March 30, 1989 

Mr. Perry L. Adkisson 

Chancellor 

Texas A h M University System 

219 Systems Administration Bldg. 

College Station, Texas 77843 

Opinion No. JM-1035 

Re: Assessment of Capital 

Recovery Fees by the city 

of Houston against Texas 

A & M University for waste 

water services (RQ-1533) 

Dear Mr. Adkisson: 

you inform us that the city of Houston is seeking to 

collect a capital recovery fee for the use of the city's 

waste water system, and ask the following question: 

Can the City of Houston legally assess the 

capital recovery fees set out herein against 

a state agency for utilizing its waste water 

system? 

Texas A 6r M University is building an Institute of 

Biosciences and Technology in the Texas Medical Center in 

Houston. In conjunction with the actual cost of connecting 

with Andy using the city's waste water 

attempting to assess 

system, the city is 

a capital recovery fee in accordance 

with a city ordinance. The ordinance provides that amounts 

collected as capital recovery charges shall be used solely 

to pay or reimburse all or part of "the capital cost of 

constructing specific facilities comprising or to comprise a 

portion of the system and designed to increase the wastewater capacity of the system," excluding repairs and 

replacements of existing facilities, and extensions or 

enlargements to certain sewer mains or laterals. Houston, 

Tex., Code of Ordinances S 47-323 (1968). 

You do not express any objection to paying other 

charges of providing sewer service, such as connection fees 

or monthly service charges. A city may make a reasonable 

charge to a public entity for the provision of sewer 

Service. BeXar Countv v. Citv of San Ant nio 352 S.W.2d 

905 (Tex. Civ. App. - San Antonio 1961, wryt dism#d). See 

oenerally Attorney General Opinions R-1289, Ii-1265 (1978) 

p. 5352 
Mr. Perry L. Adkisson - Page 2 (JR-1035) 

(charges includible in rates charged the state for electric 

utility service and telephone service). 

you argue that the 

special assessment 

"capital recovery fee" is actually a 

and therefore cannot be imposed on a 

public entity in the absence of express legislative authority. Maverick Countv Water Contra Imnrovement D ist.. N 1 

Y. Stat e, 456 S.W.ld 204, 207 (Tex. Civ. App. - San An&o 

1970, writ ref*d); Attorney General Opinions JW-523 (1986); 

WW-551 (1982). A brief submitted in connection with your 

request agrees that capital recovery fees are special 

assessments and argues that article XI, section 9, of the 

Texas Constitution exempts public property from them. 

The Texas Supreme Court has defined special assessments 

as follows: 

Special assessments . . . are those special 

and local impositions upon the property in 

the immediate vicinity of municipal 

ments which are necessary to pay 

improvefor the 

improvements, and are laid with reference to 

the special benefit which the property is 

supposed to have derived therefrom. 

Citv of Wichita Falls v . Williij@S 

1930). See a 

, 26cS.t:2d 910, 911 (Tex. 

lso Conlen Grain and Wer an ile I c T 

Grain Sorahum Producers Board 

1975) (distinguishing 

519 S.W.2d 62:;6;3 (;::: 

assessm&t on grain processors from 

special assessments on land). 

Other briefs argue that these fees are not special 

assessments, but usage fees charged as a cost of providing 

the service, so that 

imposition of special 

the arguments relevant to the 

assessments do not apply to capital 

recovery fees. See aeneru Bexar Countv v. Citv of San 

Antonio, a (sewer charges were not assessments, even 

though rates include costs of making replacements and 

extending and improving system). 

are assessed against users of 

The capital recovery fees 

a sewage disposal and treatment system to pay for improvements necessary to provide 

sewer disposal services. The traditional special assessment, a charge against landowners for the costs of 

a street bordering on their property, 

building 

is not connected 

with the delivery of municipal services. Thus, the capital 

recovery fee may not fit easily into the category of 

special assessment. See aenerally San Marco6 Water D ist. . . 

v. San M~L~CO -fled School Di t, Rptr. 

(Cal. App. lz85) (sewer fee used tg d;f:iG c% of capi::: 

improvements was not a special assessment but a usage fee), 

P- 5353 
Wr. Perry L. Adkisson - Page 3 (JM-1035) 

g erru&$ 720 P.2d 935 (Cal. 1986) (such sewer fee was a 

szecial a&essment). 

