Attorney General Opinion JM-0285

JIM MATTOX tttorney General ~~,emCo&BuIIdlq 4;*m,Tx. 78711-2548 s12/47!9501 Telex 910/874-1267 lelecopier 51214750266 714 Jackson. Suite 700 LIelIes, TX. 752024506 2141742.9944 3824 AlBerta AW.. Suite 160 El PIW, TX. 799052783 91E&XM494 1001 Texas, SuIta 700 Hounon.Tx. 77W2Jlll 7131222-5886 806 Broadway. Suite 312 Lubbock, TX. 794013479 0OU747.5228 4209 N. Tmth. Sulle 6 McAllen. TX. 78501-1683 512l6824547 m MaIn Plaza. suits 400 San Antonio.TX. 7820~2707 512ms-4191 An Equal Op,MtU~llYl Afllrmatlve Actlon Employer The Attorney General of Texas Dectmber 20. 1984 Eonorable Sten Schlueter chairman Ways and Means Comictee Texas Eouae of Representatives P. 0. Box 2910 Austin, Texas 78769 Opinion No. JM-285 Re: Applicability of 15% pen- alty provided by section 33.07 of the Tax Code Dear Representative Schluetcr: letter to UB asks: (1) Does the 15% penalty allowed by section 33.07 of the Texas Property Tax Code apply to all tax years chr is it limited to years subsequent to the enactment of the code? (2) I3 the July 1st date of section 33.07 mandatory or directory? That is to say, is the taxing enl::,ty prevented from availing itself of section 33.07 after this date in the initial year of adoptd.oa or does the date establish the earliest possible date a taxing unit can add a penalty? The section of the Tex Code tb which you refer was added by the Sixty-seventh Legiakture in 1981. to become effective January 1, 1982. It reads: (a) A taxing unit or appraisal district may provide. in the manner required by law for official action by the body, that taxes that remain del.inquent on July 1 of the year in which they beconE delinquent incur an additional penalty to defray coats of collection, if the unit or district or another unit that collects taxes for the unit has contracted with an attorney pursuant to Section 6.30 of this code. The amount of the penalty mt.y not exceed 15 percent of the amount of taxes. per,a,lty. and interest due. (b) A tax lien attaches to the property on which the tax is imposed to secure payment of the penalty. p. 1264 ilonorable Stan Schlueter - Page 2 (JM-285) (c) If a penalty is imposed pursuant to this section, a taxing un:it may not recover attorney’s fees in a suit to collect delinquent taxes subject to the penalty. (d) If a taxing unit or appraisal district Erovidea for a per&y under this section. the collector shall delj;er a notice of delinquency and of the penalty t; the property owner at least 30 and not more t&n 60 days before July 1. (Emphasis added). Acts 1981. 67th Leg., 1st C.S., ch. 13. $130, at 168. The stated purpose of tha! statutory penalty under discussion is to “defray costs of collection” and it may be assessed only if the collecting unit has contractelI with a private attorney to represent the unit. Tax Code 533.07(a). See Tax Code 16.30; Attorney General - Opinion JM-14 (1983). Statutes impoaiag penaltim are to be strictly construed. Hatch v. Davis. 621 S.W.Zd 443 (Tex. App. - Corpus Christ1 1981. writ ref’d n. It is hinhlv aianificant that. accordina to the atatutom language, -_ - the penalty may be applied only to those taxes “that remain .dellnquent on July 1 of the yg:ar in which they become delinquent” -- and not then unless “the colle’?:or” has delivered a notice of delinqu- ency and of the penalty to the property owner “at least 30 and dot more than 60 days before July I.” In other words, the section 33.07 penalty can attach only after z;e notice has been given and during the year the taxes first become delinquent. In our opinion, the ad(.i,tioaal penalty authorized by section 33.07(a) of the Tax Code cannot be applied to taxes that first became delinquent in a year prior to t,he year in which section 33.07. having already become effective as law, is adopted by a taxing unit or appraisal district, even thott$:h sucii taxes might remain delinquent thereafter. The legislative :Lutent, we believe, was to allow the imposition of the additional penalty only after the property owner had been specially warned of its Imoapective attachment (and in time to avoid its imposition). If the, additional penalty were to