THEAITORKEY GENERAL
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GERALD C, MANN
Honorable J..E. Broussard, Chairman
Texs% Rice Development Commission
Beaumont, Texas
Dear Sir:
Opinion No. O-l+143
Re: Whether taxes collectedunder'
Texas Rice Development Act, H.B.
136, Acts 47th Leg., may be held
in escrow pending judicial deter-
mination of validity of the Act.
In your letter of October 13th you request our opinion on the
followin questions relating to the Texas Rice DevelopmentAct,
B. B. 13g, Acts 47th Legislature,Regular Session:
"1. As we understand,this processing tax law became effec-
tive ninety days after adjournment of the Legislature
(October 2, 1941) and we shaveapproved aform; of tax return
to be mailed to each of the rice millers, to be executed
as provided by said law. 'sJould the Commission,acting
advisory to the State.Departmentof Agriculture,be per%
mitted to hold all taxes in trust or escrow pending the
outcome of any suit contesting the validity of saidact or
either of the acts of Arkansas or Louisiana? In this con-
nection, we are advised that there is now before the Supreme
Court ~of Arkansas a suit by one of the rice millers of that
state contesting the validity of its law. If your opinion
is that we can hold said funds in escroiv,then how long
should we hold them?
"2. Should any of the rice millers upon receipt of the
monthly tax returns pay the tax under said law to us, would
we be justified in going ahead and~using the money? If so,
then in the event the rice law of either of the three states
should be declared invalid, would the members of the Com-
mission, or the State Department of Agriculture,be per-
sonally liable for the refunding of the money to the tax-
payer?"
i In our Opinion No. O-4114, copy of which is~enclosedherewith,we
held that the-taxes collected under said Texas Rice Development
Act are to be deposited in the State Treasury'andto be--expended
for the purpose declared in said Act upon warrants drawn by the
r.
Honorable J. E. Broussard, Chairman, Page 2 o-4143
Comptroller of Public Accounts. This being true, taxes paid un-
der the Act may be held in suspense pending a judicial determina-
tion of the validity of the Act only under the statutoryprocedure
prescribed in such cases. This procedure is set out In Articles
4388 and 7057b, Vernon's Annotated Civil Statutes of Texas.
These statutes are so lengthy that we will not set them out in
full in this opinion. Suffice it to say that Article 7057b,
requires the taxpayer to make payment of the tax and "accompany
such payment with a written protest setting out fully and in
detail each and every ground or reason why it is contendedthat
such demand is unlawful and unauthorized,"and to file suit in
Travis County for recovery of the tax within ninety (90) days from
the date of ayment. See Rogers v. Daniel Oil & Royalty Co.,
110 S.ul.(2dP 891; Producers & Refiners Corp. of Texas v. Heath,
Sl S.N. (2d) 533; Rainey v. Malone, 141 S.ti/.
(2d) 713.
Any money which is paid under protest is not subject to being
spent for the purposes enumerated in the Rice DevelopmentAct
pending determinationof the suit for recovery by the taxpayer.
Any taxes which are not paid under protest will be deposited in
the State Treasury and will be subject to disbursementupon
warrants, issued by the Comprtoller of Public Accounts in the
absence of any judicial declarationor determinationto the con-
trary. As said in our opinion No. O-2627:
"The Supreme Court of the United States in the case of United
States v. Realty Company, 163 U. S. 427, 41 U. S. (L Ed.)
215 held knowledge of the invalidityof an Act of Congress
wi¬ be imputed, in advance of any authoritativede-
claration to that effect, to those who are acting under its
provisions, so as to preclude them from having equities
based on their reliance upon the Act.
"It has been said that a ministerial officer has.not the
right to decide upon the constitutionalityor unconstitution-
ality of an Act passed with all the'formality of law. It
is the duty of such officers to execute and not to pass
judgment on the law. Volume 9 Texas Jurisprudence,468;
Sessums v. Botts, 34~Tex. 335 fholdingan unconstitutional
act regulatingthe collection of debts protected clerks of
courts acting under it)."
The members of the Texas Rice Development Commissioncannot be
personally liable for the refund of any taxes to the taxpayers
when such tax moneys have been paid to the State Treasurer,be-
cause, in the event such taxes are not paid under protest and
suit filed for their recovery within ninety (90) days, as provided
by Article 7057b, the taxpayer would not be entitled to a refund;
and in the event such taxes are paid under protest and suit is
filed for their recovery, their dispositionwill be determined by
the final judgment of the court in such suit.
Honorable J. E. Broussard, Chairman, Page 3 o-4143
Yours very truly
ATTORNEYGENERALOF TEXAS
.$PPROVZDNOV.4, 1941 BY
Walter R. Koch
GROVER SZLLERS Assistant
FIRST ASSISTANT ATTORZY GENERAL
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ENCLOSURE