However, there are Texas cases dealing with special 

assessments for irrigation improvements which are necessary 

to the provision of irrigation services to the landowner. See. e.a., Maverick Countv Water Control Imnrovement 

Dist . a v. St&g , m; State v. Bexar- dina-Atascosa 

Counties Water Imvro ement Dist. Wo. 1 310 S.W.Zd 641 (Tex. 

Civ. App. - San AntoEio 1958, writ ref:d). See also Attorney 

General Opinions JW-523 (1986) (capital recovery fee for 

water services treated as a special assessment); WW-551 

(1982) (drainage fee treated as a special assessment). We 

will not attempt to determine whether the capital recovery 

fee is more properly characterized as a *user fee" than a 

"special assessmentOV but will assume for purposes of this 

opinion that the capital recovery fees are special assessments. Since we conclude #at the city of Houston may 

collect the capital recovery fee in this case, the answer to 

your question does not depend on the name we use to identify 

the fee. 

The authorities have generally stated that special 

assessments are levied as an exercise of the power of taxation. Citv of Wichita Falls v. Will- *, at 911; 

see alw 14 McQuillin, Municipal CorporaCions 8 38.01 (3d. 

ed. 1987) (special assessments are sometimes held.to be an 

exercise of the police power). However, they are not taxes 

as that word is generally understood. Citv of Wichita Falls 

v. Williams, sunra. Taxes are charges imposed by the legislative power of the state to raise revenue for the general 

purposes of government and are not related to any special 

benefit to the taxpayer from the expenditure of the funds. 

!&&en Grain and Mercantile. Inc. v. Texas Grain Sorahum 

reducers Board, !sulazar at 623; see also Wichita C ounty 

2 v - I 323 

S.W.2d 298 (Tex. Civ. App. - Fort Worth 1959, writ ref'd 

n.r.e.). 

Since special assessments are levied as an exercise of 

the taxing power, questions arise as to the application 

of constitutional and statutory provisions on taxation. 

Some states have concluded that constitutional provisions 

exempting publicly owned and used property from taxes do not 

apply to special assessments, but such assessments may be 

imposed on public property only under express legislative 

authorization. The California Supreme Court has stated as 

follows: 

p. 5354 
Wr. Perry L. Adkisson - Page 4 (JM-1035) 

While publicly owned and used property is 

not exempt from special assessments under the 

constitution or statutory law of this state, 

there is an implied exemption of such 

property from burdens of that nature. . . . 

The principle which makes property of the 

state . . . nontaxable . . . also precludes 

the imposition of a special assessment for a 

street or other local improvement upon such 

property, unless there is a positive 

legislative authority therefor. . . . 

The rationale behind a public entity's 

exemption from property taxes and special 

assessments is to prevent one tax-supported 

entity from siphoning tax money from another 

such entity: the end result of such a process 

could be unnecessary administrative costs and 

no actual gain in tax revenues. . . . On the 

other hand, when one tax-supported entity 

provides goods or services to another, 

neither the California Constitution nor 

decisional law exempts the public entity from 

paying for these goods or services. 

# 

720 P.2d 935 (Cal: 

t 

1986) (citations omitted): Citv ii 

Inalewood v. Los Anaeles County, 280 P: 360, 363 (Cal. 

1929). 

The Texas courts also recognize the principle that 

ordinarily the legislature does not intend to tax property 

of the state. The Texas Supreme Court has said that this 

would involve the state in "the senseless process of taxing 

itself," the net result of which would be to take money 

out of one pocket to put it into another, less assessment 

and collection costs. &ower Colorado Ri er Aut&ritv 

Chemical Bank 8 Tru t Co 190 S.W.Zd 4av 51 (Tex. 

The principle applizs to &itical 

1945;. 

subdivi;ions supported by 

taxation, as well as to the state. Citv f Wa.rlin v. State 

205 S.W.2d 809 (Tex. Civ. App. - Waco lZ47, no writ). 1; 

the absence of a constitutional prohibition, however, the 

legislature may subject the state and political subdivisions 

to taxation. sler: Attorney General Opinion WW-1502 (1962) 

(state purchases of motor fuel subject to excise tax): a 

8&~ Attorney General Opinions JW-987 (limited sales and use 

tax law applies to state, its agencies, and political .subdivisions): JW-972 (1988) (state employees traveling at 

state expense on state business are not exempt from hotel 

occupancy tax). 

p. 5355 
. 

