. .

OIRNEY GENERAL TEXAS

Honorable Truett Hubbard County Attorney. Van Zandt County Canton, Texas
Dear Sir: Opinion No. 

### ,O-3796 Re: May the Grand Saline Independent School District require a 

### corporation owning a salt mine in said District to psy texes upon the proven and developed underground salt deposits 7
We are in receipt of your letter of July 17, 1941in which you request the opinlon of this department on the questions set out therein as follows:

*A corporation in the business of mining and selling salt has a large mine located within the limits of the Grand Saline Independent School District. This salt is mined from a rock-salt formation several hundred feet below the sulfate of said corporation‘s property. This corporation renders all of its property and equipment for taxes to this school district except its underground salt deposit. It refuses to render these proven and developed underground salt deposits. il “1. Does then. GrandSaline. Indepe,ndent School Dfstrtctbave autho,rity to require this corporation which owns a salt mine 0 in its district, to pay taxes upon their proven and developed underground salt deposits ?

“2. If said school district has authority to require said corporation to pay taxes on its underground salt deposits and said corporation.only renders its machinery and equipment and real estate; but does not include these proven and developed underground salt deposits in its real estateI

.

Honorable Truett Hubbard, page 2, 0-3796

rendition, and fails and purposely refuses to render the same, does the Grand Saline. Independent School District have the authority to assess said corporation for its taxes upon its mineral interests therein?”
In your first question you inquire whether or not the school dist,rict has the authority to require the corporation to pay taxes upon the proven and developed underground salt deposits.

Article 2784 of the R. C. S. provides in part as follows : *The commissioners court for the common school districts in its county, and the district school trustees for the independent school districts incorporated for school purposes only, shall have power to levy and cause to be collected the ,annual taxes and to issue the bonds herein authorized, subject to the following provisions :
-1. * * * and in independent districts for the maintenance of schools therein, an ad valorem tax, not to exceed one dollar on the one hundred dollars valuation:. of taxable property of the district.”
Article 7146 of R. C. S. provides as follows:

“Real property for the purpose of taxation, shall be construed to include the land itself, whether laid out in town lots or otherwise, and all buildings, structures and improvements, or other fixtures of whatsoever kind thereon, and all the rights and privileges belonging or in any wise appertaining thereto, and all mines, minerals, quarries and fossils in and under the same. Id.”
Under the above legislative definition of real propqnty all mines, minerals, quarries etc. inand under the land are real property. It is a well settled rule of lawHonorable Truett Hubbard, page 3, o-3796

in this state that minerals that have not been severed either by actual severance or by conveyance are assessed as part of the value of the land in and uader which the same is located. The Supreme Court of Texas in the case of Texas Company vs. Daugherty, 17bS. W. 717 stated as follows:

“The rights and privileges belonging to land contribute in a very substantial way to its value. They largely cause it to yield its income, and it is the theory of our statute, therefore, that their value shall be included in the valuation of the land for taxation in the hands of the owner. They do no!: escape taxation by this method; on the contrary, they are subjected to its burden through the inclusion of their value in the assessment of the land; and they are taxed against the owner of the land because the Legislature has deemed it proper for him to bear the charge in view of their essential contribution to its value,”
This theory is also stated again by the Supreme Court of Texas in the case of Hager v. Stakes, 294 S. W. 835. The court stated as follows :

“(9) Fifth, Real estate is ordinarily taxed as a

unit; ,yet, where there have been severances by conveyance, exception, or reservation, so that ene portion of the 

### renlty belon;gs to one person and other portions to others, each owner should pay taxes under 

### proper assessment against him of the portion owned by him. The fact that a portion may consist of minerals or of a fractional interest therein makes no difference, as outlines in State v. Downman (Tex. C.iv. App.) 134S. W. 795, and Downman v. Texas, 231 U. S. 356, 357, 34 S. Ct. 62, 58 L. Ed. 264.” Unquestionably the Grand Saline Independent School District has the authority to require the corporation in question to pay a tax on its real estate based on its full value which would include the value of the salt deposits in and under the land.- .

Honorable Truett Hubbard, page 4, 0-3796

In your second question you state that the corporation has failed and purposely refused to render the proven and developed underground salt deposits. You ask whether the school dist~rict has the authority to assess the corporation for taxes on its said mineral interests in the land. Under the decision previously quoted the owner of land is required to make only one rendition of the real property, which rendition should include the full value, of the land including the mineral interests therein. The coiporation in this case is not required to make a rendition of the mineral deposits in the land separate and apart from the’rendition of the value of the land itself. You state finyo& cjues’tion that the corporation has rendered the land but that this rendition does not include the value of the underground mineral de-~ posits in the land.
We assume that in the District in question the taxes are assessed and collected by an independent tax assessorcollector of the District under the authority of Article 2791, R. C. S. Under the facts you submit we believe the correct procedure would be for the tax assessor to raise the valuation and submit same to the board of equalization. See Articles 2791 and 1050 R. C. S. and Blewett v. Richardson Independent School District, 240 S.W. 529.

