                               December 9, 1988




Honorable Lloyd Criss                      Opinion No.   JM-991
Chairman
Committee on Labor and                     Re: Taxation of a home-
  Employment Relations                     stead occupied by a sur-
Texas House of Representatives             viving spouse  (RQ-1416)
P. 0. Box 2910
Austin, Texas 78769

Dear Representative   CriSS:


     You ask whether an .amendment to article VIII,  section
l-b, of the Texas Constitution  is applicable only to home-
steads occupied by surviving spouses whose husbands or wives
died after the amendment took effect. The amendment    limits
the taxation of certain homesteads for school purposes.

      Article VIII, section l-b, is one of several constitu-
tional provisions concerning homesteads.   Article XVI, sec-
tion 51, defines a homestead for purposes of exemption from
forced sale, and section 50 of that article provides     that
t.he sale of a homestead  cannot be forced except to satisfy
purchase-money   liens, improvement   liens, or tax liens.
Section 52 of article XVI specifies that upon the death of a
spouse, the homestead property    is not to be distributed
among the heirs of the deceased so long as it is used as a
homestead by the surviving    spouse or, as permitted   under
court order, is used and occupied by the deceased's     minor
children.

     Article VIII of the Texas Constitution      deals with
taxation and revenue. As amended in 1978, section 1 thereof
requires that taxation be equal and uniform, and that all
real property and tangible personal property in the state be
taxed, except that it requires the exemption     of certain
household furnishings and permits the exemption of "personal
property homestead."

     Until 1932, the homestead    was not excepted from the
"equal and uniform I1taxation requirement.  Jufkin v. Citv of
Galveston, 58 Tex. 545 (1883).     Section l-a was added to
article VIII in that year and amended in 1933. As amended,
the section provided that $3,000 of the assessed      taxable



                                     p. 5066
Honorable Lloyd Criss - Page 2   (JM-991)




value of residential   homesteads should be exempt from all
taxation  "for state purposes."      The amendment  did not
authorize an exemption   from local taxes.  Citv of Wichita
Falls v. Coower, 170 S.W.2d 777 (Tex. Civ. App. - Fort Worth
1943, writ ref'd).

     Fifteen years later, in 1948, section l-a was amended
to abolish the levy of state ad valorem taxes for general
revenue purposes and to permit counties to levy ad valorem
taxes on property for county purposes "except the first
Three Thousand Dollars ($3,000) value of residential   home-
steads."  Section l-b was added to article VIII at the same
time to exempt $3,000 of the assessed taxable value of all
residence  homesteads  llfrom all taxation   for all State
purposes" (not merely for general revenue purposes).

      Section l-a of article VIII has been amended only one
.other time. In 1973 it was amended to apply to "residential
homesteads of married or unmarried adults, male or female,
 including those living alone.1' Section l-b, on the other
 hand, has been amended five times since 1948. YOU inquire
 only about the most recent amendment, but an appreciation of
 those that preceded it is useful to its understanding.

     In 1972, section l-b was divided into subsections,   and
for the first time it was provided, in subsection (b), that
the governing body of any political subdivision could exempt
bv its own action "not less than" $3,000 of the assessed
value of residence homesteads of persons 65 years of age or
older from all ad valorem taxes    "thereafter levied by the
political subdivision."   See S.J.R. No. 7, 62d Leg., 4126
(1972): Attorney General Opinion H-9 (1973). A year    later,
section l-b(b) was made applicable to residence    homesteads
"of married or unmarried persons sixty-five    (65) years of
age or older,   including those living alone.1' See    S.J.R.
No. 13, 63d Leg., 2469, at 2470 (1973).

     An amendment adopted in 1978 changed section l-b(b) to
include the homesteads   of certain disabled  persons and to
base the amount of an exemption upon market value      rather
than assessed value.   It also added subsections (c) and   Cd)
to the section. See H.J.R. No. 1, 65th Leg., 2d C.S., 54
(1978). Subsection    (c) generally  exempted $5,000 of the
market value of residence homesteads "for general elementary
and secondary school purposes"   and authorized the legisla-
ture to exempt up to $10,000 of a homestead's market     value
for disabled persons and persons aged 65 or older.    Subsec-
tion (d) read:




                              P. 5067
Honorable Lloyd Criss - Page 3   (JM-991)




            (d) Except as otherwise provided by this
        subsection, if a person receives the resi-
        dence homestead exemption prescribed by Sub-
        section (c) of this section for homesteads of
        persons   sixty-five   (65) years of age or
        older, the total amount of ad valorem    taxes
        Jmwosed on that homestead for aeneral elemen-
        tar-v and secondarv wublic school wurnoses may
        not be increased while ,it remains the resi-
        dence homestead     of that werson or     that
        person's swouse who receives the exemwtion.
        However, those taxes may be increased to the
        extent the value of the homestead      is in-
        creased by improvements other than repairs or
        improvements made to comply with governmental
        requirements.    (Emphasis added.)

     Another amendment adding subsection (e) to section l-b
was adopted  in 1981.   It required any general homestead
exemption granted by a political subdivision   to be in the
amount of at least $5,000. See H.J.R. No. 81, 67th Leg.,
4222 (1981).

