Untitled Texas Attorney General Opinion ( 1946 )

TRIEATTORNRY GENEXAL
Hon. T. M. Trimble, First Assistant
State Department of Public Instruction
Austin, Texas
Dear Sir: Opinion No. O-7097
Rer Status of tax rate of Indepen-
dent School District separated
from city control; authority
of city tax collector to collect
taxes for separated ISD; and
definition of term "property
ownersn, as regards-qualification
of electors in ISD election.
We are in receipt of your letter in which you submit the follow-
ing questions on behalf of the Abilene Parent-Teacher Council:
"1. Under the Abilene City Charter the present tax rate
for the city is $2.50, with $1.70 of this amount provided
for general city purposes end the balance of SO+ alloted
to the public schools. If the people vote to separate,
what would be the status of the tax rate for the newly
created fiscally independent school district?
"2. If an eleotlon to separate the schools frcrm the
municipality (City of Abilene) carries, how long will it
be before the board of education of the newly created
district can call another election for the purpose of
soting a tax levy, or a raise in tax rate?
"3. If the election held on the question of school and
city separation is approved by the people, what would be
the status of our school finances provided the people
then voted against a proposition to raise the tax rate?
"4. Can the proposition of voting upon sohool and city
separation be placed on the same ballot with matters
relating to the changing of the city charter, such as
the city manager form of government, the method of
electing city commissioners, etc.?
"5. after the separation of schools and municipality
has been approved by a vote of the people, as provided
.’ -
- -
Hon. T. M. Trimble - Page 2, O-7097
in Article 2783a of the Revised Civil Statutes of the
State of Texas, is it legal to permit one taxing agency
to colleot the taxes of both the city and the public
schools? What legal procedure is necessary to establish
such a taxing agency?
"6. In an election for the purpose of voting upon a tax
rate raise, who are considered to be Pproperty owners*?"
1.
According to the 1940 Federal Census, the City of Abilene has
a population of 26,612; so far as we are advised, the 1940 ten-
BUS is the latest federal census taken in the City. Your first
question regarding the status of the tax rate of an independent
school district which has been legally separated from municipal
control is therefore referable to Art. 2783b, V,A,C.S. (Ch.88
Acts 44th Legislature). Sections 5 and 9 of the act have
particular applioation; they read respectively:
"Sec. 5. Except as herein denied or limited, all the
powers conferred upon independent school districts and/or
towns and villages incorporated for free school purposes
only, by Title 49, of the Revised Civil Statutes of
Texas, of 1925, and amendments thereto, inoluding the
right to annex contiguous territory for school purposesp
and the right to levy taxes and issue bonds for school
purposes, as provided by General Law, are hereby conferred
upon any independent school district separated from
municipal control under the provisions of this act; pro-
vided however, that the trustees of any independent school
district that may hereafter be separated from municipal
control under the provisions of this. Act, shall have the
power to levy and collect en annual ad valorem tax not
to exceed One Dollar ($1) on the One Hundred Dollars ($100)
valuation of taxable property of the district, for the
maintenance of the schools therein, and, in addition
thereto, an annual ad valorem tax on each One Hundred
Dollars ($100) valuation of taxable property of the
district suffioient to pay the principal of and interest
on all bonds issued for school building purposes out-
standing against the municipal school district at the
time of separation from municipal control, and the
principal of and interest on all bonds to be issued
hereafter by any such independent school district; pro-
vided, that nothing herein shall be construed as abrogat-
ing or in any manner repealing or affecting any maintenance
tax and/or bond taxes heretofore voted, authorized and/or
levied on taxable properties situated within the limits of
the municipal school distriot; provided further, that no
increase in the maximum rate of school maintenanoe tax
and/or bond debt of any such district shall be authorized
Hon. T, Id, Trimble - Page 3, O-7097
until after an election shall have been held where a
majority of the tax-paying voters, voting at said
election, shall have voted in favor of said tax, or the
issuance of said bonds, or both, as the aase may be;
and provided further, that the bonds of any such district
shall not exceed in amount seven (7) per centum of the
assessed value of taxable property of such district, as
shown by the last annual assessment of such property.!