Under the authority of the above quoted Articles if the tax assessor is not satisfied with the rendition of the property made by the corporation in question, it is then the tax assessor’s duty to proceed to increase the valuation of such property and submit same to the board of equalization. Unless this is done the rendition of the land carries with it the value of the entire estate, including the mineral interests therein. The Waco Court of Civil Appeals so held in the case of Humble Oil and Refining Company v. State, 3S. W

. 2nd, 559, writ of error refused by the Supreme Court. The court stated as follows:Honorable Truett Hubbard, page 5,

### o-3796

“Appellants contend that, since the mineral estate had not been severed from eight of said tracts of land on January 1, 1923, and since the owners of the land had rendered said land in its entirety for taxes for 1923, and paid the taxes so assessed and levied, that the attempted levy made by the tax assessor in July, 1924, was illegal and void. We sustain this contention. It is now a well-recognized principal of law that, after the mineral estate has tIeen severed by the owner from the land, same is subject to taxes, and the owner of the mineral estate is liable for taxes to the same extent that property owners are liable for any other tax. State v. Downman (Tex. Civ. App.) 134S. W. 787; Id., 231 U. S. 353, 34 S. Ct. 62, 53 L. Ed. 264; Stephens County v. Mid-Kansas Oil & Gas Co., 113Tex. 160, 254 S. W, 290, 29 A. L. F. 566; Texas Co. V. Daugherty, 107Tex. 226, 176S. W. 717, L. R. A. 1917F, 989. Until, however, the mineral estate has been severed, therendition of the land carries with it the value of the entire estate. Article 7!46 of the Rev&_I!.?.atutes read:;:

‘Real property fbr the purpose of taxation, shall be construed to include the land itself, * * 8 and all the rights and privileges belonging * * * thereto, and all mines, minerals, quarries and fossils in and under the same.’ * (Underlining ours)
It is our opinion that the procedure outlined above is the one that should be followed by the tax assessor to require the property of the corporation .in question to be taxed at its full value including the value of the mineral interests contained therein.

We call your attention hotieGkr.to tge case of Victory v. Xinson, 71S. W. (2nd) 365. In that case the rendition sheet of the plaintiff was discussed as follows:

### HonorableTruettHubbard,page 6, O-3796

"Theplaintiffsrendered said land for taxes to the countytax assessor,but indorsedon saidrendition,thefollowingnotation: 'Thisdoesnot includethe l/8 royaltyunder oil lease. The royalty isnot subjectto taxation against these lessors, see: Ehlingerv. Clark, 117Tex. 547, 8 S.W. (2nd) 666; StephensCountyv. Mid-KansasOil & Gas Co., 113 TAX. 160, 

### 254 s. w. 30, 29 

### A. L. R. 566.1 

### 11
TheWaco Court of CivilAppeals inan opinionwrittenby JusticeAlexanderheld as follows:

"(4) Plaintiffs'next contention is that the tax assessorhad no rightto assess their royalty interest in the em-=~y, separatelyfrom their interest in the'surface,but shouldhave assessedall of their interest,whatever itmay have been,as a unit. Ordinarilyone's entire interest in a particulartract of land shouldbe assessed for tax purposes as a unit. The assessor shouldnot divide said interest into various.portionsand assess the same separately;butwhere the ownerhas himself separatedhis interest intovariousportions and thus inviteda separateassessmentthereof,we seeno reasonwhy the property cannotbe soassessed. Slaterv. EllisCounty Levee ImprovementDist. (Tex.Civ.App.) 42 S.W. (2z~?) 867, par. 2; Hager Y. Stakes, supra,par. 9. In the ease st~barthe ownersrendered for tax purposestheir surdce interest,but expresslyreserved,and purposelyrefused to render, their royalty interestas reserved in the oil and gasmining leasestheretofore executedby them. Under such circumstances,we think the assessorhad a right to accept the renditionof the portion so renderedand to separately assess the portion or interestwhich the owners refusedto include inthe rendition somade by them. The ownershaving thus inviteda separateassessmentof their interest in the property shouldnot nowbe heard to complain ifthe assessor accepted their in'litation and assessed the property in the manner suggestedby them. StateMortgage Corp.Y. Ludwig, 121~- vex. 268, 48 

### S. W. (2nd.) 950, par. 5."
In the above case theWaco Court of CivilAppeals declaredthat the taxpayer.had.

undertakento specificallyexcludethe mineral interests from the rendition sheet,and that he then couldnot complainof the action of the tax assessor inplacing the part so excludedon the unrendered roll for taxationpurposes. The casewas affirmedby the Canmission ofAppeals of Texas in 102 S. W. (2nd) 194 in an opinionwrittm by CommissionerHickman. The Court concludesas follows:

### HonorahleTruett Hubbard,page 7, O-3796



### "Ourholding is limitedto this conclusion. If a taxpayer, who owes the duty of renderinghis property for taxation,voluntarily undertakesto excludea portion thereof, even though suchportion be an integralpart of thewhole, from his rendition sheet,the tax assessor isauthorizedto treat that portion as unrenderedproperty and proceed to listand assess same inaccordancewith the statutes."
It is our opinionthat the mineral interestbelongingto th? corporation in question isproperly taxableas a part of the land inand underwhich the same is located. Where the rendition failsto include the value of this mineral interest inthe land it is the duty of the tax assessorto increasethe valuation of the corporation'spropertyto includethe value of thesemineral interests in the land and to submit the sameto theboard of equalization. If the corporation'srendition shows on its face that the value placed on the land doesnot includeths value of the mineral interest inand under the land then the tax assessormay assess the same separatelyupon the unrenderedroll for tax purposes and samewouldbe a proper assessmentofwhich the tax payerwould be unable to complain.

We trust that the foregoingfullyanswersyour inquiry.
Youes very truly
ATl'OFCNEY

GENERALOFTEXAS

BG:fs APPROVEDJLJL29, 1941
/s/ Grover Gellers


### FIRSTASSISYCANT GEXERALATTO= By: /s/ Billy Goldberg Billy Goldberg Assistant

APPmvm OPINION Cm= By: BWB CHAIRMAN