                              ATTORNEY            GENERAL         OF   TEXAS
                                           GREG       ABBOTT



                                                May 26,2004



The Honorable David Swinford                                     Opinion No. GA-O 194
Chair, Committee on Government Reform
Texas House of Representatives                                   Re: Refund of taxes on travel trailers
Post Office Box 2910                                             (RQ-0148-GA)
Austin, Texas 78768-2910

The Honorable James A. Farren
Randall County Criminal District Attorney
501 16th Street
Canyon, Texas 79015




        You both ask whether a school district that collected ad valorem taxes on travel trailers
under prior law may now refund those taxes pursuantto Texas Constitution, article VIII, section 1,
as amended in 2003, and Tax Code section 11.14(a).’ See Tex. S.J. Res. 25,78th Leg., R.S., 2003
Tex. Gen. Laws 6217: TEX.TAX CODE ANN. § 11.14(a) (Vernon Supp. 2004). In addition,
Representative Swinford asks whether a school district is required to refund such taxes and Mr.
Farren asks about procedures for refunding the taxes. See Swinford Request Letter, supra note 1,
at 1; Farren Request Letter, supra note 1, at 7-8.

I.      Leeal Background

       Texas Constitution, article VIII, section l(b) provides that “[a]11real property and tangible
personal property in this State, unless exempt as required or permitted by this Constitution,  shall
be taxed in proportion to its value.” TEX.CONST. art.VIII, 5 l(b). Section l(d) provides that “[tlhe
Legislature by general law shall exempt from ad valorem taxation household goods not held or used



          ‘Letter from Honorable David Swinford, Chair, Committee on Government Reform, Texas House of
Representatives, to Honorable Greg Abbott, Texas Attorney General (Dec. 9,2003) (on tile with opinion Committee:
also available at http://www.oag.state.~,us) [hereinatkr Swinford Request Letter]; Letter from Honorable James A.
Farren, Randall County Criminal District Attorney, to Honorable Greg Abbott, Texas Attorney General (Jan. 5,2004)
(on tile with Opinion Committee, also available at http://www.oag.state.tx.us)[hereinafter Farren Request Letter].

         ‘Adopted September 13,2003. See TEX.CONST.art. VIII, 5 1 (Vernon Supp. 2004) (notes regarding text of
sections l(d) and (i-l) upon adoption).
The Honorable David Swinford - Page 2                 (GA-O 194)
The Honorable James A. Farren




for the production of income and personal effects not held or used for the production of income” and
that the “legislature by general law may exempt from ad valorem taxation . . . all or part of the
personal property homestead of a family or single adult,” as well as other specifically described
property. Id. 4 l(d) (emphasis added).

        Article VIII, section 1 was amended in 2001, adding certain travel trailersto the property that
the legislature could exempt from ad valorem taxation. See Tex. H.R.J. Res. 44, 77th Leg., R.S.,
2001 Tex. Gen. Laws 6705 (adopted 2001). The 2003 amendment revised the exemption for travel
trailers. Your questions require us to address both amendments.

        The legislature proposed the 2001 amendment to address the diffkulties in applying the
property tax laws to travel trailers. See TEXASLEGISLATIVE        COUNCIL,ANALYSESOFPROPOSED
CONSTITUTIONAL      AMENDMENTS      116 (2001). Before 2000, a travel trailerthathad been permanently
attached to the land could be treated as real property. See id. If used as the owner’s primary
residence, the trailer could qualify for tax exemptions applicable to residence homesteads. See
id. See also TEX. CONST.art. VIII, 5 l-b; TEX. TAX CODEANN. 5 11.13 (Vernon Supp. 2004)
(homestead exemption). Otherwise, it would be fully taxable as real property. See TEXAS
LEGISLATIVE    COUNCIL,ANALYSESOF PROPOSEDCONSTITUTIONAL                   AMENDMENTS       116 (2001).
Travel trailersnot attachedto the land were tangible personal property and, if not used for producing
income, were exempt from property tax unless a particulartaxing unit elected to tax them. See id.;
TEX.TAX CODEANN. 3 11.14(c) (Vernon Supp. 2004) (taxing unit may provide for taxing tangible
personal property not held or used to produce income). Given the complexities in applying property
tax laws to travel trailers, it was possible that taxing units would reach inconsistent results. See
TEXAS LEGISLATIVE       COUNCIL,ANALYSESOF PROPOSEDCONSTITUTIONAL                   AMENDMENTS      116
(2001). See also Rourk v. Cameron Appraisal Dist., 131 S.W.3d 285 (Tex. App.-Corpus Christi
2004, pet. filed) (class action by travel trailer owners against appraisal district, seeking declaration
thattrailerswere not subject to ad valorem tax in 2000 and 2001); Tex. Att’y Gen. Op. Nos. JC-0282
(2000) (considering whether a travel trailer attachedto real property is an improvement to the land),
JC-0150 (1999) (considering whether travel trailers may be subject to property tax).

