Honorable T. M. 'lkimble 

First Assistant State Superintendent 

Austin, Texas 

Dear Sir: Opinion No. O-6687 

Re: Effect of tax and valuation reductions under provisions of 

3. B. 167, 49th Legislature, R.S. 

Your recent communication to this department reads 

as follows: 

"Section 2 of Article I, of S.B. No. 167, an 

Act of the 49th Legislature, reads, in part as follows: 

"'No school district will be eligible for aid 

under the provisions of this Act which has reduced 

its tax rate within the two years immediately preceding the year for which aid is applied for hereunder 

or which has reduced its tax valuation in order to 

show budgetary need.' 

"A common school district, which contracts to 

a receiving district, has paid all outstanding bonds 

for which the second 50 cents on the $100.00 was levied. 

Now, the citizens plan to diminish the tax from one 

dollar to fifty cents per $100.00. Will this disqualify that district for Equalization Aid under the 

new Equalization Aid Law? 

"A school district, which has for the last two 

years had a 654 maintenance tax, has recently voted 

a bond issue, which will require a 5Oq! bond levy. 

This will mean that a school district will use 50# 

on a $1.00 tax for maintenance purposes and 50$ to 

liquidate their bonds. This means a reduction of 

15# in their local maintenance tax rate, but an increase of 35# in their over-all tax levy. Would such 

a district be ineligible to receive aid under the 

provisions of the Equalization Law quoted above? 

"An oil field district, which had a high valuation has lost the value due to the depletion of 

the oil in the field. Under the provisions of 
Honorable T. M. Trimble, page 2 0 -6687 

the Equalization Law quoted above, is such a district eligible to receive aid, since it has been 

necessary to reduce the values on the real estate 

as there is no longer an oil field in the district 

to hold up the values?" 

Session, 

Chapter 304, Acts of the 49th Legislature, Regular 

listed by Vernon as Article 2784e, repeals Article 

2784, Revised, Civil Statutes, 1925, after re-enacting its 

provisions with the following changes: 

Subdivision 1 of Section 1 of Chapter 304, reads 

as follows: 

"1 . In common school districts, for the 

further maintenance of public free schools and 

the erection and equipment of school buildings 

therein, a special tax; and in independent districts for the maintenance of schools therein, 

an ad valorem tax not to exceed One Dollar and 

Fifty Cents ($1.50) on the one hundred dollars 

valuatlon of taxable property of the district." 

In Subdivision 1 of Article 2784, Revised Civil 

Statutes, 1925, the corresponding ad valorem tax was fixed at 

$1.00. 

Subdivision 3 of Section 1 of Chapter 304, reads as 

followsr 

“3 . The amount of maintenance tax, together 

with the amount of bond tax of any district, shall 

never exceed One Dollar and Fifty Cents ($1.50) on 

the one hundred dollars valuation of taxable property; 

and if the rate of bond tax, together with the rate 

of maintenance tax voted in the district shall at 

any time exceed One Dollar and Fifty Cents ($1.50) 

on the one hundred dollars valuation, such bond tax 

shall operate to reduce the maintenance tax to the 

difference between the rate of the bond tax and One 

Dollar and Fifty Cents ($1.50) 

In Subdivision 3 of Article 2784, Revised Civil 

Statutes, 1925, it was provided that the amount of the wtenance tax, together with the amount of the bond tax, should 

never exceed one dollar on the hundred dollars valuation. 

The fifty-cent maximum rate for bonds, as set forth 

in Chapter 304 is the same as set forth in Subdivision 2 of 

Article 2784, Revised Civil Statutes, 1925. 
I . 

Honorable T. M. Trimble, page 3 O-6687 

Subdivision 4 of Section 1 of Chapter 304 which 

is identical with Subdivision 4 of said Article 2784, Revised 

Civil Statutes, 1925, reads as follows: 

"4 . No tax shall be levied, collected, abrogated, diminished or increased, and no bonds shall 

be issued hereunder until such action has been authorized by a majority of the votes cast atan election held in the district for such-purposes, at 

which none but property taxpaying qualified voters 

of such district shall be entitled to vote." 

