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# The Attorney General ofTexas
February 25. 1982

MARK WHITE Attorney General

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**200 MaIn** **Plaza. sure**  **400 San** **Anlonio. TX.** **76205.2797 5w225-4191**  Honorable John F. Perry Opinion No.MI+451 Hopkins County Attorney Courthouse Re: Section 11.161, Property Sulphur Springs, Texas 75482 TaxCode

DearMr. Perry:

In 1981. the legislature amendedthe Property TaxCodeby adding section 11.161, which provides that “[a111individual is entitled to an exemption from taxation of implements of farming or ranching that he
owns and uaes in the production of farm or ranch products.” Acts 1981, 67th Leg., 1st C.S., ch. 13. section 32. at 127. YOUask a series of twelve questions, which fall into three principal categories, concerning what items are entitled to exemption, vho is eligible **to** receive the exemption, and what limftations apply to the granting of it. Welimit our discussion to the specific questions of statutory construction that you raise.

Section 11.161 was adopted pursuant to authority granted by article VIII, section 1of the Texas Constitution, which provides, in pertinent part: “[T]he Legislature by general lav mayexempt all or part of the personal property homestead of a family or single adult,

‘personal property homestead’ meaning that personal property exemptby law from forced sale for debt, from advalorem taxation.” (Emphasis added). Article XVI, section 49of the Texas Constitution authorizes the legislature, bygeneral law

, to protect fromforced sale aportion of the personal property of heaas of families andof unmarried adults. male andfemale. Article 3836. V.T.C.S.. specifies the property which the legislature has determined is exempt fromforced sale:

(a) Personal property (not to exceed an .aggregate fair market value of $15.000 for each single, adult person. not a. constituent of a family, or $30,000 for a family) is exempt from attachment, execution and every type of seizure for the satisfaction of liabilities. except for encumbrances properly fixed thereon, If included amongthe following:

D. 1555Honorable John F. Perry - Page 2 (kw-451)

(2) all of the following which are reasonably necessary for the family or single, adult person, not a constituent of a family: implements of farming or ranching....

Your first six questions are concerned with what items of personal property are entitled to exemption, andare as follows:

1. Should the tens implements be construed
so as to include’any andall types of equlpnt or machinery that could be used in an agricultural environment?

2. Wouldadairy operation be entitled to an exemption from taxation for all types of equipment and machinery used in such operation, including, but not limited to. milking, storage, feed and sanitation equipment?

3. Would vehicles utilized in agricultural products, such as trucks andtrailers. be included in this exemption?

4. Wouldequipment used to obtain water from wells or for i.rrigation be exempt?

5. Wouldpermanent structures such as silos
or feed bins andtanks utilized for the prc-rluction of forage and feed for livestock and poultry and used exclusively by the producer to feed his ovn stock be exsmpt?

6. Could other structures such ss barns or sheds used for storage of forage and feed be considered implements?
Neither article XVI, section 49 of the Texas Constitution nor article 3836, V.T.C.S.. define what constitutes an “implement of farming or ranching.” The predecessor to article 3836, V.T.C.S., now-repealed article 3832. V.T.C.S.. employed **the** phrase “implements of husbandry.” “Husbandry” is ordinarily applied t: mstters involving agriculture. Stuart **v.** State, **563** S.W.Zd 398, 399 (Ark. 1978).

“Husbandry” has been defined to be “the business of s farmer. comprehending agriculture or tillage of the grczzd. the raising. managing, and fattening of cattle and other ?znestic animals, the msnagement of the dairy and whatever the land ;reduces
,‘I and is equivalent to agriculture in its general sense. Itions v..Lovell. 7 Heisk. 510, 516 (Term. 1872). Seealso State ex rel. Boynton v. Wheat Fanning Company. 22 P..2d 1093 (Kan. 1933). Therefore. an item which~..-

., . Honorable John F. Perry - Page 3 (MW-451)

was an “implement of husbandry” under article 3832 would nowbe an implement of farming or ranching underarticle 3836.

