Court Opinion

ID: 4133216
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:35:22.955083+00
Date Added: 2024-06-11T13:09:01.029008
License: Public Domain

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                                                     November         29,   1973
             The Honorable J. W. Edgar                                          Opinion   No.   H-   162
             Commissioner     of Education
             Texas Education Agency                                             Re:   Determining    amount of
             201 E. 11th Street                                                       homestead    exemption
             Austin, Texas 78701                                                      for persons over 65 and
                                                                                      related questions under
                                                                                      Article 8, $ l-b(b),  Texas
             Dear           Dr.   Edgar:                                              Constitution

                 Your questions concerning the interpretation     and implementation
             of Subsection (b), § l-b. Article 8 of the Constitution of Texas,   adopted
             by Texas citizens in November of 1972, are:

                                   1. “Legally,   does Subsection (b) of Section l-b of
                              Article VIII, Constitution of Texas,     require that the
                              $3,000   exemption,   if and when adopted by a school dist-
                              rict, shall be based upon the district’s    fixed (market)
                              value of the residence homestead,      or upon the dist-
                              rict’s assessed   value of residence homesteads     based upon
                              a ratio, percentage    of true value?”

                                   2. “May a school district board, pursuant to Section
                              l-b(b) of Article VIII, Constitution of Texas, exempt from
                              district ad valorem taxation any amount of assessed   value
                              of the residence  homestead of persons age 65 or older,
                              provided that the amount it exempts exceeds $3,000    valua-
                              tions? ”

                                   3. “Is an exemption amount once fixed or determined
                              this year (a) permissably.  subject to alteration by the same
                              board this year, and/or (b) by future school boards - - the
                              law reading to permit exemption of an amount certain from
                              all ad valorem  taxes thereafter   levied by the political sub-
                              division? ”

                                  4.   “If an amendment to the amount of exemption (but
                              not less than $3,000)  is permitted, how would the amendment
                              apply ? ’’

                                                          p.    749
The Honorable   J. W.    Edgar,   page 2 (H-162)

    The 1972 amendment      to $ l-b,   Article     8, added subsection    (b):

            “(b) From and after January 1, 1973, the governing
       body of any county, city, town, school district,    or other
       political  subdivision of the State may exempt by its own
       action not less than Three Thousand Dollars ($3, 000) of
       the assessed     value of residence homesteads  of persons
       sixty-five   (65) years of age or older from all ad valorem
       taxes thereafter levied by the political subdivision   . . . . ”

   The form in which the Legislature          authorized    that Subsection       (b) be
submitted to the electorate was:

            “The constitutional  amendment providing that the
       various political subdivisions    of the State may exempt not
       less than Three Thousand Dollars ($3, 000) of the value of
       residence homesteads     of all persons   sixty-five years of age
       or older from ad valorem taxes under certain conditions. ”
       (Emphasis   added) Section 2, S. J. R. No. 7, Acts 1971,
       b2nd Leg.,   R. S., p. 4126.

    The term “assessed      value”,  has been uniformly construed by the courts
to mean fair market value or any proportion thereof.       Smith v. Davis,   426
S. W-2&821.,    834 (Tex. 1968).    See also Richardson v. State, 53 S. W. 2d 508
(Tex. Civ. App. , Eastland,    1932), affirmed 84 S. W. 2d 1076 (Tex. 1935);
Slaughter v- Sundown Independent School Dist. , 41 S. W. 2d 478 (Tex. Civ. App.,
Amarillo,    1931); Lively v. Missouri,    K. & T. Ry. Co. of Texas,  120 S. W. 8.52
(Tex. 1909); Attorney General Opinion No. C-402 (1965).

    The Legislature     used the term     “value”    in its submission    to the voters     of
Subsection (b).

   The discretion    granted the Legislature   in submitting        a constitutional       amend-
ment to the electorate   is exceedingly broad:

        1’. . . the language of the proposition   submitted is
        not material,  provided it substantially  submits the
        question which the law authorizes    with such definite-
        ness and certainty that the voters are not misled. ”
        Turner v. Lewie,    201 S. W. 2d 86, 91 (Tex. Civ.App.,
        Ft. Worth, 1947, writ dis’m. ) (Emphasis      added)

                                        p. 750
The Honorable    J.   W.   E&w,      page 3 (H-162)

