Untitled Texas Attorney General Opinion

June 21, 1988

Honorable Stan Schlueter Opinion No. JM-919
Chairman
Ways and Means Committee Re: Whether the directors
Texas House of Representatives of a taxing unit are per-
P. 0. Box 2910 mitted to waive interest
Austin, Texas 78769 and penalties on a tax pay-
ment delinquent by reason
of a central appraisal dis-
trict error (RQ-1173)

Dear Representative Schlueter:

you have asked us to determine

[wlhether a central appraisal district is an
agent of a taxing unit which utilizes the
central appraisal district so that an error
or omission of the central appraisal district
would allow the board of the taxing unit to
waive interest and penalties on a delinquent
tax payment under section 33.011 of the Tax
Code.

The Tax Code provision to which you refer reads:

The governing body of a taxing unit may pro-
vide for the waiver of penalties and interest
on a delinquent tax if an act or omission of
an officer, employee, or agent of the taxing
p~j& caused the taxpayer's failure to pay the
tax before delinquency and if the tax is paid
within 21 days after the taxpayer knows of or
should know of the delinquency. (Emphasis
added.)

A county is a "taxing unit" within the meaning of the
statute, but a central appraisal district is not. Section
1.04(12) of the Tax Code provides:

(12) 'Taxing unit' means a county, an
incorporated city or town (including a home-

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Honorable Stan Schlueter - Page 2 (JM-919)

rule city), a school district, a special
district or authority (including a junior
college district, a hospital district, a
district created by or pursuant to the Water
Code, a mosquito control district, a fire
prevention district, or a noxious weed
control district), or any other political
unit of this state, whether created by or
pursuant to the constitution or a local,
special, or general law, that is authorized
to imoose and is imoosinu ad valorem taxes on
property even if the governing body of
another political unit determines the tax
rate for the unit or otherwise governs its
affairs. (Emphasis added.)

An appraisal district does not fit this definition because
it is not authorized to "imposel' taxes on property: it is
responsible only for appraising property in the district.
See Barclav v. Ochiltree ADDraiSal District Board, 730
S.W.2d 878 (Tex. App. - Amarillo 1987, no writ). Cf. Tax
Code 5§171.2021(~)(2), 311.002(4).

Another statutory provision also makes it clear that an
appraisal district is not a "taxing unit." Section 1.15 of
the Tax Code, enacted in 1983 to become effective October 1,
1985,l prohibits a taxing unit from employing "any person
for the purpose of appraising property for taxation purposes
except to the extent necessary to perform a contract under
Section 6.05(b) of [the1 code" (section 6.05(b) allows
appraisal districts to contract with a taxing unit to
perform the duties of an appraisal office for the district).
On the other hand, an appraisaldistrict is statutorily
responsible for appraising property for the ad valorem tax
purposes of each taxing unit in the district -- which neces-
sitates employing appraisers. Tax Code 56.01(b). See Tax
Code 56.05(d). Cf. Tex. Con&. art. VIII, 518; Wilson v.
Galveston County Central Annraisal District, 713 S.W.2d 98
(Tex. 1986).

1. Section 1.15 of the Tax Code was codified as
section 1.13 until 1987. See Acts 1983, 68th Leg., ch.
1028, at 5463; Acts 1987, 70th Leg., ch. 167, §5.01(a)50, at
1360.

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Honorable Stan Schlueter - Page 3 (JM-919)

It has been suggested that because an appraisal
district is not itself a taxing unit, and because it is a
"political subdivision of the state," Tax Code 56.01(c), an
error caused by an officer, employee or agent of the
appraisal district would not be an error caused by an
officer, employee, or agent of the taxins unit so as to
allow the taxing unit to waive penalties and interest on
delinquent taxes under section 33.011 of the code. In our
opinion, however, a central appraisal district, within the
meaning of section 33.011, acts as the agent of the taxing
units for which it makes appraisals.

The argument that the appraisal district cannot be the
agent of the taxing unit rests on the familiar rule that
l"agencyrlis a legal relationship founded upon an express or
implied contract whereby the agent acts for and on behalf of
the principal and under his control. See 3 Tex. Jur. 3d,
Asency 51, at 13. The relationship between an appraisal
unit and a taxing unit for which it makes appraisals is said
to be neither consensual nor one in which the .appraisal
district is subject to the control of the taxing unit,
since the duties of the appraisal district are established
independently by statute.

