JIMMATTOX tttorney General

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AnEqualOp,MtU~llYl Afllrmatlve Actlon Employer 

# TheAttorney General ofTexas

Dectmber 20. 1984

Eonorable Sten Schlueter chairman WaysandMeansComictee Texas Eouaeof Representatives P. 0. Box2910 Austin, Texas 78769 Opinion No. JM-285
Re: Applicability of 15%penalty provided by section 33.07 of the TaxCode

DearRepresentative Schluetcr:

letter to UB asks: (1) Does the 15%penalty allowed by section 33.07 of the Texas Property TaxCode apply to all tax years chris it limited to years subsequent to the enactment of the code? (2) I3 the July 1st date of section 33.07 mandatory or directory? That is to say, is the taxing enl::,ty prevented from availing itself of section 33.07 after this date in the initial year of adoptd.oa or does the date establish the earliest possible date a taxing unit can add a penalty?
The section of the Tex Code tb which you refer was added by the Sixty-seventh Legiakture in 1981. to become effective January 1, 1982. It reads:

(a) A taxing unit or appraisal district may provide. in the manner required by law for official action by the body, that taxes that remain del.inquent on July 1 of the year in which they beconE delinquent incur anadditional penalty to defray coats of collection, if the unit or district or another unit that collects taxes for the unit has contracted with an attorney pursuant to Section 6.30 of this code. The amountof the penalty mt.ynot exceed 15percent of the amountof taxes. per,a,lty. andinterest due. (b) A tax lien attaches to the property on which the tax is imposed to secure payment of the penalty.

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(c) If a penalty is imposed pursuant to this section, a taxing un:it maynot recover attorney’s fees in a suit to collect delinquent taxes subject to the penalty. (d) If a taxing unit or appraisal district Erovidea for a 

## per&y under this section. the collector shall delj;er a notice of delinquency and of the penalty t; the property owner at least 30 and not more t&n 60 days before July 1. (Emphasis added).
Acts 1981. 67th Leg., 1st C.S., ch. 13. $130, at 168.
The stated purpose of tha!statutory penalty under discussion is to “defray costs of collection” and it maybe assessed only if the collecting unit has contractelI with a private attorney to represent the unit. Tax Code 533.07(a). See Tax Code 16.30; Attorney General - Opinion JM-14 (1983).
Statutes impoaiag penaltim are to be strictly construed. Hatch v. Davis. 621 S.W.Zd 443 (Tex. App. - Corpus Christ1 1981. writ ref ’d n. It is hinhlv aianificant that. accordina to the atatutom language, -_ -

the penalty maybe applied only to those taxes “that remain .dellnquent onJuly 1of the yg:ar in which they become delinquent” -- andnot then unless “the colle’?:or” has delivered anotice of delinquency and of the penalty to the property owner “at least 30 and dot more than 60 days before July I.” In other words, the section 33.07 penalty can attach only after z;e notice has been given andduring the year the taxes first become delinquent.
In our opinion, the ad(.i,tioaal penalty authorized by section 33.07(a) of the TaxCodecannot be applied to taxes that first became delinquent in ayear prior to t,heyear in which section 33.07. having already become effective as law, is adopted by a taxing unit or appraisal district, even thott$:hsucii taxes might remain delinquent thereafter. The legislative :Lutent, we believe, was to allow the imposition of the additional penalty only after the property ownerhad been specially warned of its Imoapective attachment (and in time to avoid its imposition). If the, additional penalty were to attach to back taxes because the taxes had remained delinquent past July 1 in a previous year -- i.e.. the year during which they had first become delinquent -- then warning; could be effective and it would be impossible for the property owuer, by paying the delinquent taxes, to avoid the additional penalty. Indeed, under the section 33.07(a) “year in which they become delinquent” language, if applied to taxes which became delinquent in prior years and remained so past July 1 of those years, the section 33.07 penalty would apply ever!If the delinquent taxes were &prior to the enactment of section Yi3.07. Wecannot and do not ascribe to

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the leeislature anintent that wouldraise the mecter of anunconstitutionally retrospective law. See Tex. Const. art. I. 516; French v. Insurance Companyof North Am?::=. 591 S.W.2d 620 (Tex. Civ. App. - Austin 1979, nowrit). See a:Lzalder v. Bull, 3Dall. (3 U.S) 386, 391 (1798) (dictum) (Chase. 3.) (“Every law that takes away, or impairs,

. - .

rights vested; agree;lbly to existing laws, is retrospective, andis generally unjust.“) XC:should be noted, however, that even if this additional penalty does not attach, regular penalties maybe recovered when delinquent taxes for past years are collected. Tax CodeS33.01.
In addition to these arguments against a retrospective application of the statute, ssction 3.02 of the Code Construction Act (V.T.C.S. art. 5429b-2) requ:lres a statute to be construed to have only a prospective effect un!.r:ss It is madeexpressly retrospective. Section 1.03 of the Tax Code requires that this rule of construction be followed In interpreting the code. Not only does section 33.07 lack any express language requiring retrospective construction; there are examples of tax statutes having such language, showing that the legislature knowshowto requj.re a retrospective application whenit so desires. See, e.g., Acts 1981, 67th Leg., 1st C.S.. ch. 13. 1159, at 176.
In answer to your first question, we advise therefore that the 15%additional penalty allowemiby section 33.07 of the TaxCodecannot be applied to taxes that first becamedelinquent in years prior to the date that section 33.07 and its procedures are adopted by a taxing unit.
You inform us that, with your second question, you wish to know whether a taxing unit or anap,?raisal district which seeks to impose a section 33.07 penalty mayextend the July 1 date set forth in the statute for the imposition OFthe penalty to. say, August 1 instead. It is suggested that the July 1date set forth in section 33.07(s) is directory only, not mandatory, and that a taxing unit or appraisal district mayproperly designate another date at which time the penalty 1s imposed just so long as the notice requirements of subsection (d) are met. Wedisagree. Wec:cnclude for two reasons that the July 1 date is mandatory; section 3X.07 does not provide anymeanswhereby a taxing unit or anappraisal district mayextend the July 1date. First, in support of the proposition that the July 1 date is merely directory. it is argued that statutory provisions which regulate the duty of public offi:ers andspecify the time for performance of such duties are directory unless the statute forbids the exercise of such power after that tfne. Markowskyv. Newman,136 S.W.2d 808 (Tex. 1940); Federal Cntde D:;!.Cc. v. Yount-Lee Oil Co., 52 S.W.Zd 56 (Tex. 1932). As the Texas Supreme Court declared in Chisholm v. BewleyMills, 287S.W.2d 943, 945 (Tex. 1956):

