Could Texas exempt privately owned dredge-disposal land from property tax?

Plain-English summary

A state senator asked the Attorney General whether a property-tax exemption the legislature had created was constitutional. Tax Code section 11.29 gave a landowner an exemption for land the owner dedicated, by recorded donated easement, as a disposal site for material dredged from the main channel of the Gulf Intracoastal Waterway by or under the direction of the state or federal government. The question was whether that exemption squared with article VIII, sections 1 and 2 of the Texas Constitution.

The office concluded it did not, at least as applied to privately owned land. Article VIII, section 1 requires that taxation be equal and uniform and that all real and tangible personal property, unless exempt as the constitution requires or permits, be taxed in proportion to its value. Section 2 lets the legislature exempt certain listed categories of property, and it says any law exempting property other than what section 2 lists is "null and void." Dredge-material disposal sites are not on that list, and the office found no constitutional authority anywhere for exempting them. So the office concluded that section 11.29 was void insofar as it would apply to property the constitution requires to be taxed, meaning property held by natural persons or private corporations.

Currency note

This opinion was issued in 1994. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

The Texas Constitution's tax-exemption provisions and the Tax Code have both been amended since 1994. This page describes the office's 1994 conclusion about section 11.29 as it then read. Verify the current status of any exemption before relying on it.

What the opinion meant for those who asked

For the legislature and tax-policy officials: The opinion treated the dredge-disposal exemption as outside the categories article VIII, section 2 allows, so it concluded the exemption was void as applied to taxable private property. The office's reasoning pointed to the constitutional path for valid exemptions: a category authorized by section 2 and actually enacted, or one grounded in another constitutional provision.

For landowners and appraisal districts along the waterway: The opinion concluded that privately owned land used as a dredge-disposal site was not validly exempt under section 11.29, because the constitution required that property to be taxed and supplied no authority for the exemption. The office framed the holding narrowly, as voiding the exemption only "insofar as it would apply to property required to be taxed."

Common questions

What did Tax Code section 11.29 try to exempt?
Land that an owner dedicated, by recorded donated easement, as a disposal site for material dredged from the main channel of the Gulf Intracoastal Waterway by or under the direction of the state or federal government.

Why did the Attorney General say the exemption was unconstitutional?
Because article VIII of the Texas Constitution requires equal and uniform taxation and lets the legislature exempt only the property categories listed in section 2. Dredge-disposal sites are not listed, and section 2 makes any exemption outside its list null and void, so the office found no constitutional authority for the exemption.

Did the opinion strike down section 11.29 entirely?
It concluded the exemption was void "insofar as it would apply to property required to be taxed by section 1(b)" of article VIII, that is, property held by natural persons or private corporations. The holding was framed around the property the constitution requires to be taxed.

Background and statutory framework

The dispute turned on the structure of article VIII. Section 1 sets the baseline: taxation must be equal and uniform, and all real and tangible personal property, unless exempt as required or permitted by the constitution, must be taxed in proportion to its value. Section 2 is the exemption provision; it lets the legislature pass general laws exempting listed kinds of property from ad valorem taxation, and it closes with the rule that "all laws exempting property from taxation other than the property mentioned in this Section shall be null and void" (Tex. Const. art. VIII, § 2(a)). Disposal sites for material dredged from the Gulf Intracoastal Waterway are not among the permissible statutory exemptions in section 2.

The office relied on the Texas case law applying that framework. The Texas Supreme Court had held that sections 1 and 2 require the taxation of private property held by natural persons or private corporations (City of Beaumont v. Fertitta, 415 S.W.2d 902, 909 (Tex. 1967)), subject to exemptions permitted by section 2 and actually enacted by the legislature, or established in other constitutional provisions, whether self-executing or legislatively implemented (State v. American Legion Post No. 58, 611 S.W.2d 720, 723 (Tex. Civ. App.—El Paso 1981, no writ)). In other words, private property that comes within a statutory exemption can be exempt only if there is clear constitutional authority for it. The senator cited no such authority, the office was aware of none, and a property-tax treatise had reached the same conclusion that section 11.29 was null and void (21 Jay D. Howell, Property Taxes § 238 (Texas Practice 1988)). The office therefore concluded that section 11.29 was void insofar as it would apply to property required to be taxed by section 1(b) of article VIII.