There are, of course, situations where the ordinary
definition and consequences of agency do not apply. Not all
agencies are created by contract: some arise by operation of
law. The administrator of a decedent's estate, for example,
has been termed a "statutory agent." See Roberts v. Kenna,
241 S.W.2d 680, 685 (Tex. Civ. App. - Beaumont 1951, no
writ). Agencies can be created by estoppel. -3 Tex.
Jur. 3d, Aoencv 547, at 77. And an agent whose power of
attorney is coupled with an interest is not completely
subject to the control of the principal. Id. 528, at 51.

An agent for a public body is no less an agent because
the duties of the agent are established by statutory law
rather than by contract at common law. A public depository
holds tax collections for the county as the trustee and
agent of the county. See Fidelity and Deoosit Co. v. Farmers
and Merchants National Bank, 121 S.W.2d 503 (Tex. Civ. APP.
- Fort Worth 1938, writ dism'd). In Callashan v. McGown, 90
S.W. 319, 327 (Tex. Civ. App. 1905, writ ref'd), the court,
speaking of public officials, said:

An officer is simply an agent of the public,
whose power of attorney is the law, which
prescribes his duties and limits his authority
to such acts only as are necessary and

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Honorable Stan Schlueter - Page 4 (JM-919)

incidental to a proper discharge of such
duties as it imposes.

An independent contractor engaged by a Public Utility
District to read meters and to determine and collect water
bills was held by this office to be the agent of the
district in discharging those tasks. See Open Records
Decision No. 437 (1986). We have also concluded that an
independent governmental agency may be considered to be
acting as the agent of another governmental entity even
though no statute expressly denominates one as the agent of
the other: yiz., in Attorney General Opinion JM-446 (1986),
the State Purchasing and General Services Commission was
said to be the agent of the Supreme Court in collecting and
abstracting information concerning the court.

Alternative concepts of "agency" need not be exhaus-
tively explored. .Here, we need only demonstrate that a
legislature could reasonably have intended to use the word
"agent" in a broader legal sense. The. purpose of the
legislative provision is clear and its use of "agent" in
the suggested restrictive sense would lead to incongruous
results.

Section'1.15 of the Tax Code (previously section 1.13)
prohibiting taxing units from employing appraisers, was
passed in 1983 but did not take effect until October 1,
1985. See Acts 1983, 68th Leg., ch. 1028, at 5463. Section
33.011 of the Tax Code (which permits the governing body of
a taxing unit to provide for the waiver of penalties and
interest on delinquent taxes "if an act or omission of an
officer, employee, or agent of the taxing unit" caused the
delinquency) became effective more than three months earlier
-- on June 14, 1985, the day the Governor signed the bill
enacting it. The bill was passed by a unanimous senate and
a unanimous house, except for one house member present but
not voting.

Thus, when the waiver provision was enacted, the
legislature was aware that it would become effective at a
time when not every taxing unit was yet prohibited from
employing appraisers and when penalties resulting from
delinquencies caused by the errors of such employees would
be waivable under section 33.011. The legislature clearly
intended that errors caused by RgNg appraisal personnel
resulting in delinquency penalties would allow waiver under
the statute.

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Honorable Stan Schlueter - Page 5 (JM-919)

Though not all taxing units were prohibited from
employing appraisers during the period from June 14, 1985 to
October 1, 1985, m were. The same 1983 bill which pro-
hibited everv taxing unit from employing appraisers after
October 1, 1985 (except in a contract situation), prohibited
some (those located in appraisal districts that had not
postponed their appraisal duties pursuant to a 1981 law)
from employing appraisers after October 1, 1984. See Acts
1983, 68th Leg., ch. 1028, at 5463. The legislature, then,
was not only aware that penalties resulting from delin-
quencies caused by the errors of some appraisers -- those
employed by taxing units at the time section 33.011 became
law -- would be waivable; it was also aware that some taxing
units were then prohibited from employing appraisers them-
selves and were forced to rely upon appraisal districts
for such appraisal services. See Driscoll v. Harris County
Commissioners Court, 688 S.W.2d 569 (Tex. APP. - Houston
[14th Dist.] 1984, writ ref'd n.r.e.).

