Case Information
*1 . .
The Attorney General of Texas December 31, 1982 MARK WHITE
Attorney General
Honorable Mark M. Humble Opinion No. ?lW-583 Supreme P. 0. BOX 12546 Austin. [51214752501] Telex Telecopier 9101674~1367 TX. 76711. Court Building 5121475.0266 [2546] Milam County Attorney County Courthouse Cameron, Texas 76520 Property Tax Code Re: Constitutionality for nursery products 11.16 of tax Dear Mr. Humble: 1607 Main St., Suite 1400 Dallas, TX. 75201-4709
You ask whether the ad valorem tax exemption for nursery products 2141742-6944 set forth in section 11.16 of the Property Tax Code is constitutional. We conclude it is. 4624 Alberta Ave., Suite 160 El Paso. TX. 79905-2793 Section 11.16 of the Property Tax Code provides the following 91.w533.3464 pertinent part: 1220 Dallas Ave.. Suite 202 (a) A producer is entitled to an exemption Houston. TX. 77002-6966 taxation farm Droducts that he 713,650.0666 produces and owns. A nursery pioduct. as defined
by Section 71.041, Agriculture Code, is a farm 606 Broadway, Suite 312 product for purposes of this section if is in a Lubbock, TX. 79401.3479 growing state. (Emphasis added). 6061747-5236
Section 71.041 the Agriculture Code contains following definition: 4309 N. Tenth. Suite 6 McAllen, TX. 76501.1665 5121682-4547 'Nursery product' includes a tree, shrub, vine,
cutting, graft, scion, grass, bulb, or bud that grown for, kept for, or is capable of, propagation 200 Main Plaza, Suite 400 and distribution for sale. San Antonio, TX. 78205.2797
512,225.4191
Section 11.16 was adopted in conformity with article VIII, 19 of the Texas Constitution which provides: An Equal Opportunity/ Affirmative Action Employer Farm products... in the hands of the producer,
family supplies for home and farm use, are exempt from all until otherwise directed by a two-thirds vote of all the members elect to both houses of the Legislature.
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. . (Mw-583) legislature may not authorize that which the constitution (Tex. prohibits, Maher V. Lasater, 354 S.W.Zd 923 1962). Specifically, the legis: lature is without power to add to the list of pioperties - entitled -to exemption under the constitution, Leander Independent School District V. Cedar Park Water Supply Corporation, 479 S.W.Zd 908 (Tex. 1972); City of Amarillo V. Amarillo Lodge No.
731, A.F. and A.M., 488 S.W.Zd 69 (Tex. 1972), and any attempt to do so is void. City of Amarillo V. Love, 356 S.W.Zd 325 (Tex. Civ. App.
- Amarillo 1962, writ ref’d n.r.e.); Dickison V. Woodmen of the World Life Insurance Society, 280 S.W.Zd 315 (Tex. Civ. App. - San Antonio In this instance, the issue is whether “nursery 1955. writ ref’d).
prod&ts,” as defined by section 71.041, Agriculture Code, constitute “farm products” within the meaning of article VIII, 19 of the Texas Constitution. If they do, the statute is constitutional. If they do not, the statute attempts to add to the list of properties and is void. While the entitled to exemption under the constitution authority is not clear and unambiguous, we conclude that the courts would be likely to hold that “nursery products” are “farm products” and that the statute is constitutional.
It has been suggested that Kirby Lumber Corporation v. Hardin Independent School District, (Tex. Civ. App. - Waco 1961. writ ref’d n.r.e.) is controllina. We disagree. The court timber grown on --II therein declared tree farms” does not fall the ambit of article Relying on principles constitutional provisions must be construed light of conditions existing at the time of adoption and that it does not lie within the power of the legislature to change their meaning or enact laws in conflict therewith, Jones V. Ross, 173 S.W.Zd 1022 (Tex.
1943); Travelers’ Insurance Company v. Marshall, 76 S.W.Zd 1007 (Tex.