     Finally, in 1987, subsection (d) of section l-b       (set
out above) was amended by inserting a sentence reading:

        If a person sixty-five   (65) years of age or
        older dies in a year in which the person
        received the exemption,   the total amount of
        ad valorem taxes imposed on the homestead for
        general. elementary    and secondary    public
        school purposes may not be increased while it
        remains the residence homestead      of   that
        person's surviving  spouse if the spouse    is
        fifty-five (55) years of age or older at the
        time of the person's death, subject to any
        exceptions provided by general law.

See H.J.R. No. 48, 70th Leg., 4124 (1987).    You have    asked
us to construe this 1987 amendment.

     Amendments are made pursuant to article XVII, section
1, of the Texas Constitution.   In declaring the objective
and meaning  of amendments,  courts should give the words
their natural, obvious, .and ordinary meaning as understood
by the citizenry.    Amendments  should be construed    with
reference to all other provisions of the constitution and --
with a view to giving every provision effect -- they should
be construed in a way that will carry out the broad general



                              p. 5068
Honorable Lloyd Criss - Page 4      (JM-991)




principles of government.  State v. Clements   319 S.W.2d 450
(Tex. Civ. App. - Texarkana 1958, writ ref'di.

     In arriving at the intent of the electorate and of the
drafters, the primary focus must be upon the language used.
See Booth v. Striwwleman, 61 Tex. 378 (1884) (rules for con-
stitutional construction   analogous to rules for statutory
construction); Duval Corooration v. Sadler, 407 S.W.2d    493
(Tex. 1966) (intent ascertained   from language used and its
legal context): 12 Tex. Jur.3d, Constitutional Law §§ 13-15.
It is presumed that the words used were carefully   selected.
Leander Indewendent   School District v. Cedar Park Water
Suwwlv Corworation, 479 S.W.Zd 908 (Tex. 1972).

     The initial portion of the 1987 amendment reads:

        If a person sixty-five     (65) years of age   or
_       older dies . . .

This language connotes a future event, as does the entire
constitutional passage.  The final words of the provision
decisively indicate that only deaths in the future are to
trigger benefits that accrue

        if the spouse &. fifty-five (55) years of age
        or older gt the time of the werson's   death
        subject to any exceptions provided by genera;
        law.   (Emphasis added.)

Tex. Const. art. XVII, 5 l-b.

If the provision had been intended to embrace past events,
the underscored   word 'Iis" would have been written l'wast'
                                                           .
The use of the verb ais,n together with the prepositional
phrase "at the time of the person's death," imparts clearly
a natural,   obvious,  and ordinary meaning  that looks to
future events.

     Very great difficulties    would accompany   a different
interpretation.   If the word I1is.@'
                                   in the foregoing   sentence
fragment were read 'lwas,@lthe amendment might mean that a
widow who was fifty-five at the time her husband died in
1975 would receive the benefit of a freeze, but a widow, now
sixty-three,. who was only fifty years old when her husband
died in the same year, would not.     The latter widow was not
"fifty-five (55) years of age or older bt     the time of   h
person's death".    If the advantage     of a l@freeze" wZrZ
available to either of them, would the taxes be "frozen" at




                                 p. 5069
Honorable Lloyd Criss - Page 5      (JM-991)




their level when the husband died in 1975? Would the excess
taxes collected in the interim have to be returned?

     There are no appellate   cases construing the constitu-
tionally mandated lNfreeze,** and only one attorney general
opinion has dealt with it. Attorney General Opinion MW-265
(1980) equated the effect of a section l-b(b) tax freeze
with a tax exemption but differentiated the two. The opi-
nion suggested  that, absent constitutional    authorization,
both the freeze and the exemption would be violative of the
"equal and uniform@* command of article VIII, section 1, of
the Texas Constitution.

     Those who argue for an "expansive" interpretation      of
the freeze language   (to cover deaths occurring before the
constitutional amendment took effect) urge that the expan-
sive construction should be chosen because it "is most    fair
to the greatest number of people."   However, that test  leads
to an opposite result. Taxes are fairer for the most people
when there are no tax exemptions at all.    Expanding   exemp-
tions does not expand fairness.     As we noted in Attorney
General Opinion JM-612 (1986):

           The law does not favor tax exemptions,
        since they are the antithesis of equality and
        uniformity.  Hilltow Villaae.    Inc. v. Kerr-
        ville Indewendent School District,   426 S.W.Zd
        943 (Tex. 1968).   Constitutional and statu-
        tory provisions   creating them are to be
        construed narrowly with all doubts resolved
        against granting the exemption.       Citv   of
        Lonoview v. Markham-McRee Municiwal Hoswital,
        152 S.W.Zd 1112 (Tex. 1941).

     A residence may be liberally classified   as the home-
stead of both spouses for other constitutional purposes, but
the "over 65 exemption" has not been read broadly.       One
spouse cannot claim the tax exemption   if the constitution
gives it only to the other spouse. Riwlev v. Stewhens,   686
S.W.2d 757 (Tex. App. - Austin 1985, writ ref'd n.r.e.).

