Court Opinion

ID: 4132282
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:24:57.224268+00
Date Added: 2024-06-11T14:33:51.372974
License: Public Domain

The Attorney            General of Texas
                         November   29,   1917

The Honorable   Johnny W. Actkinson              Opinion   No.   H-1098
Parmer County Attorney
P/O.   Box 286                                   Re:   Constitutionality
Farwell,  Texas   79325                          of House Bill 22 per-
                                                 mitting an income cap-
The Honorable     Oscar H. Mauzy                 italixation   valuation
Chairman,    Senate Committee   on               of open space land used
   Education                                     for agricultural    pur-
Senate Chamber                                   poses.
State   Capitol
Austin, Texas      78711

Dear   Mr.   Actkinson     and Senator     Mauzy:

      You have asked whether House Bill 22 of the 65th
Legislature,   Acts 1977, 65th Leg., ch. 318, at 847, codi-
fied as article 7150k, V.T.C.S.,    can be given effect
without the people voting on a companion    constitutional
amendment.    Each of you has submitted a brief with your
request and each has concluded   that a constitutional
amendment   is required before the bill can be effective.

      In Attorney General Opinion H-1022       (1977). which was
issued on July 6, 1977, we answered a similar inquiry from
our State legislative     leadership   in the negative.    Inasmuch
as the controlling    constitutional    provisions  and the con-
trolling   judicial decisions    remain the same,   our answer
must remain the same.      Once again we will set forward those
controlling   provisions   and decisions.

     The constitutional  questions surrounding                House Bill
22 involve article 8, section 1 of the Texas                 Constitution
which provides  in part:

              Taxation shall be equal and uniform.
              All property in this State, whether
              owned by natural persons or corpora-
              tions, other than municipal,   shall
              be taxed in proportion  to its value,
              which shall be ascertained   as may be
              provided by law.

                               p. 4504
The Honorable   Johnny W. Actkinson
The Honorable   Oscar H. Mauzy            - Page   2   (H-1098)

Article   8, section l-d of the Constitution    provides for special
assessment   of certain agricultural   land, but there is no dis-
pute that House Bill 22 provides     for a broader program than that
authorized   by article 8, section l-d.

      When House Bill 22 was introduced       it obviously   was the
view of the sponsors that a constitutional        amendment   would be
necessary   to authorize  this broader program of appraisal        of
open space land.     The bill provided    that it would become effec-
tive only if and when the companion       constitutional    amendment
was adopted.    In fact, the contingent     effective   date provision
was in House Bill 22 as it passed the House and Senate and as
it was referred to conference      committee.    It was only on May 25,
1977, when the conference     committee   reported its version of
the bill, that House Bill 22 emerged without being explicitly
dependent   on the passage of the constitutional       amendment.     House
Journal,   65th Leg., R.S., at 3922 (May 25, 1977).         The proposed
constitutional   amendment was defeated     in the House of Representa-
tives when it lacked one vote of obtaining        the one hundred votes
necessary   for passage.    House Journal,    65th Leg., R.S., at 3923
 (May 25, 1977).    The vote was 99 yeas, 48 nays and 3 not voting.

      Since House Bill 22 had, therefore,       been passed but the
companion   constitutional    amendment   had been defeated,    the legis-
lative leadership     requested   an opinion prior to the special
session on the constitutionality        of a program of valuation     of
agricultural    land on a basis other than market value.         While
the opinion request did not specifically        mention House Bill
22, the same constitutional       issue raised by that legislation
was involved.     Attorney General Opinion H-1022       (1977) was issued
on July 6, 1977, and stated that a constitutional          amendment
would be required before the Legislature         could provide for the
valuation   of one type of property at a smaller percentage          of
market value than other types of property.          Thereafter,   certain
legislators   and this office, all of whom had supported         the pro-
gram sought to be enacted by House Bill 22, urged that the sub-
ject of such a constitutional       amendment  be included in the call
of the special session which convened on July 11, 1977.            However,
the subject was not included by the Governor          in the proclamation
calling the special session.

      In spite of this clear history, additional       arguments  have
been advanced   in an effort to uphold the bill without the neces-
sity of a constitutional    amendment.     The arguments   can be grouped
under two general headings.      First, it is argued that such an
amendment  would not be necessary     because the income capitaliza-
tion method of valuation    provided by House Bill 22 is merely a
means of ascertaining   market value.      We believe House Bill 22
P. 4505
The Honorable   Johnny W. Actkinson
The Honorable   Oscar H. Mauzy          - Page   3   (H-1098)

indicates   on its face that something other than market value
is produced by the formulas set out in the bill.        While an in-
come capitalization    method of valuation may sometimes     be useful
in determining   market value, it is clear that House Bill 22
is designed   to produce a valuation   which does not represent
market value.    The bill provides that the value produced by the
income capitalization    method will be less than market value.
The assessor   is required to record both market value and an
income capitalization    value.   He is also required to roll back
the assessments   for the four years prior to a change in the use
of agricultural   land and to collect the taxes for those years
as if they had been levied on market value assessments.         Add-
itionally,   the legislative   debates leave no doubt that the
legislation   is designed to produce valuations    which do not
reflect market value.