IIIconstruing article 3832, courts declared that determination as towhat constitutes an implement of husbandry is aquestion of fact to be resolved on a case-by-case basis. HenryV. McLean. 1White 6w. 609 (Tex. Ct. App. 1881). Courts focused on the use to which an item is put, HickmanV. Hickman, 234 S.W.Zd 410 (Tex. 1950). declaring

“implements of husbandry” to include “all implements used by the farmer in conducting his farming operations, not only those that he might use directly, but those used by his tenants and employees.” Smith v. McBryde. 173 S.W. 234, 235 (Tex. Civ. App. - San Antonio 1915, no writ). In construing article 6675a-1, V.T.C.S., .which governs vehicle registration and provides an exemption from registration for “implements of husbandry,” this office declared that the test wss one of primary design andprimary use or purpose: “It IS fundamental then, that whether a vehicle IS an ‘implement of husbandry’ mustbe determined by the primary design andprimary use or purpose to which the vehicle is put and turns on the ‘facts of any particular case. “’ Attorney General Opinions U-1254 (1972) (four-wheel riding lawn mowernot an “implement of husbandry” within article 6675a-1, V.T.C.S;~. because not used primarily for agricultural purposes), citing Allred w. J.C. Engelman. Inc., 61 S.W.2d 75 (Tex. 1933) (water truck designed for aole purpose of carrying water for irrigation and gasoline carrier truck designed and used for sole purpose of providing gasoline to tractors in orchards and fields were

“implements of husbandry” within article 6675a-I. V.T.C.S.); M-1288 (1972) (piece of equipment designed andused primarily for applicaton of fertilizer and herbicides an “implement of husbandry” within article 66758-1, V.T.C.S.). In Reaves V. State, 50 S.W.2d 286, 287 (Tex. Grim. App. 1931). the Texas Court of Criminal Appeals construed the phrase in the context of article 827(a). section 3(a). V.T.C.S.. which exempted from length limitations placed upon motor vehicles implements of husbandry temporarily propelled or movedupon the public highways. The court stated that “[aIn implement of husbandry is something necessary to the carrying on of the business of farming, **etc.,** without which the work cannot bedone.” Employing such tests, courts variously held that planting machines. SmithV. McBryde. supra, cultivators, plows. stalk cutters. riding planters. Seiler v. Buckholdt, 293 S.W. 210 (Tex. Civ. App. - SanAntonio 1927. no writ). tractors, Wollner V. Darnell. .94 S.W.2d 1225 (Tex. Civ. App. - Amarillo 1936, nowrit), combines, beehives, and trailer chassis, Hickmanv. Hickman. 220 S.W.Zd 565 (Tex. Civ. APP.- Eastland). aff ’d. 234 S.W.2d 410 (Tex. 1950), were “implements of husbandry.” Onthe other hand, courts also held that a pickup truck used,~primarily for purposes of trensporcation wasnot exempt as an “Implement of husbandry,” although. under the statute then In effect, It was exempt as a “carriage.” HickmanV. Hickman. supra...

We construe your first question to consist of two related questions: Whether sole or complete ownership of property uponwhich
a claimant seeks exempt status is required, and whether a claimant must possess al.1 of the property necessary to the pursuit of the agricultural business in order to qualify. Weconclude that sole or complete ownership of the implements of husbandry is unnecessary. Article 3836(b) and (c). V.T.C.S.. both refer to “

. ..property described in [s]ubsection (a) of this article [which lists the kinds of property exempt from forced sale], or any interest therein.” (Emphasis added). Webelieve that the legislature clearly intended honorable John F. Perry - Page 4 (MW-451)

Courts also held that a mill and gin, Cullers v. James, 1 S.W. 314 (Tex. 1886). andawindmill andthree gates, all unused andunerected. HickmanV. Hickman,s\rpra. were not exempt; such items would be exempt only if they were attached as fixtures to realty which occupied the status oftahomestead.

From the cases, we can abstract two propositions. First, that which is intended to be attached to realty, such as a windmill, a gate, amill, or a gin, is not an“implement.” Courts would probably hold, for example, that structures such as barns. sheds, silos, and tanks are not implements under this statute. However, tools and machines such as combines, tractors, and milling machines would probably fall within the statute. Second, the determination as to which implements are “implements of husbandry” is a fact question to be determined on a case-by-case basis by employing a test of primary design andprimaryr’use. Weare not empoweredto make determinations of fact; hence, wemust decline to answer your questions concerning specific items of property.
Yournext four questions center onwhois eligible to receive the exemption. Section 11.161, Property Tax Code, employs the term

