Untitled Texas Attorney General Opinion ( 2007 )

ATTORNEY GENERAL OF
GREG ABBOTT
February 16,2007
The Honorable Mike Stafford Opinion No. GA-05 18
Harris County Attorney
1019 Congress, 15th Floor Re: Whether delinquent property taxes not
Houston, Texas 77002 reduced to judgment constitute indebtedness
under sections 154.045 and 262.0276 of the
Local Government Code (RQ-05 16-GA)
Dear Mr. Stafford:
Section 154.045 of the Local Government Code generally prohibits larger counties from
disbursing county funds to persons indebted “to the state, the county, or a salary fund.” See TEX.
LOC. GOV’T CODE ANN. 5 154.045 (Vernon 1999). Section 262.0276 of the same code authorizes
a procedure for counties “to refuse to award a contract to or enter into a transaction with an apparent
low bidder or successful proposer that is indebted to the county.” See id. $ 262.0276(b) (Vernon
2005). You ask whether delinquent property taxes not reduced to judgment constitute indebtedness
under either section 154.045 or 262.0276 of the Local Government Code.’ You also ask whether
either of these sections requires “general obligations” other than taxes “to be reduced to judgment
before becoming ‘debt.“’ Request Letter, supra note 1, at 1.
The ultimate purpose of statutory construction is to ascertain and give effect to the
Legislature’s intent. See McIntyre v. Ramirez, 109 S.W.3d 741,745 (Tex. 2003). Courts generally
begin with the plain and common meaning of a statute’s words. See id. Unambiguous statutory
language should be interpreted according to its plain meaning. Id. But undefined terms must not
be given a meaning that is out of harmony or inconsistent with other provisions of the statute. Id.
And a court may consider aids to construction such as a statute’s preamble and legislative history,
its object, and the consequences of a particular construction. See id.; see also TEX. GOV’T CODE
ANN. 5 3 11.023(l), (3), (5), (7) (V ernon 2005) (Code Construction Act aids to construction).
Texas courts have long observed that the word “debt” does not have a single fixed meaning
and thus must be construed in the context of the language of the particular statute under
consideration. See, e.g., Reconstr. Fin. Corp. v. Gossett, 111 S.W.2d 1066, 1073 (Tex. 1938)
(stating that “debt” has been defined differently due to the subject matter of the statutes in which it
has been used); McNeil2 v. City of Waco, 33 S.W. 322,323 (Tex. 1895) (the meaning of “debt” in
different statutes and constitutions varies from the very restricted to the very general); Wilburn v.
‘See Letter fi-om Honorable Mike Stafford, Harris County Attorney, to Honorable Greg Abbott, Attorney
General of Texas (July 3 1, 2006) (on file with the Opinion Committee, also available at http://www.oag.state.tx.us)
[hereinafter Request Letter].
The Honorable Mike Stafford - Page 2 (GA-05 18)
State, 824 S.W.2d 755,759 (Tex. App. -Austin 1992, no writ) (stating that “[tlhe meaning of the
term ‘debt’, as used in a particular statute, is to be determined by construction”). In a broad sense,
a “debt” is a “specified sum of money owing to one person from another.” Seay v. Hall, 677 S.W.2d
19, 23 (Tex. 1984) (quoting BLACK’S LAW DICTIONARY 363 (5th ed. 1979));2 Cain v. State, 882
S.W.2d 515,516 n.1 (Tex. App. -Austin 1994, no writ) (“debt” is ordinarily a legally enforceable
obligation “for a sum certain in money”). A number of courts have held, however, that because taxes
are not in the nature of contractual obligations, they are not a “debt” in the ordinary sense of the
word. See, e.g., Jones v. Williams, 45 S.W.2d 130,136-37 (Tex. 193 1) (holding that “taxes are not
debts in the ordinary sense of contractual obligations” but are “impositions by governmental
authority”); Wisenbaker v. State, 860 S.W.2d 681, 688 (Tex. App.Austin 1993, pet. ref d)
(punishment for failure to remit motor fuel taxes is not imprisonment for “debt” because it is not a
“liability to pay money growing out of contract”); Wilburn, 824 S.W.2d at 760 (“A tax is not a debt
in the ordinary sense of the word, because taxes are not contractual obligations . . . .“) (citing Jones,
45 S.W.2d at 136-37); see also Dallas Joint Stock Land Bank v. Ellis County Levee Improvement
Dist. No. 3, 55 S.W.2d 227, 229 (Tex. Civ. App. -El Paso 1932, no writ) (claim against state or
municipality may not be offset against taxes because taxes are not debt in the word’s usual and
ordinary sense). “Nevertheless, a tax is considered a liability or obligation, and may be a debt under
a particular statute . . . .” WiZburn, 824 S.W.2d at 760. We find that these statements are best
harmonized in accordance with the following: ‘
[Wlhile occasionally the words ‘debts’ and ‘taxes’ are used
interchangeably, ordinarily this is not so. Indeed in most instances
they are used distinctively. This established, it follows that to support
a construction of a statute that the word ‘debt’ includes taxes, there
must be some reason shown to so read a statute other than the fact
that sometimes the word ‘debt’ will include taxes. This reason must
be sought in the purpose of the statute, that is the mischief sought to
be prevented and the appropriate means to achieve that end.