      The other argument   is that an amendment    is unnecessary
because the Constitution    gives the Legislature    broad authority
to permit valuation    of property on a basis other than market
value.    This argument has been rejected by our highest legal
authority   on State constitutional   issues.   The Supreme Court
of Texas has addressed    the requirement   of article   8, section 1
of the Constitution.     The court said:

           Article   8, 9 1, of the Constitution,      con-
           tains this language:       "All property   in
           this state, whether owned by natural persons
           or corporations,    other than municipal,     shall
           be taxed in proportion      to its value, which
           shall be ascertained     as may be provided by
           law."   The rule announced     by that provision
           is "equality and uniformity."        To secure
           this "uniform and equal" taxation,       the same
           sentence prescribes     that the property of
           all persons and corporations,       other than
           municipal,   "shall be taxed in proportion
           to its value, which shall be ascertained         as
           may be provided by law."       This is a clearly
           expressed   purpose, that the officers charged
           with the assessment     of property shall in
           the manner prescribed     by law ascertain     its
           value.    "The value of the property is to
           be determined    by what it can be bought and
           sold for."    New York State v. Barker, 179
U.S. 287, 21 Sup. Ct. 124, 45 L. Ed. 194.
           If it means full market value when applied
           to the intangible    assets of a railroad
           company,   it means the same thing when
           applied to land, horses, etc.        The stan-
           dard of uniformity     prescribed   by the

                                 p. 4506
The   Honorable   Johnny W. Actkinson
The   Honorable   Oscar H. Mauzy        - Page   4     (H-1098)

            Constitution  being the value of the prop-
            erty, taxation cannot be in the same pro-
            portion to the value of the property      unless
            the value of all property   is ascertained   by
            the same standard.

Lively v. Missouri, K. & T. Ry. Co. of Texas,          120 S.W. 852,
856 (Tex. 1909) (Emphasis added).

      On numerous occasions  Texas courts have specifically
indicated  that it is settled that the Texas Constitution,    unless
amended by the people to provide otherwise,    requires appraisal
on the basis of market value.     Rowland v. C
S.W.2d 756, 760.(Tex. Comm'n App. 1928, jd
Richfield  Co. v. Warren Ind. Sch. Dist., 4
(Tex. Civ. App. -- Beaumont 1970, writ ref'd n.r.e.1; Dietrich
~~g~3~~~~~~;';'~~~lf~~e~~~."~~;,*A~~,t~-v~~~~~p~'~~6
S.W.2d 235, 237 (Tex. Civ. App. -- San Antonio   1940, writ ref'd);
Porter v. Langley,  155 S.W. 1042 (Tex. Civ. App. -- Dallas 1913,
writ ref'd).   See also City of Arlington v. Cannon, 271 S.W.2d
414 (Tex. 19541; City of Houston v. Baker, 178 S.W. 820 (Tex.
Civ. App. -- Galveston  1915, writ ref'd); Attorney General
Opinion H-1022 (1977).

      Laudable as the purposes of House Bill 22 are in lessening
the severe economic problems     facing our farmers and ranchers,
we are not at liberty to ignore the substantial       and long estab-
lished judicial authority    that a constitutional    amendment  is
necessary   to implement  such purposes.   Accordingly,    it is still
our opinion, as it was prior to the special session, that to
bring about the desired purposes of House Bill 22 an amendment
to the Texas Constitution    will have to be proposed by the
Legislature   and approved by a majority of Texas voters.

                           SUMMARY

             House Bill 22 of the 65th Legislature
              (article 7150k, V.T.C.S.),  which would
             establish  a new program of valuing agri-
             cultural land on a basis other than
             market value, cannot be placed in effect
             without approval of the companion   consti-
             tutional amendment   by a majority of Texas
             voters.

                                 P. 4507
The Honorable   Johnny W. Actkinson
The Honorable   Oscar H. Mauzy              - Page   5   (H-1098)

DAVID   M. KENDALL,   First   Assistant

C. ROBERT HEATK, Chairman
Opinion Committee

jst

                                  p. 4508