     We think the use of the term “value” rather than “assessed             value”
is sufficiently   precise to convey the “intent, import,        and subject matter” of
the amendment       so as not to mislead the voters.      See Hill v. Evans,     414
S. W. 2d b84(Tex.     Civ. App.,   Austin,   1967, ref.,  n. r. e. ); Whit~eside v.
Brown, 214 S. W. 2d .844(Tex.       Civ. App. , Austin, 1948, writ dism. ). The
terms,    in certain instances,     haves identical meanings.      “Value”,   as used
in Article   8, $1, of the Texas Constitution and elsewhere,           has been held
to mean the fair or reasonable        market value at the time of assessment         for
tax purposes.      See, for example,     Articles   7211, 7149, V. T. C. S., and
Rowland v. City of Tyler,        5 S. W. 2d 756 (Tex. Comm.App.,        1928); Harlingen
Independent School Dist. v. Dunlap, 146 S. W. 2d 235 (Tex. Civ. App. , San
Antonio,    1940, err. ref’d. ); Atlantic Richfield Company v. Warren Independent
School District,     453 S. W. 2d ~190 (Tex. Civ. App. , Beaumont,       1970, ref’d. ,
n. r. e. 1.

     Therefore,  in answer to your first question,    we think the $3, 000
exemption provided for in Article   8, $1-b(b) may be based upon whatever
standard of fair market value assessment     is utilized by the individual
taxing district.

    Your second question concerns the power of a school          district   to provide
exemptions  in excess of $3,000. 00 pursuant to $1-b(b).

    The final sentence     of § l-b(b)   reads    as follows:

             ,I . . . Where any ad valorem tax has theretofore
        been pledged for the payment of any debt, the taxing
        officers   of the political subdivision   shall have authority
        to continue to levy and collect the tax against the home-
        stead property at the same rate as the tax so pledged
        until the debt is discharged,     if the~Cessation of the levy
        would impair the obligation of the contract by which the
        debt was created. ”

     The language of 5 l-b(b) clearly grants discretion   to a taxing unit to
exempt any amount “not less than $3, 000” up to the full amount of the
assessed  taxable value, except where ad valorem taxes havebeen pledged
and the retirement  of a pledge-secured    debt would be jeopardized   by
allowing the exemption.    Given the latter situation,  no exemption
granted would be operative until the debt was discharged.       But otherwise
there is no limit on the maximum     exemption that may be granted.

                                         p. 751
The Honorable     J. W.   Edgar,   page 4 (H-162)

     In answering your third question,   we note that you have underlined
the word “thereafter“    in the amendment,   indicating that you question
whether the use of this word may have the effect of freezing exemptions
once given.    We believe the use of ‘*thereafter”   merely denotes that the
amendment and the exemption granted therein are not to apply retro-
actively.

    In answer to subparagraph      (a) of your third question, we believe
that once the property is assessed      for a year during a time when such an
exemption is applicable,     the tax must be collected on that basis for that
year.   Accordingly,    the amount of an exemption for a given tax year is
not subject to alteration by the same Board in the year it is adopted.

     Subsection (b) of your third question concerns the right of future
Boards to alter an exemption amount once granted.           If the intention of
the amendment had been to deny future governing bodies and electorates,
once an exemption were allowed,        the right to decrease an exemption to
$3,000,   or to eliminate it entirely,   the denial would have been clearly
expressed.     It is not. Absent such expression,      we are of the opinion that
future Boards or electorates    may alter or discontinue future exemptions.

    In answer to your fourth question,      it is our opinion that any alteration
would have to operate prospectively.

                              SUMMARY

            1. The $3,000.00    exemption for persons over 65
        years of age, established   by Subsection l-b(b), Article
        8, of the Constitution of Texas,  is to be based upon the
        assessed  value of residence homesteads.

            2.   The   minimum amount of such exemption is
        $3, 000. 00,   if allowed at all, but the maximum amount
        is unlimited     except by the need to protect the pledged
        security for    debt.

             3.   An exemption amount once fixed cannot be
        altered   during the year so as to modify the amount      of

                                       p. 752
The Honorable    J. W.   Edgar,    page 5    (H-162)

         taxes assessed    for that year against property subject
         to the exemption,    but such exemptions  may be abolished
         or changed prospectively.

                                              Very     truly yours,
                                             x- \.

                                           ,&OHN     L. HILL
                                              Attorney General        of Texas

APPROVED:

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                           -I”QfJ
DAVID    M.   KENDALL,    Chairman

                                      p.    753