No. 310%
Res Date or payment or unemployment
oompenratlon tax a8 8frectinp the
tollins 0r limitation undar
Artiola SWlb-12(j) Yarnon's
Annotated Civil Statutes,
Texaa Unemployment Compenretlon Cos&aslon
Brown Duilding
Austin, Texas
Gentlemen:
Opinion No. O-42618
we have received and aarerully considered your
opinion J:equest of recent date. In order to ruiiy eat out
the facts involved, we quote your letter in full:
"This request has reterenoe to the refund provi-
dons cf the Texas Unenploymnt Con?ensstlcn .$ct
(Article 522lb-12(j), Vernon'e Annotated Civil Stat-
i.mu Or n~3a, 193). You have prnvionaly iercued
your opinions Wo. O-459 on Maroh 17, 1939, and O-1705
on Earoh 7, 1940. Those: two opinions nre oited in
your opinion No. O-2183 dated June 13, 1940,
*In the year 1940 the Conrmlaeion esaerted tax
liability aGainat X impa~y for unsn~lo~rment Taxes
ior the period January 1, 1937 through December 31,
1059. X Comaany denied liabilfty but in 1940 mid all
of the taxes which the Commission claimed were-owing.
At 'its time it paid th,e terns it filed an applioatlon
for refund in accordanos with the terms of the Unemploy-
morit *let. In 1942 c I"edaral oourt flnelly estublisbacI
the correotneea or the oorporatlonls contention of non-
liability. (The oaae iu which t?e -;,uestion %%a deoldud
wae not a tsx suit by thie State for unemployment ttlxes.)
'*Onthe basis of the deoioion or tha Federnl court,
this ~ormtio8fon told the % Company that it wao not an
onployer during tha period January 1, 1937, Tao December 31,
lY39, and that the refund application would be gmnted
with rereroncs to tare8 duo after &larch31, 1938. This
was for the reason that the refllnd provision of the Texae
law, as it existed prior to April 1, 1939, iqcossd a ona-
yuur limitation perlod'ror the filing of npplloatlons.
.
*The X corporation 110~ contends t&it since taxes
duo prior to April 1, 3938, Wro, paid the aommiaeion
at a time when the n~pllcstlon for refund with reepeat
to them was barred, n altucrtlon ie Weat which demndo
that tha statute bo not interpreted to bar recovery of
suoh taxsa.
*?ie ahall appreciate your oplnlon an to the cor-
rectness or our oaition in denying the refund of taxea
due prior to Apr f 1 1, 1938."
St would seem that o~lniona Numbers O-459 and
O-1765 have anamred inferentially the question expressed In
your oplnlon request. Bowever, it 18 now smarted that 4
differout conoluslon ahould be reached beoauae the oontribu-
tlone allegsd to be due for the perfod prior to April 1, 1959,
were paid in 1940 rather than in that psrlod. In order to
fully answer thla oontention, we reel that a ahart review of
the applioable statutes and our previous rulings will be
profitable.
Our opinion No. O-459 dealt with a situation where
the aomnlesion was aeked to rerund ooatrlbutZonr regularly
paid by the supposed employer which were due prior to one
year from the data or the ti piioatlon therefor. At the date
of this opinion, Section 12 9 d) of Artlole 552lb, Ysmon~s
Annotated Civil Statutes, was in effeot and it reads as folloas:
"Refunda: fr not later than (1) year altar the
date on which any oontrlbutions or intereat t!mreon
~~~*~~t:~~~srl~h~a~~Se~~~~ 5uch yy;p;:;;;,-
cntlo~
nent thereof In commotion with subsequent coz"&ributio?i-
payzmtn, or for R r13ruhd theroor bnofiuso such sdjustmeat
cannot be xde, anA the Zo.mieeion shall. deternine that
suoh contributione Or lntcrost or any portion thereor
wae erroneously collected, the coumlloaion rSnl1 allow
such enplcym- to rake an HU,jurct.ment thereof, witizout
lnterast, in connection with subsequent contribution
pnynents by hix, or if such adjustmant can not be made
the GomIssriun shall refund said amount, wlthcut interest,
from the fund. For like cause and wlthin the.samo gcrlod,
udjutitxent or refund nap be HO mnde on tha Comisslon'o
own initiatlva.* (!:3;phosls s~~ppllad)
The Attorney General held that the Comis8ion could
not leeally refmd contrlbutlons which wero due prior to one
yam frm ths date of applfca.tion thereror. In the course of
the optnion 'tie find tho following languagei
*One of the meet signlfioant provisions of Seotion
14(d) 1s the phrase 'the date on which say contributions
or interest thereon became due.' The *due* data rather
then the Gate of peymont is cortrolling. X0 csstter when
the oontributions em paid, the one (1) year period of
limitation apainat refunds beglno to operate in favor of
t”?o atata ‘after the date on which my contributions or
intareet t5erocn became due.‘*
.
