Untitled Texas Attorney General Opinion ( 1940 )

OFFICE OF THE ATTORNEY GENERAL OF TEXAS AUSTIN Honorabla J. Finer Pow.11 County Attornay Brown County Br~wnwood, Texas Jhar sir1 Ka are SD noalpt raqueatin~ the opin101~of t put 88 roli0r8: tba ques$loq4vbetbara bondholderfor inatansa for the payment of whoa8 bon6 a oertati Mr. he& bean laviad, OOuld 00mpal th8 hUfm& authority to devote the lntaraatand paalty to the pay- ment of his bond; and ir:nO;.ca8ea0 iu 88 my knowledge goea, was the quu,atloninYolY6d whether a taxpayer could o~pal awh 65.~p0cati0~ of the intare& and penaltjriund. 1 m partf- eularly anxious for your opinion on tbia 8apwt of tbs quaatlon." 7’42 Eon. J. Plner 7owel1, Page 8 The g@n@r@l rub with rarerenoe to the disposition Of penalties and intorest is edited in Ooolay on Taxation, 4th Ed. Vol. 4, p. 3578, .TQO. 1821, aa &llma; “F’enaltlealbr dallnquant taxma gcmarally follow the tax ace 80 to the dlstrict sntitiea to the tax, unless It ir otharwiaa protIde by statute. Cn tbc 0tba.rhand, if tEt pbnaltIea are ImPosad by the Leglalatum, thaiii- dlapo~ltlon routs In its dlaoretlon. Money lbriY.6 from RMaltisa and torfeitureawhere taxes are dally- quent @I%?not % part Of the tax, end tiara Irrpoaad by Fe Laglalatura it baa ,a rf&t to dispoaa or PAah runda a# It llksm, ragardlaas ot the purpose of the tax, as agalnat the objaotion that pub110 money relaeb.for one purpoas cannot ba usrd for anothw. . .” Ths p*nera~sr~l~l~~elao stated in 61 Corpus Jurla p* lfN?B,S*o. 2E50) : *Unless otharwlsa direoted, Intaraat,pan- altlaa, and coats oolleotad on dalinquant turns rollow tba tax, end go to the atate, oountJ or olty, looordlng a8 tta one or tha othar is entitled to the tax Itaolf, end, In oaa~a wham two or more of thee8 two Inkr4stod in the tax, auob Interest szibnsnaltiea should be appcmtIon- ad esong them In the ratio of their roapaotire aharea or the tax, the foragolng baing eometlmee provided for bg-statute. But the ~~iU~P%lPO map ahange thin rule and diapoas otherwiar Of lntarrat or penalties. A etatut. provldlng for the dletrlbutionot Interest end penaltl88 601- leoted i:16 Biifartnt ainner from the 6lepoaItlon of the taxas on wbfoh the lntareat and Renaltier are baaed does not umotlntto the Sppli~@tfO~ Of taxga to obJaots other than for wbiob tbY were i~p0s.d. . .” Artlo 7338, Revteed (~1~11.Ydxte@, lO25, @@ amsndea, *ich p0rides ror penaltlaa end Intmaat on dalln- quant taxes, reads in part aa followat rioon. J. Finer ?awtll, 2868 $j *kll penalties and Intareat prov$ded~for 1~ ti:ic.;otstell, whtn colltotad,be ?eld m the state, counties,and dletriota, if any, In pro- .;;Ortion to the tsxas upon vb,lchthe pemlty and inttraatarc follaotad. All aisaountc prorldad fOT lo thic Act shell, a-bcnallowed, be ohargatj to the state, counties,end dlatricts, if ay, in proportionto thu tare% upon which such d;a- counts nrt ellmad.*~ You state that you haYe been unable to rind any statute In Texas proYidIng for the dlcpomltionor panaltiea end Intartat and we have bran unable to find a0y axeept that quoted above which epgllaa as between t!! Yarloua taxing authoritlbaand not rrprassly to the varlout funda of the county. In tht oasa Of JOWE Ya. I'i~liaaa, 1El Tex. 94, 46 I'.X. (R8) 150 our %xprem Court held that p&tSlti~@arid intaraat lra no part Of tht tax and tbt Le@lslaturatherefore has autimlty to lsakatiispoeltlon ttereaf or to raleaao such peoaltleasnd interest. ft is suaaastaa that this holding affords t&m basis for strong argunmnt that,the taxlne,au- thorities do not neoaasarllybooa to plaoe the interart gid p~naltles in #a pertioularfund far which tha dellnc;wnt taxaa mra levied and asaa~aad~ We do not think, however, met this la the netural or proper rwult of auoh holding ainoa it la ar,a~plioatIonof the ganaral rule that the Lagltlaturoamy laekaother ;xoYIslona for the biapoaltlon of ptnaltIra. The quaatlan here peaantad inroltaa the proper credltlneof penaltlas as betwten various funds whan the hLeglelatura has not g.lrm any 8ptolPloalraotIonwith refuonca thu*to. ft mu16 sees to rollaa, by analogy to the mneral rulea hereimmrt stated, that in the abaenat Of at@tUt~rV pr@Ylslonsto the contrary, $NaSltie6 COlieOtSdfOF 88X da- linguaocy should fo31ow the prl::olpaland be prora886 among the Yarious fund6 ror whl0b the ttxe5 W4rt collt0tad. If thj.8were not true than would be no proYiaiOnf0r the da- posit and accountingrOr pesmltlos mai lnttraat. It is tharefore our opinion that panaltltdend interest, toftsn mlleotsd, &oultI be proratedand pl8Ued to the or&It of the various fund6 to vAii.ohthe tax88 in que@- t;On ware due and upOn Rich the penaltimeand Intares% 10 c,uestionaocrutd. Eon. 3. Plaer Powell, yasrs4 You diaauar a further‘question%n your letter but iron attached corre4pondeno4 and other data wu believe it does not oonawn the aountp, but la a qu8stion affeoting a water lmgrovententdietclct and its bondholders,whiah it would hardly be groper ror UB to atteknptto 4mw4r. IfIRSTAC: fiTTORNFi--.- GGGIJ’M