Untitled Texas Attorney General Opinion ( 1973 )


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  • Honorable    Franklin    L. Smith                    Opfnion     No.   H- 9
    County Attorney     of Nueces County
    Corpue    Christi,   Texas   78401                   Re:       Questions    relating    to the
    Constitutional     Amendment
    Honorable  James H. Whitcomb                                   passed on November          7th,
    County Attorney   of Colorado County                           1972 concerning      the Home-
    Columbus,   Texas    18934                                     stead Exemption       for
    persons    over sixty-five
    Honorable  Joe Resweber                                        years of age.
    County Attorney  of Harris         County
    Houston,  Texas
    Gentlemen:
    Prior  to November      of 1972 there was no constitutional   authority
    for any political    subdivision   of the State of Texas to grant any exemption
    from taxation     for a homestead.      An effort by the City of Wichita   Falls
    to grant such an exemption        was held unconstitutional   in City of Wichita
    Falls   v. Cooper,    
    170 S.W.2d 777
    (Tex. Civ. App. Ft. Worth,      1943, error
    ref. ).
    Section   l-b(a)   of Article   8 of thd Constitution      of Texas    provides:
    “Three    Thousand Dollars    ($3,000)  of the
    assessed    taxable value of all residence     homesteads
    as now defined by law shall be exempt from all
    taxation for all State purposes.    ‘I
    Subsection    (b) was added in 1972, providing,         that, from and after
    January 1, 1973, the governing        body of any political      subdivision     of
    the State may provide      an exemption      “not less than Three       Thousand
    Dollars   ($3,000)”   of the assessed     value of “residence       homesteads      of
    personr    sixty-five  (65) years of age or older” from all ad valorem
    taxes levied    by that subdivision.     Alternatively.      it provides    that, upon
    petition  of twenty percent     of the votcrs,~who voted in the last preceding
    election   held by the political   .subdivision,    an election    shall be called to
    determine     “by majority   vote, ‘I whether    such an exemption        shall be
    provided.      There are other conditions       not pertinent    to your questions.
    -36-
    Honorable      Franklin   L.   Smith,   page    2,   (H-9)
    Each of you has asked several            questions    concerning      ,the meaning
    and effect of this amendment.
    If certain’basic     facts concerning   homesteads      are       understood,
    then   the answers      to your questions   are less difficult.
    Section l-b(a) of Article 8 of the Constitution            speaks      in terms   of
    a residence   homestead   “as now defined by law”.
    “Homestead”    is defined in Article    3833, Vernon’s    Texas Civil
    Statutes.   The statute refers     to it as “the homestead    of a family.”
    The courts have held that the homestead         is given by our Constitution
    to the family,   not to the husband or to’ the wife.     Crowder    v. Union
    National   Bank of Houston,     
    114 Tex. 34
    , 
    261 S.W. 375
    (1924).
    The term “family”     is not defined.     However    it is held that home-
    stead is not a mere privilege       accorded    the head of a family.      It is an
    estate created    for the protection    of each constituent     member     of the
    family,   including,   for instance.    an adult, unmarried      daughter.
    Reconstruction     Finance   Corp. v. Burguess.       155 S. W. Zd 977, (Tex.
    Civ. App. Waco,      1941. error   ref. ).
    Thus, there is only one homestead  per family and the husband
    and wife cannot each have his own separate   homestead.   Crowder  v.
    Union National  Bank of 
    Houston, supra
    .
    The mere living together   without a lawful marriage.    either
    ceremonial   or at common law, does not create the necessary        family
    and does not give rise to a homestead.     Barber  v.   Lee, 
    337 S.W.2d 637
    (Tex. Civ. App. Eastland,   1960. no writ history).
    Attorney    General   Opinion No. C-725(1966)  discusses            in much
    greater      detail the precise    question of whether and to what           extent a
    family     relationship    is necessary.
    Article 16, Section 52 of the Constitution  of Texas provides  that.
    upon the death of the husband or wife,   the survivor   may elect to
    continue to occupy the homestead    as homestead.     And thus the death
    -37-
    Honorable     Franklin     L.   Smith,   page    3,   (H-9)
    of a husband leaving    a wife does not terminate  the homestead    character
    of their home.    Cox v. Messer.    
    469 S.W.2d 611
    (Tex. Civ. App. Tyler,
    1971, no writ history).
    The Constitution,     however,   makes no provision       for a divorced
    spouse.     Bush Royalty     Co. v. Rieley,    475 S.-W. Zd 566 (Tex.       1972).
    Where the marriage        was childless,    a divorce   destroys    homestead
    rights.    Steitz v. Steitz,   
    262 S.W.2d 262
    (Tex. Civ. App. Dallas,         1963,
    error   dism. ).    Where there are children       6nd thus a family      remaining)
    the homestead     may continue even after divorce.          White v. Edzards,
    
    399 S.W.2d 935
    (Tex. Civ.App.        Texarkana,     1966, error    ref. n. r. e. ).