     In Riwlev v. Stewhens,    suwra, a couple claimed       a
section l-b homestead exemption.   The wife was over the age
of 65 but the residence was owned as separate property     by
the husband (who was not yet 65).    Because the constitution
authorized the legislature  to define "residence homestead"
for purposes of the section -- and it had done so by defin-
ing a residence.homestead as property occupied "by an owner
who qualifies   for the exemption"   -- the court said the




                                 p. 5070
Honorable Lloyd Criss - Page 6    (JM-991)




couple could not claim the exemption from taxes. The wife
was not the owner of the property and the husband was not
yet eligible for the exemption.

     Shortly after the "over 65 homestead     exemption"   was
added to the constitution, this office found it necessary to
read into the constitutional     language the same   kind of
Riwlev v. Stewhens     restrictions  later included by the
legislature in its "residence homestead" definition.       The
interpretation was thought necessary in order to save the
exemption from invalidity under the Equal Protection    Clause
of the Fourteenth Amendment to the Constitution of the Unit-
ed States. See Attorney    General Opinion H-9 (1973).    That
restrictive interpretation   was thought necessary   because,
without it, the constitutional language would have been too
broad.

     In the case of the 1987 amendment,      broadening  the
"freeze" provision to include past deaths would not make  it
less vulnerable to Equal Protection attacks.  It would make
entirely  selective  (and arbitrarily   retroactive   in its
operation) the limitation that the surviving    spouse must
have been 55 Years or more at the time of the death to enjoy
the benefit.l-



     1. There are parallels    between the "65 or older"
homestead exemption of article VIII, section   l-b, and the
@'disabled veterans" homestead exemption allowed by section
2(b) of that article.    In 1976, this office concluded    in
Attorney General Opinion H-894 that, as implemented by the
legislature, constitutional permission to grant a veteran's
surviving spouse and children   an exemption equal to the
exemption "to which the decedent was entitled at the tine he
died I1Tex. Const. art. VIII, § 2(b) (emphasis added), was
-I
not limited to the families of those who died after the tG!f-
fective date of the statutory implementation, even though no
veteran could have been "entitled" to an exemption    before
that time. Attorney General Opinion H-894 (1976); see At-
torney General Opinion H-88 (1973).

     In our opinion, Attorney General Opinion H-894 was
wrongly decided. The only justification for the opinion's
conclusion was:

   To restrict   the   statutory exemption     . . . only to
                                             (Footnote Continued)




                               p. 5071
Honorable Lloyd Criss - Page 7     (JM-991)




     Attorney General Opinion H-9 said:

           The Fourteenth Amendment does not prohibit
        or prevent classification, provided classifi-
        cation is reasonable for the purpose of the
        legislation: is based on proper and justifi-
        able distinctions, considering the purpose of
        the law; is not clearly arbitrary; and is not
        a subterfuge to shield one class and unduly
        burden another or to oppress unlawfully    in
        its administration.

Attorney General Opinion H-9 (1973), at 4.

This continues to be the law. gee Western 8 Southern     Life
Insurance Co. v. State Board of Eaualization, 451 U.S.    648
(1981); Carrinaton   v. Rash, 380 U.S. 89 (1965); 16A Am.
Jur.2d Constitutional Law 5 746. We are of the opinion that
the 1987 constitutional   amendment speaks prospectively  and
that its limitation    of taxation. on exempted homesteads
during the occupancy of surviving spouses is applicable only
if the non-surviving   spouse died after the amendment   took
effect.



(Footnote Continued)
   survivors of those disabled veterans who       have died
   since January  1, 1976, would give  [it]       negligible
   immediate effect. . . .

Attorney General Opinion H-894 (1976), at 2.

No appellate court has directly considered the H-894 conclu-
sion, but five years later in State v. American Leaion Post
No. 58, the court said:

   [Elxemptions granted by [statute] must be read in the
   light of Article VIII, 'sec. 2, of the Constitution
   since the Constitution expressly makes null and void
   all exemptions attempted thereunder by the legislature
   not authorized by the Constitution.   If the property
   comes within a statutory exemption, it can be exempt
   only because it is clearly embraced within the consti-
   tutional authorization.

 611 S.W.2d 720,   723 (Tex.   Civ. App.   - El   Paso 1981,   no
 writ).




                                 P. 5072
Honorable Lloyd Criss - Page 8       (JM-991)




                         SUMMARY
           The 1987 amendment  to article VIII,   sec-
        tion l-b(d), of the Texas Constitution,   that
        limits, for school purposes, the taxation   of
        homesteads occupied by surviving spouses of
        persons entitled to "sixty-five years of age
        or older" exemptions applies only to spouses
        who survive persons dying after the constitu-
        tional amendment took effect.


                                     ;fZh



                                      JIM     MATTOX
                                      Attorney General of Texas

MARY KELLER
First pssistant   Attorney General

LOU MCCREARY                                                      -.
Executive Assistant Attorney General

JUDGE ZOLLIE STEAELEY
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Bruce Youngblood
Assistant Attorney General




                                                                  -_




                               P. 5073