attach to back taxes because the taxes had remained delinquent past July 1 in a previous year -- i.e.. the year during which they had first become delinquent -- then warning; could be effective and it would be impossible for the property owuer, by paying the delinquent taxes, to avoid the additional penalty. Indeed, under the section 33.07(a) “year in which they become delinquent” language, if applied to taxes which became delinquent in prior years and remained so past July 1 of those years, the section 33.07 penalty would apply ever! If the delinquent taxes were &prior to the enactment of section Yi3.07. We cannot and do not ascribe to p. 1265 Bonorable Stan Schlueter - Page 3 (~21-285) the leeislature an intent that would raise the mecter of an unconsti- tutionally retrospective law. See Tex. Const. art. I. 516; French v. Insurance Company of North Am?::=. 591 S.W.2d 620 (Tex. Civ. App. - Austin 1979, no writ). See a:Lzalder v. Bull, 3 Dall. (3 U.S) 386, 391 (1798) (dictum) (Chase. 3.) (“Every law that takes away, or impairs, . - . rights vested; agree;lbly to existing laws, is retrospective, and is generally unjust.“) XC: should be noted, however, that even if this additional penalty does not attach, regular penalties may be recovered when delinquent taxes for past years are collected. Tax Code S33.01. In addition to these arguments against a retrospective application of the statute, ssction 3.02 of the Code Construction Act (V.T.C.S. art. 5429b-2) requ:lres a statute to be construed to have only a prospective effect un!.r:ss It is made expressly retrospective. Section 1.03 of the Tax Code requires that this rule of construction be followed In interpreting the code. Not only does section 33.07 lack any express language requiring retrospective construction; there are examples of tax statutes having such language, showing that the legislature knows how to requj.re a retrospective application when it so desires. See, e.g., Acts 1981, 67th Leg., 1st C.S.. ch. 13. 1159, at 176. In answer to your first question, we advise therefore that the 15% additional penalty allowemi by section 33.07 of the Tax Code cannot be applied to taxes that first became delinquent in years prior to the date that section 33.07 and its procedures are adopted by a taxing unit. You inform us that, with your second question, you wish to know whether a taxing unit or an ap,?raisal district which seeks to impose a section 33.07 penalty may extend the July 1 date set forth in the statute for the imposition OF the penalty to. say, August 1 instead. It is suggested that the July 1 date set forth in section 33.07(s) is directory only, not mandatory, and that a taxing unit or appraisal district may properly designate another date at which time the penalty 1s imposed just so long as the notice requirements of subsection (d) are met. We disagree. We c:cnclude for two reasons that the July 1 date is mandatory; section 3X.07 does not provide any means whereby a taxing unit or an appraisal district may extend the July 1 date. First, in support of the proposition that the July 1 date is merely directory. it is argued that statutory provisions which regu- late the duty of public offi:ers and specify the time for performance of such duties are directory unless the statute forbids the exercise of such power after that tfne. Markowsky v. Newman, 136 S.W.2d 808 (Tex. 1940); Federal Cntde D:;!. Cc. v. Yount-Lee Oil Co., 52 S.W.Zd 56 (Tex. 1932). As the Texas Supreme Court declared in Chisholm v. Bewley Mills, 287 S.W.2d 943, 945 (Tex. 1956): p. 1266 Ronorable Stan Schlueter - Page 4 (JM-283) There is no absolute test by which it may be determined whether a statutory provision is mandatory or directory. . . . In determining whether the Legisl~~ture intended the particular provision to be mandatory or merely directory. consideration should be given to the entire act, its nature and object. and the consequences that would follow from- each construction. Provisions which are not of the essence of the thing to be done, but which ara[ included for the purpose of promoting the propez, orderly and prompt conduct of business, are not generally regarded as mandatory. (Emphas!