“individual,” while article XVI, section 49of the Texas Constitution
uses the phrase I’

... all heads of families, and ,also of unmarried adults, male and female.” Article 3836. V.T.C.S., makes eligible (1

...each single, adult person, not a constituent of a family, or... a family.” Clearly the class of persons embraced by section 11.161, Property Tax Code, could not be greater than the class embraced by article XVI, section 49 of the Texas Constitution and article 3836, V.T.C.S. Wemusttherefore turn to these provisions to determine just whomayqualify under section 11.161.

first question under this topic is:
Would the term individual as used in the [code provision] be limited or defined to include only persons in the agricultural business that have sole or complete ownership of all the property necessary for pursuit of said business?Honorable JohnF. Perry - Page 5 (MW-451)

that any recognizable legal interest would be sufficient to impress uponpersonal property the character of apersonal’property homestead. We further conclude that the legislature did oot intend that a claimant mustpossess all of the implements of husbandry necessary for the pursuit of an agricultural business before he mayqualify any implements. See, e.g., Wollner v. Darnell. suprs (where teoant farmer whohadrental contract upon 320 acres of land andpossessed only one tractor andnohorses, court held that, since claimant was unable to farmwithout the tractor, that tractor was exempt as an implement of husbandry).

Wenote again that the determination of whether any item of personal property is an“implement of husbandry,, is aquestion of fact and that the term includes “all implements used by the farmer In conducting his farming operations, not only those that he might use directly, but those used by his tenants and employees.,, Smith v. McBryde. supra, at 235. Since someone not engaged in farming or ranching maynot avail himself of the statute, Tucker v. Napier, 1 White hW. 365 (Tex. Ct. App. 1878); Attorney General Opinion U-1254 (1972). adetermination must first be madeas towhether a claimant is ectually engaged in farming or ranching. If he is, then anyitems of personal property whose “primary design and primary use or purpose”
are.as an implement for farming or ranching for purposes of article 3836. V.T.C.S.. and. concomitantly, section 11.161, Property TaxCode, would qualify.

Your second question under this topic is:
Would an individual or singular person who has incorporated be entitled to anexemption?

Weconclude that a corporation, regardless of the type, Is not entitled to an exemption. While the term “Individual” in section 11.161 of the Property Tax Code is not expressly limited to “natural persons ,” the reach of article XVI. section 49 of the Texas Constitution andarticle 3836, V.T.C.S.. clearly **is.** Exemptions from forced sale were unknownto the commonlaw and are purely statutory creations. Pickens v. Pickens, 83 S.W.2d 951 (Tex. 1935). Underthe
commonlaw. a debtor was deprived of all of his property and then, frequently, imprisoned. Smith v. McBryde, supra. The purpose of exemption laws is to afford protection to aperson in the pursuit of a lawful occupation and to assure to the family **of** the debtor the shelter of a home, the means of securing a livelihood. and the earnings of the head of the household. Rodgers v. Ferguson, 32Tex. 533 (1870). Exemption lavs were passed not merely for the purpose of protecting the poor from creditors whowould deprive the debtor and his family of their meansof subsistence, but also to protect persons in the pursuit of legitimate occupations in order that they not become charges on the public. Gaddyv. First National Bank, 283 **S.W.** 277.Eonorable JohnF. Perry - Page6 (MI-4511

280 (Tex. Civ. App. - Beaumont1923. nowrit). Evena cursory reading of article XVI, section 49 of the Texas Constitution, article 3836, V.T.C.S., and the cases decided thereunder, make it clear that the exemption reaches only natural persons.
Your third question under this topic is:
Would a partnership of any nature, including a family partnership, be excluded from the benefits of this exemption?

