Court Opinion

ID: 4131156
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:12:36.261957+00
Date Added: 2024-06-11T14:33:22.414444
License: Public Domain

The Attorney         General of Texas
                                                April 23, 1985
JIM MATTOX
Attorney General

Supreme Court Building         Honorable Stan Schlwter               Opinion No.JM-311
P. 0. BOX 12549
Austin. TX. 79.711. 2548
                               Chairman
5121475-2501                   Ways and Means Commitwe               Ret Constitutionality of House
Telex 910/974-1397             Texas Rouse of Representatives        Bill No. 1751, Acts 1985. Sixty-
Telecopier   51214750286       P. 0. Box 2910                        ninth Legislature
                               Austin, Texas   78763
714 Jackson. Suite 700
Dallas. TX. 75202&B            Dear Representative S'chluetet:
214l74289u
                                    You ask about the constitutionality of House Bill No. 1751. Acts
                               1985, Sixty-ninth L~eSislature. which provides for an amnesty period
4824 Alberta Ave., Suite 180
El Paso, TX. 799052793
                               for the payment of tielinquentproperty and local sales taxes without
9151533-3494                   the imposition of a penalty. Specifically, you wish to know whether
                               House Bill No. 1751 violates either article VIII, section 10 of the
                               Texas Constitution which forbids the legislature from releasing any
1001 Texas, Suite 700          taxpayer from the payment of state or county taxes unless specifically
Houston, TX. 77002-3111
                               permitted therein, or article III, section 55 of the Texas
71312255886
                               Constitution which prohibits the release or extinguishment of an
                               "indebtedness, liability or obligation of any corporation or
806 Broadway, Suite 312        individual to this State . . ." or any other political subdivision.
Lubbock. TX. 79401.3479        We conclude that it violates neither.
8081747.5239

                                    House Bill No. 1751 contains the following in pertinent part:
4309 N. Tenth. Suite S
McAllsn, TX. 795Ol~tSS5                  ARTICLE 1.   AMNESTT FOR PROPFXTY TAX PENALTIES
5t2lSS2-4547

                                            SECTION 1. PROPERTY TAX AMNESTY PROGRAM
200 Main Plaza, Suite 400                (a) If a property owner pays in full a delinquent
San Antonio. TX. 78205-2797              property tax and all outstanding interest on the
51212254191                              tax during the period beginning September 1, 1985,
                                         and ending; November 30, 1985, all penalties
An Equal Opportunityl
                                         incurred by the delinquent tax under Sections
Affirmative Action Employer              33.01 and 23.07, Tax Code, are extinguished.

                                            . . . .

                                            SECTIOK' 2. PENALTIES IN LITIGATION OR REDUCED
                                         TO JDDGNENT NOT AFFECTED.     Section 1 of this
                                         article dcsesnot apply to:

                                                         p. 1417
                                                                                 .

Honorable Stan Schlueter - Paw! 2                     (JM-311)
                                                                                     \

             (1)     penalty  aincurred by a delinquent
          property tax if a suit to collect the tax is
          pending on September 1, 1985; or

             (2)  a penalty jocluded in a judgment rendered
          before September 1, 1985, in a suit to collect a
          delinquent property tax.

             .       .    .       .

          ARTICLE 2.                      AMNEST!! FOR LOCAL SALES AND USE TAX
          PENALTIES

             SECTION 1. LOCK    SALES AND USE TAX AMNESTY
          PROGRAM. (a) If ZI person pays in full a delin-
          quent sakes and we tax imposed under the Local
          Sales and Use Tax Act (Article 1066~. Vernon's
          Texas Civil Statutes), Section 11B. Chapter 141,
          Acts of the 63rd Legislature, Regular Session,
          1973   (Article 1118x, Vernon's      Texas   Civil
          Statutes), or Sect1.m 16, Chapter 683, Acts of the
          66th Legislature, Regular Session, 1979 (Article
          1118~. Vernon's Texas Civil Statutes) and all
          outstanding intermt on the tax during the period
          beginning September 1, 1985, and ending November
          30, 1985, all pensl.t:ies
                                  incurred by the delinquent
          tax under those lam: are extinguished.

