Cornyn v. County of Hill

• Citation: 10 S.W.3d 424
• Decision Date: 26 January 2000
• Docket Number: No. 10-98-375-CV,10-98-375-CV
• Parties: (Tex.App.-Waco 2000) JOHN CORNYN, ATTORNEY GENERAL STATE OF TEXAS AND CAROLYN KEETON RYLANDER, COMPTROLLER OF PUBLIC ACCOUNTS, STATE OF TEXAS, Appellants v. THE COUNTY OF HILL, THE STATE OF TEXAS, Appellee
• Court: Court of Appeals of Texas

Page 424

10 S.W.3d 424 (Tex.App.-Waco 2000)

JOHN CORNYN, ATTORNEY GENERAL STATE OF TEXAS AND CAROLYN KEETON RYLANDER, COMPTROLLER OF PUBLIC ACCOUNTS, STATE OF TEXAS, Appellants v. THE COUNTY OF HILL, THE STATE OF TEXAS, Appellee

No. 10-98-375-CV

IN THE TENTH COURT OF APPEALS OF TEXAS WACO.

January 26, 2000

From the 66th District Court Hill County, Texas Trial Court # 35621

BEFORE: Chief Justice DAVIS, Justice VANCE, and Justice GRAY.

O P I N I O N

TOM GRAY, Justice.

The County of Hill forwarded fees to the comptroller collected pursuant to the Code of Criminal Procedure. Hill County asserts that a portion of the fees should not have been forwarded and has filed suit to recover the overpayment. The State filed a plea to the jurisdiction asserting that such claims are required to be brought under the Tax Code. The trial court denied the plea to the Jurisdiction. The State brought this interlocutory appeal. Because we find that the fees come under the refund provisions of the Tax Code, if any court has jurisdiction of this particular suit, it is the district courts of Travis County because they have exclusive, original jurisdiction of a suit under the Tax Code for a refund. Accordingly, the trial court's ruling on the plea to the jurisdiction will be reversed and the cause dismissed.

FACTUAL BACKGROUND

Under the Code of Criminal Procedure, the fees for certain activities of law enforcement personnel are collected from the accused by the County. TEX. CODE CRIM. PROC. ANN. art. 102.011 (Vernon 2000). A portion of the fees are paid over to the State Comptroller of Public Accounts. The fees at issue in this case were collected and paid over to the State by Hill County from the fourth quarter of 1989 to at least the second quarter of 1992.¹ It appears that the County forwarded the entire amount of the fee, and did not keep its portion as authorized by the Code of Criminal Procedure. In late 1997, Hill County made a written request to the comptroller for the return of its portion of the fees which were alleged to have been improperly paid.² The comptroller did not return to Hill County the portion erroneously paid.

PROCEDURAL BACKGROUND

Hill County filed this suit in the district court of Hill County for return of the overpayment from the comptroller, joining the Attorney General as a defendant.³ The State answered with a general denial and asserted that as the sovereign, they were immune from suit. The State also asserted that the refund was governed by the procedures in the Texas Tax Code and that Hill County had failed to exhaust administrative remedies and had not followed proper administrative procedures prior to filing suit in accordance with the Texas Tax Code. In addition to their answer which raised these issues, the State filed a plea to the jurisdiction and motion for summary judgment. The district court in Hill County denied both the plea to the jurisdiction and the motion for summary judgment. The State appeals the plea to the jurisdiction. TEX. CIV. PRAC. & REM. CODE ANN. 51.014(a)(8) (Vernon 1999).

THE APPEAL

On appeal, the State again asserts that the district court of Hill County is without jurisdiction because the suit is barred by sovereign immunity. Alternatively, the State asserts that the trial court does not have jurisdiction because Hill County failed to exhaust its administrative remedies under the Tax Code. But, if the suit is not barred on either of these bases, the State contends this suit for a refund must be brought in the Travis County district courts which have exclusive jurisdiction under the Tax Code for all disputes concerning refunds.

In its response, Hill County asserts that because the funds in question never came under the control of the comptroller and because the funds were erroneously paid over to the State, the State does not have statutory authority to collect and administer the funds. Thus the funds were never under the administrative jurisdiction of the State and are not subject to the Tax Code. Hill County also asserts that the district court of Hill County is a proper forum, and that sovereign immunity was waived because the comptroller allowed a similar case to proceed in another county.

It is undisputed at this stage of the proceeding that Hill County properly collected the funds. Hill County was obligated to forward to the Comptroller only one-fifth of the amount collected. Hill County appears to have sent it all. The fundamental question is what procedure is available for Hill County to force the State to return money that was erroneously forwarded to the comptroller. The specific question presented to us is whether the district court of Hill County has jurisdiction of an action brought to obtain a refund.