~: added). We do not dispute the statemc:nt of the law; we merely think that its application to this question :A contrary to the one suggested. The “essence of the thing to be done” by a taxing unit or an appraisal district in this instance is the adoption of the ordinance or resolution imposing the sel:tion 33.07 penalty. Once the resolution Is adopted, the penalty is imposed on July 1 by operation of law, and the tax assessor-collector jior the unit is required to deliver a notice of the delinquency and of the penalty to the property owner at least 30 and not more than 60 days before July 1. The statute is silent as to the date by whd.ch such ordinance or resolution must be adopted in order to be effective. In other words, a taxing unit or appraisal district is not empowered to impose a penalty as of July 1 or any other date which is deemed appropriate; a taxing unit or appraisal district is empowe,K,d by section 33.07 to impose only the penalty. The date on whicln the penalty automatically attaches pursuant to a valid ordinance: or resolution is specifically set forth In the statute. We are required to construe a statute in such a way as to express only the will of the makers of the law, not forced or strained, but simply such as the words of the law in their plain sense fairly sanction and will clearly sus:tain. Railroad Coxunission of Texas v. Miller, 434 S.W.2d 670 (Tex. 1968). If the legislature had Intended that a taxing unit or an appraisal district be empowered to extend the July 1 date or adopt a new date on which the penalty attaches, it could have done so and would have done so explicitly. See. e.g., Tax Code 5131.02, 31.03, and 31.51 (providing for February 1 delinquency date and for postponement of such date in certain instances). Second, in light of the: traditional significance of the July 1 date in the ad valorem tax c.Aendar, it is doubtful that the legisla- ture intended that the date on which the section 33.07 penalty be imposed be chosen arbitrarily. Traditionally, July 1 is the last date on which the second payment under a split payment plan may be tendered without the taxpayer incurrirg a delinquent tax penalty. See Tax Code 631.03 and now-repealed V.T.C.S. art. 7336 (predecessorxatute .to p. 1267 Honorable Stan Schlueter - Pal:t: 5 (JM-285) section 31.03 of the code). July 1 was also the traditional date on which taxing units compiled delinquent taxpayers lists and notified each prior to the imposition of a foreclosure suit. See now-repealed V.T.C.S. arts. 7324, 7325, Y326. And finally, July1 is also the traditional date on which the penalty imposed upon delinquent taxes no longer accrues on a per-month basis but rather is imposed as a flat rate. See Tax Code 133.01 and now-repealed V.T.C.S. art. 7336 (predecessor to section 33.01 of the code). Accordingly, we conclude that the July 1 date set forth in section 33.07, on which date the penalty attaches, is mandatory. Section 33.07 does not provik any means whereby a taxing unit or an appraisal district may extend the July 1 deadline for payment without incurring the penalty or select a different date on which the penalty attaches. The penalty provided by section 33.07 of the Tax Code applies to ;a11 taxes currently delinquent in the year in whi:h the penalty is imposed; its application is limited to the years including and subsequent to the z.doption of this code provision by the appropriate taxing unit or appraisal district. Tbe Jul:r 1 date set forth in section 33.07 of the Tax Code, the date on which the penalty attaches, is mandatory; section 33.07 does not provide any means whereby a taxing unit or an appraisal district may extend the July 1 date or select a differen’: date on which the penalty attaches. JIM HATTOX Attorney General of Texas TOM GREEN First Assistant Attorney General DAVID R. RICHARDS Executive Assistant Attorney General RICK GILPIN Chairman, Opinion Committee Prepared by Robert Gray Assistant Attorney General p. 1268 Ronorable Stan Schlueter - Pags 6 (JM-265) APPROVRD: OPINION COMMIlTRE Rick Gilpin. Chairman Colin Carl Susan Garrison Jennifer Riggs p. 1269