                 .       * .          .

              SECTION 2. PEEtSLTIESIN LITIGATION OR REDUCED
           TO JUDGMENT NOT AFFECTED. Section 1 of this
           article does not apply to:

              (1) a penalty j~ncurred by a delinquent sales
           and use tax if II suit to collect the tax is
           pending on Septe&?:r 1. 1985; or

              (2) a penalty included in a judgment rendered
           before September 1, 1985. in a suit to collect a
           delinquent sales and use tax.

                 . . . .

              SECTION 4. CERTAIN PENALTIES NOT AFFECTH).
           This article does not affect penalties on
           delinquent taxes kposed under the Limited Ssles,
           Excise, and Use T.z:rAct (Chapter 151. Tax Code).
           (Emphasis added).

                                                   p. 1418
    Aonorable Stan Schlueter - Page 3 (JM-311)
,

         Article VITI, section 10 of the Texas Constitution provides the
    following:

              110.   Release from   payment of taxes

                 Sec. 10. The Legislature shall have no power
              to release the inhabitants of, or property in. any
              county, city or tom from the payment of taxes
              levied for State XC county purposes, unless in
              case of great public calamity in any such county,
              city or town, when such release may be made by a
              vote   of  two-thirds of each House of the
              Legislsture.

         Article III, section 55 of the Texas Constitution provides the
    following:

              555. Release or er.tinguishmentof indebtedness to
              state, county, subdivision or municipal corpora-
              tion

                 Sec. 55. The Legislature shall have no power
              to release or exl:inguish. or to authorize the
              releasing or extinguishing, in whole or in part,
              the indebtedness, liability or obligation of any
              corporation or indjkdual, to this State or to any
              county or defined subdivision thereof, or other
              municipal corporation therein, except delinquent
              taxes which have been due for a period of at least
              ten years. (Emphasis added).

         And article III, section 56 sets forth the following in pertinent
    part:

              556.   Local and special laws

                 Sec. 56. The Le:gislature shall not, except as
              otherwise provided in this Constitution, pass x
              local or special lm!, authorizing:

                 . . . .

                 Remitting fines, penalties and forfeitures. and
              refunding   moneys    legally   paid   into    the
              treasury. . . . (:?nphasisadded).

         The issue before us is whether a penalty imposed upon a taxpayer
    for failing to pay a tax 181 itself a "tax" for purposes of article
    VIII, section 10 or is an “indebtedness. liability or obligation" for

                                       p. 1419
Honorable Stan Schlueter - Page 4 (JM-311)
                                                                         .

purposes of article III. sect~lon55 and cannot thereby be released.
On the authority of Jones v. Williams, 45 S.W.2d 130 (Tex. 1931).
[hereinafter Jones] we con&&   that it is not.

     At issue in Jones was the?constitutionality of a statute which in
all material resz        tracks Bouse Bill No. 1751. That statute
provided

          [t]hst all interest:and penalties accrued and as
          now fixed by law, D'D all . . . taxes . . . other
          than [taxes of] in,corporated cities and towns,
          delinquent up to and including October 20, 1931,
          shall be, and the same are hereby released,
          provided said taxes are paid on or before January
          31, 1932.

Jones, supra, at 131. The court first rejected the assertion that the
statute could be sustained by reliance upon article VIII, section 10.
If such exactions imposed upon taxpayers for failing timely to tender
payment of accrued taxes are themselves "taxes!' for purposes of
article VIII, section 10, then the court, after concluding that the
statute at issue was not posed pursuant to the "great public calamity"
requirement, would perforce have struck down the statute. Because it
did not, it is clear that the court did not conclude that such
exactions constitute "taxes."

