Can a Texas county still pay the salary of an employee who owes back property taxes to the county?

Texas AG Opinion JM-1193: Can a County Pay an Employee Who Owes It Back Taxes?

Plain-English summary

The Lipscomb County Attorney asked whether Local Government Code section 154.025, which bars a salary warrant "in favor of a person... who is indebted to the state, the county, or the salary fund," stopped the county from paying employees or elected officials who were behind on their own ad valorem taxes, even ones who had arranged periodic payments to catch up.

The Attorney General looked at how courts and prior opinions had read the word "debt" in similar statutes and concluded that "debt," standing alone, ordinarily does not include a tax. That reading traced back to a 1943 opinion interpreting an older statute barring warrants to anyone "indebted to the State," and to federal and Texas case law holding that "debt" and "taxes" are ordinarily treated as distinct concepts unless a statute says otherwise. The opinion also pointed to the fact that the legislature had, in a related statute, expressly amended the word "indebted" to add "or owing delinquent taxes" when it wanted to reach tax debts, but had never made the same amendment to section 154.025. From that, the Attorney General concluded the Local Government Code's silence meant tax delinquency was not covered, so the statute did not bar paying the affected employees' salaries.

Currency note

This opinion was issued in 1990. 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 mentioned here.

Who this opinion affected (as of 1990)

Lipscomb County and other Texas counties with employees behind on property taxes: The opinion concluded these counties were not barred by section 154.025 from continuing to pay salaries to employees or elected officials delinquent on their own ad valorem tax obligations.

County employees and elected officials delinquent on property taxes: The opinion meant these individuals' county paychecks were not at risk under section 154.025 solely because of an unpaid property tax debt to the same county, regardless of whether they had arranged periodic payments.

Common questions

Could a Texas county withhold an employee's paycheck because the employee owed the county back property taxes?
Not under this statute, according to the opinion. The Attorney General concluded that the word "indebted" in Local Government Code section 154.025 did not extend to ordinary delinquent ad valorem taxes.

Did it matter that the employee had set up a payment plan for the back taxes?
No. Because the opinion concluded tax delinquency was not "indebtedness" under section 154.025 at all, it did not need to decide whether a periodic-payment arrangement would have counted as a discharge of any debt.

Why did the Attorney General think "debt" and "taxes" are different things?
The opinion pointed to case law holding that courts ordinarily treat "debt" and "taxes" as distinct unless a statute's purpose calls for reading them together, and to a related Texas statute that the legislature amended specifically to add delinquent taxes as a separate category, which the Attorney General read as confirming the plain word "indebted" did not already include taxes on its own.

Background and statutory framework

Local Government Code section 154.025 provides that "a warrant may not be drawn on a salary fund in favor of a person... who is indebted to the state, the county, or the salary fund." The Attorney General had addressed a similarly worded predecessor statute, former V.T.C.S. article 4350, in a 1943 opinion concluding that "debt" did not ordinarily include a tax, consistent with the weight of American case law on the meaning of "debt." The opinion cited Texas authority holding that "debt" does not ordinarily include taxes, and a Fifth Circuit decision explaining that courts read "debts" and "taxes" as interchangeable only when a statute's purpose calls for it.

The opinion also traced the legislative history of article 4350, noting that in 1977 the legislature amended it to add "or owing delinquent taxes" alongside "indebted," a change the accompanying bill analysis explained was meant to let the state treasurer withhold warrants from people owing delinquent taxes, something the treasurer could not do under the "indebted" language alone. Article 4350 was later codified as Government Code section 403.055. Because the legislature never made an analogous amendment to Local Government Code section 154.025, the Attorney General concluded the word "indebted" in that provision likewise did not reach delinquent taxes, and that section 154.025's purpose of ensuring county obligations are paid did not itself justify reading "indebted" more broadly than its ordinary meaning.

Citations

Statutes:

• Local Government Code § 154.025 (bar on salary warrants to a person indebted to the county)
• V.T.C.S. art. 4350 (predecessor statute, later amended and codified)
• Government Code § 403.055 (current codification of former article 4350)
• 31 U.S.C. § 3713(a) (federal debt-priority statute construed in Price v. United States)

Cases:

• Price v. United States, 269 U.S. 492 (1926)
• Brooks v. Brooks, 515 S.W.2d 730 (Tex. Civ. App.-Eastland 1974, writ ref'd n.r.e.)
• Rochelle v. City of Dallas, 264 F.2d 166 (5th Cir. 1959), cert. denied, 361 U.S. 828 (1959)
• Rains v. Mercantile Nat'l Bank at Dallas, 188 S.W.2d 798 (Tex. Civ. App.-El Paso 1945), aff'd, 191 S.W.2d 850 (Tex. 1946)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/jim-mattox/jm-1193
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/1990/jm1193.pdf

Original opinion text

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

THE ATTORNEY GENERAL OF TEXAS

Jim Mattox

July 26, 1990

Honorable Randy M. Phillips
Lipscomb County Attorney
Box 348
Booker, Texas 79005

Opinion No. JM-1193

Re: Authority of a county to pay its employees who are indebted to the county for property taxes (RQ-1826)

Dear Mr. Phillips:

You advise that certain county employees are delinquent in paying ad valorem taxes owed to the county, and that these employees are making periodic payments on the taxes owed. You ask whether section 154.025 of the Local Government Code prohibits the payment of salaries of county employees or elected officials who owe taxes to the county if the employees or elected officials have made arrangements with the county to make periodic payments to retire the obligation.