Rochelle v. City of Dallas, 264 F.2d 166, 169 (5th Cir. 1959).
With these principles in mind, we begin with section 154.045 of the Local Government Code,
which provides in its entirety:
If a notice of indebtedness has been filed with the county auditor or
county treasurer evidencing the indebtedness of a person to the state,
the county, or a salary fund, a warrant may not be drawn on a county
fund in favor of the person, or an agent or assignee of the person,
until the person owing the debt is notified that the debt is outstanding
and the debt is paid.
TEX. LOC. GOV’T CODE ANN. 5 154.045 (Vernon 1999). Section 154.045 is located in chapter 154,
which regulates the compensation of district, county, and precinct officials on a salary basis. See id.
2Superseded by statute on other grounds by Palmer v. Coble Wall Trust Co., 85 1 S.W.2d 178,18 1 (Tex. 1992).
The Honorable Mike Stafford - Page 3 (GA-05 18)
$5 154.001-.046 (Vernon 1999 & Supp. 2006); see also TEX. CONST. art. XVI, 5 61 (requiring
certain officers to be compensated on a salary basis rather than a fee basis). Section 154.045 applies
to counties with a population of more than 190,000. TEX. LOC. GOV’T CODE ANN. $5 154.041, .045
(Vernon 1999). A virtually identical provision, section 154.025, applies to counties with a
population of 190,000 or less. See id. $5 154.021, .025.
No court has considered whether delinquent taxes are debt for warrant withholding purposes
under chapter 154 of the Local Government Code or the warrant withholding statute applicable to
the state, section 403.055 of the Government Code. See TEX. GOV'T CODE ANN. 5 403.055 (Vernon
2005). A long line of opinions of this office, however, have determined that a delinquent tax is not
. a debt for which a county or state warrant may be withheld. See, e.g., Tex. Att’y Gen. Op. Nos.
JM-1193 (1990) at 2--4,0-5249 (1943) at 3-4,0-l 089 (1939) at 3-5. In 1939, the attorney general
determined that a county auditor did not have the authority to hold up claims of persons who were
delinquent in paying ad valorem taxes. See Tex. Att’y Gen. Op. No. O-1089 (1939) at 3-5. That
opinion noted that courts do not allow a claim against the state or a local government to offset a tax
demand, because “[a] tax is not a debt in the usual and ordinary sense of the word.” Id. at 3 (quoting
Dallas Joint Stock Land Bank, 55 S.W.2d at 229). Additionally, the opinion observed that
withholding a warrant for delinquent taxes would deprive the taxpayer of the statutory procedure for
collecting ad valorem taxes. Id. at 3.
In JM-1193, the attorney general concluded that section 154.025 of the Local Government
Code does not preclude a county from paying salaries to employees or officials who are delinquent
in their ad valorem tax obligations. See Tex. Att’y Gen. Op. No. JM-1193 (1990) at 4. The opinion
relied in main part on Texas cases holding that debt ordinarily does not include tax obligations. See
id. at 2 (citing Brooks v. Brooks, 515 S.W.2d 730,733 (Tex. Civ. App.-Eastland 1974, writ ref d
n.r.e.), and quoting Rochelle, 264 F.2d at 169). The opinion was followed by JC-0087, in which the
attorney general concluded that delinquent taxes may not be debt but that a judgment for delinquent
taxes establishes a debt under section 154.025 of the Local Government Code. See Tex. Att’y Gen.
