Untitled Texas Attorney General Opinion

The Attorney’ General of Texas
JIM MATTOX
March lg.'1986
Attorney General
Supreme Court Building Bowsable Guy Jarm?oGray opinion No. JM-453
P. 0. BOX 12548 Criminal District Attorney
Austin. TX. 78711. 2548 P. 0. Box 1329 Re: Applicability of article 2351a-6,
51214752501
Jasper, Texas 7!i951 V.T.C.S., to the withdrawal of a city
Telex 9101874-1387
Telecopier 5W475-0288
from a rural fire prevention district
Dear Mr. Gray:
714 Jackson, Sulle 700
Dallas, TX. 7520245M
You ask for the opinion of this office concerning the right of a
214l742.8944
city within a nmal fire prevention district to withdraw from the
district. You a&r:tseus that the Jasper County Rural Fire Prevention
4824 Alberta Ave., Suite 180 District Ho. 4. composed of a portion of Jasper County. was created
El Paso, TX. 799052793 under the provisf(ms of article III. section 48-d, of the Texas
9151533-3484 Constitution and a.rticle 2351a-6, V.T.C.S. The city of Jasper was
included in the original boundaries of the district. In 1983, the
100, Texas, Suite 700 voters of the proposed district, including the voters of the city of
Houston, TX. 77002-3111 Jasper, voted in xcordance with the provisions of article 2351a-6 to
71312235888 confirm the organ:Lz:ation of the district and to authorize the levy of
a tax not to exceed three cants on the $100 valuation of property.
V.T.C.S. art. 235l.er6,$12.
WE Broadway. Suite 312
Lubbock, TX. 79401-3479
8OW47.5238 Except for the issuance of bonds or notes which are authorized by
sections 12A-12G of article 2351a-6, a rural fire prevention district
may not contract :Eor an indebtedness in any one year in excess of
4309 N. Tenth, Suite B
funds then on hand or in excess of an amount which may be satisfied
McAllen, TX. 78501-1685
51216824547
out of current rrrenues for the year. V.T.C.S. art. 2351a-6, 512. A
fire prevention di:strictis authorized to issue bonds and notes that
are payable from and secured by liens on and pledges of ad valorem
200 Main Plaza, Suite 400
taxes, or revenueiI,income, or receipts of the district, or a combina-
San Antonio, TX. 78205-2797
51212254191
tion of taxes, revenues, incoma, and receipts. V.T.C.S. art. 2351a-6,
512A(a). The sta!:uteprovides that if bonds or notes are payable from
ad valorem texes, the Board of Fire Commissioners, at the time of the
An Equal OppOrtunityI authorization of the bonds or notes, shall levy a tax sufficient to
Affirmative Action Employer pay the principal of and interest on the bonds or notes and to provide
reserve funds. Sets. 12A(j), (k). Bonds or notes secured by taxes
may not be authorbred until approved by the voters of the district at
an election for that purpose. Seci 12B. Section 14a of the act
provides for expansion of the area of a district. Effective September
1. 1985, section 14b was added to the act to authorize the exclusion
of a city from a Eire prevention district's territory. Section 14b
provides that
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Honorable Guy Jamas Gray - P,age2 (JM-453)
(a) The governing body of a city that has an
area within its corporate or extraterritorial
jurisdiction included within a rural fire preven-
tion district my, on agreeing to provide fire
protection to the area as provided by Section 8B
of this Act, or if the area is designated au
industrial distrLct under Section 5, Municipal
Annexation Act (Article 970a. Vernon's Texas Civil
Statutes), notif!, the secretary of the board of
fire commissione:rs in writing that the area is
excluded fromthe district's territory.
(b) On receipt of the notice under Subsection
(a) of this section. the board shall cease to
provide further :rarviceto the area, exclude the
area by order from the district, and redefine the
district's boundaries.
Subsequently, on October 28, 1985, the city of Jasper notified
the Jasper County Rural Fire District No. 4 that the city had adopted
a resolution to exclude the arca within its corporate and extra-
territorial jurisdiction from the fire prevention district's
territory.
You first inquire whether section 14b of article 2351a-6 applies
only to rural fire prevent:Lon districts created after September 1,
1985. We believe that whwl section 14b became law on September 1,
1985, it became applicable on that date to all rural fire prevention
districts created and then existing under article 23518-6.
Where the legislature makes no exceptions to the provisions of a
statute, it is presumed that the legislature intends no exceptions.
It is well settled that ~zxceptions in statutes are not ordinarily
implied. See Spears v. City of San Antonio, 223 S.W. 166, 169 (Tex.
1920); Stubxv. Lowrey's II:&, 253 S.W.2d 312, 313 (Tex. Civ. App. -
Eastland 1952, writ ref'd n.r.e.). We find nothing in the act to
indicate that the legislature intended section 14b to apply only in
the case of rural fire prevention districts created after September 1,
1985.
Your second question 239 S.W.2d 828, 830 (Tex.
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Honorable Guy James Gray - Piage3 (JM-453)
Civ. App. - Galveston 1951). rev'd on other grounds, 244 S.W.2d 632
(Tex. 1951); Attorney General Opinion O-4589 (1942).
The board of a rural fire prevention district shall annually levy
and cause to be assessed and collected a tax on all properties, real
and personal, situated within the district and subject to district
taxation in an amount not to exceed three cents on the $100 valuation
for the support of the di:jtrict and for the purposes authorized by
article 2351a-6. Sec. 12. Real property is taxable by a taxing unit
if located in the unit on January 1. Tax Code 921.01. Except for
railroad rolling stock, tr.ngiblepersonal property is taxable by a
taxing unit on January 1, iC it is located in the unit on January 1
for more than a tanporary period or it normally is located in the
unit, evan though it is outside the unit on January 1, if it is out-
side the unit only temporarily. Tax Code 921.02.
