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The Attorney General of Texas
February 25. 1982
MARK WHITE
Attorney General
Honorable John F. Perry Opinion No. MI+451
SupremCowl Building Hopkins County Attorney
P. 0. Box 12546
Courthouse Re: Section 11.161, Property
Austin. TX. ?6711- 2546
5124475-2501
Sulphur Springs, Texas 75482 Tax Code
Tddl 910m74.1367
Tel*COpier 5121475a66 Dear Mr. Perry:
In 1981. the legislature amended the Property Tax Code by adding
1607 Main SC..Suite1400
Dallas. TX. 752Q1.4709
section 11.161, which provides that “[a111 individual is entitled to an
214l742.6944 exemption from taxation of implements of farming or ranching that he
owns and uaes in the production of farm or ranch products.” Acts
1981, 67th Leg., 1st C.S., ch. 13. section 32. at 127. YOU ask a
4624 AIbmS Ave.. SUlh 160
series of twelve questions, which fall into three principal
El Paso. TX. 799052793
SlyuJ-3464 categories, concerning what items are entitled to exemption, vho is
eligible to receive the exemption, and what limftations apply to the
granting of it. We limit our discussion to the specific questions of
12M DallasAve..suite 202 statutory construction that you raise.
Houslon.TX. 770024966
713/65M)8w
Section 11.161 was adopted pursuant to authority granted by
article VIII, section 1 of the Texas Constitution, which provides, in
606 Broadway. Suile312 pertinent part: “[T]he Legislature by general lav may exempt all or
cubbocc. TX. 794014479 part of the personal property homestead of a family or single adult,
-747.5236
‘personal property homestead’ meaning that personal property exempt by
law from forced sale for debt, from ad valorem taxation.” (Emphasis
4309 N. Tenth. Suite S added). Article XVI, section 49 of the Texas Constitution authorizes
McAllen. TX. 76501-1665 the legislature, by general law , to protect from forced sale a portion
512m624547 of the personal property of heaas of families and of unmarried adults.
male and female. Article 3836. V.T.C.S.. specifies the property which
200 MaIn Plaza. sure 400 the legislature has determined is exempt from forced sale:
San Anlonio. TX. 76205.2797
5w225-4191 (a) Personal property (not to exceed an
.aggregate fair market value of $15.000 for each
single, adult person. not a. constituent of a
family, or $30,000 for a family) is exempt from
attachment, execution and every type of seizure
for the satisfaction of liabilities. except for
encumbrances properly fixed thereon, If included
among the following:
D. 1555
Honorable John F. Perry - Page 2 (kw-451)
(2) all of the following which are
reasonably necessary for the family or single,
adult person, not a constituent of a family:
implements of farming or ranching....
Your first six questions are concerned with what items of
personal property are entitled to exemption, and are as follows:
1. Should the tens implements be construed
so as to include’any and all types of equlpnt or
machinery that could be used in an agricultural
environment?
2. Would a dairy operation be entitled to an
exemption from taxation for all types of equipment
and machinery used in such operation, including,
but not limited to. milking, storage, feed and
sanitation equipment?
3. Would vehicles utilized in agricultural
products, such as trucks and trailers. be included
in this exemption?
4. Would equipment used to obtain water from
wells or for i.rrigation be exempt?
5. Would permanent structures such as silos
or feed bins and tanks utilized for the prc-rluction
of forage and feed for livestock and poultry and
used exclusively by the producer to feed his ovn
stock be exsmpt?
6.Could other structures such ss barns or
sheds used for storage of forage and feed be
considered implements?
Neither article XVI, section 49 of the Texas Constitution nor
article 3836, V.T.C.S.. define what constitutes an “implement of
farming or ranching.” The predecessor to article 3836, V.T.C.S.,
now-repealed article 3832. V.T.C.S.. employed the phrase “implements
of husbandry.” “Husbandry” is ordinarily applied t: mstters involving
agriculture. Stuart v. State, 563 S.W.Zd 398, 399 (Ark. 1978).
“Husbandry” has been defined to be “the business of s farmer.
comprehending agriculture or tillage of the grczzd. the raising.
managing, and fattening of cattle and other ?znestic animals, the
msnagement of the dairy and whatever the land ; reduces ,‘I and is
equivalent to agriculture in its general sense. Itions v..Lovell. 7
Heisk. 510, 516 (Term. 1872). See also State ex rel. Boynton v. Wheat
Fanning Company. 22 P..2d 1093 (Kan. 1933). Therefore. an item which
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Honorable John F. Perry - Page 3 (MW-451)
was an “implement of husbandry” under article 3832 would now be an
implement of farming or ranching under article 3836.
