Court Opinion

ID: 4130751
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:08:00.423186+00
Date Added: 2024-06-11T14:35:13.997504
License: Public Domain

June 4, 1987

Honorable Mark W. Stiles               Opinion No. JM-718
Chairman
County Affairs Committee               Re: Whether a rice dryer used
Texas House of Representatives         in grain production qualifies as
P. 0. Box 2910                         farm machinery for purposes of
Austin, Texas   78769                  the Tax Code

Dear Representative Stiles:

     Article VIII, section 19a. of the Texas Constitution provides
that "[i]mplements of husbandry that are used in the production of
farm or ranch products are exempt from ad valorem taxation." The
present version of section 11.161 of the Tax Code tracks specifically
the language of the constitutional exemption. You ask whether a rice
dryer owned and operated by a rice farmer and presumably used in rice
production, as opposed to processing, falls within the constitutional
and statutory provisions. The determination as to whether any item of
property is tax exempt involves a factual determination which is
inappropriate in the opinion process. We can, however, state the
applicable test that a chief appraiser or appraisal review board would
invoke when either makes such a determination. If a rice dryer is an
implement of husbandry, as opposed to a fixture, and if it is used in
the production of farm products, as opposed to the processing of farm
products, it would fall within article VIII, section 19a, of the Texas
Constitution and section 11.161 of the Tax Code and be exempt from ad
valorem taxation. If not, it would be taxable.

     In 1981 the legislature amended the Property Tax Code by adding
the original version of section 11.161, which exempted "implements of
farming or ranching." Acts 1981, 67th Leg., 1st C.S.. ch. 13, section
32. at 127.     Section 11.161 originally was adopted pursuant to
authority granted by article VIII, section 1, of the Texas Constitu-
tion, which provides, in pertinent part:      "[Tlhe Legislature by
general law may 'exemptall or part of the personal property homestead
of a family or single adult, 'personal property homestead' meaning
that personal property exempt by law from forced sale for debt, from
ad valorem taxation." Article XVI, section 49, of the Texas Constitu-
tion authorizes the legislature, by general law. to protect from
forced sale a portion of the personal property of heads of families
and of unmarried adults, male and female. Chapter 42 of the Property
Code specifies the property that the legislature has determined is
exempt from forced sale.

                                 p. 3336
Honorable Mark W. Stiles - Page 2   (JM-718)

     In 1981, article 3836, V.T.C.S., the predecessor to chapter 42,
limited to a specified dollar amount the personal property exempt from
forced sale. For that reason, this office concluded in Attorney
General Opinion MW-451 (1982). that the implements of farming and
ranching exempt from ad valorem taxation were likewise limited to
specific dollar amounts. Because this limitation was thought to
impose a hardship upon farmers and ranchers and for other reasons not
relevant to the instant request, article VIII, section 19a, of the
Texas Constitution was proposed and adopted in November 1982. Acts
1982, 67th Leg., 2nd C.S., S.J.R. No. 8, 91. at 50. Section 11.161 of
the Tax Code, was amended subsequent to the adoption of the
constitutional amendment, Acts 1983, 68th Leg., ch. 851, 07. at 4823,
and the phrase "implements of farming or ranching" was changed to
"implements of husbandry."

     In Attorney General Opinion NW-451, this office noted that
neither article XVI, section 49, of the Texas Constitution nor article
3836, V.T.C.S., defined what constitutes an "implement of farming or
ranching."   The predecessor statute to article 3836, V.T.C.S.,
now-repealed article 3832, V.T.C.S., employed the phrase that now
appears in article VIII, section 19a. of the Texas Constitution and
section 11.161 of the Tax Code, i.e., "implements of husbandry."
"Husbandry" is ordinarily applied Gtters        involving agriculture.
Stuart v. State, 563 S.W.2d 398, 399 (Ark. 1978). "Husbandry" has
been defined to be "the business of a farmer, comprehending agri-
culture or tillage of the ground, the raising, managing, and fattening
of cattle and other domestic animals, the management of the dairy and
whatever the land produces," and is equivalent to agriculture in its
general sense. Simon8 v. Lovell, 7 Heisk. 510, 516 (Term. 1872). See
also State ex rel. Boynton v. Wheat Farming Company, 22 P.2d 1093
(Kau. 1933). This office concluded in Attorney General Opinion
NW-451, that an item that was an "implement of husbandry" under
article 3832, V.T.C.S., would be an "implement of farming or ranching"
under article 3836, V.T.C.S. Likewise, we concluded chat what would
be an "implement of farming or ranching" under article 3836, V.T.C.S.,
would be an "implement of farming or ranching" under section 11.161 of
the Tax Code. We now conclude that what was an "implement of farming
or ranching" under the previous version  of section 11.161 of the Tax
Code, would be an "implement of husbandry" under the amended section
11.161 of the Tax Code. We will turn then to now-repealed article
3832, V.T.C.S.. and the cases decided thereunder, as well as other
judicial constructions of "implements of husbandry," in order to
determine whether a court would hold that a rice dryer is an "imple-
ment of husbandry."