       The 2001 amendment added to section l(d) the language italicized below:

                      (d) The Legislature by general law may exempt !?om ad
               valorem taxation:

                               (1) [personal property homestead];

                              (2) subject to Subsections (e), (g), and (j) of
                       this section, all other tangible personal property,
                       except structureswhich are personal property and are
                       used or occupied as residential dwellings and except
                       property held or used for the production of income;
                       and
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The Honorable James A. Farren




                              (3) [subject to subsection (e) a leased motor
                       vehicle not held primarily for the production of
                       income].

Tex. H.R.J. Res. 44,77th Leg., R.S., 2001 Tex. Gen. Laws 6705 (adopted 2001) (emphasis added).
Section l(e) authorizes a political subdivision to tax property exempt under a law adopted under
section l(d)(2) or (3) of article VIII “and not exempt from ad valorem taxation by any other law,”
while section l(g) authorizes the legislature to exempt Tom ad valorem tax tangible personal
property held or used to produce income if its taxable value is less than the costs of administering
the taxes ontheproperty. TEX.CONSTart.VIII,        $ l(e),(g).

       The 2001 amendment also added subsection (i) to section 1:

                       tj) The Legislatureby general law may authorize a taxing unit,
               other than a school district, to exempt from ad valorem taxation by
               the taxing unit, a travel trailer, as defined by the Legislature,
               regardless of whether the travel trailer is real or personal property,
               that:

                               (1) [is registered in Texas on January1 of the
                       tax year]; and

                              (2) is not held or used for the production of
                       income.

Tex. H.R.J. Res. 44, 5 1, 77th Leg., R.S., 2001 Tex. Gen. Laws 6705 (adopted 2001) (emphasis
added). The ballot permitted voting for or againstthe proposition: ‘The constitutional amendment
to authorize the legislature to authorize taxing units other than school districts to exempt from ad
valorem taxation travel trailers that are not held or used for the production of income.” Id. 4 2.

        Subsection (j) was effective January 1,2002. See id. 5 1 (section (j-l)). House Bill 2076,
the legislation implementing the exemption, adopted section 11.142 ofthe Tax Code, providing that
the “governing body of a taxing unit, other than a school district, . may exempt from taxation a
travel trailer.” See Act ofMay 22,2001,77th Leg., R.S., ch. 521, $2,2001 Tex. Gen. Laws 978,
repealed by Act of Apr. 1, 2003, 78th Leg., R.S., ch. 5, 5 2, 2003 Tex. Gen. Laws 6 (emphasis
added).