     Nor did the court inJones
                          ---   consider such exactions an instance of
an "indebtedness, liability, or obligation" for purposes of article
111, section 55. If the court had concluded that such exactions were
in reality interest eo nomine~imposed by the state as compensation for
the detention of its money rather than view such exactions as a form
of "penal interest," the statute would have run afoul of article III,
sections 51 and 55. The court set forth the history surrounding
attempts to enforce public revenue and tax collection procedures and
declared

          [o]n the whole, we h,aveconcluded that the imposi-
          tions made for deli,nquency in rendering property
          for taxation, ani. for failure to pay taxes,
          whether   these    impositions   are   denominated
          'penalties,' 'intere,st,''forfeitures,' or whether
          prescribed without definition or name, are all in
          reality penalties imposed for delinquency or
          failure of duty, ,nld all enacted in and of the
          state's revenue, rather than as charges made by
          the state for the use or detention of its money.
          In other words, t!ae exactions are 'penalties'
          rather than 'inte.cest' in the commercial or
          statutory sense.
                         --ij:mphasis in original).

                                p. 1420
    .                                       (JM-311)
        Aonorable Stan Schlueter - Pa&e 5
.

        Jones, supra. et 133. The court concluded that

                  [v]e think the act is constitutional for the
                  reason that the [Ilegislature has the power to
                  release, cancel, annul, or suspend penalties
                  previously accrued for delinquent taxes, so long
                  as these penalties have not been reduced to final
                  judgment.

        -Id.
             And fiaally, in respd&    to the claim that the statute at issue
        vlolated article III, section :36,which prohibits the legislature from
        passing certain local and spr:ciallaws remitting penalties, the court
        concluded that the legislature by implication could remit such
        penalties by general law.

                     The only express limitation on the right of the
                  Legislature to remit penalties is that specified
                  in section 56 of mrticle 3, which prohibits the
                  Legislature from ‘mmitting fines, penalties, and
                  forfeitures by seecial law.'        The necessary
                  implication from the language used is that ‘fines,
                  penalties and forfeitures may be remitted by
                  general laws, suet. as the one before us. . . .
                  Nor do we think that the Legislature is pro-
                  hibited, either expressly or by necessary implica-
                  tion. by the langurge of any other sectioc of the
                  Constitution. If ,LI: be said that the'provisions
                  of sections 51 and 55 apply to penalties imposed
                  for tax delinquent?, then, for the same reason, we
                  would be compelled to say they apply to all
                  classes of penaltir:s.and to fines and forfeitu=
                  as well.     Such 1; constnii        would render
                  meaningless the pcraer clearly reserved to the
                  Legislature by the ‘termsof section 56 of article
                  3, to release ‘fines, penalties and forfeitures’
                  by general law.    [Citations omitted). (Emphasis
                  in original).

        Jones, s_upra,at 137.

             Accordingly, we ‘conclude that House Bill No. 1751 providing an
        amnesty period for the payment ,of delinquent property and local sales
        taxes without the imposition of a penalty violates neither article
        VIII, section 10 nor artic!.a III, sections 51 and 55 of the Texas
        Constitution.

                                        p. 1421
Eonorable Stan Schlueter - Paga 6     (JR-311)
                                                                      .

             House Bill No. 1751, Acts 1985, Sixty-ninth
          Legislature, which provides an amnesty period for
          the payment of delin,quentproperty and local sales
          taxes without the imposition of a penalty, vio-
          lates neither article VIII, section 10 nor article
          III, sections 51 and 55 of the Texas Constitution.

                                       J
                                         Very truly yours

                                               A,
                                          JIM     MATTOX
                                          Attorney General of Texas

TOM GREEN
First Assistant Attorney General

DAVID R. RICRARDS
Executive Assistant Attorney %neral

ROBERT GRAY
Special Assistant Attorney Gentera

RICK GILPIN
Chairman, Opinion Committee

Prepared by Jim Moellinger
Assistant Attorney General

APPROVED:
OPINION COMMITTEE

Rick Gilpin, Chairman
Jon Bible
Colin Carl
Susan Garrison
Tony Guillory
Jim Noellinger
Jennifer Riggs
Nancy Sutton
Bruce Youngblood

                                    p. 1422