III construing article 3832, courts declared that determination as
to what constitutes an implement of husbandry is a question of fact to
be resolved on a case-by-case basis. Henry V. McLean. 1 White 6 w.
609 (Tex. Ct. App. 1881). Courts focused on the use to which an item
is put, Hickman V. Hickman, 234 S.W.Zd 410 (Tex. 1950). declaring
“implements of husbandry” to include “all implements used by the
farmer in conducting his farming operations, not only those that he
might use directly, but those used by his tenants and employees.”
Smith v. McBryde. 173 S.W. 234, 235 (Tex. Civ. App. - San Antonio
1915, no writ). In construing article 6675a-1, V.T.C.S., .which
governs vehicle registration and provides an exemption from
registration for “implements of husbandry,” this office declared that
the test wss one of primary design and primary use or purpose: “It IS
fundamental then, that whether a vehicle IS an ‘implement of
husbandry’ must be determined by the primary design and primary use or
purpose to which the vehicle is put and turns on the ‘facts of any
particular case. “’ Attorney General Opinions U-1254 (1972)
(four-wheel riding lawn mower not an “implement of husbandry” within
article 6675a-1, V.T.C.S;~. because not used primarily for agricultural
purposes), citing Allred w. J.C. Engelman. Inc., 61 S.W.2d 75 (Tex.
1933) (water truck designed for aole purpose of carrying water for
irrigation and gasoline carrier truck designed and used for sole
purpose of providing gasoline to tractors in orchards and fields were
“implements of husbandry” within article 6675a-I. V.T.C.S.); M-1288
(1972) (piece of equipment designed and used primarily for applicaton
of fertilizer and herbicides an “implement of husbandry” within
article 66758-1, V.T.C.S.). In Reaves V. State, 50 S.W.2d 286, 287
(Tex. Grim. App. 1931). the Texas Court of Criminal Appeals construed
the phrase in the context of article 827(a). section 3(a). V.T.C.S..
which exempted from length limitations placed upon motor vehicles
implements of husbandry temporarily propelled or moved upon the public
highways. The court stated that “[aIn implement of husbandry is
something necessary to the carrying on of the business of farming,
etc., without which the work cannot be done.”
Employing such tests, courts variously held that planting
machines. Smith V. McBryde. supra, cultivators, plows. stalk cutters.
riding planters. Seiler v. Buckholdt, 293 S.W. 210 (Tex. Civ. App. -
San Antonio 1927. no writ). tractors, Wollner V. Darnell. .94 S.W.2d
1225 (Tex. Civ. App. - Amarillo 1936, no writ), combines, beehives,
and trailer chassis, Hickman v. Hickman. 220 S.W.Zd 565 (Tex. Civ.
APP. - Eastland). aff’d. 234 S.W.2d 410 (Tex. 1950), were “implements
of husbandry.” On the other hand, courts also held that a pickup
truck used,~primarily for purposes of trensporcation was not exempt as
an “Implement of husbandry,” although. under the statute then In
effect, It was exempt as a “carriage.” Hickman V. Hickman. supra.
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honorable John F. Perry - Page 4 (MW-451)
Courts also held that a mill and gin, Cullers v. James, 1 S.W. 314
(Tex. 1886). and a windmill and three gates, all unused and unerected.
Hickman V. Hickman, s\rpra. were not exempt; such items would be exempt
only if they were attached as fixtures to realty which occupied the
status oft a homestead.
From the cases, we can abstract two propositions. First, that
which is intended to be attached to realty, such as a windmill, a
gate, a mill, or a gin, is not an “implement.” Courts would probably
hold, for example, that structures such as barns. sheds, silos, and
tanks are not implements under this statute. However, tools and
machines such as combines, tractors, and milling machines would
probably fall within the statute. Second, the determination as to
which implements are “implements of husbandry” is a fact question to
be determined on a case-by-case basis by employing a test of primary
design and primaryr’use. We are not empowered to make determinations
of fact; hence, we must decline to answer your questions concerning
specific items of property.