        The 2001 constitutional amendment and the enabling legislation excluded school districts
from the taxing units that might exempt travel trailers Tom ad valorem taxes. As a result of these
provisions, some school districts thathad not previously taxed travel trailersbegan to tax them. See
HOUSERESEARCHORGANIZATION,AMENDMENTSPROPOSEDFORSEPTEMBER~OO~BALLOT 16
(Focus Report No. 78-10) (analysis of S.J. Res. 25, proposing repeal of Texas Constitution, article
VIII, 5 l(j)). In 2003, the Seventy-eighth Legislature proposed and the voters approved an
The Honorable David Swinford - Page 4                  (GA-0194)
The Honorable James A. Farren




amendment to article VIII, section 1 of the Texas Constitution, designed to make the exemption for
travel trailers apply in school districts as well as other taxing units. See Tex. S.J. Res. 25, 5 4,78th
Leg., R.S., 2003 Tex. Gen. Laws 6217, 6218 (adopted 2003); TEXAS LEGISLATIVE                  COUNCIL,
ANALYSESOFPROPOSEDCONSTITUTIONAL               AMENDMENTS,Amendment No. 5 (2003), available at
http://www.tlc.state.tx.us. The 2003 amendmentadded to section l(d) the language italicizedbelow:

                      (d) The Legislature by general law shall exempt from ad
               valorem taxation household goods not held or used for the production
               of income and personal effects not held or used for the production of
               income. The Legislature by general law may exempt from ad
               valorem taxation:

                               (1) [personal property homestead];

                               (2) subject to Subsections (e) and (g) of this
                       section, all other tangible personal property, except
                       structures which are substantially uffured to real
                       estate and are used or occupied as residential
                       dwellings and except property held or used for the
                       production of income.

Tex. S.J. Res. 25,s 2,78thLeg., R.S., 2003 Tex. Gen. Laws 6217 (adopted 2003) (emphasis added).
See TEX.CONST.art.VIII, 5 l(e) (political subdivision may tax property exempt under a law adopted
under section l(d)(2) or (3)); id. 5 l(g) (legislature may exempt from ad valorem tax tangible
personal property held or used to produce income if its taxable value is less than the costs of
administering the taxes on the property).

        The 2003 constitutional amendment also repealed section l(j) and adopted the following
provision:

                      (i-l) Temporary Provision. (a) This temporary provision
               applies to the constitutional amendment proposed by the 78th
               Legislature, Regular Session, 2003, authorizing the legislature to
               exempt from ad valorem taxation a travel trailernot held or used for
               the production of income and expires January 1,2005.

                       (b) The amendment to Section l(d), Article VIU of this
               constitution, takes effect January 1,2004, and applies onZy to a tax
               year that begins on or after January 1. 2002. The repeal of Section
               l(j), Article VIJJof this constitution, takes effect January 1,2004.

Tex. S.J. Res. 25, 5 3,78th Leg., R.S., 2003 Tex. Gen. Laws 6217,6218 (emphasis added).
The Honorable David Swinford - Page 5                             (GA-01 94)
The Honorable James A. Farren




         The temporary provision makes the amendment to section 1(d) retroactive, authorizing the
legislature to exempt travel trailers from ad valorem tax as of the 2002 tax year. The legislature’s
authorityto adopt such retroactive exemption expires January 1,2005. See id. 5 3(a). Senate Bill
5 10 of the Seventy-eighth Legislature, an act “relating to the exemption of certain travel trailersfrom
ad valorem taxation,” implements the 2003 constitutional amendment. Act of Apr. 1,2003, 78th
Leg., RX, ch. 5, $I,2003 Tex. Gen. Laws 6 (title). This enactmentrepealed former section 11.142,
which barred school districts from exempting travel trailersfrom property tax, and amended section
11.14(a) by adding the language emphasized below:

                         (a) A person is entitled to an exemption from taxation of all
                  tangible personal property, other than manufactured homes,’ that the
                  person owns and that is not held or used for production of income.
                  This subsection does not exempt from taxation a structure that a
                  person owns which is substantially affied to real estate and is used
                  or occupied as a residential dwelling.

TEX.TAX CODE ANN. 8 11.14(a) (Vernon Supp. 2004), LISamended by Act of Apr. 1,2003,78th
Leg., R.S., ch. 5, § 1,2003 Tex. Gen. Laws 6 (emphasis added). The 2003 amendment to section
11.14(a), like the 2003 amendment to article VIII, section l(d), is retroactive, the effective date
clause providing that “[tlhis Act applies to taxes imposed for the tax year 2002 and thereafter.‘d Id.
5 3. While the amendment to section 11.14(a) provides a retroactive exemption, it says nothing
about refunds to persons who paid the tax.

