Can a Texas county waive or refund property tax penalties and interest if the county caused the late payment?

Plain-English summary

Hood County had a property-tax mess. Until 2017, the county appraisal district had collected county property taxes alongside taxes for other local entities, so owners got a single bill. In 2017 the county's tax assessor-collector took over county collections, and things did not go smoothly: taxpayers complained about checks not being deposited, confusion in paying, and having to pay two bills in two places. By August 2018, a number of taxpayers were getting delinquency notices from a private collections firm even though they said they had never received a county tax bill — and in some cases had paid the full bill on time, gotten the county portion refunded with no explanation, and then seen those county taxes marked delinquent. The commissioners court felt these taxpayers should not owe penalties and interest, but the Tax Code says failure to receive a bill is not an excuse for nonpayment, and it bars a waiver request once 181 days have passed since delinquency. The county attorney asked whether the county had any authority to provide relief.

The AG laid out the waiver rules in section 33.011 of the Tax Code. A taxing unit must waive penalties (and may waive interest) when an act or omission of the unit's officer, employee, or agent caused the taxpayer's failure to pay before delinquency, provided the tax is paid within 21 days of when the taxpayer knew or should have known of the delinquency. Related provisions cover undeliverable bills and payments mailed to a formerly-correct address. But under subsection 33.011(d), no waiver may be granted without a written request made before the 181st day after the delinquency date.

The hinge of the opinion was the delinquency date itself, which depends on mailing. The Tax Code requires the assessor to mail each tax bill by October 1 or as soon as practicable; taxes are generally delinquent if not paid before February 1, but if a bill is mailed late the delinquency date is postponed, and so is the accrual of penalties and interest. A court of appeals had recognized that if no tax bill is ever mailed, the taxes never become delinquent and penalties and interest never accrue — though that reasoning applies only where the unit has the taxpayer's name and address but neglects to mail or mails late, not where it cannot send a bill because the name or address is unknown. The AG said it could not decide whether Hood County had actually mailed the bills, because that is a fact question outside the opinion process. So it gave a conditional answer: to the extent the county had a mailing address but failed to mail a bill, a court could find the taxes were not yet delinquent, the 181-day waiver deadline had not run, and a proper waiver request could still be granted. To the extent the county did mail the bills and the waiver window had closed, article III, section 52(a) of the Texas Constitution — which bars granting public money to an individual — would likely prevent the county from reimbursing taxpayers from its general fund. But if no bill was ever mailed and the taxes never became delinquent, the penalties and interest never accrued and the money remitted was never the county's, so that constitutional bar would not apply to a refund.

Currency note

This opinion was issued in 2019. 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.

What the opinion meant for those who asked

Commissioners courts and county tax officials: At the time of the opinion, the AG read the Tax Code to allow a penalty-and-interest waiver under section 33.011 when the taxing unit's own act or omission caused the late payment, but only on a written request filed before the 181st day after the delinquency date. Whether that window was still open depended on whether the county had mailed the bills — a fact the AG said the county itself had to determine.

Taxpayers who say they never got a bill: The opinion explained that failure to receive a bill is not, by itself, an excuse for nonpayment, but that if the taxing unit had the taxpayer's address and never mailed the bill, a court could conclude the taxes never became delinquent — meaning penalties and interest never accrued and the waiver deadline had not run.

Anyone expecting a general-fund refund: The AG cautioned that if bills were mailed and the waiver period had passed, article III, section 52(a) of the Texas Constitution likely barred the county from reimbursing penalties and interest out of its general fund, because that would be a grant of public money to individuals.

Common questions

Can a Texas county waive penalties and interest if it caused the delinquency? The AG concluded a taxing unit can, under section 33.011 of the Tax Code, when an act or omission of the unit caused the failure to pay on time — but only if it receives a written waiver request made before the 181st day after the delinquency date.

What if 181 days have already passed?
The AG explained that the 181-day clock runs from the delinquency date, and the delinquency date depends on when the bill was mailed. If the county had the taxpayer's address but never mailed a bill, a court could conclude the taxes never became delinquent, so the deadline would not have started running.

Does never receiving a tax bill excuse nonpayment?
Not on its own. The AG noted the Tax Code provides that failure to send or receive a tax bill does not affect the validity of the tax, penalty, interest, or due date. The mailing question matters because it controls the delinquency date, not because non-receipt is itself an excuse.

Can the county just refund the penalties out of its general fund? The AG advised that if the bills were mailed and a section 33.011 waiver was foreclosed, article III, section 52(a) of the Texas Constitution would likely bar the county from reimbursing taxpayers from its general fund. But if no bill was ever mailed and the taxes never became delinquent, the penalties and interest never accrued, the money was never the county's, and a refund would not be barred.