Your next four questions center on who is eligible to receive the
exemption. Section 11.161, Property Tax Code, employs the term
“individual,” while article XVI, section 49 of the Texas Constitution
uses the phrase I’... all heads of families, and ,also of unmarried
adults, male and female.” Article 3836. V.T.C.S., makes eligible
(1. ..each single, adult person, not a constituent of a family, or... a
family.” Clearly the class of persons embraced by section 11.161,
Property Tax Code, could not be greater than the class embraced by
article XVI, section 49 of the Texas Constitution and article 3836,
V.T.C.S. We must therefore turn to these provisions to determine just
who may qualify under section 11.161.
first question under this topic is:
Would the term individual as used in the [code
provision] be limited or defined to include only
persons in the agricultural business that have
sole or complete ownership of all the property
necessary for pursuit of said business?
We construe your first question to consist of two related
questions: Whether sole or complete ownership of property upon which
a claimant seeks exempt status is required, and whether a claimant
must possess al.1 of the property necessary to the pursuit of the
agricultural business in order to qualify. We conclude that sole or
complete ownership of the implements of husbandry is unnecessary.
Article 3836(b) and (c). V.T.C.S.. both refer to “. ..property
described in [s]ubsection (a) of this article [which lists the kinds
of property exempt from forced sale], or any interest therein.”
(Emphasis added). We believe that the legislature clearly intended
Honorable John F. Perry - Page 5 (MW-451)
that any recognizable legal interest would be sufficient to impress
upon personal property the character of a personal’property homestead.
We further conclude that the legislature did oot intend that a
claimant must possess all of the implements of husbandry necessary for
the pursuit of an agricultural business before he may qualify any
implements. See, e.g., Wollner v. Darnell. suprs (where teoant farmer
who had rental contract upon 320 acres of land and possessed only one
tractor and no horses, court held that, since claimant was unable to
farm without the tractor, that tractor was exempt as an implement of
husbandry).
We note again that the determination of whether any item of
personal property is an “implement of husbandry,, is a question of fact
and that the term includes “all implements used by the farmer In
conducting his farming operations, not only those that he might use
directly, but those used by his tenants and employees.,, Smith v.
McBryde. supra, at 235. Since someone not engaged in farming or
ranching may not avail himself of the statute, Tucker v. Napier, 1
White h W. 365 (Tex. Ct. App. 1878); Attorney General Opinion U-1254
(1972). a determination must first be made as to whether a claimant is
ectually engaged in farming or ranching. If he is, then any items of
personal property whose “primary design and primary use or purpose”
are .as an implement for farming or ranching for purposes of article
3836. V.T.C.S.. and. concomitantly, section 11.161, Property Tax Code,
would qualify.
Your second question under this topic is:
Would an individual or singular person who has
incorporated be entitled to an exemption?
We conclude that a corporation, regardless of the type, Is not
entitled to an exemption. While the term “Individual” in section
11.161 of the Property Tax Code is not expressly limited to “natural
persons ,” the reach of article XVI. section 49 of the Texas
Constitution and article 3836, V.T.C.S.. clearly is. Exemptions from
forced sale were unknown to the common law and are purely statutory
creations. Pickens v. Pickens, 83 S.W.2d 951 (Tex. 1935). Under the
common law. a debtor was deprived of all of his property and then,
frequently, imprisoned. Smith v. McBryde, supra. The purpose of
exemption laws is to afford protection to a person in the pursuit of a
lawful occupation and to assure to the family of the debtor the
shelter of a home, the means of securing a livelihood. and the
earnings of the head of the household. Rodgers v. Ferguson, 32 Tex.
533 (1870). Exemption lavs were passed not merely for the purpose of
protecting the poor from creditors who would deprive the debtor and
his family of their means of subsistence, but also to protect persons
in the pursuit of legitimate occupations in order that they not become
charges on the public. Gaddy v. First National Bank, 283 S.W. 277.
Eonorable John F. Perry - Page 6 (MI-451 1
280 (Tex. Civ. App. - Beaumont 1923. no writ). Even a cursory reading
of article XVI, section 49 of the Texas Constitution, article 3836,
V.T.C.S., and the cases decided thereunder, make it clear that the
exemption reaches only natural persons.
Your third question under this topic is:
Would a partnership of any nature, including a
family partnership, be excluded from the benefits
of this exemption?