II.      Chestions Presented

        Representative Swinford asks whether a school district must refund ad valorem taxes
collected for the 2002 tax year on a travel trailer now exempt from taxation under article VIII,
section 1(d) and Tax Code section 11.14. See Swinford Request Letter,supra note 1, at 5. He points
out that the legislature did not expressly require that taxes collected for the 2002 tax year be
refunded. See id. If a school district is not required to refund such taxes, he asks whether the
governing body of a school district may elect to authorize such refunds. See id. at 1.

        Mr. Farren asks whether a school district may legally refund taxes on travel trailersthatwere
taxable by law for 2002 and 2003. Farren Request Letter, supra note 1, at 7. He also asks the
following questions:


        “‘Manufacturedhome”inTaxCodesection ll.l4(a)“hasthemeaningassignedbySection 11.432ofthiscode.”
TEX.TAXCODEANN.5 11.14(b)(Vernon Supp. 2004). Tax Code section 11.432 addresses the homestead exemption
for manufactured homes. See id. $ 11.432.

          4Absentthe 2003 amendment to Texas Constitution, article VIII, section l(d), the retroactive tax exemption
would raise certain constitutional issues. See TEX.CONST.art. III, g 52 (legislature may not authorize political
subdivision to give or grant public funds to individual); id. art. III, $ 55 (prohibiting release of corporate OIindividual
liabilitiesto state, counties, or municipal corporations);id. art. VIII, 5 10(legislahue has no power to release inhabitants
of any county or city from payment of taxes, subject to exception).
The Honorable David Swinford - Page 6                    (GA-0194)
The Honorable James A. Farren




               [B]y what authority should the appraisal district act to exempt such
               property for 2002 and 2003?

                [Ijf the appraisaldistrict is required to exempt such property for 2002
                and 2003, what procedure should the appraisal district and tax
                assessor/collector take to remove the property from the tax roll and
                to refund the money?

                [I]f the school district is not the tax assessor/collector, should the tax
                assessor/collector be the entity to process the refunds from the current
                year collections for the school district?

Id. at 7-8.

        A.      Authority of Political Subdivisions, Including School Districts, to
                Exempt Travel Trailers from Property Tax

               Senate Bill 510 of the Seventy-eighth Legislature exempts travel trailers fiorn ad
valorem taxation as ofthe 2002 tax year. See Act of Apr. 1,2003,78th Leg., R.S., ch. 5, § 3,2003
Tex. Gen. Laws 6 (effective date provision). Appraisal districts do not need to take any action to
provide the exemption for the years 2002 and 2003. Nor do school districts that taxed travel trailers
in 2002 and 2003 need to take action now to exempt travel trailersfrom tax, because Senate Bill 510
does so as a matter of law.

         A school district still has constitutional and statutoryauthorityto tax travel trailersin any tax
year, including the years 2002 and 2003. Texas Constitution article VIII, section l(d)(2) authorizes
the legislature to exempt travel trailers from ad valorem tax, but a political subdivision also has
constitutional authorityto tax personal property exempted by the legislature. See TEX.CONST.art.
VIII, $j l(d)(2), (e). Tax Code section 11.14(a), as amended in 2003, provides a tax exemption
applicable to “tangible personal property”including travel trailers,but under section 11.14(c) “[tlhe
governing body of a taxing unit, by resolution or order, depending upon the method prescribed by
law for official action by that governing body, may provide for taxation of tangible personal property
exempted under Subsection (a).” TEX.TAX CODE ANN. 5 11.14(a), (c) (Vernon Supp. 2004). If a
taxing unit provides for taxing such property, “the exemption prescribed by Subsection (a) does not
apply to that unit.” Id. 5 11.14(c). It must first hold a hearing on the matter; giving notice as
required by section 11.14(e). See id. 5 11.14(e). Thus, a school district may act to tax travel trailers
for the 2002 and 2003 tax years pursuantto section Il. 14(c). If it does so, such taxes remain in place
and the question of refunds for those tax years does not arise.