Weconclude that partnerships, regardless of the type, are not entitled to claim this exemption. With the adoption of the Uniform Partnership Act, article 6132b. V.T.C.S.. the Texas Legislature adopted the so-called “entity” theory. as opposed **to** the “aggregate” theory of partnerships. In other words. for most purposes, a partnership is an entity legally distinct from Its partners, rather than the assresate of its Partners acting as individuals pursuant to a contract. --Se; V.T.C.S. -art. 6132b. -91. Comment;

. see generally Bromberg, TheProposed Texas Uniform Partnershi-, 14Southwestern LawJournal 437 (1960); Bromberg. Texas Uniform Partnership Act -- The Enacted Version, 15 Southwestern LawJournal 386 (1961). Thus the creditors of an individual partner cannot seize partnership property, nor can a partner claim a homestead or exemption from forced sale in partnership property against partnership creditors. V.T.C.S.. art. 6132b, section 25(2)(c). See Kelley v. Shields, 448 S.W.2d 135 (Tex. Civ. App. - San Antonio-69. writ ref ’d n.r.e.) (under Uniform Partnership Act. widownot allowed to claim as exempt property tools of trade of a partnership of which her late husband had~been a partner). Therefore, nopartnership is entitled to claim anexemption under section 11.161 for “implements of husbandry.”

Your fourth andfinal question under this topic is:
Wouldan Individual whois a citizen of a foreign country beeligible for the exemption?

Citizens of a foreign country are clearly liable for advalorem taxation on real and personal property which has acquired taxable status in a taxing jurisdiction In Texas. The question is whether a citizen of a foreign country is also entitled to an exemption under section 11.161. We conclude that he is so entitled. The Texss SupremeCourt has declared that aliens are entitled to the benefit of state exemption laws, Cobbs v. Coleman, 14Tex. 594 (1855). as are nonresidents. Hell v. Indian Live-Stock Company, 11 S.W. 344 (Tex. 18891. See also Carroll v. First State Bankof Den&on. 148S.W. 818 (Tex. Clv. App. - Dallas 1912. no writ). We conclude that, since article XVI, section 49andarticle 3836, V.T.C.S.. reach the property of aliens andnonresidents, section 11.161 does aswell.

p. 1560Honorable JohnF. Perry - Page? (nW-451)

Your final topic is concerned with what limitations apply to the granting of the exemption. Your first question under this topic is:

Do the limits [set forth] in [article 3836, V.T.C.S.,] apply to [section 11.161. Property Tax Code]?

Article’ 3836 places 8 limitation of “$15,000 for each single, adult person, not a constituent of a family. or $30,000 for a family”
on the amountof personal property exempt from forced sale. It has been suggested that these limitations somehowdo not apply to the personal property exemption set forth in section 11.161. It has been suggested that section 11,161 exempts from ad valorem taxation, not the specific items which maybe exempt from forced sale by operation of article 3836, but Instead the clsss of items upon which article 3836 can operate. In other words, section 11.161 is thought to exempt simply the class of ‘properties reached by the phrase in article 3836

“implements of, farming or ranching.” without regard to any dollar limitation. In support of this interpretation, it is suggested that this view reflects the latent of the legislature whenthe section was passed, that, by use of the term “exempt” in both article VIII, section 1of the Texas Constitution andsection 11.161 of the Property Tax Code, the legislature chose to provide a total, as opposed to a partial. exemption. Wedisagree.

It is clearly the rule that, when a law is attacked as being unconstitutional, there is a presumption that the law Is valid and doubts as to its constitutionsllty should be resolved in favor of its constitutionality. Smithv. Davis, 426 S.W.Zd 827 (Tex. 1968). If an act admits of twoconstructions, it must not be interpreted in away which will render it unconstitutional and void. State v. Shoppers World, Inc., 380 S.W.2d 107 (Tex. 1964). Section 11.161 of the Property TaxCodedoes not on its face contain the dollar limitations contained in article 3836, V.T.C.S. If wewere to interpret section 11.161 as not including the limitations. wewould be constrained to declare the section unconstitutional. Wetherefore interpret it to include by implication the limitations set forth In article 3836. V.T.C.S., andhold It constitutional.

Article VIII, section 1 of the’ Texas Constitution provides in pertinent part: “[T]he Legislature by general lawmayexempt all or part of the personal property homestead ot a family or single adult,

‘personal property homestead’ meaningthat personal property exemptby law from forced sale for debt, from ad valorem taxation.” (Emphasis added). In other words. the legislature mayexempt from ad valorem taxation all or part (i.e.. grant either a “partial” or a “total” exemption) of the personal property exempt by lawfrom forced sale for debt. On the other hand, it clearly cannot enlarge the class of properties which it is empowered to exempt as set forth in article

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_‘, Honorable John F. Perry - Page8 (MW-451)

VIII. section 1. Dickison v. Woodmenof the World Life Insurance Society. 280 S.W.2d 315 (Tex. Civ. App. - San Antonio 1955. writ ref‘d). hv attemot todoso is void. Tex. Const. art. VIII. section 2(a). Se&;ion 111161 of the Property Tax Code does not purport to expand the class of properties presently exempt from forced sale under article 3836.

