Untitled Texas Attorney General Opinion ( 1993 )

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DAN MORALES April 26,1993
ATTORNEY
GENERAL
Honorable Tom Craddick Option No. DM-218
Chairman
Committee on Public He&b Re: wllether an additional sales and use tax
Texas House of Representatives under section 321.101(b) of the Tax Code may
P.O. Box 2910 be used to finance a homestead exemption,
Austin, Texas 78768-2910 whethex an eligible city may simultatlMusly
adopt sales and use taxes under both sections
4A and 4B of V.T.C.S. article 5190.6, and
dated questions (RQ-466)
DetKRepresentativecraddick:
On behalf of the city of Cedar Hill (the “city”), you have asked several questions
about sales and use taxes. Pii you ask whether an additional sates and use tax under
section 321.101(b) of the Tax Code may be- used to tlnance a homestead exemption
instead of reducing the property tax rate.
Section 321.101(b) provides that certain municipalities“may, by a majority vote of
the quahied voters. . . adopt an additional sales and use tax for the benefit of the
mtmicipality in accordattm with this chapter... .“I The 1~ has expressly
prescrii the use of revemre collected under section 321.101(b). Revenues from an
additional sales and use tax under this chapter must first be used to reduce the property
tax rate. See Tax Code 8 321.404(a) (mquking that a ballot in an election to adopt an
~dltionalsales~dwetaxJpecifythatthetaxwill”beusedtoreduccthepropcrtytax
rate”); see also id. 5 321.507 (citing Tax Code. 58 26.04(c) and 26.041(d), and providing
that excess funds must be deposited in an “excess sales tax revenue fund”and a “municipal
sales tax debt service timd,”which may only be expended for limited purposes); 8 321.506
(goveming the use of any remain@ funds).2
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Honorable Tom Craddick - Page. 2 (nu-218)
Whenagovaningbodylldoptsahomest~aanption,itacanptsfromrd
u&rent taxation a prcmtqe of the appraised value of residence homesteads. See Tax
Code 0 11.13. A homestead exemption does not reduce the prop@ tar rate. The
memorandum submitted with your request suggests~that this distinction is immaterial
because the purpose of the additional sales and use ULXunder section 321.101(b) is to
reduce the tax burden on property owners. It contends that cities should have the
authority to determine how to achieve that end, idding adopting a homestead
exemption in lieu of redueing the property tax rate. We dimgree.
While a homestead exemption reduces the tax burden on residential property by
exempting a portion of the appraised vahre of residences from taxation, it does not reduce
the tax burden on non-residential property. See id. The legislature has specifically
provided that the purpose ofthe additional sales and use tax under section 321.101(b) is
to reduce the property tax rite, and has set fbrtb a number of provisions which explicitly
govern the use of these revenues. See Tax Code, 5 321404(a); see CrLao id. $8 26.04(c).
26.041(d). 321.506, and 321.507. None of these provisions permits a city to use an
additionalsalesanduse~toreduccthetaxbPlrdmofresideatialpropatyumilenot
reducing the. tax burdem of non-residential proper@ Because a homestead exemption
doesnotreducethepropatytaxnteasnquindbytheseprovisions,wecwclude~a
municipalityisnotauthorizedtousean~~tio~saluMdusetaxundasection
321.101(b)oftheTaxCodetofinanceahomesteadexemption.
Second,youexplainthatin~~onto~o~aonahallcent~uMdusetax
tmder section 4B of article 5190.6, V.T.C.S., e&et.& July 1. 1993, the city would also
liLetoadoptacombined~hafcaapslesudurtraundasection4Aofthat~~e
and section 321.101(b) of the Tax Code, efktive October 1, 1993, for an overall one
centsalestax3 ThecitywouldholdMelectionto~optasaesMdusetaxundaeachof
these provisions on the same day.4 You ask ifthe city is authorized to do so. Section 4A
and section 4B separately authorize an ‘eligible city” to adopt a sales and use tax.
Assumingthatacityiseligibleunderbothprovisions,weseenothingin~~e5190.6that
would suggest that the city may not simultaneouslyadopt sales and use taxes under both
section 4A and section 4B.
You point out that subsection (f) of section 4B provides that “[u@r the e@ctiw
~eoIthPtmceSinpavdunda~~on,theadoptionofasalesandusetaxorthe
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Honorable Tom Craddick - Page 3 (DM-218)
Ina~~question,youaJ;whethaaproposaltoadoptasalesaadusetra
mder section 4B of article 5190.6, on the one hand, and a combmed sales and use tax
undersection4Aoftbatarticleandsection321.10l(b)oftheTaxCode,ontheother,may
appedronaballotasasingleballotproposit.ion. Section4A(p)attthbsacitytoimpose
asalesandusetPruadathat~~aadtoimpo~eanrdditionalsalesMd~taxunder
section 321.101(b) of the Tax Code “at tbe same time and on the same ballot.” See aku
V.T.C.S. art. 5190.6, 84A(e). It is clear fkom the ballot hnguage set forth in section
4A@)~thetwo~~~ontbeballotinthesameproposition. Section
4A(p) provides in perhent part:
The city must follow, in relation to tbe imposition. . . of the
additional sales and use tax imposed under Section 321.101@), Tax
code,theproozduresofthatchapter,exepttllatinaneleuionto
impose...thetaxunderthisrection~theldditional~~~~
taxthebpllotsMIbeprintedtoprovideforvotiagfororclgainsttbe
proposition: “Theadoptionofasalesandusetaxwithinthecityfor
tbepromotionanddevelopmattofnewaudexpandedbushess
extterprisesat the rate of. . . and the adoption of au additional sales
md~~withinthccity~therateOf...tokusedtonduce.the
propatytiSXnte”....