        IL     Legal Authority for Tax Refunds

                 You ask whether a school district is requiredby existing law to refund taxes on travel
trailers collected in the 2002 and 2003 tax years. Under common law, the voluntary payment of an
illegal tax will not support a claim for repayment. See State Y. Conn. Gen. LifeZns. Co., 382 S.W.2d
The Honorable David Swinford - Page 7                 (GA-0194)
The Honorable James A. Farren




745, 746-47 (Tex. 1964); Austin Nat’1 Bank v. Sheppard, 71 S.W.2d 242, 245-46 (Tex. 1934);
Galveston County v. Gorham, 49 Tex. 279 (1878). See also Tex. Nat ‘1Bank of Baytown v. Harris
County, 765 S.W.2d 823, 825 (Tex. App.-Houston [14th Dist.] 1988, writ denied) (applying
voluntary payment rule in case involving property tax). A person who has paid an illegal fee or tax
can receive a refund only upon a showing that the payment resulted from fraud, mutual mistake of
fact, or duress, whether implied or express. See Sheppard, 71 S.W.2d at 246; Camacho v.
Samaniego, 954 S.W.2d 8 11,826 (Tex. App.-El Paso 1997, writ denied). See also Conn. Gen. Life
Ins. Co., 382 S.W.2d at 746-47. A mistake of law is not a valid ground for repayment of a tax.
Camacho, 954 S.W.2d at 826; Gould v. City ofElPaso, 440 S.W.2d 696,698-99 (Tex. Civ. App.-El
Paso 1969, writ ref d n.r.e.); Tex. Att’y Gen. Op. No. JC-0286 (2000). The voluntary payment rule
assumes that everyone knows the law, and if one voluntarily makes a payment that the law does not
compel him to make, he cannot laterbase a refund claim on ignorance of the law. Johnson Controls,
Inc. v. Carrollton-Farmers Branch Zndep. Sch. Dist., 605 S.W.2d 688 (Tex. Civ. App.-Dallas 1980,
writ ref d n.r.e.).

        Statutes authorizing taxpayers to recover illegal taxes create a right that did not exist at
common law. See Bullock v. Amoco Prod. Co., 608 S.W.2d 899, 900 (Tex. 1980). Where the
legislation provides a method for seeking recovery of a tax “the courts may act only in the manner
provided by the statutewhich created the right.” Id. This rule applies to local property taxes. See
Appraisal Review Bd. v. Znternat’IChurch ofthe Foursquare Gospel, 719 S.W.2d 160 (Tex. 1986)
(per cur&m) (when statute creates a right not existing at common law and prescribes a remedy to
enforce the right, compliance with statuteis jurisdictional).

       Tax Code chapters 41 and 42 establish strict procedures for protesting the collection of ad
valorem taxes and securing a tax refund. See TEX. TAX CODEANN. ch. 41, subch. C (Vernon 2001
& Supp. 2004) (Taxpayer Protest); id. 4 42.01 (Vernon 2001) (property owner’s right to appeal
orders of appraisal review board); id. 5 42.43 (Vernon 2001) (refund of taxes after final
determination of appeal). See also id. $ 31.071 (Vernon 2001) (taxpayer may make conditional
payment of property taxes subject to a pending challenge or protest). These procedures are
exclusive, with narrow exceptions, and a taxpayer who fails to raise a ground of protest at the
required time may not rely on it to obtain a tax refund. See id. 5 42.09; Tex Nat ‘IBank ofBaytown,
765 S.W.2dat 826. S~~~ISOTEX.TAXCODEANN.5 31.115 (Vemon2001) (taxpayermayshow that
payment of an ad valorem tax is involuntaryby indicating thatit is paid under protest on the payment
instrumentor in an accompanying document).

