. . 

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, 1941 in 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 estate 
I . 

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 law 
Honorable 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, 17b S. 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.) 134 S. 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 fin yo& 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, 3 S. 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.) 134 S. W. 787; Id., 231 

U. S. 353, 34 S. Ct. 62, 53 L. Ed. 264; Stephens 

County v. Mid-Kansas Oil & Gas Co., 113 Tex. 160, 

254 S. W, 290, 29 A. L. F. 566; Texas Co. V. Daugherty, 

107 Tex. 226, 176 S. 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, 71 S. W. (2nd) 365. In that case the 

rendition sheet of the plaintiff was discussed as follows: 
Honorable Truett Hubbard, page 6, O-3796 

"The plaintiffs rendered said land for taxes to the 

county tax assessor, but indorsed on said rendition,the following notation: 'This does not include the l/8 royalty under 

oil lease. The royalty is not subject to taxation against 

these lessors, see: Ehlinger v. Clark, 117 Tex. 547, 8 S. W. 

(2nd) 666; Stephens County v. Mid-Kansas Oil & Gas Co., 113 

TAX. 160, 254 s. w. 30, 29 A. L. R. 566.1 11 

The Waco Court of Civil Appeals in an opinion written by 

Justice Alexander held as follows: 

"(4) Plaintiffs' next contention is that the tax 

assessor had no right to assess their royalty interest in the 

em-=~y, separately from their interest in the'surface, but 

should have assessed all of their interest, whatever it may 

have been, as a unit. Ordinarily one's entire interest in a 

particular tract of land should be assessed for tax purposes 

as a unit. The assessor should not divide said interest into 

various.portions and assess the same separately; but where the 

owner has himself separated his interest into various portions 

and thus invited a separate assessment thereof, we see no 

reason why the property cannot be so assessed. Slater v. 

Ellis County Levee Improvement Dist. (Tex. Civ. App.) 42 S. W. 

(2z~?) 867, par. 2; Hager Y. Stakes, supra, par. 9. In the 

ease st~bar the owners rendered for tax purposes their surdce interest, but expressly reserved, and purposely refused 

to render, their royalty interest as reserved in the oil and 

gas mining leases theretofore executed by them. Under such 

circumstances, we think the assessor had a right to accept 

the rendition of the portion so rendered and to separately 

assess the portion or interest which the owners refused to 

include in the rendition so made by them. The owners having 

thus invited a separate assessment of their interest in the 

property should not now be heard to complain if the assessor 

accepted their in'litation and assessed the property in the 

manner suggested by them. State Mortgage Corp. Y. Ludwig, 121~- 

vex. 268, 48 S. W. (2nd.) 950, par. 5." 

In the above case the Waco Court of Civil Appeals declared that the 

taxpayer.had. undertaken to specifically exclude the mineral interests 

from the rendition sheet, and that he then could not complain of the 

action of the tax assessor in placing the part so excluded on the 

unrendered roll for taxation purposes. The case was affirmed by the Canmission of Appeals of Texas in 102 S. W. (2nd) 194 in an opinion writtm 

by Commissioner Hickman. The Court concludes as follows: 
Honorahle Truett Hubbard, page 7, O-3796 

"Our holding is limited to this conclusion. If a taxpayer, 

who owes the duty of rendering his property for taxation, voluntarily 

undertakes to exclude a portion thereof, even though such portion 

be an integral part of the whole, from his rendition sheet, the tax 

assessor is authorized to treat that portion as unrendered property and proceed to list and assess same in accordance with the 

statutes." 

It is our opinion that the mineral interest belonging to th? 

corporation in question is properly taxable as a part of the land in and 

under which the same is located. Where the rendition fails to include 

the value of this mineral interest in the land it is the duty of the tax 

assessor to increase the valuation of the corporation's property to include the value of these mineral interests in the land and to submit 

the same to the board of equalization. If the corporation's rendition 

shows on its face that the value placed on the land does not include ths 

value of the mineral interest in and under the land then the tax assessor may assess the same separately upon the unrendered roll for tax purposes and same would be a proper assessment of which the tax payer would 

be unable to complain. 

We trust that the foregoing fully answers your inquiry. 

Youes very truly 

ATl'OFCNEY GENERALOFTEXAS 

BG:fs 

APPROVED JLJL 29, 1941 

/s/ Grover Gellers 

FIRST ASSISYCANT 

GEXERAL ATTO= 

By: /s/ Billy Goldberg 

Billy Goldberg 

Assistant 

APPmvm 

OPINION 

Cm= 

By: BWB 

CHAIRMAN