survivors of those disabled veterans who have died since January 1, 1976,would give [it] negligible immediate effect.

. . . Attorney General Opinion H-894 (1976),at 2.

No appellate court has directly considered theH-894 conclusion, but fiveyears later inStatev.American Leaion Post No. 58, the court said: [Elxemptions granted by [statute]must be read in the light of Article VIII, 'sec.2, of the Constitution since the Constitution expressly makes null and void all exemptions attempted thereunder by the legislature not authorized by the Constitution. If the property comes within a statutory exemption, itcan be exempt only because it isclearly embraced within the constitutional authorization.

611 S.W.2d 720, 723 (Tex. Civ.App. -El Paso 1981, no writ).

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SUMMARY
The 1987 amendment to article VIII, section l-b(d), of the Texas Constitution, that limits, for school purposes, the taxation of homesteads occupied by surviving spouses of persons entitled to "sixty-five years of age or older" exemptions applies only to spouses who survive persons dying after the constitutional amendment took effect.

;fZh

JIM MATTOX Attorney General ofTexas

MARY KELLER Firstpssistant Attorney General

LOUMCCREARY Executive Assistant Attorney General

JUDGE ZOLLIE STEAELEY Special Assistant Attorney General

RICK GILPIN Chairman, Opinion Committee
Prepared by Bruce Youngblood Assistant Attorney General -.

-_

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