If Hill County must use the Tax Code to pursue a refund of the erroneous payment, Hill County has filed suit in a court that does not have jurisdiction. The Tax Code specifies that only the district courts of Travis County have jurisdiction of refund cases under the Tax Code.

STANDARD OF REVIEW

Subject matter jurisdiction is essential to the authority of a court to decide a case. Texas Ass'n of Bus. v. Texas Air Control Bd., 852 S.W.2d 440, 443 (Tex. 1993); Bland Ind. School Dist. v. Blue, 989 S.W.2d 441, 445 (Tex. App.-Dallas 1999, pet. granted). The petitioner in a lawsuit must allege facts that affirmatively demonstrate the court's jurisdiction to hear the cause of action. Texas Ass'n of Bus., 852 S.W.2d at 446. A plea to the jurisdiction is the vehicle by which a party contests the trial court's authority to determine the subject matter of a cause. Bland, 989 S.W.2d at 445. Whether a trial court has subject matter jurisdiction over a cause is a question of law and is reviewed de novo. Scott v. Prairie View A&M Univ., 7 S.W.3d 717, 719 (Tex. App.-Houston [1st Dist.] November 10, 1999, n.p.h.) (citing Mayhew v. Town of Sunnyvale, 964 S.W.2d 922, 928 (Tex. 1998)).

REFUND PROCEDURES UNDER THE TAX CODE

We will start with an analysis of the applicability of the Tax Code. To understand whether the Tax Code refund provisions apply, we must walk through a maze of definitions and provisions to be interpreted.

Rather than start with the specific provisions for a refund and work backwards into the definitions of the various terms, we will first define the terms used by the applicable sections of the Tax Code. Armed with the appropriate legal definitions we will then examine the text of refund provisions of the Tax Code.

The analysis begins with the definition of "person." Is Hill County a person? The refund provision of the Tax Code does not contain a definition of "person." Thus, we look to the Code Construction Act which defines "person," to include "government or governmental subdivision ... and any other legal entity."⁴ TEX. GOV'T CODE ANN. 311.005(2) (Vernon 1998). A county is a governmental subdivision of the State. See TEX. CIV. PRAC. & REM. CODE ANN. 101.001(2) (A)-(B) (Vernon 1997). Hill County is therefore a person for purposes of the Tax Code.

The next step in the analysis is whether Hill County is a taxpayer. The legislature amended the definition of "taxpayer" in 1993.⁵ Taxpayer is defined as "a person liable for a tax, fee, assessment, or other amount imposed by a statute or under the authority of a statutory function administered by the comptroller." TEX. TAX CODE ANN. 101.003 (Vernon 1999).

Reading these two provisions together, a taxpayer is a person, including a governmental subdivision, which is liable for a fee, or other amount that is imposed by statute. In other words, a county is a taxpayer if it is liable for a fee or other amount imposed by a statute. The county is liable to the State for the fee imposed by and collected under the authority of the Code of Criminal Procedure. Therefore, Hill County is a taxpayer as defined by the Tax Code.

However, just because the county is a taxpayer does not necessarily mean that the fee collected is a tax subject to the refund provisions of the Tax Code. Therefore, the next question is whether the fee collected by Hill County is a "tax" for purposes of the manner of seeking a refund.

Refund of "fees" are not directly included in the Tax Code refund provisions. Specifically, the provisions for refund under section 111.104 of the Tax Code only apply to tax, penalty, or interest that have been unlawfully or erroneously collected. However, all the procedures of chapter 111 apply to fees that the comptroller is required to collect. Id. 111.0021 (Vernon 1992). Further, 111.0022 provides that subtitle B, entitled Enforcement and Collection, applies to the administration, collection and enforcement of other taxes, fees, and charges, including penalties or other financial transactions that the comptroller is authorized to collect or administer under other law. Id. 111.0022.⁶ Enforcement and collection under subtitle B of the Tax Code, includes suits for refunds. See id. Chapter 112.

When interpreting statutes we must give effect to legislative intent. TEX. GOV'T CODE ANN. 312.005 (Vernon 1998); Monsanto Co. v. Cornerstones Mun. Util. Dist., 865 S.W.2d 937, 939 (Tex. 1993). When reading these sections together, section 111.104 requirements for refunds apply to taxes or fees required to be collected by the comptroller. Liberty Mut. Ins. Co. v. Garrison Contractors, 966 S.W.2d 482, 484 (Tex. 1998). From a plain language reading of the statutes together, when sections 111.0021 and 111.0022 were added the legislature intended to broaden the application of Chapter 111 of the Tax Code to specifically include the refund of "fees" under the refund provisions of the code. Thus, for purposes of applying the Tax Code refund provisions, the fee at issue here is a tax.⁷

Having determined that Hill County is a person and the fee is a tax, we now look to the relevant Tax Code provisions for obtaining refunds. The question of whether Hill County can request a refund is initially addressed by section 111.104...