        Tax Code section 3 1.11 provides for “a refund of an overpayment or erroneous payment of
taxes” if the taxpayer applies to the taxing unit and the unit’s auditor determines that “the payment
was erroneous or excessive.” Id. 5 3 1.1l(a) (Vernon Supp. 2004). If the refund exceeds a stated
amount the governing body of the taxing unit must also determine that the payment was erroneous
or excessive. See id. The taxing unit may apply the amount of refund to a tax delinquency on other
property owned by the taxpayer. See id. 5 3 1.11(b). If the taxpayer does not apply for a refund
within three years after he paid the tax, the claim is waived. See id. 5 3 1.11(c).
The Honorable David Swinford - Page 8                 (GA-01 94)
The Honorable James A. Farren




        Judicial decisions have read section 3 1.l 1 narrowly. It applies “only in cases where the tax
is correctly assessed but the taxpayer erred in paying it,” for example, by “accidental payment on the
wrong account, inadvertent payment of a greater amount than that assessed or an overpayment
caused by errors in calculation.” Tex. Nat ‘1Bank ofBaytown, 165 S.W.2d at 826. See also Brooks
County Cent. Appraisal Dist. v. Tipperary Energy Corp., 847 S.W.2d 592,598-99 (Tex. App.-San
Antonio 1992, no writ) (taxpayerwho paid taxes alreadypaid by anotherentitywas entitled to refund
under section 31.11 for an “accidental payment on the wrong account”). A bank’s payment of
property taxes according to a Texas statutethat the United States Supreme Court later invalidated
was a “mistake of law.” First Bank ofDeer Park v. Deer Parklndep. Sch. Dist., 770 S.W.2d 849,
850,854 (Tex. App.-Texarkana 1989, writ denied) (citing Am. Bank& Trust Co. v. Dallas County,
463 U.S. 855 (1983), holding Texas statute invalid under federal law); see Tex. Nat’1 Bank of
Baytown, 765 S.W.2d at 825 (bank’s paymentofpropertytax under allegedly unconstitutionalstatute
was unilateral mistake of law). Section 3 1.l 1 does not authorize a refund where the tax was paid
as a mistake of law. See First Bank ofDeer Park, 770 S.W.2d at 853; Tex. Nat ‘IBank ofBaytown,
765 S.W.2d at 826. The taxes that school districts collected on travel trailersin the 2002 and 2003
tax years were not collected due to either a mistake of law or a mistake of fact. Neither the common
law nor the statutesrequire a school board to refund taxes collected on travel trailersin those years.

        C.     Whether a School District May Elect to Refund Taxes

                The voluntary payment rule and the statuteson refunding ad valorem taxes relate to
taxes that were illegal when paid. School districts were required by the constitution and statutory
law to tax travel trailers in the 2002 and 2003 tax years. See Tex. H.R.J. Res. 44,77th Leg., R.S.,
2001 Tex. Gen. Laws 6705 (amendment to Texas Constitution article VIII, $ 1, adopted 2001)
(repealed 2003); Act of May 22,2001, 77th Leg., R.S., ch. 521, $ 2, 2001 Tex. Gen. Laws 978,
repealed by Act of Apr. 1,2003,78th Leg., R.S., ch. 5, $ 2,2003 Tex. Gen. Laws 6. The tax on
travel trailersthat school districts collected in 2002 and 2003 was not illegal at that time. The cases
and statuteson tax refunds do not address a tax that was legally collected but later became subject
to a retroactive exemption. This body of law does not provide a present remedy for persons who
paid taxes on travel trailers to school districts in 2002 and 2003.

        No statuteexpressly authorizes a school district’s governing body to refund taxes collected
on travel trailersin 2002 and 2003, and we find no basis for concluding that school district governing
bodies have implied authorityto make such refunds. Section 45.105 of the Education Code, which
governs the expenditure of public school funds, provides that “[l]ocal school funds horn district
taxes, tuition fees. . , other local sources, and statefunds not designated for a specific purpose may
be used” for specific enumeratedpurposes including “other purposes necessary in the conduct of the
public schools determined by the board of trustees.” TEX.EDUC.CODE ANN. 5 45.105(c) (Vernon
Supp. 2004). While section 45.105 authorizes expenditures for various school district purposes, it
does not authorize the school board to develop procedures necessary to refund taxes under a
retroactive exemption.