Article 2785, Revised Civil Statutes, 1925, reads 

in part as follows: 

"Before an election is held to determine the 

pro osition of the levy of such tax (maintenance 

tax P or the issuance of such bonds, a petition 

therefor, signed by twenty (20) or more, or a majority of those entitled to vote at such election, 

shall be presented to the County Judge of the county if for a common shcool district, and to the district trustees if for an independent school district. . . . The petition, election order and notice of election shall in all cases either state 

the specific rate of tax to be voted on or. that 

the rate shall not exceed the limit herein specified. *..)I 

Article 2787, Revised Civil Statutes, 1925, which 

applies to common school bonds, contains, among others, the 

following provisions: 

II 

. . . At the time of the issuance of said bonds 

and each year thereafter so long as any-,of said bonds 

are outstanding, the said court shall levy a bond tax 

within the limits herein specified to pay the interest 

on said bonds and redeem the same at maturity. The 

rate of such tax shall be determined by the trustees 

of the district and county superintendent and certified by the county superintendent to the commissioners court, and said court shall levy the tax at said 

rate until a change is recommended by said school 

officers. Said tax shall be assessed and collected 

as provided by law for the assessment and collection 

of special local tax for the maintenance of public 

free schools. After said bonds shall have been issued and sold and said bond tax has been levied, it 

shall be unlawful to hold an election in said district to determine whether or not said tax shall be 
. . 

Honorable T. M. Trlmble, Page 4 o-6687 

discontinued or lowered until said bonds, together 

with the interest thereon, shall have been fully 

paid, nor shall the limits and boundaries of said 

common school district ever be decreased by the 

county board of school trustees until all of said 

bonds and the accrued interest thereon shall have 

been fully paid." 

Article 2794, Revised Civil Statutes, 1925, applying to changes in common school tax, reads as follows: 

"At any time after the expiration of two years 

after any common school district has levied a school. 

tax on itself, twenty property taxpaying qualified 

voters, or a majority of such voters in the district, 

may have an election held, upon the proper petition 

to the county judge, to determine whether such tax 

shall be abrogated, increased or diminished. Said 

election shall be held and conducted as other elections in said district. If the election be to abrogate or diminish the school tax, the ballots shall 

have written or printed thereon the words: 'For 

abrogating school tax,' or 'For diminishing school 

tax to . . . cents;' and 'Against abrogating school 

tax,' or 'Against diminishing school tax to . . . . 

cents.' If the election be to determine whether the 

tax shall be increased, the ballots shall have written or printed thereon the words: 'For increase of 

school tax' and 'Against increase of school tax.'" 

Article 2795> Revised Civil Statutes, 1925, concerning the levy of common school tax, provides in part as follows: 

"The commissioners court, at the time of levying taxes for county purposes, shall also levy upon 

all taxable property within any common school district the rate of tax so voted if a specific rate 

has been voted; otherwise said court shall levy'such 

a rate within the limit so voted as has been determined by the board of trustees of said district and 

the county superintendent and certified to said court 

by the county superintendent. . . .' 

In view of the foregoing provisions, your first 

question is answered as follows: 

If, before levying the bond tax of fifty cents, only 

fifty cents had theretofore been levied for maintenance purposes, then said common school district need not levy over 

fifty cents for maintenance purposes, and would not be dis- 
Honorable T. M. Trimble, page 5 O-6687 

qualified to receive Equalization Aid under the new law. However, if before levying said ,fiftg-cent bond tax,. the distrect 

had voted a greater sneclflc maintenance tax than fifty cents, 

and said greater maintenance tax has not been diminished or 

increased by a majority vote cast at an election held in the 

district for sala purpose, then said specific maintenance tax 

must be continued by said district, even though said bona3 

have been liquidated. (See Subsection 4 of Section 1 of 

said Chapter 304 and also Articles 2785 and 2795, Revised ( 

Civil Statutes, 1925). 