    It is not necessary       that the interest   in the land comprising      the
    homestead       be of any particular      type.   The homestead     may be in
    separate     property     of either the husband or the wife or it may be in
    community       property.      Crowder     v. Union National    Bank of 
    Houston, supra
    .     A tenant in common may acquire            a homestead     in land he
    owns in common with others.              Powell   v. Ott, 
    146 S.W. 1019
    (Tex.
    Civ.A#p.      Texarkana,      1912, no writ history).      Homestead    may exist
    in rented premises.           Davis v. Laund. 
    41 S.W.2d 57
    (Tex. Comm.           App.
    1931). A life tenant may acquire homestead               rights in his life tenancy.
    Sullivan    v. Barnett,      47i S. W. 2d 39 (Tex.    1971); Moorhouse      v. Crew;
    
    273 S.W.2d 654
    (Tex. Civ. App. San Antonio,              1954. error   ref. ).
    Article    8, Section 1 of the Constitution     of Texas requires    that
    “Taxation      shall be equal and uniform. ” Tax exemptions          are subject
    to strict construction       since they are the very antithesis     of the equality
    and uniformity       otherwise    required.  Hiltop Village    Inc. v. Kerrvilla
    Ind. Sch. Dist.,       
    426 S.W.2d 943
    (Tex.    1968).
    Section l-b(a)     of Article    8 of the Constitution    of Texas,       added in
    November      1948, created      a favored    class of taxpayers--       possessors        of
    homesteads.        Similarly   the exemption       permitted    by subsection       (bl of
    Article   8, Section l-b, creates         a favored   class.     Whether    this violates
    the Equal ProtectioaClause            of the Fourteenth      Amendment       to the
    Constitution     of the United States depends upon the criteria              employed
    in determining      the class.      A state may classify      its citizens     into
    reasonable     classes    and apply different      laws to each class or it may
    apply its laws differently        according    to class without violatiq         thr
    Equal Protection       Clause.      Bjorgo   v. Bjorgo,     
    402 S.W.2d 143
    (Tex.
    1956).
    -38-
    Honorable    Franklin    L.   Smith,   page   4.   (H-9)
    The Fourteenth     Amendment       does not prohibit      or prevent    classi-
    fication,    provided   classification    ia reasonable     for the purpose of the
    legislation;    is based on proper and justifiable         dirtinctions.     conridering
    the purpose      of the law; is not clearly     arbitrary;    and ir not a subterfuge
    to shield one class and unduly burden another or to oppreea                   unlawfully
    in its administration.        16 AmJur. 2d. Constitutional          Law,Scc.    494, p, 860
    et seq. ; Carrington      v. Rash,     
    380 U.S. 89
    , 
    13 L. Ed. 2d 675
    , 05 S. Ct.
    (1965).
    Exempting      persona     sixty-five years of age or older from the
    burdens of taxation,          in part. would appear to be a reasonable        axerciee
    of sovereign       discretion.      Many such persona      are unable to work or
    produce      income.      Many are on pensions      or amall fixed incomes,       making
    it difficult    for them to cope with the iirring costs of existence.           A
    measure       which relieves      them of Borne financial     reapon,ribility  for taxes
    may have the effect aleo of relieving           the political   subdivision   of the need
    to care for them acr public charges.
    The exemption     permitted   by Article   8, Section l-b(b)   ia a personal
    one ,to be claimed    only by a pereon of sixty-five       years of age or older
    and only to the extent of hia taxable interest        in the property   which
    conatituteo   hie residence     homestead.     Were thin not ao, ,and if it could
    be claimed    by others,    it might prove difficult    to eetablinh  the reasonable-
    ness of the classification.
    However,    the exemption   is not merelya     permona    one.   Homcmtead
    rights can rile no higher than the interest      of the claimant,     and cannot
    affect the interests   of other8 in the property    if those intercrts   are not
    subordinated    to the homertead   claim.
    It ir our opinion,       therefore,    that the,exemption     permitted by
    Article    8, § 16(b) applier       to property    in the lcnse that the total of all
    taxable interentr       in any piece of property        are subject to the maximum
    exemption      allowed    by law. but no more,         regardless   of the number of
    persons     over it&)+-five       who claim it as theic ramidence homestead.
    On the other .hand, it ia personal            in that it may only be claimed     by and
    for the benefit of a perron over rixty-five              yearr of age to the extent of
    him personal      tax liability,    whether    asveral    or joint.
    -39-
    Honorable     Franklin   L.   Smith,   page   5,     (H-91
    Turning    then’ to the specific  questions   each of    you has asked,    the
    first asked by Mr. Whircomb           is whether a couple is       entitled to the
    exemption      if the husband is sixty-five     as of January     1, the wife is under
    sixty-five    and the property     is community     property.      Since the homestead
    belongs    to the family and it is a residence       homestead      of a pereon sixty-
    five or older,      we answer that question “yes”.         This   also answers     Mr.
    Reswebar’s       third question.
    Mr. Whitcomb     then asks if the result would differ       if the wife w~rr:
    sixty-five     and the husband under sixty-five,       or if the property    is separate
    property     of the one over sixty-five   , or  if the  property  was    the separate
    property     of the one under sixty-five.      Our answer to each of these is
    “no”.    to the extent that the one over sixty-five       has any tax liability.