We conclude that partnerships, regardless of the type, are not
entitled to claim this exemption. With the adoption of the Uniform
Partnership Act, article 6132b. V.T.C.S.. the Texas Legislature
adopted the so-called “entity” theory. as opposed to the “aggregate”
theory of partnerships. In other words. for most purposes, a
partnership is an entity legally distinct from Its partners, rather
than the assresate of its Partners acting as individuals pursuant to a
contract. --Se; V.T.C.S. -art. 6132b. -91. Comment; see . generally
Bromberg, TheProposed Texas Uniform Partnershi-, 14 Southwestern
Law Journal 437 (1960); Bromberg. Texas Uniform Partnership Act -- The
Enacted Version, 15 Southwestern Law Journal 386 (1961). Thus the
creditors of an individual partner cannot seize partnership property,
nor can a partner claim a homestead or exemption from forced sale in
partnership property against partnership creditors. V.T.C.S.. art.
6132b, section 25(2)(c). See Kelley v. Shields, 448 S.W.2d 135 (Tex.
Civ. App. - San Antonio-69. writ ref’d n.r.e.) (under Uniform
Partnership Act. widow not allowed to claim as exempt property tools
of trade of a partnership of which her late husband had ~been a
partner). Therefore, no partnership is entitled to claim an exemption
under section 11.161 for “implements of husbandry.”
Your fourth and final question under this topic is:
Would an Individual who is a citizen of a foreign
country be eligible for the exemption?
Citizens of a foreign country are clearly liable for ad valorem
taxation on real and personal property which has acquired taxable
status in a taxing jurisdiction In Texas. The question is whether a
citizen of a foreign country is also entitled to an exemption under
section 11.161. We conclude that he is so entitled. The Texss
Supreme Court has declared that aliens are entitled to the benefit of
state exemption laws, Cobbs v. Coleman, 14 Tex. 594 (1855). as are
nonresidents. Hell v. Indian Live-Stock Company, 11 S.W. 344 (Tex.
18891. See also Carroll v. First State Bank of Den&on. 148 S.W. 818
(Tex. Clv. App. - Dallas 1912. no writ). We conclude that, since
article XVI, section 49 and article 3836, V.T.C.S.. reach the property
of aliens and nonresidents, section 11.161 does as well.
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Honorable John F. Perry - Page ? (nW-451)
Your final topic is concerned with what limitations apply to the
granting of the exemption. Your first question under this topic is:
Do the limits [set forth] in [article 3836,
V.T.C.S.,] apply to [section 11.161. Property Tax
Code] ?
Article’ 3836 places 8 limitation of “$15,000 for each single,
adult person, not a constituent of a family. or $30,000 for a family”
on the amount of personal property exempt from forced sale. It has
been suggested that these limitations somehow do not apply to the
personal property exemption set forth in section 11.161. It has been
suggested that section 11,161 exempts from ad valorem taxation, not
the specific items which may be exempt from forced sale by operation
of article 3836, but Instead the clsss of items upon which article
3836 can operate. In other words, section 11.161 is thought to exempt
simply the class of ‘properties reached by the phrase in article 3836
“implements of, farming or ranching.” without regard to any dollar
limitation. In support of this interpretation, it is suggested that
this view reflects the latent of the legislature when the section was
passed, that, by use of the term “exempt” in both article VIII,
section 1 of the Texas Constitution and section 11.161 of the Property
Tax Code, the legislature chose to provide a total, as opposed to a
partial. exemption. We disagree.
It is clearly the rule that, when a law is attacked as being
unconstitutional, there is a presumption that the law Is valid and
doubts as to its constitutionsllty should be resolved in favor of its
constitutionality. Smith v. Davis, 426 S.W.Zd 827 (Tex. 1968). If an
act admits of two constructions, it must not be interpreted in a way
which will render it unconstitutional and void. State v. Shoppers
World, Inc., 380 S.W.2d 107 (Tex. 1964). Section 11.161 of the
Property Tax Code does not on its face contain the dollar limitations
contained in article 3836, V.T.C.S. If we were to interpret section
11.161 as not including the limitations. we would be constrained to
declare the section unconstitutional. We therefore interpret it to
include by implication the limitations set forth In article 3836.
V.T.C.S., and hold It constitutional.
Article VIII, section 1 of the’ Texas Constitution provides in
pertinent part: “[T]he Legislature by general law may exempt all or
part of the personal property homestead ot a family or single adult,
‘personal property homestead’ meaning that personal property exempt by
law from forced sale for debt, from ad valorem taxation.” (Emphasis
added). In other words. the legislature may exempt from ad valorem
taxation all or part (i.e.. grant either a “partial” or a “total”
exemption) of the personal property exempt by law from forced sale for
debt. On the other hand, it clearly cannot enlarge the class of
properties which it is empowered to exempt as set forth in article
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Honorable John F. Perry - Page 8 (MW-451)
VIII. section 1. Dickison v. Woodmen of the World Life Insurance
Society. 280 S.W.2d 315 (Tex. Civ. App. - San Antonio 1955. writ
ref ‘d). hv attemot to do so is void. Tex. Const. art. VIII. section
2(a). Se&;ion 111161 of the Property Tax Code does not purport to
expand the class of properties presently exempt from forced sale under
article 3836.