Likewise, If before levying said fifty-cent bond 

tax, the district had voted a maximum maintenance tax ,of ,more 

than fifty cents, but not a specific maintenance tax, and the 

commissioners' court had been levying a greater rate for maintenance purposes, within the limit so voted, as had-been determined by the board of trustees of said district and the 

county superintendent, and certified to said court by the 

county superintendent, then said maintenance tax so certified 

must be continued by said dlstrlct in order to qualify for 

Equalization Aid 

4 

even though said bonds have been llquldated. 

(See Subsection of Section 1 of said Chapter 304, and also 

Articles 2785 and 2795, R.C.S., 1925. Also see Opinion No. 

o-6768 of this department, a copy of which is attached hereto). 

We now answer your second question: 

If the school district has $oted said fifty-cent .- 

bond tax as a specific tax on or since June 4, 1945, the date 

said Chapter 304 became effective, same would not affect the 

sixty-five-cent maintenance tax, as from and lncludlng said 

date, $1.50 Fs now the maximum for all tax purposes. However, 

If said fifty-cent bond levy was voted prior to June 4, 1945, 

the provisions of Subdivision 3 of Article 2784, Revised Civil 

Statutes, (now repealed) Ewould apply. Therefore, by operation 

of law. and not by reason of any action of the school district, 

the fifty-cent bona tax reduced the sixty-five-cent maintenance tax to the difference between the rate of bond tax (fifty 

cents),, and one dollar. This would leave the maintenance tax 

(orglnallg sixty-five cents), during the time said bond issue 

was outstanding, to be fifty cents. However, unless said 

sixty-five-cent maintenance tax is reduced, either by an 

election or by action of the board of trustees and the county 

superintendent, as per the provisions of Articles 2794 and 

2795, Revised Civil Statutes, 1925, same is by operation of 

law continued in force and effect when said bonds are liquidated. Also, if the fifty-cent bond tax so voted by the district ia a maximum tax and not a specific tax, and such bond 

tax should be reduced by the trustees of said dlstrict and the 

county superintendent at any time before said bonds have been 
Honorable T. M. Trimble, page 6 O-6687 

finally liquidated, as per Article 2787, then and in such 

event the maintenance tax ~111 automatically be increased to 

an amount which represents the difference between the rate 

of the bond tax and one dollar, but in no event to exceed 

sixty-five cents. The contents of the preceding sentence 

are based on the assumption that the sixty-five-cent maintenance tax has not been reduced either by election, if voted 

as a specific tax, or by actton of the board of trustees and 

the county superintendent, if voted as a maximum tax. (See 

Arts. 2794 and 2795, R. C. S., 1925). 

In view of the foregoing, said district will not 

become Ineligible for Equallsation Aid under the provislons 

of Senate Bill No. 167, 49th Legislature, Regular Ses31on, 

so long only as its maintenance tax of sixty-five cent3 is 

reduced by operation of the bond taxYour third questton Implies and assumes that the 

valuations of the district were lost as a result of depletion 

rather than by a reductfon in tax valuation bv the dlstrlct 

in order to show budgetary need. If such Is a fact, it 

obviously follows that such a condition or result would not 

render such district ineligible to receive aid. Each case 

in which tax valuation is reduced, will necessitate a determination as to the cause there0 f. Where proper lnvestigation results in a determination that such reduced tax valuation has resulted from causes other than by action of the 

district in order to show budgetary need, such tax reduction 

will not render the affected district ineligible for aid. 

Yours very truly 

ATTORNEY GENERAL OF TEXAS 

By s/L. H. Flewellen 

L. H. Fl~ewellen 

Assistant 

LHF/JCP/wc 

Enclosure-l 

APPROVE0 SEP 28, 19'45 

s/Carlos CI Ashley 

FIRST ASSISTANT 

ATTORNEY GENERAL 

Approved Opinion Committee By,s/J. F. Chairman