p. 1266Ronorable Stan Schlueter - Page 4 (JM-283)

There is no absolute 

### testby which it may be determined whether a statutory provision is mandatory or directory.

. . . In determining whether the Legisl~~ture intended the particular provision 

### to be mandatory or merely directory. consideration should be given 

### tothe entire act, its nature and object. and the consequences that would follow from-each construction. Provisions which are not of the essence of the thing to be done, but which ara[ included for the purpose of promoting the propez, orderly and prompt conduct of business, are not generally regarded as mandatory. (Emphas!~:added).
Wedo not dispute the statemc:nt of the law; wemerely think that its application to this question :A contrary to the one suggested. The “essence of the thing to be done” by a taxing unit or an appraisal district in this instance is the adoption of the ordinance or resolution imposing the sel:tion 33.07 penalty. Oncethe resolution Is adopted, the penalty is imposed onJuly 1by operation of law, and the tax assessor-collector jior the 

### unit is required to deliver a notice of the delinquency and of the penalty to the property owner at least 30 and not more than 60 days before July 1. The statute is silent as to the date by whd.chsuch ordinance or resolution must be adopted in order to be effective. In other words, a taxing unit or appraisal district is not empoweredto impose a penalty as of July 1 or any other date which is deemed appropriate; a taxing unit or appraisal district is empowe,K,dby section 33.07 to impose only the penalty. The date on whicln the penalty automatically attaches pursuant to avalid ordinance: or resolution is specifically set forth In the statute.
Weare required to construe astatute in such awayas to express only the will of the makers of the law, not forced or strained, but simply such as the words of the law in their plain sense fairly sanction andwill clearly sus:tain. Railroad Coxunission of Texas v. Miller, 434 S.W.2d 670 (Tex. 1968). If the legislature had Intended that a taxing unit 

### oranappraisal district be empoweredto extend the July 1 date or adopt a new date on which the penalty attaches, it could have done so andwould have done so explicitly. See. e.g., Tax Code 5131.02, 31.03, and 31.51 (providing for February 1 delinquency date andfor postponement of such date in certain instances). Second, in light of the: traditional significance of the July 1 date in the advalorem tax c.Aendar, it is doubtful that the legislature intended that the date on which the section 33.07 penalty be imposed be chosen arbitrarily. Traditionally, July 1is the last date onwhich the second paymentunder asplit paymentplan maybe tendered without the taxpayer incurrirg adelinquent tax penalty. SeeTaxCode 631.03 and now-repealed V.T.C.S. art. 7336 (predecessorxatute .to

p. 1267Honorable Stan Schlueter - Pal:t:5 

### (JM-285)

section 31.03 of the code). July 1was also the traditional date on which taxing units compiled delinquent taxpayers lists and notified each prior to the imposition of a foreclosure suit. See now-repealed V.T.C.S. arts. 7324, 7325, Y326. And finally, July1 is also the traditional date onwhich the penalty imposed upondelinquent taxes no longer accrues on a per-month basis but rather is imposed as a flat rate. See Tax Code 133.01 and now-repealed V.T.C.S. art. 7336 (predecessor to section 33.01 of the code). Accordingly, we conclude that the July 1 date set forth in section 33.07, on which date the penalty attaches, is mandatory. Section 33.07 does not provik anymeanswhereby a taxing unit or an appraisal district mayextend the July 1deadline for paymentwithout incurring the penalty or select a different date onwhich the penalty attaches.

The penalty provided by section 33.07 of the

TaxCodeapplies to ;a11taxes currently delinquent in the year in whi:h the penalty is imposed; its application is limited to the years including and subsequent to the z.doption of this code provision by the appropriate taxing unit or appraisal district. Tbe Jul:r 1 date set forth in section 33.07 of the Tax Code, the date on which the penalty attaches, is mandatory; section 33.07 does not provide anymeanswhereby ataxing unit or an appraisal district mayextend the July 1 date or select a differen’: date on which the penalty attaches.

JIM HATTOX Attorney General of Texas
TOM GREEN First Assistant Attorney General
DAVIDR. RICHARDS Executive Assistant Attorney General
RICKGILPIN Chairman, Opinion Committee Prepared by Robert Gray Assistant Attorney General

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### RonorableStanSchlueter -Pags6 (JM-265)

APPROVRD: OPINIONCOMMIlTRE
Rick

### Gilpin.Chairman ColinCarl SusanGarrison Jennifer

Riggs

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