If the legislature hadwished to exempt implements bf farming and ranching without regard to dollar limitations, it could have proposed appropriate language for inclusion in article VIII, section 1. For example. it could have proposed language exempting all or part of the class of properties upon which the personal property homestead provisions operate. Or, in the alternative, the legislature could have amended article 3836. V.T.C.S., by removing the dollar amount limitations. now-repealed

Compare article 3832, V.T.C.S. (the predecessor to article 3836. which placed nodollar amountlimitations
on the personal property homestead exempt from forced sale). Butthe legislature did not doeither.

The law does not favor tax exemntions. since they are the antithesis of equality and uniformity.- Hilltop Village; Inc. v. Kerrville Independent School District, 426 S.W.2d 943 (Tex. 1968). Constitutional and statutory provisions creating them are to be construed narrowly with all doubts resolved against granting the exemption. City of Longviswv. Marl&am- McReeMemorial Hospital, 152 S.W.Zd 1112 (Tex. 1941). Therefore, weInterpret the statute in the
more restrictive wayandconclude that the dollar amount limitations set forth in article 3836, V.T.C.S.. also apply to section 11.161 of the Property Tax Code.

Your last question under this last topic is:
Would an individual holding equipment and machinery in an~agricultural area in which he is

“OK currently engaged, evan though he still pursues nnother type of agricultural useage. be entitled to an exemption?

Weundrrstnnd you to ask whether an individual is entitled to an exemption on implements of husbandry that he owns even though he is not then actually using such Implements in farming or ranching. We turn again to the cases decided under article 3836 and its predecessor, now-repealed article 3832. It is clear that a claimant for exemption may be engaged in other work besides farming or ranching. Seller v. Buckholdt. ~upr3; Smithv. Hcgryde. supra. With respect to the exemption for tools of the trade, apparatus, andbooks, it was held that there is no requirement that the claimant be engaged in the particular trade or profession at the time of the levy; it was sufficient that the claimant belonged to the trade or profession andHonorable JohnP. Perry - Page9 (klw-451)

intended to use the nrticles therein. HcBrayerv. Cravens, Darganand Roberts, 265 S.W. 694 (Tex. 1924). By analogy ue conclude that a claimant whois not engaged In farming or ranching for a temporary period, but retains the requisite intent, haa not abandoned hia personal property homestead and mayclaim an exemption under section 11.161. See Seiler v. Buckholdt. suprcl; Attowayv. Still, 2Poaey 697 (Tex. Comm’nApp. 1879).

SUMMARY

1. The phrase “implements of farming or ranching” under section 11.161 of the Property Tax Code Includes those items of equipment or machinery whose primary design andprimary use or purpose is that of an implement used by a farmer
or rancher in conducting his farming or ranching operations; such a determination turns on the facts of any particular case. “Implements of husbandry” cannot as a matter of law include improvement to real property or fixtures; hence, barns, silos and sheds would not qualify. Items which are neither fixtures nor improvements to real property, such as tractors, cultivators. and trailers, could qualify, depending upon the fact situation in each case.

2. Section 11.161 of the Property Tax Code reaches; vith the term “individual,” the same persons reached by the exemption from forced sale provisions, article XVI, section 49 of the Texas Constitution and article 3836, V.T.C.S. Neither partnerships nor corporations can qualify; a claimant mustbe anatural person.

3. The dollar limitation restricting the amount of personal property subject to the exemption provisions as set forth in article 3836, V.T.C.S.. apply also to section 11.161 of the Property TaxCode.

- MARK WHITE Attorney General of Texas

JOHN W.FAINTER,JR. First **Assistant** Attorney GeneralHonorable John F. Perry - Page 10 (nw-451)

RICHARD

E. GRAYIII Executive Assistant Attorney General Prepared byJimHoeflinger Assistant Attorney General

APPROVED: OPINIONCOMMITTEE

SusanL. Garrison, Chairman Jon Bible Rick Gilpln Patricia Hinojosa Robert Lattimore JimMoellinger Bruce Youngblood