The foregoing provision sets forth the language which must be used in a ballot
proposition on the adoption of a combined sales and use tax under section 4A and section
321.101@). It does not authorize the city to include any other language in the ballot
proposition. The&ore, we conclude that the city is not authorized to join a proposal to
adopt a combmed sales and use tax under section 4A and section 321.101(b) and a
proposal to adopt a sales and use tax under section 4B on the ballot as a single ballot
proposition. See Wtight v. Bomd of T-es of Tar~m h&p. Sch. Da.., 520 S.W.2d
787, 792 (Tex. Cii. App.-Tyler 1975, writ dism’d w.o.j.) (“When a statute which
authoriws a special election for the imposition of a tax prescribes the form in which the
question shall be submitted to the popular vote, the statute shall be strictly complied
With.“)
p. 1146
Honorable Tom Craddick - Page 4 (DM-2 18)
You~rsk~meliSiblecitymryrdoptaralesradusetaxrtantelssr
than one-half of one percent under section 4B, article 5190.6. S§ion (e) of section
4Bprovides~“[i]f~~~~city~opssth~atmbimposedoatherecciptsfiom
tbesrle~rrtailof~~~~withinthedigiblecityitanteequJtooaahalfofone
” Section 4A of article 5190.6 and section 321.101(b) of the Tax Code
~~.adoptiollofasslesturta*squdu,Dawiehtboabfounbthraeeigtnqor
one-half of one percat. See V.T.C.S. att. 5190.6, #4A(d), (m), (p); Tax Code
&j321.lOl(b). 321.103(b). Prior to 1991, both section 4A and section 321.101(b)
providedonlyforaone-halfofonepercenttaxrate. lal99l,ho~mr,tbeSeventy-
~~r~unmdcdthere~torllowfor~~undaonahrlfofoae
paccnt. Acts 1991,72d Leg., ch 184, 00 1,4. Siicantly, the legkture has not
- amended section 4B to provide for tax rites under one-half of one percent.
Accwdu& weconclude~~on4Bdossnotruthoriteandisible~toldopta
saksand&taxataratelessthanoabhaifofoneparcent.
Pii,youaskwhethermembersofac@%municipaladvisoryboardsarecity
officers for pwposes of article 5190.6, section 4B(c). Subsection (c) proides that the
boanlofawrpontionestablisheduad~section4Bcon&sofswendktors,andthat
“[alt least four dkctors must be pemons who are manbers of the gowning bodyofthe
eligiile city, and the tEtMkgthnedifWtO~rhallbepWSOltSWhOUeWtemplOyees,
offi- ormembuaofthe gover&gbodyoftheeligiilecity.” Youatatethatyou
uadarturdthatmanycitiesiaclude~boardmanbasap”offi~“for~o~
purposesintheircitycharter!3andcod es. Thefactthatanadvisotyboardmemberis
de6nedasacityofficcrinacitycodeorchmter,however, doesnotwcwwilymekehim
or her an offica fbr purposes of state law in gQleral or atticle 5190.6 in particular. Under
~isw,rplblicoffi~genenllyhuafaedtamMd~benmmedwlyin
accordance with the applicable provisions of law. Akfine In&p. SchooJDfst. v. S&r&y,
280 S.W.2d 578 (Tex. 1955). In addition, a public officer is someone upon whom some
wvereignflmctionofthegovemmt isconfwedfbrthebeneiitoftbepublic,largely
imkpendentofthewntrolofothus. Id.at583. Anindividualwhoservesinamereiy
adviwry capacity does not exercise sowreign powexsindependent of the wntrol of others
andisthe&orenotanofficer. ThedetemGnationwhethermembersofaparticular
mtmicipal advisory board are officers depends upon the foregoing factors and must be
made on a case-by-case basis.
SUMMARY
Acityisnotauthokzcdtouseanadditionalsalesandusetax
under section 321.101(b) of the Tax Code to fmance a homestead
CXMtptiOtt.
Acitythuadoptsaonahalfcent~alwanduseturunder~on
4BofarticJe5190.6,V.T.C.S..mayalsoadoptinthesameelectiona
wmbmed on&alf cent sales and use tax under section 4A of that
articJe and section 321.101(b) of the Tax Code, asskng that the
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Honorable Tom Cmddick - Page 5 (DM-218)
cityiseligibleto~~a~alesMd~tucundatheseprovirionsud
theoveraUsalesandusetaxratewouldnotexceedatntutoryhits.
Acityisnotauthorizedtojoiaaproposaltoldopta~~Mduse
tsxundareaion4B,andaw~~~Mdusetaxunda~on
4A and section 321.101(b), on the ballot as a single ballot
proposition. Acityisnotauthorizedtoadoptasalesa~~Iuutax
tmder section 4B at a rate less than one-half of one percent.
Thehctthatrmunicipalldvisoryboardmcmberisdeihdasa
cityofficerinacitycodeor~dasnotnecessarilymakehimor
beranofficerforpurposesofstatelawingeneralorazticle5190.6in
particular. The determhation wh&er members of a particular
rmrnicipaladvisoryboardarecityofficersmm%bemadeonacase-
by-casebasis.
DAN MORALES
Attorney Oeneral of Texas
WILL PRYOR
PiiAuistMtAttomeyoweral
MARYKELLER
DcputyAttomcyGenemlibrLitigation
RENEAHlcKs
State Solicitor
MADELEINE B. JOHNSON
Chairs opiion committee
p. 1148