"Sec. 9. All bonds issued by and outstanding against-
any such city or town, as a municipal sohool district,
and all obligations, contracts and indebtedness existing
against the city or town, as a municipal school district,
shall become the obligations and debts of the independent
school district at the time of its separation from
municipal control, and the said independent school district,
after separation from municipal control, shall be held to
have assumed the discharge of all such obligations,
contracts and indebtedness, and the same shall be enforca-
able and collectible from, paid off and discharged by the'
said independent school district, as if originally
created by it as a separate and independent school
district; and it shall not be necessary to call an
election within and for such district for the purpose of
assuming such bonds end other indebtedness."
The scope of your first inquiry is not clear to us; in the
light of your third question, however, we interpret the first
as inquiring whether the Abilene School District after separa-
tion from city control has power without an eleotion to impose
the rate of tax for maintenance (within the maximum specified
by Sec.5) and for bonds outstanding at time of separation, as
were authorized for school purposes prior to divorcement of
the district from City Control. Section 5, supra, expressly
Fonfere upon the trustees of the district after separation,
the power to levy maintenance and bond taxes, and stipulates
"that nothing herein shall be construed as abrogating or in
any manner repealing or affecting any maintenance and/or bond
taxes heretofore voted, authorized and/or levied on taxable
properties situatedthin the limits of the municipal school
district* o 0n (Bnphasis ours)
Sy our letter~of August 7th we inquired whether any maintenance
taxes for school purposes had been heretofore voted in the
municipally-controlled Abilene school district, at an
eleotion at which only qualified taxpayLng voters who had
duly rendered their property for taxation were allowed to
vote 0 From the response to that inquiry, we understand that
the only aotion taken with reference to school maintenance
taxes was the adoption of the charter provisions which in
effect provide that the school and city taxes together shall
-.
Hon. T. M. Trimble - Page 4, O-7097
not exceed $2.50 per hundred, to be divided not in excess
of $1.70 for city purposes and not in excess of g.80 per
hundred "for the support and maintenance of the public
free schools within said city and for the purpose of paying the
interest and creating a sinking fund on bonds for school
buildings. . o . . .'I It appears that the amendment to the
charter was submitted to and was adopted by majority vote of
the qualified voters of the city of Abilene at an election
held in the city on January 19, 1924.
The adoption of a charter amendment relative to division of
tax rate between a municipally-controlled school district and
the municipality does not constitute the voting of a maintenance
tax for school purposes, as contemplated by Section 3 of Article
7 of the Constitution. vi Zone Cetti.
(Corn.$~;.)~p2'8 Sew. 18 ao. Treaccar v. City of Galveston
(Tex. . error refused) 87. Under the
facts here preiinted, you are therefore advised that the
Abilene school district has no maintenance tax voted and
authorized, within the contemplation of Seation 5 of Article
2783a, supra. Upon divorcement of the district from City
control, the district would have no maintenance taxes, until
such tax had been voted conformably to the Constitution and
applicable statutes. City of Ft. Worth v. Zane Cetti,supra;
``c``~ie~p``~,3````.A``~)578295 S,W- 1091; Pyote 1.S.D
We turn then, to the question of the power of a district
after divorcement from city control, to levy taxes for out-
standing bonds issued for school buildings. Under the
separation aat, title to the buildings after separation belongs
to the school district; and under Section 9, above quoted, it
is charged with the outstanding indebtedness Incurred therefor,
and is empowered to levy the taxes authorized and voted for
the purpose of paying interest on such bonds, and for the
redemption of the principal at maturity. In view of these
express provisions, it is but necessary to ascertain whether
the legislative mandate is valid.
Whether the school district following divorcement be regarded
as the same political entity++ or as a new corporation
successor to that existing before separation, wethink the
legislative power relating to establishment of school districts
is sufficiently broad to charge the district after separation
with responsibility for the outstanding debt insofar as to
empower its officials to impose the taxes voted and irrevocably
pledged by contract to support of the bonds, within the area
liable to such taxes before such separation from municipal
control. El Dorado l$SA;p ;.2Tisdale, (Corn,App.) 3 S.W.(2)
420; Ibid., (T . Ci 7 S W, 147; Tod V* City of
-(Com.eipp.)
Houston; 276 S:W. 419;-Crabb v. Celeste I.S.D.