The penalties and interest exacted of delinquent tax-
payers in Texas are considered "penalties,1' not taxes.
Jones v. Williams, 45 S.W.2d 130 (Tex. 1931). As such,
their remission may be authorized by general law, though not
by a special or local law, notwithstanding sections 51 and
55 of article III of the Texas Constitution, or section 10
of article VIII. Jones v. Williams, suora. Cf. Tex. Const.
art. III, 556.

If, in its application to appraisers, section 33.011
applied only to those taxing units which on June 14, 1985,
could still employ appraisers (a closed class), an argument
might be made that it constituted unconstitutional local or
special legislation, but we do not so regard it. In our
opinion, section 33.011 was intended to be a uniform,
general law extending to all taxpayers the possibility of
relief from the consequences of a tax delinquency caused by
taxing authorities.

The consequences of tax delinquency are severe.
Delinquency triggers the application of section 15 of
article VIII of the Texas Constitution, which reads:

The annual assessment made upon landed
property shall be a special lien thereon: and
all oronertv. both real and personal,
belonaina to anv delinouent taxnaver shall be
liable to seizure and sale for the oavment
of all the taxes and nenalties due by such
delinouent; and such property may be sold for

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the payment of the taxes and penalties due
by such delinquent, under such regulations
as the Legislature may provide. (Emphasis
added.)

See Tax Code title 1, ch. 33.

It is unreasonable to suppose that both the house and
the senate would unanimouslv vote to permit relief of the
constituents of m legislators, but not others, from
burdens caused by tax appraisers exercising authority that,
insofar as the taxpayer is concerned, is identical in
nature, operation, and effect. The result would be even
more incongruous in a %ontract" situation if the word
"agent," as used in section 33.011, were given a narrow
meaning. A central appraisal district is permitted by
section 6.05(b) of the Tax Code to contract with a taxing
unit within the district to perform the functions of an
appraisal office. Under the narrow interpretation suggested,
mistakes made by appraisers used by the contractinq taxing
unit -- if delinquencies resulted -- would produce penalties
waivable by the contracting taxing unit [caused by its
agent I , but p& waivable by other taxing units in the dis-
trict [not caused by their agent], even thouah the delin-
auencies occurrina in all taxina units were caused bv
the identical mistake of the identical anoraiser. We are
confident that the legislature intended otherwise.

When taxes become delinquent as a result of errors
committed by authorities charged with tax administration and
not by reason of the taxpayer's fault, it is unjust, harsh
and oppressive to visit upon the taxpayer a penalty which
the taxpayer could not have avoided by any action of his
own. While it may be within the power of the legislature to
enact a statute having such an effect, it should not be held
that the legislature intended to do so unless the language
of the statute compels such construction. See Austin v.
Strong, 1 S.W.2d 872 (Tex. 1928). In our pinion, the
language of section 33.011 of the Tax Code does not compel
such a construction.

The intention of the legislature in enacting legisla-
tion is the essence of the law, and it is the duty of courts
to give effect to the legislative purpose. &S 53 Tex. Jur.
2d, Statutes 5125 et sea., at 180. The purpose of section
33.011 is to allow the relief of taxpayers from harsh and
unjustified penalties resulting from delinquencies caused by
errors of taxing authorities which the taxpayers were
powerless to prevent. In order to effectuate that purpose,

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Honorable Stan Schlueter - Page 7 (JM-919)

it is necessary to broadly read the term VVagent,'las used in
section 33.011 of the Tax Code, to include an appraisal
district making tax appraisals for use by the taxing units.
We do so.

SUMMARY

To effectuate the legislative intent,
the term "agent," as used in section 33.011
of the Tax Code, is to be read as including a
central appraisal district making appraisals
for use by the taxing unit. Therefore, the
directors of a taxing unit are permitted to
waive interest and penalties on a tax payment
which is delinquent by reason of an error of
a central. appraisal district.

(--rb
MATTOX
Attorney General of Texas

MARY KELLER
First Assistant Attorney General

MU MCCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, opinion Committee

Prepared by Bruce Youngblood
Assistant Attorney General

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