     In construing article 3832, V.T.C.S., courts declared that the
determination as to what constitutes an implement of husbandry is a
question of fact to be resolved on a case-by-case basis. Henry v.
McLean, 1 White & W. 609 (Tex. Ct. App. 1881). Courts focused on the

                             p. 3337
Honorable Mark W. Stiles - Page 3   (JM-718)

use to which an item is put, Hickman v. Hickman, 234 S.W.2d 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 registra-
tion for "implements of husbandry," this office declared that the test
was one of primary design and primary use or purpose:

          It is fundamental then, that whether a vehicle is
          an 'implement of husbandry' must be determined by
          the primary design and primary use or purpose to
          which the vehicle is put and turns on the 'facts
          of any particular case.'

Attorney General Opinion Nos. M-1254 (1972) (four-wheel riding lawn
mower not an "imolement of husbandry" within article 6675a-1.
V.T.C.S., because hot used primarily -for agricultural purposes),
citing Allred v. J. C. Engleman. Inc., 61 S.W.2d 75 (Tex. 1933) (water
truck designed for sole 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-1. V.T.C.S.); M-1288 (piece of
equipment designed and used primarily for application of fertilizer
and herbicides an "implement of husbandry" within article 6675a-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 827a, section 3(a), of the Penal Code which
exempted from length limitations placed upon motor vehicles "imple-
ments of husbandry, including . . . machinery temporarily propelled or
moved upon the public highways."       The court stated that "[aln
implement of husbandry is something necessary to the carrying on of
the business of farming, etc., without which the work cannot be done."

     Employing such tests, courts variously held that planting
machines, Smith v. McBryde, supra, cultivators, plows, stalk cutters,
riding planters, Seller v. Buckholdt, 293 S.W. 210 (Tex. Civ. App. -
San Antonio 1927, no writ), tractors, Wollner v. Darnell, 94 S.W.2d
1225 (Tex. Civ. App. - Amarillo 1936. writ dism'd), combines,
beehives, and trailer chassis, Hickman v. Hickman, 228 S.W.2d 565
(Tex. Civ. App. - Eastland), aff'd, 234 S.W.2d 410 (Tex. 1950). were
"implements of husbandry." On the other hand, courts also held that a
pickup truck used primarily for purposes of transportation was not
exempt as an "implement of husbandry," although, under the statute
then in effect, it was exempt as a "carriage." Hickman v. Hickman,

                              p. 3338
Honorable Mark W. Stiles - Page 4   (JM-718)

                                                                         -,

supra.  Courts also held that a mill and gin, Cullers v. James, 1 S.W.
314 (Tex. 1886). and a windmill and three gates, all unused and
unerected. Hickman v. Hickman, supra, were not exempt as implements of
husbandry.

     From the cited authorities, we can abstract two propositions.
First, that which is intended to be attached to realty, i.e., a
"fixture," such as a windmill, a gate, a mill, or a gin, is=       an
"implement." A "fixture" is broadly defined as something that is
personal in nature but so annexed to realty as to become a part of
realty; this does not mean that it must be impossible to remove the
fixture. Fenlon v. Jaffee, 553 S.W.2d 422, 428 (Tex. Civ. App. -
Tyler 1977, writ ref'd n.r.e.); see also Capital Aggregates, Inc. v.
Walker, 448 S.W.2d 830 (Tex. Civ. App. - Austin 1969, writ ref'd
n.r.e.). 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 and primary use.

     We have been informed that rice dryers are of such size and
weight that they must be bolted down and affixed to concrete slabs;
they are not movable. Also, it is the opinion of some knowledgeable
in this field that rice dryers are used in the processing of
rice, preparatory to its marketing and consumption; others who are
knowledgeable in this field claim that rice dryers are used in the
production of rice. The question as to whether a rice dryer is a
fixture or an implement and whether it is used in production or in
processing is a question of fact. We are not empowered to make
determinations of fact. We can state, however, the rules that a chief
appraiser or an appraisal review board would employ in order to make
such a determination. The phrase "implements of husbandry" under
section 11.161 of the Tax Code includes those items of equipment or
machinery whose primary design and primary 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 improvements 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.

                             SUMMARY

             The phrase "implements of husbandry" in article
          VIII, section 19a. of the Texas Constitution and
          section 11.161 of the Tax Code, includes those

                              p. 3339
    Honorable Mark W. Stiles - Page 5    (JM-718)

              items of equipment or machinery whose primary
              design and primary 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 improvements to real
              property or fixtures; hence, barns, silos, and
              sheds would not qualify. Items that are neither
              fixtures nor improvements to real property, such
              as tractors, cultivators, and trailers, could
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                                      -JlP-
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                                                            su9l.
               case. The question as to whether a rice dryer is
               an implement or a fixture and whether it is used
               in production or in processing is a question of
               fact whose resolution is inappropriate in the
               opinion process.

                                                     MATTOX
P
                                             Attorney General of Texas

    JACK HIGHTOWER
    First Assistant Attorney General

    MARY KF,LLER
    Executive Assistant Attorney General

    JUDGE ZOLLIE STRAKLEY
    Special Assistant Attorney General

    RICK GILPIN
    Chairman, Opinion Committee

    Prepared by Jim Moellinger
    Assistant Attorney General

                                    p. 3340