105 Tex. 194, 146 S.W. 528, 39 LPA (WS) 601 . We think this
conclusion in no wise conflicts with the rule established by
Ron. T, M. Trimble - Page 5, O-7097
our decisions that when a new school district is established
by the Legislature, it may not be empowered to impose school
taxes until such taxes are voted by the qualified,taxpaying
voters of the newly established district conformably to
Section 3ofArticle 7 of the Constitutfnn- n11-s v.e Dilly ISD,
____I-__11"
supra; Crabb v. Celest I.S.D.. aunra: Pyote ISD v. JJyer, supra ;
Bigfoot ISD v. Genard,~;j:‘i;;i.> 116 S.W. C2) 864
fft d c d
APP.) 1' *e i2iS. j Abolition~-of-a-school
dSfstri:i otmgehalf of'whi.ch school maintenance taxes were
authorized to be imposed, destroys the authorization for
imposition of its maintenance taxes; the power cannot be
conferred upon a successor corporation, except subject to vote
of the qualified taxpaying voters of the new district.
Bigfoot I.S.D. v. Genard, supra; Pyote I.S.D. v. Dyer, supra.
The Legislature camabolish an existing district,
*On this problem, attention is invited to our opinions
Numbers O-4490 and O-6059 and the following cases reviewed
therein: Houston V* Gonzales I.S.D., (Corn. _-- App.) 229 S.W. 467;
City of-Rockdale v. ci ureton, 111 Tex. 136, 229 S.W. 852;
City of Ft. Worth v. Zane Cetti, (Corn.App 8.) 278 S.W. 183;
M.K- & T. R-R- CO, ve City of Whitesboro, (Corn. App.)
287 S.W. 904: City of Ft. Worth v. Cureton ~, 110 Tex. 590, 222
S.W. 531; City Belton v. Harris Trust and Savings Bank,(Civ.
app.) 273 S.W. 914 (aff*d. 283 S a 1 s 1641 T reaccar v. City of
Galveston, (Civ. App;; error refused) 26 S.7 N. fP1 .-, --.,
AR7<
Temple I.S.D. v. Proctor, (Civ. App.; error re:fused) 97 S.W.
121 1047: and Citv of fl Paso v. I Ca:proll, (Civ. App.; error
refused) 108 E3.w. e howeve:c so as to destroy the power
of taxat .on for support of outstanding bonds issued bv such
district Sec. 16, Art. 1, Constitution of Texas; Burns v.
a, supraa Where such a district is mergedith
sii%?ig or otherwise is altered in its legal aspect, provision
for disc Large of its contractual obligations must begmade or
retained so that the obligations of its contracts will not be
impaired The obligations of a predecessor school district
cannot be imposed upon a successor in such manner as without
vote of taxpayers of the district as altered, to subject to
taxes for discharge thereof, property not included within the
boundaries of the-nredecessbr, Burns v. Dilley I.S.D., supra;
Crabb v. Cleste 1-S. D., supra. But we see no objection to the
Teaislative power to impose upon the trustees of the successor
district, the authority-and the responsibility of levying upon
properties subject thereto, such taxes as are requisite to
discharge the obligations of a predecessor district. To the
extent necessary to discharge its obligations, it well may be
considered that the former district is not and cannot be
abolished; and that the offioers of the successor, ex officio,
are empowered to exercise the powers of the predecessor,
insofar as they must continue to exist under its contractual
liabilities.
Hon. T. M. Trlmble - Page 6, O-7097
If any change ln area was made subsequent to Issuance of any
series of bonds now outstanding against the school district,
lt would be,neceasary that the enlarged district have assumed
the outstanding debt In order to charge with taxes therefor
any property not looated within the district at time of
Issuance of such bonds. For that reason, it is not possible
to give a oategorleal answer to the question whether the
district after divorcement can levy taxes on all property
within Its boundaries to support outstanding debts. In order
to avoid confusion from any such changes made subsequent
to issuance of such bonds, and before divorcement, if the
separation election carries It wouldbeadvlsable that the
question of assumption of Indebtedness be submitted to vote
of the district.
Your attention 1s invited to Article 2784e, Vernon's Annotated
Civil Statutes (Chap. 304, Acts 49th Legis.) whereby the
maximum rate of tax permitted to be voted In independent and
common school districts was increased to $1.50 on the hundred
dollars valuatlon; and to Articles 2785, et seq. relating
to the procedure to be followed ln holding school tax elections.
2.
Your second Inquiry 1s governed by Article 2795, Revised
Statutes, as amended, Ch. 476, Acts 2nd C. S. 44th Legislature.
Under Its terms, maintenance tax elections may be called upon
petition signed by twenty or more, or a majority of those
entitled to vote at suoh election. At least ten days notice
of such election given pursuant to the requirements of the
statute Is required.
3.
