Court Opinion

ID: 9647149
Source: CourtListenerOpinion
Date Created: 2023-08-23 13:24:57.591662+00
Date Added: 2024-06-11T18:11:45.916097
License: Public Domain

ENOCH, Justice
joined by GONZALEZ, HIGHTOWER and SPECTOR, Justices
dissenting.
Section 11.433 seeks to retroactively attach exempt status to the property of religious organizations. It is available only to delinquent taxpayers. TexTax Code § 11.433(b). Continuing its beneficence to those who fail to pay their taxes, see Syntax, Inc. v. Hall, 899 S.W.2d 189 (Tex.1995) (delinquent taxpayer entitled to excess proceeds of resale by taxing unit despite lack of any interest in the property), the Court gives short shrift to the Texas Constitution and erroneously concludes that section 11.433 of the tax code violates neither article III, section 55 nor article I, section 16 of the Texas Constitution. Section 11.433 of the Tax Code violates the plain meaning of both provisions of the Texas Constitution. I respectfully dissent.
I.
Under article III, section 55 of the Texas Constitution, the only tax liabilities the Legislature has any power to forgive are delinquent taxes that have been due for at least ten years. Tex. Const, art. Ill, § 55. Otherwise, the Legislature has “no power to release or extinguish, or to authorize the releasing or extinguishing, in whole or in part,” the tax liability of any corporation or individual owed to the County. Id. The delinquent taxes at issue in this case are for tax years 1986-89 and thus not within the Legislature’s power to forgive. By retroactively attaching exempt status to the Church’s property, section 11.433 forgives the original tax liability for those years contrary to the plain terms of article III, section 55.
The Court concludes that section 11.433 does not extinguish or release any such obligation, but simply limits the County’s remedy for collecting the taxes. 904 S.W.2d at 625. This limitation, the Court asserts, is akin to statutes of limitation which we have held do not violate article III, section 55. Sam Bassett Lumber Co. v. City of Houston, 145 Tex. 492, 198 S.W.2d 879, 882 (1947). Section 11.433 does not have a similar effect.
It is undisputed that, but for the late application, the Church’s property is entitled to an exemption under section 11.20. TexTax Code § 11.20. An exemption under section 11.20 must be claimed by May 1 of the year for which the exemption is sought. Id. § 11.43(d). Once allowed, the section 11.20 exemption need not be claimed in subsequent years except in certain situations not relevant here. Id. § 11.43(e). The Church, although entitled to an exemption, did not claim the exemption for the years 1986-89 and the Church’s property became subject to taxation. Taxes were levied and assessed and became due on receipt of the tax bill. Id. § 31.02(a). The taxes became delinquent when they were not paid by February 1 of the year following the year in which the taxes were imposed. Id. Section 11.433 does not simply limit the County’s remedy by precluding the County from enforcing its remedy to collect the unpaid taxes for six years. This provision seeks to retroactively *627attach exempt status to property when taxes have already been levied and assessed and are delinquent. Section 11.433 of the Texas Tax Code violates article III, section 55 of the Texas Constitution.
II.
Unquestionably, section 11.433 is retroactive in operation by permitting retroactive attachment of exempt status to property for prior tax years. The retroactive effect of a statute, however, does not itself violate article I, section 16. A statute must also impinge on vested rights. State v. Project Principle, Inc., 724 S.W.2d 387, 390 (Tex.1987). In this regard, our article I, section 16 has been interpreted by this Court as broader than the federal counterpart, article I, sections 9 and 10 of the United States Constitution. Mellinger v. City of Houston, 68 Tex. 37, 3 S.W. 249, 253 (1887).
The prohibition in the Texas Constitution is broader because unlike the Federal Constitution, article I, section 16 prohibits not only bills of attainder, ex post facto laws, and laws impairing the obligation of contracts, but also prohibits retroactive laws. Id. By prohibiting retroactive laws, our Constitution protects not only property rights, but any other rights that have vested prior to the passage of any law, which if retroactively applied, would take away those rights. Id.
In 1887, this Court wrote about those rights subject to protection under article I, section 16 as follows:
[I]t must necessarily be held that a right, in a legal sense, exists, when, in the consequence of the existence of given facts, the law declares that one person is entitled to enforce against another a given claim, or to resist the enforcement of a claim urged by another. Facts may exist out of which, in the course of time or under given circumstances, a right would become feed or vested by operation of existing law, but until the state of facts which the law declares shall give a right comes into existence there cannot be in law a right; and for this reason it has been constantly held that, until the right becomes feed or vested, it is lawful for the law-making power to declare that the given state of facts shall not fix it, and such laws have been constantly held not to be retroactive in the sense in which the term is used.
Mellinger, 3 S.W. at 253. Interpreting the rights protected under article I, section 16 in this manner, the Court struck down as retroactive a statute that eliminated a delinquent taxpayer’s right to rely on limitations as a defense to a tax collection suit when limitations had run prior to enactment of the statute. Id. at 254-55.
Agreeing that section 11.433 has a retroactive effect, the Court concludes that section 11.433 nonetheless is constitutional because it does not impinge on any vested rights. 904 S.W.2d at 626. The retroactive extension of exempt status under section 11.433, however, extinguishes the existing tax liability owed to the County. The taxes, which are due on receipt of the tax bill and become delinquent if not paid by February 1 of the following year, represent a liability that has matured and for which the taxing unit may enforce collection. Tex.Tax Code §§ 31.02(a), 33.41. That right to collect delinquent taxes cannot be taken away by the retroactive application of an exemption. Mellinger, 3 S.W. at 253.
Moreover, section 11.433 destroys the County’s vested constitutional and statutory tax liens in the property. Tex. Const, art. VIII, § 15; Tex.Tax Code § 32.01. The Texas Property Tax Code provides that although a lien attaches as of January 1 of the year for which any taxes, penalties, or interest may become due, the tax lien may be foreclosed only after the taxes on the property become delinquent. Tex/Tax Code §§ 32.01, 33.41. There can be no dispute that at the time section 11.433 was enacted in 1990, the County possessed constitutional and statutory tax liens that could be enforced and foreclosed to collect the delinquent taxes owed for tax years 1986-89. With the late application and allowance of a retroactive exemption, section 11.433 destroys the County’s valid, existing, and mature tax liens in violation of article I, section 16 of the Texas Constitution.
Because I would hold that section 11.433 violates both article III, section 55 and article I, section 16 of the Texas Constitution, I *628would affirm the judgment of the court of appeals. I dissent.