Section 154.025 of the Local Government Code reads as follows:

A warrant may not be drawn on a salary fund in favor of a person, or an agent or assignee of a person, who is indebted to the state, the county, or the salary fund.

The attorney general responded to a similar question in Attorney General Opinion O-5249 (1943). In Attorney General Opinion O-5249 the question posed was whether article 4350, V.T.C.S., prohibited the comptroller from issuing a warrant to a person against whom the state had an

1. Debt as a bar to the issuance of government warrants, and the determination of when such indebtedness exists has been discussed in a number of attorney general opinions over the years. See, e.g., Attorney General Opinions JM-255 (1984); MW-416 (1981); Letter Advisory No. 57 (1973); WW-1504 (1962); WW-671 (1959); V-1113 (1950); O-4655 (1942).

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outstanding judgment for delinquent tax payments. At the time Attorney General Opinion O-5249 was issued article 4350 read as follows:

No warrant shall be issued to any person indebted to the State, or to his agent or assignee, until such debt is paid.

The attorney general held that the term "debt," as ordinarily used, did not include a tax, and that consequently, the comptroller was not authorized to withhold a warrant on this basis. In so holding, the attorney general was in line with the preponderance of precedent in American courts. See Words and Phrases, "Debt," (West 1971). But cf. Price v. United States, 269 U.S. 492 (1926). Texas courts have also held that, ordinarily, "debt" does not include taxes. Brooks v. Brooks, 515 S.W.2d 730, 733 (Tex. Civ. App. - Eastland 1974, writ ref'd n.r.e.). In Rochelle v. City of Dallas, 264 F.2d 166 (5th Cir. 1959), cert. denied, 361 U.S. 828 (1959), the court stated:

[W]hile occasionally the words "debts" and "taxes" are used interchangeably, ordinarily this is not so. Indeed in most instances they are used distinctively. This established, it follows that to support a construction of a statute that the word "debt" include taxes, there must be some reason shown to so read a statute other than the fact that sometimes the word debt will include taxes. This reason must be sought in the purpose of the statute, that is the mischief sought to be prevented and the appropriate means to achieve that end.

2. In holding that "debt" included taxes owed the United States for purposes of the priority of federal claims, the court in Price stated: "The meaning properly to be attributed to that word depends upon the connection in which it is used in the particular statute and the purpose to be accomplished." 269 U.S. at 500. The statute construed in Price, the former R.S. 3466, now appears as 31 U.S.C. § 3713(a) and uses the word "claim."

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The purpose of section 154.025 of the Local Government Code is to insure payment of obligations owing to the county. Rains v. Mercantile Nat'l Bank at Dallas, 188 S.W.2d 798, 804 (Tex. Civ. App. - El Paso 1945) (construing section 7 of predecessor article 3912e) aff'd, 191 S.W.2d 850, 854 (Tex. 1946). While such a purpose could as easily apply to delinquent taxes as to any other obligation, we have no basis for finding that the legislature meant the word "indebted" in section 154.025 of the Local Government Code to have a more inclusive meaning than it would ordinarily have. To the contrary, we note the legislature has, with regard to other legislation, affirmatively indicated by the use of express language its intent to include delinquent taxes as a bar to the issuance of government warrants.

For example, article 4350, quoted above, was amended by House Bill 2067 in 1977 to read:

No warrant shall be issued to any person indebted or owing delinquent taxes to the State, or to his agent or assignee, until such debt or taxes are paid.

Acts 1977, 65th Leg., ch. 682, § 1, at 1715 (emphasis added to show 1977 changes). The bill analysis of House Bill 2067 states:

Background:

The state treasurer under present law may withhold warrants from persons indebted to the state.

Purpose:

This bill enables the state treasurer to withhold warrants from persons owing delinquent taxes.

3. Article 4350 was subsequently amended in 1983 to prohibit the issuance of a warrant to a person owing delinquent taxes on any tax administered or collected by the comptroller. Acts 1983, 68th Leg., ch. 100, at 499. In 1987, article 4350 was codified into the Government Code where it now appears as section 403.055. Acts 1987, 70th Leg., ch. 147, § 1, at 333.

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The 1977 amendment to article 4350 indicates recognition by the legislature that the term "indebted" in the original version of the statute did not include obligations for delinquent taxes. As the legislature has not enacted an analogous amendment to section 154.025 of the Local Government Code, we conclude that the term "indebted" as used in that statute does not include outstanding tax obligations.

In conclusion, section 154.025 of the Local Government Code does not prohibit a county from paying the salaries of county employees or elected officials who are delinquent in ad valorem tax obligations. As this resolves your question, we need not consider under what circumstances, if any, an agreement to make periodic payments could be considered a discharge of indebtedness for purposes of Local Government Code section 154.025.

SUMMARY

Section 154.025 of the Local Government Code does not prohibit a county from paying the salaries of county employees or elected officials who are delinquent in ad valorem tax obligations.

Very truly yours,

JIM MATTOX
Attorney General of Texas

MARY KELLER
First Assistant Attorney General

LOU MCCREARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

4. The source law for section 154.025, former section 7 of article 3912e, was slightly reworded when included in the Local Government Code, but no substantive change was made. Acts 1987, 70th Leg., ch. 149, §§ 1, 51 at 936, 1308.

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RENEA HICKS
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by John Steiner
Assistant Attorney General

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