Op. No. JC-0087 (1999) at 2-3.3
Both sections 154.025 and 154.045 derive from the same 1935 enactment. See Act of Nov.
14,1935,44th Leg., 2d C.S., ch. 465, $ 19(m), 1935 Tex. Gen. Laws 1762,178l. Neither the plain
language nor the history of these two sections provides a basis for concluding that the word “debt”
in section 154.045 should be construed more expansively to include delinquent taxes not reduced
to judgment. See Tex. Dep’t of Transp. v. Needham, 82 S.W.3d 314,318 (Tex. 2002) (“Statutory
terms should be interpreted consistently in every part of an act.“). Moreover, a court is unlikely to
depart from the longstanding construction of “debt” in the warrant withholding statutes. See Tex.
Dep ‘tofProtective &Regulatory Servs. v. Mega Child Care, Inc., 145 S.W.3d 170,176 (Tex. 2004)
(“If an ambiguous statute that has been . . . given a longstanding construction by a proper
administrative officer is re-enacted without substantial change, the Legislature is presumed to have
3But see Tex. Att'y Gen. Op. No. O-5249 (1943) (determining that comptroller could not withhold state warrant
because of judgment for delinquent unemployment taxes).
The Honorable Mike Stafford - Page 4 (GA-05 18)
been familiar with that interpretation and to have adopted it.“);4 see also S. Tex. Coil. ofLaw v. Tex.
Higher Educ. Coordinating Bd., 40 S.W.3d 130, 137 n.l (Tex. App.Austin 2000, pet. denied)
(stating that while attorney general opinions are not binding on courts, numerous attorney general
opinions construing a statute are particularly persuasive when there “is otherwise limited authority”).
We conclude that under section 154.045 of the Local Government Code delinquent taxes that have
not been reduced to judgment are not “debt” that precludes a county from disbursing funds to a
person indebted to the county.
We next consider the meaning of “indebted” in section 262.0276 of the Local Government
Code. Unlike sections 154.045 and 154.025, which have remained largely unchanged since they
were enacted in 1935, section 262.0276 was only recently added to the Local Government Code in
2003. See Act of May 9, 2003, 78th Leg., R.S., ch. 156, $ 2, 2003 Tex. Gen. Laws 230, 23 1.
Section 262.0276 is located in the County Purchasing Act, chapter 262, subchapter C of the Local
Government Code, which concerns county purchasing by competitive bidding. See TEX.LOC.GOV’T
CODE ANN. $5 262.021-.036 (Vernon 2005). Contracts subject to subchapter C generally must be
awarded “to the responsible bidder who submits the lowest and best bid.” Id. 5 262.027(a)(l). The
subchapter allows a county to take certain factors other than price into consideration, such as a
bidder’s safety record and employee health insurance coverage. See id. $8 262.0271, .0275.
Pertinent here, section 262.0276 allows a commissioners court to reject an apparent low bid because
the bidder is “indebted to the county” by adopting rules to that effect:
(a) By an order adopted and entered in the minutes of the
commissioners court and after notice is published in a newspaper of
general circulation in the county, the commissioners court may adopt
rules permitting the county to refuse to enter into a contract or other
transaction with a person indebted to the county.
(b) It is not a violation of this subchapter for a county, under rules
adopted under Subsection (a), to refuse to award a contract to or enter
into a transaction with an apparent low bidder or successful proposer
that is indebted to the county.
(c) In this section, “person” includes an individual, sole
proprietorship, corporation, nonprofit corporation, partnership, joint
venture, limited liability company, and any other entity that proposes
or otherwise seeks to enter into a contract or other transaction with
the county requiring approval by the commissioners court.
Id . § 262.02
4Subsequent to the attorney general opinions concluding that delinquent taxes were not debt, the Legislature
reenacted the warrant withholding statutes at issue here without substantial change. See Act ofNovember 14,1935,44th
Leg., 2d C.S., ch. 465, tj 19(m), 1935 Tex. Gen. Laws 1762, 178 1, amended by Act of May 1, 1987,7Oth Leg., R.S., ch.
149, 5 1, sec. 154.045, 1987 Tex. Gen. Laws 707,937 (providing “a nonsubstantive revision of the statutes relating to
local government”); amended by Act of May 17, 1989, 71st Leg., R.S., ch. 1155, 1989 Tex. Gen. Laws 4761, 4761;
amended by Act of May 6, 1997,75th Leg., R.S., ch. 139, § 2, 1997 Tex. Gen. Laws 282,283 (now TEX. Lot. GOV’T
CODE ANN. 5 154.045 (Vernon 1999)).