Your third question asks, if article 2351a-6, section 14b. is not
applicable, must the withdrawal be by a majority vote in an election
of those living within thle corporate limits and extraterritorial
jurisdiction of the city. Article 2351a-6 provides both for expansion
of an existing rural fire p,cevantiondistrict and for dissolution of
such a district. sees. lQf1, 19-22. Except for section 14b, which
became effective on September 1, 1985, the act contains no provisions
which authorize the withdrawal of any territory from an axisting rural
fire prevention district. The act requires ratification of the
annexation of territory to a district by a majority vote of the
electors at a separate election held in the existing district and by a
majority vote of the electors at a separate election held in the
territory proposed to be added. Sec. 14a(S)(s). The act also
requires an election to :onfirm the dissolution of a rural fire
prevention district. Sec. 21. But neither section 14b. which
provides for the exclusion of corporate limits and extraterrltorial
jurisdiction from the boundaries of an existing fire prevention
district, nor any other provision of article 2351a-6 contains either a
requirement or authority for an election by the voters residing in a
territory that will be uithdrawn from an existing district. We
conclude that the act doe11 not authorize an election to confirm or
accomplish the withdrawal of any territory from the boundaries of an
existing rural fire prevantion district.
You advise us that the fire prevention district made purchases of
equipment and incurred InddMedness based on its ability to pay with
its existing tax base, and that the withdrawal of city property values
from the tax base jeopardizes the district's ability to repay its
previously incurred indebtedness. Your last question is:
What protection does the district have in this
situation?
p. 2059
Honorable Guy Jamas Gray - ~?age4 (JM-453)
Since the legislature expreszslyprovided that, except for the issuance
of authorized bonds or notes, no indebtedness may be contracted in any
one year in excess of funds ,thenon hand or which may be satisfied out
of current revenues for ,:he year, we assums that the district's
concern involves its abilj.ty to repay indebtedness incurred by the
issuance of bonds or notes. Hence, the issue includes the protection
of bondholders of the district.
A statute authorizing a bond issue and providing the means for
its repayment constitutes part of a contract with bondholders that may
be enforced by bondholders. See Cochran County v. Mann, 172 S.W.2d
689, 690 (Tex. 1943). Subllequz legislation that removes the source
of repayment to bondholders without substitution of something of equal
efficacy
_ mav
- imnair
_ the ohl~inationof contract and. therefore. come
under constitutional condauiation. See U.S. Coast. -art. I. 510, cl.
1; Tex. Const. art. I, 116; City of rEnsas Pass v. Keeling, 247 S.W.
818. 821 (Tex. 1923); Burn, v. Dillcp County Line Independent School
District, 295 S.W. 1091. 6% (Tex. Comm'n App. 1927, ludgmt adopted);
Attorney General Opinion O-1205 (1939). The-courts have said that the
most certain test of whetha:ran imoairmant of a contract has occurred
is whether the value of the!ccntra& has been diminished. See Dallas
County Levee Improvement D:ietrictNo. 6 v. Rugel, 36 S.W.2d 188, 189
(Tax. Comm'n App. 1931, :u.dgmt adopted). In Determan v. City of
Irving, Texas, 609 S.W.2d 565 (Tex. Civ. App. - Dallas 1980, no writ),
the court found that a charter amendment limiting the taxing authority
of a city lessened the security of bondholders and constituted impair-
mant of the obligation of coattact. It is, however, the bondholders
who have standing to raise the question of impairment of the obliga-
tion of contract. -See --U.S. Trust Co. v. New Jersey, 431 U.S. 1
(1977).
In the case of the e?+amsion of a rural fire prevention district
that has outstanding debt,3 or taxes, article 2351a-6 requires the
voters of proposed additional territory to agree to assume the addi-
tional territory's proportian of the debts or taxes. Sec. 14a(S)(h).
Following voter approval to dissolve a rural fire prevention district,
article 2351a-6 requires the: board to continue levying and collecting
a tax on the property in th'edistrict until all outstanding debts of
the district are paid. Sec. 22. Article 2351a-6 contains no express
provision for payment of tbe excluded territory's pro rata share of an
axisting district indebtedness. Cf. Water Code S953.268, 54.731 (on
payment of pro rata share of axiszg district indebtedness, excluded
territory and irs taxpayers are released from liability to the dis-
trict and payment of taxes). It is our opinion that article 2351a-6,
as recently amended to allthorize the exclusion of a city from a
district, is not facially unconstitutional. In particular situations
where the obligation of contract to bondholders would be impaired, the
statute may be unconstitutional as applied without the collection of
taxes from the excluded arca to pay its pro rata share of obligations
p. 2060
Eonorable Guy James Gray - Page 5 (JM-453)
to bondholders that are in existence at the time the city is withdrawn
from the district. -See Attorney General Opinion MW-337 (1981).
SUMMARY
Section 14b of article 2351a-6, V.T.C.S., applies
to all rural fire prevention districts. A city's
withdrawal from a ,mral.fire prevention district is
effective for tax :purposeson January 1 of the year
following withdrawal. Article 2351a-6 does not
require or author::zean election by voters of a city
to confirm or accomplish withdrawal of the city from
a district. A statute authorizing a bond issue and
providing the mems for its repayment constlrutes
part of a contnm with bondholders that may be
enforced by bondholders.
JIM MATTOX
Attorney General of Texas
JACK HIGHTOWER
First Assistant Attorney Gmeral
MARYKELLER
Executive Assistant Attommy General
ROBERT GRAY
Special Assistant Attorney General
RICR GILPIN
Chairman, Opinion Coumlttetr
Prepared by Nancy Sutton
Assistant Attorney General
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