Article ,2785, supra, contains the following provisions, per-
tinent to your third questlon:
"If said maintenance tax proposition is defeated at an
election held for such purpose, no other election shall
be held therefor within one year from the date of said
election."
4.
Your fourth question 1s answered in the affirmative. In
our opinion, a city may place the proposition of separating
the school system from the alty on the same ballot with
other propositions relating to changes In the city charter;
see the case of State v. City Commission of San Angelo
[Clv. App.) 101 S.W. (2d) 361, whloh expressly held that
an election divorcing the public school system from
municipal control constituted an amendment to the city
charter.
Ron, T. M. Trlmble - Page 7, O-7097
Two statutes enacted by the Regular Session of the 49th
Legislature deal with the subjeot matter of your fifth Inquiry.
We sew serious questions as to validity of the earlier of
these acts, viz., Chapter 176, whloh assumed to amend Articles
2791 and 2792, R. C. S., 1925. We pretermit discussion of
these questions, however, in view of the fact that the
Legislature subsequently ln the session enacted another act on
the same subject, which does not oall-up the same objections.
Under Chapter 351, Acts Reg. Session, 49th Legislature
(Art. 1066b, V.A.C.S.) an independent school district (among
other public corporations) which is located wholly within the
boundaries of another munlclpallty, Is empowered to authorize
and to designate the Tax Assessor, Board of Equalization and
Tax Collector of the Including municipality to act as Tax
Assessor, Board of Equalization and Tax Collector for the
school district. As the City of Abllene, and Abllene School
Dlstrlct occupy the same geograuhical area, the school
district may authorize, under Chapter 351, the City Assessor,
Board of Equalization and City Collector by virtue of their
respeatlve offices, to perform for the school district the
same funotions they exercise on behalf of the City.
We do not believe Chapter 351 attempts to authorize the
holding of two offices, contrary to the Constitution. (Section
40, Art. XVI as amended). The officials who are authorized to
be designated, by virtue of their offices assess for taxation
the very properties on behalf of the Including agency as they
are directed to asseas for the Included munlclpallty; and
collect from the same taxpayers, the taxes imposed upon such
assessments. In effect, Chapter 351 allows the included
municipality to adopt as far as applicable the rolls of an
including public oorporatlon; and to utilize the services of
the officers of the Including agency, which they have performed
and necessarily must perform In their capacities as officers
of the Including agency. See First Baptist Church V*
Ft. Worth (Corn. App.) 196; Of., Odem v. Slnton I.S.D.,w
appb)s.w* 1090.
6.
Under Section 3 of Article VIIp aa amended, and Article 2784e,
V.A.C.S., only those persons who are "qualified property tax-
paying voters" are entitled to vote at maintenance and bond
tax elections in school districts.
In 1932, the Constitution was amended by addition of Section
3-a to Article VI; this sections reads3
--- .
Hon. T. M. Trlmble - Page 8, O-7097
"When an election Is held by any county, or any
number of counties, or any political subdivision of the
State, or any political sub-division of a county, or
any defined district now orhereafter to be described
and defined within the State and which may or may not
Include towns, villages or municipal corporations, or
any city, town or village, for the purpose of Issuing
bonds or otherwise lending credit, or expending money or
assuming any debt, only quallfled electors who own tax-
able property In the State, county, political sub-division
district, aity, town or village where such election is held,
and who have duly rendered the same for taxation, shall
be quallfled to vote and all electors shall vote In the
election precinct of their residence."
In 1937, this department advised the State‘Superlntendent that
a maintenance tax election In a school district was one relet-
to "expending money" within the Section 3-a, supra. (Vol. 378,
page 991, Letter Opinions). We concur. The holdlng Is ln
consonance with the broad meaning a8sigmd to the language of
the provision ln the case, City of Richmond v. Allred, 123
Texas, 365, 71 S.W. (2d) 233.
Our opinion O-3350 deals with the subject of qualifications
of voters under Section 3-a, Artlale VI and Section 3 of
Article VII In school bond elections. fhe same rules apply
In maintenance tax elections in school districts. A copy
of the opinion la ~enclosed.
Very truly yours
ATTORNEY GENERAL OF TEXAS
a/ Gaynor Kendall
BY
Gaynor Kendall
Assistant
GK:ma;djm/cg
&closure
4-13-53
APPROVRD AUGUST 23, 1946
a/ Wm. J. Fanning
ACTING ATTORNEY GlR'ER?ALOF TFXAS
APPROVED OPINION COMXITTRR By JAW, Chairman