- Based on the same faatual data aubmittbd in Opinfoa
Fib. I)-459, another opinio,n request rat received by the Attorney
General in which the main problem wes the effeat of the aaend-
ment of old Section la(d) Lo new Section 12(j), effective
April 1, 1.939. Althou$h there is some slleht difference fn
verbiage, the legal effect of both statutrs nppsarf? to be ths
same, exaeptiug the ahange in tha period of Elmi?ation. Saa-
tlon U(j) 1s still in effect a&d roade as followsr
*vthere any employing unit has made e payment to
the Commlaelon of contributions alleged to be due, and
it i5 later determined that such contributions were
not due, In whole or in part, the employine unit mnklng
suah payment may make appllaatton to the Cofm~ineion for
,an adjustment thereof in connection with contribution
payments then due, or for a refund tharsof because such
adjustment oannot be made and ii the Cardsalon shall
determine ,that such ao~ntributlons or penalty
portion thereor were erron.eoualy aolleoted, ih?Csiiie-
slon oha3.1 allow suah employing unit to meke an edjust-
ment thsreof without intereet in oonneation with apntri-
bution payments then dua by such employing unit, or if
euah adjustment oennot be made, the CWrsfon shell
refund said amount without interest from the Fund. oro-
vid6a thet no application for adjustment or rerud shall
Ger be considered by the ~ommlsalon unless the ache
shall have besn tiled within four (4) years from the
aats on whiah such contributions or penaltie@ would
fieve becoua due, had suoh contrlbutlona been legelre
colleatlble by the ConunlsBion from suoh omploping unit.
?or like ceuse, and within the WJJU~period, adjustment
or refi;nd .~ay be so made on the Comlssionis own inltla-
tive.” (Emphasis supplied)
The resulting opinion being 710. O-1795, held that
the new statute had’no retroaatlve terms and that it was in-
tended to be prospective In operation. Consequently the
claimant gained no new rkghte by the repeal OS old Section
12(d) and the passage of Eec,tlon 12(J). The holding and
reasoning in prior opinion No. O-459 was reaffirmed, 2nd the
suppoasd employer was apaln denied a refund of contributiona
becoming due prior to one year from tho aat of application
therefo?. h?.rrin, emphasis was plnced on tb3 fact thet inso-
far as the beginning of’ the period of limitation wae concerned,
the due date of the contributions was the controlling factor.
The Texas Unemployment Compensation Comnisslon has
uniformly int.erpreted the applicable statutes to mean that the
limitation period should begin on the date that tb.e oontrlbu-
tion become due. See Regulation 30, adopted July ?, 1.837, and
iiogulstion 39, adopted ;eptembsr 5, 1939.
Since every opinion by tho .httornsy General and
every regulation by tLe Cammlsz.lon, doslinG, vrlth the above
set out atatut&s, have omphsolzed the faot that the beginning
or the running of the period of limitation is the rlus date
of the contributions, we are not wlllln~ tc say now that the
date of psynent Is controlling. Vie do not believe t?at a
lsgislntlve lntznt to dlf’fersntiqte between, an,! faVor, a
claimant u.ho has not regularly paid the contributions lllep&ly
dl;s end one’ ‘*ho has rs~ulnrly paid his taxes, c8n bs ~BRI: into
the nttltutsn. Cort: