Untitled Texas Attorney General Opinion

OFFICE OF
THE AIYTORNEY' GENEIUL
AUS~N, Taxis
PRICE DANIEL Augus~t8, 3.947
NTORWEV GENERAL
Honorable L. A:Woods,
State Superintendentof Public Instruction,
Austin; Texas
Attention: Hon. T. M. Trimble, First Assistant
Opinion No. V-334
Re: Is~suanaeof bonds and
levy of taxes by Dallas
IndependentSchool Dis-
triot.
Dear Mr. Woods:
In'your letter of.August 1, 1947, you state
that the~City Council of the City of Dallas on November
14, l945, callea ad election to be,held on December.0,
1945, on the quest&n whether bonds in the,pr,lncipala-
mount of ten million aollars should be issued for sohool
purposes. The election was duly and regularly lield~,and
a majority.votewas cast in favor of the proposition.
On July 29, 1947, an election.was.helaunder the authpr-
ity of Senate Bill No. 364, Acts Fiftieth Legislature,
which resulted in the separation of the school system
from the city of Dallas, and the district is now'known
as the Dallas IndependentSchool'Distriot. Prior to the
separationelection, the city issued two hundred thousand
dollars of the authorized ten million dollars, ana in
conn+?tionwith the uq-issued balance you ask our opin-
ion upon the following question:
?The question concerning the fore-
going is whether or not the .saidten mi-l-
lion dollar bona issue, heretofore voted,
can now be issued ana a tax in payment
thereof levied by the Board of Trustees
of the Dallas IndependentSchool District
without further submittingsame to a vote
of the qualified electors? "
~The ordinance of November 14, 1845, to which
you refer called an election on separate propositions
- .
Hon. L. A. Woods - Page 2 (V-334)
covering seventeen issues of bonds. The s&o01 bona is-
sue was Proposition No. 1. In connectionwith bonds
that have been issued, this departmenthas heretofore
examined all the prooe.edings relating to this eleotion.
We have re-examinedthese proceedingsin connectionwith
this opinion request,~andyou are advised that it is~our
opinion that the authority to issue the balance,of the
ten million dollar issue ceased with the separation of'
the school district from municipal control. In this con-
nection, we wish to state that we have not been furnish-
ed copies of the separationelection proceedings,and
we express no opinion regardingwhether the election-
duly called and held. For the purposes of this opinion,
we will assume that the electionwas in all things prop-
We have been advised that the reason we have not
Ek furnished copies of such proceedings is that the
compilationof the same would necessarilytake time, and
that as the fall semesterwill open in shortly over's
month, aeoisions must be reached prior to that time; we
have also been advised that our rendering.thisopinion,
based upon the above-mentionedassumption,meets with
the approval of the board.of trustees of the district.
Prior to the'electionon July 29, 1947, the
district was a municipallycontrolled school distriot.
Keeping this fact in mind, let us exemink the prooeed-
ings relating to the voting of the bonds. -'Theordinani?e
of November 14, 1945 (No.'3722)provided in its caption
that the election 3s to be "participatedin by the qual-
ified voters of the City of Dallas ooming within the pro-
visions of Article~6, Sect on 3-A of the Texak Constitu-
tion for the purpose of determiningupon t.heissuance of
ooupon bonds in the respectiveamounts set ofltherein
and for the purposes particularlyset forth . . .* (Em-
phasis added). Section 2 providea.that"there shall be
submitted to the qualifiedvoters of the City of 'Dallas
who are qualifiedvoters of the City of Dallas domi
within the provisions of Article 6, Section 3-A of ?he
Texas Constitution,the question of the issuance of var-
ious vends as follows + . ." (Emphasisadded. Then fol-
lows descriptionof the seventeenproposed bona issues).
Section 3 provided that in the event the bonds we're
authorized,"the City Council of the City shall at the
time of issuance and sale of &aid bonds providk for a
levy of a tax sufficient . . .*
Section 4 provided as follows:
. -
Hon. L. A. Woods - Page 3 (v-334) ', 189
"That the bonds herein submitted,,,,
if authorized, shall be,issued in the .I
denominationof qil,OOO.OO peachand pay+-
able in'not~more than..fort,y(40) years:
after date, or if authorized and ordered
i~ssued,the city council shall have the
power to issue same'9eriallyas in-their
discre'tionmay be deemed-bestana pro-'
viae for iidurities thereof atany time
not to exceed forty (40) years. Said
bonds shall bear interest not to exceed
the rate of 5% per annum which shall be
'payable semi-annuallyas it accrues at
such place as me& be designatedby'the
Cit$,Councilof the City of Dallas, and
said sonas *all'be issue'sand exeoutea
~inaocordance with the~terms of the City
Charter of the City of Dallas with ref-
erenoe to.the issuance of :bonds,and the
general laws of,the State of Texas appli-
cable thereto. ~That the bonds here sub-
mitted shall, when authorized,be issue&
in accordance with the applicable terms
of the City Charter of the City of Dallas
,and the'Stat6 law."
-8
Section.5 provided for the'o,fficial
'ballot
in the foll.owingform:
"For: The proposition-ofthe issu-
ance of ~$10,000,000.00in
coupon bonds of the,City of
Dallas'for the purpose of
obtainingmoney for publ$c
school improvements . . .
"Against: The propositioh . . . (same
as above) . . ."
Section 7 provided that, in the event the
bonds were authorized at the election, nthe City Council
of the City of~Dallas may issue for sale any portion of
said amount . . ." 'Seotion8 ptiovided that,Ydie'manner
of holding said election and making the returns shall be
in accordance~withthe ordinances and the charter bf the
.Cityof Dallas relative thereto and.the general laws of
the State of Texas applicable to the holding of such an
election . . ."'
Hon. L. A. Woods - Page 4 (V-;334)
On July 26, 1946, the City Council of the
City of Dallas enacted OrdinanceNo. 3870 which~author-
ized the issuanae of bonds in the amount of two hutiked
thousand aollars (part of the ten million dollarsof
bonds authorized at the election on Deoember 8, 1945).
That ordinance in hitsoaption provide& "for.the issu- _
ante end sale of Two Hundred Thousand ($200,000)Dol-
lars in negotiablecoupon bonds of'the City of Dallas
heretofore authorizea . . .* The first preamble clause
of the ordinanceprovided in part as follows:
"WHEREAS,in accordancewi?h the
charter of the City of Dallas and the
applicableState Statutes, and in ac-
oordancewith an ordinance passed Qy.
the governing body of the City of Dal-
las oh the 14th day of November,A. D.
1945 . . . a.propositionto issue Ten
Million (810,000,000.00) Dollars in
bonds of the City of Dallas . . .n
'Section1 of the ordinanceprovided that
"there be and is hereby ordered issued negotiable Mu-
pon bonds of the City of Dallas . . ." The printed
bonds which were issued in accordanoewith the ordinenoe
aha which Were approve& by the Attorney General were
called *City of Dallas School ImprovementBonds."
'We have goqe to great length in setting out
excerpts from the ordinancesenacted by the City Coun-
~11~of the City of Dallas in an.effort to show how the
bonds were ~authorizedand issued. We would lib to add,
at this point, t,kt the ordinancesW&e enacted and the
eleotion was held in accordancewith the city charter
and with the provisions of Title.22 of the Revised Civ-
,ilStatutes of Texas, as emended, which governs the his-
suance of bonds by a aouqty or an incorporatedcity or
town.
Can it be said as a matter of law that the
qualifiedvoters at the eleotion held on December 8,..
1945, authorized'the.Boara of Trustees of~the'Dallas
Independent School District, as it siow exists, by vir-
tue of the separationelection held seventeenmonths
after the @ona election, to issue the bonds in question?
We think that the answer is in the negative. It is our
'opinionthat the proceedingsclearly show that the.vo-
ters authorized the City of Dallas (as a municipally
controlleaindependentschool district) and only thaii
Hon. L. A. Woods - Page 5 (V-334) ,191
entity to istie the bonds. In a municipally controlled
aistridt,'.the``
CitJiCouncil,~issueEl-bonds
ana,levies$axes.
Pot8et.v'.Bridges, 248 5. %. 415: Thenvoters may have,
,exercisea,'a
different choice if they had known~that the
bonds ``ould``.beissued~by
a board 'oftrUstee$ of,,& inae-
pendent~'di:stric~:i~nstead~'of
the City Council of ,theCity
of Dallas+''~:
Senate Bill No,.364.~doesnot proviae'that
the succegsor d$strict may'issue the balance,of these
bonds; therefore,we do not hqve to determinewhether
thikptier'lies :withitithe legislative``pre``gativ~.
Seo-
tion:~9,of~'thk'bill
prbvides as follows:
"All bonds issUed:by an&'Ot@tand-.
i~&~&gai,tit``&~'suohcii$oti.,.towli;
as ~&~
'~:schoola+trict',,anaall ob,llg&ions,
oontracts,andindebtednessexisting a-:
1:&iibsf the city'or town, as ~a~schocddis-,'.':'~
~.trictj shall,become the obligatio,ns a'nd '.
,',
: debtsof the'independent sohdol district ,'
~:at.the'time of its ~separationftioin
mud.- ,".,
eipal control, and the said independent-
school dis$rict, e.fterseparationfr&n
, c..:
:mu&icipal,cotitrol,'&hallbe'~held'tohave
.,assumefl~the
dis,&ar&&,ofIall;such.obTi&
_ ~.gations,,~
contracts'and.indebtedness, and' '."~
the~same shall be,enforcekble~an& collect-
i>&e~from,paid off end discharge8 by, ~, "
the~said independentschool di,strict, as
.,if'originally create&by it as 'a separate
and inaependent school district;,anait'
shall not be.necessaryto call an elec- :
.tionwithin-and for such ,distriotfor
the~,purpose of assWing such bonds and
other,indebteaness."
It will be noted that this section applies.
to bonds which have been "issued,byn and are Youtstana-
ing againstany such city oretown, as.~aschool district.*
It'.ise~ide~tthat of the ten~million dollars only two
hundrea~.thousandaollars of the bonas were issued and
are outstanding..
It is well settled that~the power to issue ~'
negotiablebon&s may be exercise& only in the mode of
the granted power and for the purposes .speoified~inthe
grant. 'Gel V. PUlte (Corn.App.), 10 US.V?.(2) 694. It
is our:opinionthat the qualifiedproperty~taxpaying
Hon. L. A. Woods - Page,6 (V-334)
192
voters did not grant the Board of Trustees of the pres-
ently existing Dallas IndependentSchool Distriat the
power to issue the bonds. This power was granted only
to the City of Dallas as a municipally controlledschool
district, ana not to its corporate,kuccessor. It is
our opinion that the fact that the City of Dallas had
extended its boundariesfor school purposes apes not al-
ter what we have said. Poteet v. Bridges, supra.
To support the view that we have taken, we
call your attention to the provisions of Seotiqn 208
of the City Charter whereih the.tax rate is limitea to
$2.50 on each $100.00~valuation,"and which said tax
shall embrace all taxes for municipal purposes, inolu-
sive of school taxes . . ." Can it be said that the
qualifiedproperty taxpayingvoters'wouldhave author-
ized these bbnds if they had known that the tax rate on
their propertywould not be limited to $2.50 for~all
purposes,but that it could be increased to $3.75 ($2.50
plus $1.25 authorizedby:Seotion5 of Senate $111 No.
364)? It is our opinion that the question should be
as.iswWed~inthe.negative. Opinion No. 6059; City of
Athens v. Moody, 280 S.W. 514.
We call your attention f&her to.the fact
that the bonds were-vote&under the.provikd.ons bf Title
22, Revised~Cidl Statntes~of‘Texas,as amended.These
statutes (Article701, et seq.) do not govern'th&is-
suance of bonds by an independent school distriot.~Love
v. Rockwall Independent,School D&strict, 230 S.W. 642.
The Dallas InaepenaentSchool District is no longer a
municipallycontWled district, but is an inaepenaent
school aistrict subjeot to the provisions of Senate
Bill No. 364 and the general laws relative to inaepena-
ent school districts; In the.issuanceof bonds, there-
fore, Articles 2704e, et seq., Vernon,ts.CivilStatutes,
would control (not Articles 701, et seq.). Article .~
2705 requires a petition as a predicate to the calling
of a bona election. It'requires~adifferent notice
than that outline&in Article 704. Article ~2786re-
.@.res that "the petition, election order &Xi fioticeaf
electionmust distinctlyspecify the amount of bonds,
the rate of interest, their maturity dates, and the
purpose for which the bonds are to be used. (J@phasis
added I. It requires.adifferentlyworded ballot. It
requires that the bonds shall mature in serial annual
installments'overa perioa of not excee&ng forty yesrs
from their date, but that when the sohoolhousesdareto
be constructedof wood, the bonds shall mature in not
more than twenty years.
Hon. L. A. Woods - Page 7 (v-334) 3.93
An independentdistrict in issuing bonds
must meet the terms of these statutes. It is obvious
that in the issuance'ofthe balance of the $lO,OOO,-
000 bonds, these terms could not be met. It is our
opinion that this fact alone would preclude the issu-
ance of such bonds.
In view of the foregoing, you are advised
that the Board of Trustees of the Dallas Independent
School District is without authority to issue the bal-
ance of such bonds.
You are interestedin a second question,
and this question concerns the tax of the new dis-
trict under Se&ion 5 of Senate Bilk No. 364. We quote
the following from your letter:
"Prior to the said separation'elec-
tion, a tax~in the amount of seventy-five
cents was voted aa levied for maintenance
of said school system';which/together
with an approximateeleven cent bond re-
tir~enient
tax theretoforevqtea and levied,
makes the total tax now leviedfor said
school district amount to approximately
weighty-sixcents on the one-hundreddol-
~larsvaluat%on.
"Now, can the Board of Trustees of
the UalLas Ind0pend8nt School District
levy an additional tax,.whiohwhen added
to the existing taxes does cot exceed one
dollar and twenty-fivecents on the one
hundred dollars valuation of taxable prop-
erty of saia~aistrict,~forthe maintenance
of the schools therein, without a vote of
the tax paying property owners therein u+
der Senate Bill 3643"
Section 5 of Senate Bill No. 364 reads as
follows:
"Except as herein denied or limited,
all the powers conferred upon idependent'
school districts and/or towns and villages
incorporatedfor free school purposes
only, by Title 49, of the Revisea Civil
Statutes of Texas, of 1925, and amendments
thereto, including the right to annex
Hon. L. A. w00as - Page 0 (V-334)
694
contiguousterritoryfor school pur-
poses, and the right to levy taxes
and issue bonas for school purposes,
as provided by General Law, hereby
are cotierredupon any inaepenaent
school district separatedfrom muni-
cipal control under the provisions
of this Act; provided however, that
the trustees of any independent
sohool district that may hereafter
be separatedfrom municipal control
under the provision& of this Aot,
shall have the power to levy and ool-
lect an annual ad valorem'tax not to
exceed One and 25/100 ($1.25)Dol-
lars on the One Hundred (~lOO;OO)
Dollars valuation of taxable propep-
ty of.the dist~i0t,for the.mainten-