       Mr. Farren asks about procedural matters involving the retroactive change of tax rolls and
the source of the refunds. See FarrenRequest Letter,supra note 1, at 7-8. Granting a refund would
The Honorable David Swinford - Page 9                (GA-0194)
The Honorable James A. Farren




also require a method of determining whether a particular travel trailer is within the statutory
exemption:

                      A person is entitled to an exemption from taxation of all
               tangible personal property, other than manufactured homes, that the
               person owns and that is not held or used for production of income.
               This subsection does not exempt from taxation a structure that a
               person owns which is substantiallyaffixed to real estate and is used
               or occupied as a residential dwelling.

Tnx. TAX CODEANN. $ 11.14(a) (Vernon Supp. 2004). See also id. 5 11.432 (application of
homestead exemption to manufactured homes). Determining whether a particular travel traileris
“substantially affixed to real estate”may involve the resolution of fact questions. Moreover, title
1 ofthe Tax Code provides for assessing, collecting, protesting, and rehmding property taxes for all
taxing units, including school districts. See id. $ 1.02 (Vernon 2001). The procedures governing
local property taxes are found in the Tax Code, and we would look there, and not to the Education
Code provisions governing school district expenditures, for authority ‘to refund a tax subject to a
retroactiveexemption. S~~TEX.GOV’TCODEANN.5 311.01 l(a)(Vemon 1998)(wordsandphrases
shall be read in context). We conclude that a school district may not elect to refund taxes on travel
trailers collected in 2002 or 2003.

         The public policy underlying the voluntarypayment rule supports a conclusion thata school
district may not, absent express authority,refund taxes it collected on travel trailersduring the 2002
and 2003 tax years. The voluntary payment rule “gives stability to a taxing authorityin the conduct
of its affairs.” Tex. Nat’1 Bank of Baytow, 765 S.W.2d at 825. It prevents “the taxing entity from
using funds paid by taxpayersin a given budget year and subsequentlybeing required to refund these
amounts.” CityofLaredov. S. Tex. Nat’lBank, 775 S.W.2d 729,731 (Tex. Civ. App.-San Antonio
1989, writ denied). See Gorham, 49 Tex. at 303 (no refund of tax claimed to be illegally assessed,
where all parties regarded it as valid when paid, and recovery could disrupt county fiscal affairs).
A retroactive adjustment of school district property tax revenues may have an impact even beyond
the school district. Government Code section 403.302 requires the Comptroller to determine the
“total taxable value of all property in each school district.” See TEX.GOV’TCODEANN. 5 403.302(a)
(Vernon Supp. 2004). The Commissioner of Education uses that figure to calculate the state’s
support for school districts and determine the district’s wealth per student under the Education
Code’s funding equalization provisions. See Tnx. EDUC.CODEANN. $5 41.001-.002,42.302(a)
(Vernon Supp. 2004). See also Tex. Att’y Gen. Op. No. JC-0373 (2001). A legislative solution is
necessary to establishprocedures for adjustingthe tax rolls, deciding whether remnds are authorized,
providing for their payment, and addressingthe school finance issues thatwould result from refunds.
While the retroactive exemption may benefit persons who have not yet paid school district taxes on
travel trailers for the 2002 and 2003 tax years, a school district has no express or implied statutory
authorityto refund such taxes to persons who have paid them.
The Honorable David Swinford - Page 10              (GA-0194)
The Honorable James A. Farren




                                      SUMMARY

                      Texas Constitution article VIII, section l(d) and Tax Code
              section 11.14 as amended in 2003 exempt travel trailers from
              property tax as ofthe 2002 tax year. While the retroactive exemption
              may benefit persons who have not yet paid school district taxes on
              travel trailers for 2002 and 2003, there is no express or implied
              statutoryauthority for school districts that collected property tax on
              travel trailers in the 2002 and 2003 tax years to make refunds.




BARRY R. MCBEE
First Assistant Attorney General

DON R. WILLETT
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Susan L. Garrison
Assistant Attorney General, Opinion Committee