Mr. Perry L. Adkisson - Page 5 (JM-1035) 

The Texas Supreme Court has held that special assessments are not ntaxesn within article VIII of the Texas 

Constitution, within sections 4 and 5 of article XI, and 

within section 50 of article XVI, pertaining to the protection of homesteads from forced sale for debt. Citv of 

Falls v. Williams rE!uRcar and authorities cited 

therein: )&rris Countv v. Bovd, 7 S.W. 713 (Tex. 1888) and 

authorities cited therein. 

The supreme court has also stated, however, that article 

XI, section 9, of the Texas Constitution prohibited a city 

from imposing a special assessment on a county for improving 

the street bordering the courthouse site. Harris Countv V. 

BQYa suR.a. This provision states as follows: 

The property of counties, cities and 

towns, owned and held only for public 

purposes, such as public buildings and the 

sites therefor . . . public grounds and all 

other property devoted exclusively to the use 

and benefit of the public shall be exempt 

from forced sale and from taxation . . . . 

Tex. Const. art. XI, 5 9. Article XI, section 9 also 

applies to state-owned property. Lower Colorado River 

8 Trust Co<, m. 

The supreme court's conclusion in mris Coun v f 

&y& sunrg, that the city could not impose a paving azseszment on the county, was based partly on the absence of 

statutory authority for this charge. The legislature did 

not intend the city's charter provision 

assessments to interfere 

authorizing 

With governmental functions 

committed to the county commissioners, or .to impose 

additional financial burdens upon~ the county against the 

orders of the commissioners. 7 S.W. at 715. The court went 

on to find the county exempt from the assessment under 

article XI, section 9, of the constitution, stating as 

follows: 

[Tlhere is no apparent reason why the exemptions in the constitution should not be taken 

in the ordinary and more comprehensive sense, 

so as to include all taxation, special as 

well as general. 

& The court also noted that this question had been 

decided differently by other courts, and "there is great 

conflict in the decisions.W & Subsequent Texas cases 

p. 5356 
Mr. Perry L. Adkisson - Page 6 (JM-1035) 

have cast doubt on the constitutionally-based holding of 

BS?El. 

In rify of Wichita Falls v. Wiw the supreme court 

construed article XVI, section 50, of de Texas Constitution, which exempts homesteads from forced sale for debts, 

except for taxes and certain other debts, and determined 

that special assessments were not "taxes" within that 

provision. The court distinguished the w case as 

follows: 

It is true that the Commission of Appeals 

in the case of Countv of I&&.s v. Bovd 70 

Tex. 237, 7 S.W. 713, stated there wa; no 

apparent reason why the exceptions from 

'taxation, in the Constitution should not 

be taken to include special assessments. 

However, the constitutional provision before 

the court in that case was section 9 of 

article 8 [sic], which contains other words 

coupled with the word *taxation,, which 

warranted the interpretation given. Besides, 

the decision in the Bovd Case was obvioa 

correct on other arounds some of which were 

stated in the opinion, a;d some of which are 

found in the general rules of law applicable 

to the taxation of public property. WcQuillin 

on Municipal Corporations (2d Ed.) vol. 5, 

9 2212. (Emphasis added.) 

& at 914; ~&8 14 McQuillin, Municipal Corporations 5 38.73 

(3d ed. 1987). 

The court in Wichita Countv Water Imnro e ent 

No. 2 Citv of Wichita FaJ,& , m, held tha: i city 

Dist. 

liablevto a water improvement district for 

was 

"benefit assessmentsw levied against city-owned land within the district's 

boundaries. The water district,6 taxes were levied by the 

benefit assessment plan rather than upon an ad valorem 

basis. See aen- Water Code 8 51.512. The court 

reviewed case law and treatises stating that tax exemptions 

apply only to ordinary taxes for the general purposes of 

government and not to special assessments for local improvements. S e. e.a 

(Tex. 194:) 

State v. Citv of El P~SQ, 143 S.W.2d 366 

(citi;s are exempt from only three classes of 

taxes: ad valorem, occupation, and income taxes); fitv of 

Ci co . Var er 16 S.W.2d 265 (Tex. Comm,n App. 1929, 

j&u,: adopEed; (special assessment is not tax within 

constitution, thus defense of limitation was available). It 

concluded that article XI, section 9, of the Texas 

p. 5357 
Mr. Perry L. Adkisson - page 7 (JM-1035) 

Constitution did not exempt the city from payment of the 

assessments. 