ante'of the sohools therein, end
whioh may be used to pay the prinoi-
pal ana interest on all bonas issued
for sohool building purposes out-
standing$$@.nst the extended muni-
cipal school district at th6 ti@ie~of
separationfrom municipd bontrol,
and the principal of and interesC0n
all bonds to be.issued hereafter by
any such independentschool district;
provided that nothing herein shall be
construedaspabrogating or in any m&n-
ner repealing or affecting any kin-
tenance tax and/or bona taxes hereto-
fore voted, authorizedand/or levied
on taxable properties situated within
the limits of the extended municipa.1
school district;PTOViaea further,
that no increase in the maximum rate
of school maintenancetax an&/or bona
debt of any such district shall be
authorizeauntil after an election
shall have been held wherein a major-
ity of the taxpayingvoters, voting
at said election;shall .havevoted in
favor of said tax, or the issuance of
said bonds, or b&h, as the 0ase may
be; ana provided further, that the
bonds,,
of any such distriot shall not
exceed in amount seVen (7%) per oent-
um of the assessed value of taxable
d -
Hon. L. A. Woods - Page 9,,(V-334) : 195
property,of suoh district,as shown
by the last annual assessmentOf
such property. In the event an elec-
tion is hela.for the purpose of sep-
arating such'schooldis$riqt from
municipal control, and such election
~1sin favor of the separationof the
public schools from municipal con-
trol, then such independentsohool
district may levy ana collect taxes
as of January lst, ,ofthe year in
w,hiohthe election Was held, and
thereafter levy and,colleotsuoh
taxes on an annual ba,sis.*
You wish to know whetherthis t&x bf $1.25
can be levied without a vote of the qualified property
taxpaying voters of the district. Seotion 3 of Article
vII,'Constitutionof Texas, provides in part:
n -~providedthat a~major-
ity of t~e*&alified proljertytaxpay-
ing voters of the district voting at
~:an electioq to ,be~heldfor that pur-
pose, shall vote such tax . . ."
This Constitutionalmandate must~be corn-
plied with: Pyote Indep&ndentSchool District v. Dyer
(Corn.App;), 34 S; 911.
(2) 578; Bigfoot Independent
School Distr&ot v. Cenard (Civ. App.) 116 S. W. (2)
804;Uff*a.., Corn.App.) 129 S. W. (21 1213; Crabb v.
Celest6 Independent School'Dititrict,105 Tex. 194, 146
S. W.~528,'39 L.R.A. (NS) 601; Burns v. Dilly Independ- .
ent So4001 Distriot (Corn.App.), 295 S.W. 1091.
You are, therefore,aavised that the Board
of Trustees of the-DallasIndependentSch6ol District
has no authority to levy a tax of $1.25~unless a "major-
ity of the qualified property taxpayingvoters of the
district voting at an eleM,ion to be held for that pur-
pose, shall vote such tax . . .*
It has been hela that an election whereby
the sohool sys$em is separatedfrom municipal oontrol
is an amendment to the charter of the qity. -State v.
City Commissionerof San Angelo (W. E. Ref.), 101 S.W.~
(2) 360.' It is assumed that the charter,of the City
of Dallas had not been amended within the two years
preceding the election held on July 29, 1947.
Hon. L. A. Woods - Page~lO (V-3344)
296
1. The Board of Trustees of the Dallas
Independentschool District', which aistr#.ct
has been separatedfrom municipal control is
without authority to issue the balance of the
ten'millibindollars of bonds authorizedat an
eleotion held on Deoember'8,1945, when the
districtwas a municipally controlledais-
trict.
2. The Board~of Trustees of the Dallas
IndependentSohool~Districtis without auth-
ority to levy a tax of $1.25 unless "a major-
ity of the qualifiedproperty taxpaying voters
of the district votingat an'eleotionto be
held for that purpose shall vote such tax."
.~ Very truly yours
ATTORNEP CENERAL OF TEXAS
B; hyT. + "
George W. Sparks
GWS-s:wb Assi.stant