Citations

Constitutional and statutory provisions discussed:

• Tax Code § 11.29 (exemption for dedicated dredge-material disposal sites)
• Tex. Const. art. VIII, § 1 (equal and uniform taxation; § 1(b) taxation of real and personal property)
• Tex. Const. art. VIII, § 2 (permissible legislative exemptions; exemptions outside the list are null and void)

Cases discussed:

• City of Beaumont v. Fertitta, 415 S.W.2d 902, 909 (Tex. 1967)
• State v. American Legion Post No. 58, 611 S.W.2d 720, 723 (Tex. Civ. App.—El Paso 1981, no writ)

Secondary authority discussed:

• 21 Jay D. Howell, Property Taxes § 238 (Texas Practice 1988)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/dan-morales/dm-0301
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1994/dm0301.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain — the linked PDF is authoritative.

Office of the Attorney General
State of Texas

DAN MORALES
ATTORNEY GENERAL

August 14, 1994

Honorable Carl A. Parker
Chair
Committee on Economic Development
Texas State Senate
P.O. Box 12068
Austin, Texas 78711

Opinion No. DM-301

Re: Whether Tax Code section 11.29, which authorizes a tax exemption for land dedicated by easement as a disposal site for material dredged from the Gulf Intracoastal Waterway by or under the direction of the state or federal government, violates Texas Constitution article VIII, sections 1 and 2 (RQ-510)

Dear Senator Parker:

You ask us to consider whether section 11.29 of the Tax Code violates Texas Constitution article VIII, sections 1 and 2. Tax Code section 11.29 provides as follows:

(a) A person is entitled to an exemption from taxation of land that the person owns and that has been dedicated by recorded donated easement dedicating said land as a disposal site for depositing and discharging materials dredged from the main channel of the Gulf Intracoastal Waterway by or under the direction of the state or federal government.

(b) An exemption granted under this section terminates when the land ceases to be used as an active dredge material disposal site described by Subsection (a) of this section and is no longer dedicated for that purpose.

Section 1 of article VIII of the constitution provides, in part, as follows:

Sec. 1. (a) Taxation shall be equal and uniform.

(b) All real property and tangible personal property in this State, unless exempt as required or permitted by this Constitution, whether owned by natural persons or corporations, other than municipal, shall be taxed in proportion to its value, which shall be ascertained as may be provided by law.

Section 2 permits the legislature to enact general laws exempting various kinds of property from ad valorem taxation and provides further that "all laws exempting property from taxation other than the property mentioned in this Section shall be null and void." Tex. Const. art. VIII, § 2(a). Disposal sites for material dredged from the Gulf Intracoastal Waterway are not included within the permissible statutory exemptions provided in section 2.

Sections 1 and 2 of article VIII require the taxation of private property held by natural persons or private corporations, City of Beaumont v. Fertitta, 415 S.W.2d 902, 909 (Tex. 1967), subject to exemptions permitted by section 2 and actually enacted by the legislature, id. at 910, or established in other provisions, either self-executing or legislatively implemented, of the constitution, see State v. American Legion Post No. 58, 611 S.W.2d 720, 723 (Tex. Civ. App.—El Paso 1981, no writ). In other words, private property held by natural persons or private corporations that comes within a statutory category of exemption can be exempt only if there is clear constitutional authority for the exemption. Id.

You cite no constitutional authority, nor are we aware of any, for the tax exemption contained in section 11.29 of the Tax Code, as it would apply to land held by natural persons or private corporations. See 21 Jay D. Howell, Property Taxes § 238 (Texas Practice 1988) (constitution does not authorize exemption of disposal sites from taxation, and section 11.29 "is null and void"). We therefore conclude that section 11.29 is void insofar as it would apply to property required to be taxed by section 1(b) of article VIII of the Texas Constitution.

SUMMARY

Section 11.29 of the Tax Code is void insofar as it would apply to property required to be taxed by section 1(b) of article VIII of the Texas Constitution.

DAN MORALES
Attorney General of Texas

JORGE VEGA
First Assistant Attorney General

DREW T. DURHAM
Deputy Attorney General for Criminal Justice

JAVIER AGUILAR
Special Assistant Attorney General

RENEA HICKS
State Solicitor

SARAH J. SHIRLEY
Chair, Opinion Committee

Prepared by James B. Pinson
Assistant Attorney General