The Honorab le Mike Stafford - Page 5 (GA-05 18)
Chapter 262 does not define “indebted” or any related word. See id. # 262.001-.036. The
Seventy-eighth Legislature enacted section 262.0276 in Senate Bill 850. See Act of May 9,2003,
78th Leg., R.S., ch. 156,§ 2,2003 Tex. Gen. Laws 230,23 1. The act’s caption and preamble reveal
that it is intended to apply to delinquent taxpayers: “AN ACT relating to allowing local governments
and school districts to prohibit contracts or other transactions with delinquent taxpayers.” Id. at 230.
And nothing in section 262.0276 or its history suggests that to constitute an indebtedness under the
statute, a “delinquent” tax must be reduced to judgment. To the contrary, ad valorem taxes need only
to be unpaid as of a certain date to be considered delinquent. See TEX. TAX CODE ANN. 5 3 1.02(a)
(Vernon Supp. 2006) (ad valorem property taxes “are delinquent if not paid before February 1 of the
year following the year in which imposed”); see also id. 5 33.41(a) (Vernon 2002) (a suit to collect
property taxes may be filed at any time after the “tax on property becomes delinquent”).
Furthermore, the analysis of the bill as enrolled states that the intent is to include bidders who owe
back taxes:
Texas cities, counties, and school districts are prohibited from taking
into consideration anything other than general qualifications and price
in awarding bid contracts. However, some bidders who have been
awarded contracts owe the city, county, or school district back taxes.
S.B. 850 allows cities, counties, and school districts to consider
whether a bidder has paid their ad valorem taxes to the entity seeking
the bid proposal and to refuse to contract with a person or firm so
indebted.
BILLANALYSIS,
TEX.SENATECOMM.ONINTERGOVERNMENTALRELATIONS, Tex.S.B.850,78th
Leg., R.S. (2003). The fact that an express purpose of the statute is to allow counties and other local
entities to withhold contracts from persons who have not paid their ad valorem taxes provides
sufficient reason to interpret “indebted” in section 262.0276 to include taxes not reduced to
judgment. Consequently, a delinquent tax obligation, although not reduced to judgment, constitutes
“debt” under section 262.0276 of the Local Government Code.
Finally, you ask whether either section 154.045 or 262.0276 of the Local Government Code
requires “general obligations” other than taxes “to be reduced to judgment before becoming ‘debt.“’
Request Letter, supra note 1, at 1. Both sections assume the existence and establishment of a debt.
See TEX. LOC. GOV’T CODE ANN. 5 154.045 (Vernon 1999); id. § 262.0276 (Vernon 2005).
Obtaining a judgment is but one means of establishing an indebtedness. As this office explained in
connection with the state’s warrant withholding statute, a debt also may be established by agreement
or contract, by the terms of a statute, or “by some other lawfully effective means.” See Tex. Att’y
Gen. Op. No. MW-416 (1981) at 3 (emphasis omitted); see also Tex. Att’y Gen. Op. No. JC-0087
(1999) at 2 (while delinquent taxes are not debt, obtaining a judgment for delinquent taxes
establishes a debt). Consequently, whether a particular obligation other than delinquent taxes has
been established as “debt” under section 154.045 or 262.0276 without reducing it to judgment
depends on the nature of the obligation.
The Honorable Mike Stafford - Page 6 (GA-05 18)
SUMMARY
Under section 154.045 of the Local Government Code,
delinquent taxes that have not been reduced to judgment are not
“debt” that precludes a county from disbursing funds to a person
indebted to the county. For purposes of section 262.0276 of the Local
Government Code, a person “indebted to the county” includes a
person who owes the county delinquent taxes, regardless of whether
the taxes have been reduced to judgment. Whether a particular
obligation other than delinquent taxes is “debt” under section 154.045
or 262.0276 without reducing it to judgment depends on the nature of
the obligation.
Atto&G eneral of Texas
I KENT C. SULLIVAN
First Assistant Attorney General
ELLEN L. WITT
Deputy Attorney General for Legal Counsel
NANCY S. FULLER
Chair, Opinion Committee
William A. Hill
Assistant Attorney General, Opinion Committee