Will the AG decide whether the county actually mailed the bills? No. The AG stated that whether the county mailed the tax bills is a fact-specific inquiry that cannot be resolved in the opinion process.

Background and statutory framework

The request arose after Hood County's tax assessor-collector took over county property-tax collection from the appraisal district in 2017 (the county had earlier contracted with the district under section 6.24(b) of the Tax Code). The AG identified section 33.011 as the provision governing waiver of penalties and interest: subsection (a)(1) requires waiver of penalties and permits waiver of interest where an act or omission of the taxing unit caused the failure to pay before delinquency, if the tax is paid within 21 days of when the taxpayer knew or should have known of the delinquency; subsection (b) addresses bills returned undeliverable; and subsection (a)(3) covers payments mailed to a formerly-correct address. Subsection (d) bars any such waiver absent a written request made before the 181st day after the delinquency date.

Because that deadline keys off the delinquency date, the AG turned to the mailing rules. Section 31.01(a) requires the assessor to mail tax bills by October 1 or as soon thereafter as practicable, and section 31.01(c)(7) requires the bill to state the due date and delinquency date. Under section 31.02(a) taxes are generally delinquent if not paid before February 1, but section 31.04(a) postpones the delinquency date when a bill is mailed late, and section 31.04(e) postpones the accrual of penalties and interest accordingly (with section 33.01 setting out the calculation). Section 31.01(g) provides that failure to send or receive a bill does not affect the validity of the tax, penalty, interest, due date, lien, or collection procedure. In Aldine Indep. Sch. Dist. v. Ogg, a court of appeals recognized that if no bill is ever mailed the taxes never become delinquent and penalties never accrue, and — reconciling the apparent conflict between subsections 31.01(g) and 31.04(e) — held that section 31.04 postpones the delinquency date only where the unit has the taxpayer's name and address but neglects to mail or mails late, not where it cannot send a bill because the name or address is unknown (citing Tex. Att'y Gen. Op. No. JM-1192 (1990)).

The AG concluded that whether Hood County actually mailed the bills is a fact-specific inquiry it could not resolve (Tex. Att'y Gen. Op. No. GA-0890 (2011)). To the extent the county had a mailing address but failed to mail a bill, a court could conclude the taxes were not yet delinquent, so the section 33.011(d) deadline had not passed and a waiver request could still be granted. To the extent the county mailed the bills and the waiver period had passed, the AG addressed article III, section 52(a) of the Texas Constitution, which prohibits authorizing a county to grant public money to an individual. Whether particular funds are public funds subject to that bar depends on the nature of the funds (Tex. Att'y Gen. Op. No. KP-0019 (2015)). The AG concluded that if the bills were mailed and a waiver was foreclosed, article III, section 52(a) likely precluded reimbursing taxpayers from the general fund; but if no bill was ever mailed, the penalties and interest never accrued and the funds remitted were never the county's, so that provision did not bar a refund.

Citations

Statutory provisions:

• Tex. Tax Code § 6.24(b); § 31.01(a); § 31.01(c)(7); § 31.01(g); § 31.02(a); § 31.04(a); § 31.04(b); § 31.04(e); § 33.01; § 33.011; § 33.011(a)(1); § 33.011(a)(3); § 33.011(b); § 33.011(d)
• Tex. Const. art. III, § 52(a)

Cases and Attorney General opinions:

• Aldine Indep. Sch. Dist. v. Ogg, 122 S.W.3d 257, 270 (Tex. App.-Houston [1st Dist.] 2003, no pet.)
• Tex. Att'y Gen. Op. No. JM-1192 (1990)
• Tex. Att'y Gen. Op. No. GA-0890 (2011)
• Tex. Att'y Gen. Op. No. KP-0019 (2015)

Source

• Landing page: https://www.texasattorneygeneral.gov/opinions/ken-paxton/kp-0239
• Original PDF: https://www.texasattorneygeneral.gov/sites/default/files/opinion-files/opinion/2019/kp-0239.pdf

Original opinion text

KEN PAXTON
ATTORNEY GENERAL OF TEXAS

February 22, 2019

The Honorable Matthew A. Mills
Opinion No. KP-0239
Hood County Attorney
1200 West Pearl Street
Re: Authority of a county to refund penalties
Granbury, Texas 76048
and interest paid by taxpayers in certain
circumstances (RQ-0244-KP)

Dear Mr. Mills:

You ask about the authority of Hood County (the "County") to refund penalties and interest paid by some taxpayers for delinquent property taxes "upon proof that the county may have caused the confusion that led to the delinquencies." [1] You explain that, until 2017, the Hood County Appraisal District collected property taxes on behalf of the County as well as other local taxing entities, which resulted in a single tax bill being sent to property owners. See Request Letter at 1; see also TEX. TAX CODE § 6.24(b) (authorizing a commissioners court, with the approval of the county assessor-collector, to contract with an appraisal district for the assessment and collection of county taxes). You tell us that in 2017, the County's tax assessor-collector took over the collection of county property taxes, which "impacted the tax bills that went out in the latter part of 2017, to be paid by January 31." Request Letter at 1. You state that "[f]or a variety of reasons, the collection of county taxes was not as successful as hoped. There were a number of complaints from taxpayers about checks not being deposited, confusion while paying bills, and general complaints about having to pay two bills in two different locations." Id. [2] You tell us that in August of 2018, a number of taxpayers received delinquency notices from a private collections firm despite apparently never receiving a tax bill from the County. See id. In some cases, you tell us, the taxpayers had "paid the full bill (county, school, etc.) to the appraisal district on time, were given a refund of the county portion with no explanation" and the County later designated the county taxes as delinquent. Id. at 1-2. The volume of these complaints and the fact that they come from taxpayers with a history of timely payments, you state, makes "the commissioners court believe[] that these taxpayers should not have to pay penalties and interest on their delinquent bills." Id. at 2. However, you note that the Tax Code "does not allow failure to receive a bill to form an excuse for nonpayment" and that the Tax Code also prevents taxpayers from seeking a waiver of penalties and interest "once 181 days have elapsed since the tax became delinquent."

[1] See Letter from Honorable Matthew A. Mills, Hood Cty. Att'y, to Honorable Ken Paxton, Tex. Att'y Gen. at 1 (Aug. 20, 2018), https://www2.texasattorneygeneral.gov/opinion/requests-for-opinion-rqs ("Request Letter").
[2] You state that in March of 2018, "the commissioners court signed an agreement with the approval of the Tax Assessor Collector to put the county's property tax collections back with the Hood County Appraisal District." Id.

Id. You question whether authority exists "for the county to provide relief to taxpayers for their penalties and interest if the county is satisfied that the county created much of the confusion in the first place." Id.

Section 33.011 of the Tax Code governs the County's authority to waive penalties and interest on a delinquent property tax. Relevant to the facts you present, subsection 33.011(a)(1) provides that "if an act or omission of an officer, employee, or agent of the taxing unit ... caused or resulted in the taxpayer's failure to pay the tax before delinquency," the governing body of the taxing unit must waive penalties and may waive interest on the delinquent tax, provided that the tax is paid by "the 21st day after the date the taxpayer knows or should know of the delinquency." TEX. TAX CODE § 33.011(a)(1); see also id. § 33.011(b) (providing that if a tax bill is returned undeliverable by the United States Postal Service "because of an act or omission ... of the taxing unit" and another tax bill is not sent within a specified period, the taxing unit must waive both penalties and interest). In addition, subsection 33.011(a)(3) allows a taxing unit to waive penalties and interest on a delinquent tax if the taxpayer can show (1) attempted mail payment prior to the delinquency date; (2) mailing to an incorrect address that was previously the correct address, within one year of that change; and (3) payment of the tax by the 21st day the taxpayer knew or should have known of the delinquency. See id. § 33.011(a)(3). However, the taxing unit may not waive the penalties or interest under any aforementioned subsections without a written request "made before the 181st day after the delinquency date." Id. § 33.011(d). You tell us that the "timing of the delinquency notices is such that a number of local taxpayers are only now finding out that the bills are delinquent, and 181 days have passed." Request Letter at 2.

The Tax Code charges the assessor for each taxing unit with preparing and mailing a tax bill to each property owner listed on the tax roll. See TEX. TAX CODE § 31.01(a). The assessor must mail the tax bills "by October 1 or as soon thereafter as practicable." Id. Among other things, the tax bill must include the tax amount, the due date, and the delinquency date. See id.
§ 31.01(c)(7). Taxes are generally "due on receipt of the tax bill and are delinquent if not paid before February 1." Id. § 31.02(a). If, however, "the tax bill is mailed after January 10, the delinquency date provided by Section 31.02 of [the Tax Code] is postponed" to a certain date after mailing that would allow for timely payment, except in instances not relevant here. [3] Id. § 31.04(a). In the event the delinquency date is postponed, the accrual of penalties and interest is likewise postponed. Id. § 31.04(e); see also id. § 33.01 (outlining the calculation method to determine the amount of penalties and interest). Thus, the mailing date of the tax bill controls the delinquency date, which, in turn, controls the date for the imposition of penalties and interest.

