Honorable Robert S. Calvert        Opinion No. M-1190
Comptroller of Public Accounts
State of Texas                     Re:   Legality of refunds or
Austin, Texas                            credits .for taxnver-
                                         payment made.prior to
                                         July 1, 1967, to .be
                                         issued after August.31,
                                         1972, under stated.facts
Dear Mr. Calvert:                        and circumstances?
       Your request presents two questions both concerning
Article 3..045,Title 122A, Taxation-General, V;C.S. The first
question hereinafter considered states in part:

           "Under the provisions of Article 1.045, Title
           122A, Revised Civil Statutes of 1925, as amended,
           the seven-year limitation period on the.issuanae
           of franchise tax assessments becomes operative on
           September 1, 1972, on and after which date the
          Comptroller is proscribed from issuing a franchise
           tax assessment for delinquent taxeswhich were.due
           pri.orto.July l.,1967. However,  Section .(C)*of.
           the statute prescribes an exception thereto where-
           under assessment and collection procedures are
           authorized after expiration-of the 'I-yearperiod
          ..if-priorto such expiration the Comptrollzer.(or
           his.representative) and the taxpayer have,.con-
           sented in writing to an-assessment after that
           time. ...
          *Your official opinion is respectfully reques‘ted
          wnether, pursuant to a written agreement with
          eachstaxpayer for extension of the time within
          which an assessmentmay be issued, a refund or
          credit may be issued by the Comptroller after
          August 31;1972 for overpayments made~prior to
          July 1, 1967, ...*




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The Honorable Robert S. Calvert, page 2   (M-1190)   -'


       Section (C), of Article 1.045, provides that the
limitation period on assessments and collections may be
extended by written consent of the taxpayer and the Comp-
troller prior to the expiration of said initial limitation
period as follows:
           "If, before the expiration of the period of
           time prescribed in this Article for the
           assessment and collection of any tax imposed
           by this Title, or before the expiration of
           any shorter period of time as may be other-
           wise provided in this Title, the Comptroller,
           or his representative, and the taxpayer have
           consented in writing to an assessment after
           such time, the tax may be assessed and
           collected, and an action may be commenced
           in any court to collect the amount delinquent,
           at any time prior to the expiration of the
           period agreed upon. The period so agreed
           upon may be extended by subsequent agree-
           ments in writing made before the expiration
           of the period previously agreed upon."

       Section (G) provides:
           "Limitation for Refunds and Credits. Notwith-
           standing any provision of this Title, the
           period of time during which the Comptroller
           may refund any werpayment of tax or issue a
           credit for overpayment of any tax imposed
           by this Title shall.not expire prior to the
           expiration of the period of time within which
           the Comptroller may assess a deficiency with
           respect to such tax. The Ccmptroller shall
           not issue any such refund or credit after the
           time for assessment of a deficiency has
           expired unless such tax was paid under protest
           and such refund or credit is made under court
           order.'
       The two Sections (C) and (G) taken together allow tax
refunds or credits during any period in which a tax deficiency
could be assessed for the same tax period for which the refund
or credit is sought.



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The Honorable Robert S. Calvert, page 3   (M-1190)


       Section (A) provides the seven-year limitations period
on franchise tax assessments and on claims for refunds or credits
by virtue of Section (G).
       Section (C) provides a method of extending this period
at the discretion of the Comptroller and the taxpayer and
therefore, a constitutional question arises of whether this
provision allows .for an exercise of discretion without any
accompanying standards or guidelines which are necessary to
the constitutional delegation of such power.
of University Park, 278 S.W.Zd 912 (Tex.Civ.App.
                                              M-
ref. n.r.e.). Article 2, Section 1, Texas Constitution.
       Section (C) contains 30 standards to-guide the Comp-
troller in the exercise of this discretion to enter into
agreements affecting an extension of the statutory limitations
period. In the Ml4    case, supra, the Court of Civil Appeals
sets out the principle*of law as follows:
          *Applicable to the foregoing grant of authority,
          by both Legislature and ordinance, are the
          following rleneralprinciples: (1) On the
          question of constitutionality or not of the . .
          delegated power, the inquiry is of whether
          the legislature has prescribed sufficient
          standards to guide the discretion conferred.
          If so, the power is not 'legislative' and
          its delegation is lawful: Davis, Admiikis-
          trative law. p. 44; Housing Authority of City
          of Dallas v. Higginbotham, 135 Tex. 158, 143
          S.W.2d 79, 130 A.&R. 1053; Railroad Commis-
          sion v. Shell Oil Co., 139 Tex. 66, 161 S.W.
          2d 1022, also Id., 146 Tex. 286, 206 S.W.2d
          235.  (2) 'It is fundamental that a legis-
          lative body may not delegate unlimited
          legislative powers and functions to an
          administrative ageny. Whenever the legis-
          lative body vests any administrative agency,
          such as a zoning board, with the power to
          exercise discretion. it must spell out the
          limits of that discretion by the establish-
          ment of scme standard to guide the agency.
          Such a standard may be general and at the
          same time be valid if it is capable of
          reasonable application.'"