If the legislature had wished to exempt implements bf farming and
ranching without regard to dollar limitations, it could have proposed
appropriate language for inclusion in article VIII, section 1. For
example. it could have proposed language exempting all or part of the
class of properties upon which the personal property homestead
provisions operate. Or, in the alternative, the legislature could
have amended article 3836. V.T.C.S., by removing the dollar amount
limitations. Compare now-repealed article 3832, V.T.C.S. (the
predecessor to article 3836. which placed no dollar amount limitations
on the personal property homestead exempt from forced sale). But the
legislature did not do either.
The law does not favor tax exemntions. since they are the
antithesis of equality and uniformity.- Hilltop Village; Inc. v.
Kerrville Independent School District, 426 S.W.2d 943 (Tex. 1968).
Constitutional and statutory provisions creating them are to be
construed narrowly with all doubts resolved against granting the
exemption. City of Longvisw v. Marl&am - McRee Memorial Hospital, 152
S.W.Zd 1112 (Tex. 1941). Therefore, we Interpret the statute in the
more restrictive way and conclude that the dollar amount limitations
set forth in article 3836, V.T.C.S.. also apply to section 11.161 of
the Property Tax Code.
Your last question under this last topic is:
Would an individual holding equipment and
machinery in an ~agricultural area in which he is
“OK currently engaged, evan though he still
pursues nnother type of agricultural useage. be
entitled to an exemption?
We undrrstnnd you to ask whether an individual is entitled to an
exemption on implements of husbandry that he owns even though he is
not then actually using such Implements in farming or ranching. We
turn again to the cases decided under article 3836 and its
predecessor, now-repealed article 3832. It is clear that a claimant
for exemption may be engaged in other work besides farming or
ranching. Seller v. Buckholdt. ~upr3; Smith v. Hcgryde. supra. With
respect to the exemption for tools of the trade, apparatus, and books,
it was held that there is no requirement that the claimant be engaged
in the particular trade or profession at the time of the levy; it was
sufficient that the claimant belonged to the trade or profession and
Honorable John P. Perry - Page 9 (klw-451)
intended to use the nrticles therein. HcBrayer v. Cravens, Dargan and
Roberts, 265 S.W. 694 (Tex. 1924). By analogy ue conclude that a
claimant who is not engaged In farming or ranching for a temporary
period, but retains the requisite intent, haa not abandoned hia
personal property homestead and may claim an exemption under section
11.161. See Seiler v. Buckholdt. suprcl; Attoway v. Still, 2 Poaey 697
(Tex. Comm’n App. 1879).
SUMMARY
1. The phrase “implements of farming or
ranching” under section 11.161 of the Property Tax
Code Includes those items of equipment or
machinery whose primary design and primary use or
purpose is that of an implement used by a farmer
or rancher in conducting his farming or ranching
operations; such a determination turns on the
facts of any particular case. “Implements of
husbandry” cannot as a matter of law include
improvement to real property or fixtures; hence,
barns, silos and sheds would not qualify. Items
which are neither fixtures nor improvements to
real property, such as tractors, cultivators. and
trailers, could qualify, depending upon the fact
situation in each case.
2. Section 11.161 of the Property Tax Code
reaches; vith the term “individual,” the same
persons reached by the exemption from forced sale
provisions, article XVI, section 49 of the Texas
Constitution and article 3836, V.T.C.S. Neither
partnerships nor corporations can qualify; a
claimant must be a natural person.
3. The dollar limitation restricting the
amount of personal property subject to the
exemption provisions as set forth in article 3836,
V.T.C.S.. apply also to section 11.161 of the
Property Tax Code.
- MARK WHITE
Attorney General of Texas
JOHNW. FAINTER, JR.
First Assistant Attorney General
Honorable John F. Perry - Page 10 (nw-451)
RICHARDE. GRAY III
Executive Assistant Attorney General
Prepared by Jim Hoeflinger
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Susan L. Garrison, Chairman
Jon Bible
Rick Gilpln
Patricia Hinojosa
Robert Lattimore
Jim Moellinger
Bruce Youngblood