One court of appeals recognized the possibility under the postponed delinquency date provisions of section 31.04 that "if no tax bill is ever mailed to the taxpayer, then the taxes never become delinquent, and, thus, penalties and interest never accrue." Aldine Indep. Sch. Dist. v. Ogg, 122 S.W.3d 257, 270 (Tex. App.-Houston [1st Dist.] 2003, no pet.). In its analysis, the court acknowledged subsection 31.01(g) of the Tax Code, which states that "failure to send or receive the tax bill ... does not affect the validity of the tax, penalty, or interest, the due date, the existence of a tax lien, or any procedure instituted to collect a tax." Id.; TEX. TAX CODE § 31.01(g).

[3] "[T]he assessor who mails the bills shall notify the governing body of each taxing unit whose taxes are included in the bills of the postponement." TEX. TAX CODE § 31.04(b).

Recognizing that "subsection 31.01(g) appears to conflict with subsection 31.04(e)," the court concluded that section 31.04 applies to postpone the delinquency date when "the taxing unit has the name and mailing address for the taxpayer, but either neglects to mail the tax bill or mails it late," but that "section 31.04 will not apply in instances in which the taxing unit cannot send the tax bill because it does not have the taxpayer's name or address." Aldine Indep. Sch. Dist., 122 S.W.3d at 270 (citing Texas Attorney General Opinion JM-1192); see also Tex. Att'y Gen. Op. No. JM-1192 (1990) at 7-8 ("We construe section 31.04 to govern only in instances in which a tax bill can be sent, but is mailed late; it has no application in an instance in which no tax bill can be sent because the name or address of the delinquent taxpayer is unknown.").

You do not tell us whether the County mailed the tax bills-only that some taxpayers claim they never received tax bills from the County. Request Letter at 1. Whether the County, in fact, mailed tax bills to the taxpayers in question is a fact-specific inquiry that cannot be determined in the opinion process. Tex. Att'y Gen. Op. No. GA-0890 (2011) at 1. However, to the extent a taxing unit failed to mail a tax bill to the taxpayer despite the taxing unit's possession of a mailing address, a court could conclude that the taxes are not yet delinquent, in which case the statutory deadline for submitting a written request for the waiver of fees and penalties has not yet passed. See TEX. TAX CODE § 33.011(d) (requiring a written request for the waiver of fees and penalties be submitted "before the 181st day after the delinquency date" (emphasis added)). In such a case, the County may waive penalties and interest upon receipt of a properly submitted request that complies with subsection 33.011(a)(1) of the Tax Code.

To the extent the County mailed a tax bill, the date of mailing establishes the date of delinquency, which determines whether the statutory period for filing a waiver request under subsection 33.011(d) has passed. Assuming the waiver period has passed, you raise article III, subsection 52(a) of the Texas Constitution as a potential barrier to the County providing taxpayers relief from the county's general fund for amounts equivalent to the penalties and interest the taxpayers incurred. See Request Letter at 2. That provision prohibits the Legislature from authorizing a county to grant "public money or thing of value in aid of, or to any individual." TEX. CONST. art. III, § 52(a). Whether any particular funds belong to the County, and are thus public funds subject to the prohibition of article III, section 52(a), depends on the nature of the particular funds. See Tex. Att'y Gen. Op. No. KP-0019 (2015) at 2 (concluding that restitution funds collected temporarily by the county clerk for eventual remittance to a victim were not funds belonging to the county). However, to the extent the County mailed the tax bills in question such that a waiver of penalties and interest under section 33.011 is foreclosed, article III, subsection 52(a) would likely preclude the County from reimbursing taxpayers from its general fund for the amount of the penalties and interest. If the County failed to mail the tax bills such that the taxes never became delinquent, then the penalties and interest never accrued and the funds remitted were never the property of the County. Article III, subsection 52(a) does not bar a refund of money not belonging to the County.

SUMMARY

Subsections 33.011(a)(1), (a)(3), and (d) of the Tax Code permit a taxing unit under some circumstances to waive penalties and interest charged on delinquent taxes based on an act or omission of the taxing unit, or a formerly-correct address for payment, if certain requirements are met and the taxing unit receives a timely submitted written request for the waiver.

To the extent Hood County failed to mail a tax bill despite the County's possession of the taxpayer's mailing address, a court could conclude that the taxes are not yet delinquent, in which case the statutory deadline in subsection 33.011(d) for submitting the waiver request has not passed. To the extent Hood County mailed the tax bills in question such that a waiver of penalties and interest under section 33.011 is foreclosed, article III, subsection 52(a) of the Texas Constitution likely precludes the County from reimbursing taxpayers from its general fund for the amount of the penalties and interest.

Very truly yours,

KEN PAXTON
Attorney General of Texas

JEFFREY C. MATEER
First Assistant Attorney General

BRANTLEY STARR
Deputy First Assistant Attorney General

VIRGINIA K. HOELSCHER
Chair, Opinion Committee

BECKY P. CASARES
Assistant Attorney General, Opinion Committee