1934), the court declared:
In our opinion appellant’s timber here involved is not included in the constitutional exemption of ‘farm products.’ We feel certain it was not the contemplation framers provisions and the people who adopted it. In 1879 Texas was in the throes of an economic depression, and apparen;t;tintended to be temporary otherwise directed by a two-thirds vote’ Legislature. See Interpretive Commentary, Vernon’s Ann. Tex. 570. Texas citizens of that day, not far Const., removed frontier and pioneer status, considered timber forests as areas to be cleared before the pursuits of husbandry could be engaged in. It would have been incredible, then, to call trees ‘farm products.’ We think they are now, within not such the meaning of the Constitution.
351 S.W.Zd at 312.
At most, the Kirby case stands for the proposition that, "the application of scientific forestry regardless of whether practices to an established stand of timber," i.e. a lumber operation commonly referred to as "tree farming," would properly be considered "farm products" now, it clearly was not so considered in 1879. But the case offers us no guidance in determining whether section 11.16 constitutional, because a lumber operation as contemplated by Kirby does not meet threshold requirement of 11.16 of Property Tax Code. A tree as part of a lumber operation is not "grown for, kept for, or is capable of, propagation and distribution for A nursery is defined as "a nlace sale." Aericulture Code 571.041.
where trees, shrubs, vines, etc., are propagated for transplanting or as use for stalks for grafting." Hill V. Georgia Casualty Company, 45 S.W.Zd 566, 567 (Tex. 1932). Timber, on the other hand, denotes "trees of a size suitable for manufacture into lumber for use of building and allied purposes and does not include saplings, brush, fruit trees or trees suitable only for firewood or decoration." M & I Timber Company V. Hope Silver-Lead Mines, Inc., 428 P.2d 955, 955 (Idaho 1967).
The word 'timber' has been generally defined as meaning growing trees suitable to be used for the construction building, tools, utensils, furniture, fences, ships, etc. This concept timber distinguishes from saplings, undergrowth, fruit trees, and trees suitable only for firewood or cordwood, or for decoration.
Melder V. Phillips Pipe Line Company, 539 S.W.Zd 208, 210 (Tex. Civ. - Austin 1976, writ ref'd n.r.e.). See also Cummer-Graham
APP. Company V. Maddox, 285 S.W.Zd 932 (Tex. 1956). Because the court in Kirby was not concerned with nurseries, it offers us little guidance.
A more helpful case is City of Amarillo V. Love, a. There the court held that a taxpayer who engaged in a general retail (and some wholesale) nursery business for profit was not entitled to claim an ad valor-em tax exemption under article
taxpayer received his nursery from large nursery plantations or farms and replanted the stock in order to preserve and continue life the plants. Prior to the time the nursery stock was removed the plantations or farms, they were their "first growth stage." During time in which stock was possession of the taxpayer, they were in their "second growth stage." The court held the taxpayer was not entitled to ad valorem tax *4 Honorable Mark M. Humble - Page 4 (w-583)
exemption because he was not a "producer" within the meaning of article VIII, section 19.
In our opinion the nursery stock in question does not come under the constitutional 'farm products in the hands of the producer.' In order to come under the exemption, appellee's nursery stock must meet two requirements: first, it must be 'farm products' and if so, it must be Under the found that appellee is the 'producer.' facts and circumstances before us, we do not think the nursery stock meets these requirements.... The trees and bushes were started by grafting and budding on large nursery farms and transferred to appellee who conducted its retail and wholesale business on several city lots within the City of
ordinarily used among both business men the general public. Appellee's care and
treatment of this nursery stock during its 'second growth stage' was incidental to its selling It would be a stock to the ultimate consumer. strained construction applicable constitutional language to say the nursery stock the hands of appellee 'farm products.' 356 S.W.Zd at 328. The court held that a person tending nursery stock during its "second growth stage" is not a "producer"
meaning of article VIII, It did not directly address issue as to whether nursery its "first growth stage" is a "farm product." However, we believe that our courts, if confronted squarely with the issue, would so conclude.