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The Honorable Robert S. Calvert, page 4     (M-1190)


The unlimited or unqualified power to exercise discretion
granted in Section (Cl to suspend the law of limitation may
not be granted by the Legislature. 11 Am.Jur. 947, Consti-
tutional Law, See. 334. As such, Section (C) ,is unconsti-
tutional and invalid. Article 1.045 contains a~severability
clause, and therefore, only the suspension provisions are
invalidated.
       Although Section (C) is invalid for the reasons given,
said provision may also be prohibited under Article 1, Section
29, of the Texas Constitution which provides as follows:
           “Sec. 28.  No power of suspending laws in
           this State shall be exercired except by the
           Legislature.Y
       Under former constitutions of the State, the suspension
of laws could be exercised by the Legislature, *or Its
authority*. The Constitution of 1976 omits the words *or its
authority", and the authority of the Legislature to delegate
its powers to suspend laws was thereby repealed. See MaDonald
v. Uenton, 132 S.W. 023 (19101, error denied 104 Tex. 206
 35 8.W. 11481 and Lyle v. State, 193 S.W. 680 tTex.Crim.'
1917)7 11 Am.Jur. 933-944 ConstZtutional L&w, Sea. 230.
       As Article 2, Section 1, of the State Constitution
invalidates Seation (C), we do not reach the question of
whether said provision is a grant of power to suspend a law
and only hsre note the existence of this question.
       The second question conaerns the interpretation ot
            (11, (F) (3) and (F) (4) of Article 1.045 which
Sections (Ip)
provider
           "(F) (1) Notwithstanding any provision of any
           other Article ot #is Title, when any adminis-
           trative proceeding before any local,  state or
           federal regulatory agency or judiaial proceedinq
           arising therefrom, results in a tinal  determi-
           nation which attects the amount of tax liability
           imposed by any Article ot this Title, suah Final
           determination shall be reported to the Comptroller
           within sixty (60) days after becoming tinal,
           with a statemsnt ot the masons for the ditter-
           ence in tax liability, in such detail as the
           Comptroller may require."



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The Honorable Robert S. Calvert, page 5   (M-1190)


           "(F)(3; should such report or investigation
           disclose fan overpayment of such tax liability,
           the Comptroller shall issue a refund or credit
           for such.overpayment within the aforementioned
           one-year,.periodafter receiving such report or
           discovering such final determination."
           "(F)(4) No action may be commenced to collect
           any.deficiency disclosed by such final deter-
           manation after one year from the date the
           Comptroller receives such report or discovers
           such finai determination unless the period
           prescribed for such an action by this Article
           or any other Article of this Title has not
          -expired."
       Your question.asks if:
           *...there is any provision for extending the
           one-year period (in Section (F)(4)] other
           than [for] that part of the deficiency or
           overpayment still-covered by the seven years
           provided in Section (A)..."
       In view-of.the.tact that the Legislature may not
constitutionally empower the Comptroller to extend in his
discretion, the statutenf limitations, where there is no
standard.or~.guidelineprovided for the exercise of that
discretion, there-isnot any method to extend the limitation
                     (4).
period in Section.'(F)
                     SUMMARY
              The Legislature may not constitutionally
           delegate its power to the Comptroller without
           any accompanying standards or guidelines.
           Article 2, Section 1, Texas Constitution.
           Section (C) of Article 1.045, Title 122A,
           Taxation-General, V.C.S., therefore, is an
           invalid delegation of power. Said provision
           may be invalid as a delegation of power to
           suspend the law under Article 1, Section
           28, of the Texas




                                      ey General of Texas
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The Honorable Robert S. Calvert,page 6   [M-1190)




Prepared by Wardlow Lane
ABBiBt~t  Attorney.Generdl
APPROVED
OPINION COMMITTEE
Kerns Taylor, Chairman
W. E. Allen, Co-Chairman
Herschel Moore
Rex White
John Reeves
Arthur Sandlin
SAMUEL D. MCDANIEL
St&t Legal ASSiStSIlt
ALFRED   WALXER
EXWJUtiVS   ASSiStant

NOLA WHITE
First   ABBiBtallt




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