    The   second question     asked by both Mr. Whitcomb        and Mr. Smith
    and Mr. Resweber’s        fourth is whether a surviving      spouse under sixty-five
    years of age would be entitled to keep the exemption           if the spouse over
    sixty-five   died after the exemption      had been granted.      Our answer   is that.
    even though the property       would retain its character     as homestead    upon
    the election   of the surviving    spouse,   it would not be a residence     homestead
    of a person    sixty-five   years of age or older and therefore       the exemption
    would terminate.
    Mr. Whicomb’s        third question and Mr. Resweber’s            fifth ask whether
    the surviving     spouse keeps the entire exemption           if both are eligible     for
    the eiemption      on January 1st but one later’dies.          By Article      7151, Vernon’s
    Texas    Civil Statutes , property      is listed for taxation with reference         to the
    quantity held or owned on January 1st of each year for which it is listed
    or rendered.       Therefore     if the exemption     applies on January 1st it will
    continue for that tax year.          A surviving    spouse who is not si.xty-five       will
    have the advantage       of the exemption      for that period of time but will lost
    it for the next tax ysar.        However     a surviving    spouse who is sixty-five
    is entitled   to the entire exemption        in any event.
    The fifth question asks whether the homestead      exemption     would
    apply where one or both of the spouses owns the property            as an undivided
    interest    with a person under sixty-five   who is not living on the property.
    A tenant in common may have homestead          rights in property     he owns in
    common wilh others.        If he does and if he is over sixty-five,     then he
    may be entitled     to the exemption.
    -4o-
    . .       ,
    Honorable     Franklin   L.   Smith,   page   6.   (H-9)
    Mr. Whitcomb’r      sixth question ask8 if the exemptioxwould        apply
    to a person    owning a life estate.     There may be a homestead       in a life
    estate.    Therefore  our answer would be that, to the extent a pereoti’
    owning a life estate has a homestead,         if he is over sixty-five,   he may
    also claim the exemption.
    Mr. Smith’s first question         is whether or not both husband and
    wife must be over age sixty-five         to claim the exemption.   Our answer
    is “no”.  Either would suffice.
    Mr.   Smith’s   third question asks what proof the tax assessor
    should require      to establish   that the taxpayer    ia over sixty-five.    There
    is no definitive     answer.     Basically   he should require   whatever    proof
    will eatirfy    him, within rearon.        Certainly  a birth certificate   or
    similar   official   document     should suffice.    But there may be other
    means of proof which also, should be adequate.
    Mr. Resweber’s      first question asks whether a person          can qualify
    for the exemption     if he becomes     sixty-five    on January 1st of the tax year.
    Article  7151, Vernon’s     Texas Civil Statutes,       provides   that the listing   of
    property   for taxation   shall be with reference       to the quantity held or
    owned on the first day of January.          Property    acquired    on the first of
    January is to be listed by the person acquiring            it.  The same rule would
    apply to a person becoming        age rixty-five     on January 1. He would
    qualify for the exemption.
    Mr. Resweber’r    second question deals with a person who,becomee
    sixty-five   iin January second. Such a person would not be entitled to
    the exemption     for the year in which he became   sixty-five.
    Mr. Rcrweber’e         sixth question asks whether, if the survivor rdle
    the homestead,        b&oh&e        wSU be entitled to the exemption      if he buyn a
    home at a later date.          We have already     indicated    that, whether   the survivor
    retains     an exemption     in the @ame homestead        will depend upon whether       the
    survivor      is over ,sixty-five.     The same will be true if the survivor        sells
    the homestead        and later reinvests     the proceeds.       He or she will be
    entitled    to the exemption in the new homestead            only if he or she is over
    sixty-five.
    -+-
    _,
    ,.   .        ,,.-
    Honorable               Franklin    L.   Smith,   page   7, (H-9)
    Mr. Resweber’s        seventh question asks whether    the exemption
    would be retained      if the person owning the homestead      is in a rest
    home.     Our answer’ would have to be that he would retain the exemption
    if the homestead     facttially   qualified as his re,sidence homestead.     This                       is
    a question   of fact and we are in no position      to answer for all the possi-
    bilities.
    Mr. Resweber      in his tenth question asks about the situation       where
    both the husband and wife are over sixty-five         and are entitled   to an
    exemption    of the homestead.      If they later divorce,   is the person    retaining
    ownership    of the homestead     entitled to continue the exemption?       If the
    property   remains     homestead,    as for instance if there are minor children
    living with the spouse,     then the exemption     would continue.     This would
    be a question    of fact.
    -SUMMARY-
    The exemption     from ad valorem      ta,xes
    provided      by Section l-b(b) of Article     8 of the
    Texas Constitution       will apply if the property
    constitutes     the residence     homestead    of a person
    sixty-five     years of age or older,      regardless     of
    the age of any other person interested           in the
    homestead,       and will terminate     when there no
    longer     is any person    sixty-five  years of age
    or older protected       by it.
    Very   truly   yours,
    Attorney    General      of Texas
    APPROVED
    &ret              Assistant
    DAVID              W.   KENDALL,         Chairman
    Opinion Committee