We find it persuasive that Texas courts in other contexts have concluded that nursery products do constitute farm or agricultural products. In Brewer V. Central Greenhouse Corporation,
(Tex. 1961), the Texas Supreme Court held that workers in greenhouses were "agricultural laborers" the meaning of the Fair Labor Standards Act, 201 et seq. 29 U.S.C. The act defined "agriculture" to mean "farming in all its branches and among other things includes... production... agricultural or any horticultural commodities.... 29 U.S.C. 9203(f). Admittedly, definition of "agriculture" in the federal act is broad. Yet, in an ad valorem case, the Ohio Supreme Court relied in part on the case in construing a statute which exempted equipment and machinery "used in agriculture" and "agricultural products on farms." In Benken v. Porterfield, 247 N.E.Zd 749, 753 (Ohio 1969), the court declared: business planting, cultivating,
[Tlh= harvesting, and selling flowers and vegetables, indoors in greenhouses, or outdoors in lath houses or planting beds in the ground, with substances being added to the soil to aid and protect growing process, is agriculture. in another context, Texas courts have held that, for
Again, purposes of workers' compensation, nursery laborers are "farm laborers" within the meaning of the statute. In Hill v. Georgia "That one engaged in the Casualty Company, B. the court stated: nursery business is engaged in an agricultural pursuit is not to be doubted." In Guerrero v. United States Fidelity and Guaranty Company, the court affirmed the proposition (Tex. 1936), horticulture constitutes one of the main divisions of agriculture. It further noted the distinction discussed in City of Amarillo v. Love, E, between raising nursery stock and buying nursery for resale and placing it in the ground temporarily for preservation.
former horticultural practice is a part of agriculture
meaning of the statute; the latter is not.
While admittedly both those cases construed a worker's compensation statute, we think that is significant that the supreme court of another jurisdiction relied on Hill v. Georgia Casualty Company, B. in deciding an ad valorem case. In Boehm v.
Burleigh County, 130 N.W.Zd 170 (N. D. 1964), the court declared a nursery engaged in growing trees, shrubs, flowers and plants fell the ambit of an ad valorem tax "all farm structures, and improvements located on agricultural lands." The court found that the products of a nursery are agricultural products because "'agriculture' is sufficiently broad to include 'horticulture."' Id.
at 176. See also State v. Wertheimer Bag Company, 43 So.Zd 824 (Ala.
1949) (a sales tax case which relies in part on both Hill v. Georgia and Guerrero v. United States Fidelity Casualty Company, supra, Guaranty Company, a); Orendorf v. H. Weber and Sons Company, 140 A.2d 641 (Md. 1958); Township of Marple v. Lynam. 30 A.2d 208 (Pa.
Super. Ct. 1943); Hagenburger v. City of Los Angeles, 124 P.2d 345 (Cal. Dist. Ct. App. 1942); Dye v. McIntyre Floral Company, 144 S.W.Zd 752 (Ten*. 1940).
We are persuaded that Texas courts would construe "farm products" in article 19 of the Texas Constitution to include nursery products as defined in section 71.041 of the Agriculture Code and believe that section 11.16 of the Property Tax Code is constitu- tional.
SUMMARY Section 11.16 of the Property Tax Code which exempts from ad valorem farm products, including nursery products as defined by section 71.041 of the Agriculture Code, is constitutional. MARK WHITE Attorney General of Texas JOHN W. FAINTER, JR.
First Assistant Attorney General
RICHARD E. GRAY III
Executive Assistant Attorney General
Prepared by Jim Moellinger
Assistant Attorney General
APPROVED:
OPINION COMMITTEE
Susan L. Garrison, Chairman
Jon Bible
Rick Gilpin
Patricia Hinojosa
Bob Lattimore
Jim Moellinger