Attorney General Opinion No. WW-786 (1960)' issued 

shortly after Wichita 

v. Citv of Wichita p8,J.l~ was decided, relied on that case to 

hold that a hospital district was liable to a city for 

paving assessments. After pointing out that the application for writ of error was refused with the notation %o 

reversible error," the opinion stated as follows: 

Though this docket notation may have cast 

certain doubt (the extent of which has never 

been satisfactorily defined) upon the reasoning of the Fort Worth Court, the Supreme 

Court's refusal to entertain the writ of 

error laid to rest any question as to the 

continued vitality of the early case of 

y:;,;rtv v. Bovd, 7 S.W. 713 (Tex. Sup. 

. 1 which reached a directly contrary 

result. 

Attorney General Opinion WW-786 (1960). 

However, m was relied upon in Citv of Garland 

Garland Indeo. School Dist. 468 S.W.Zd 110 (Tex. Ci:: 

APP. - Dallas 1971, writ ref,; n.r.e.), in which the court 

held that a city could not 

special 

compel a school district to pay 

assessments for paving streets ,next to school 

property. The court first determined that section 20.48 of 

the Education Code did not permit the expenditure of school 

funds for street improvement unless the trustees of the 

district first determined that the expenditure was 

,,necessary in the conduct of the public schools.~, XL at 

112. This was the 'primary ground" of the court's decision 

. . of 

& that tE 

rland and it was supported by the holding * 

city,charter provision authorizing the asses:: 

ment was not intended to impose additional financial burdens 

on the county. 

The !&X&B.& court also concluded that article XI, 

section 9, exempted a political subdivision from assessments 

for street improvements and that Barris C untv v. Bovd stood 

as authoritative on this issue. && atO114. 

this alternative ground for its decision, 

In reaching 

sought to distinguish Wichita Co- Water ‘::D%%% :::it 

No. 2 v. Citv of Wicbjta Fu by stating that zheecity had 

used the district's irrigatio;. services on the land, and 

thus impliedly consented to pay reasonable charges for those 

services. This distinction, however, appears to confuse 

p. 5358 
Mr. Perry L. Adkisson - Page 8 (JM-1035) 

benefit assessments with charges for providing water to 

irrigate the land. The city of Wichita Falls was subject to 

an assessment for each acre of irrigable land and had used 

irrigation services on warnall areas" of its tract. Wichita 

Countv ater Imvrovement Dist. No. 2 v. Citv of Wichita 

lzauil LRa. Water improvement districts impose benefit 

assessments to finance the construction of improvements 

necessary to irrigate the land. &,f& Water Code 55 51.125, 

51.502, 51.512, 51.516, 51.518. In addition, the landowner 

must pay a separate water charge or assessment for receiving 

water to irrigate his land. Water Code Sf 51.301-51.321, 

51.508, 51.509. The supreme court designated the Citv of 

Garland case "writ refused, no reversible error." 

The most recent Texas decision on the payment of 

special assessments by governmental bodies is Kgverick 

Countv Water Control & Imorovement Dist. No. 1 v. State 

EW2?2. The court noted that the Texas Supreme Court had 

held in Bsyg that article XI, section 9, of the Texas 

Constitution applied to special assessments, but that 

subsequent decisions had reached a contrary result. 456 

S.W.2d at 206-07, n. 5. The Wav;~i~o~;~w~;termined that 

land owned by the Veterans* exempted by 

statute from ad valorem taxation and was not subject to 

special assessments because no statute imposed them on the 

state. & at 206. .The court stated as follows: 

Although the power of a governmental agency 

to levy special assessments for local improvements is generally recognized to be an 

exercise of the taxing power, there are 

numerous decisions holding that a special 

assessment is not a 'tax, in the sense in 

which that word is ordinarily used. We do not 

think it necessary to consider the question 

whether such an assessment is a tax within the 

meaning of constitutional provisions exempting 

property from taxation in a case where, as 

here, a political subdivision created by the 

sovereign is attempting to impose a monetary 

exaction upon its creator. 

Even if it be assumed that a county or 

municipality is subject to special assessments 

levied by another political subdivision of the 

State, it does not necessarily follow that a 

subordinate political subdivision can impose 

an involuntary monetary obligation on the 

sovereign. It is generally held that, in the 

absence of clear legislative authorization, a 

p. 5359 
Mr. Perry L. Adkisson - Page 9 (JM-1035) 

political subdivision of the State has no 

power to levy a special assessment against 

State property. We adopt this view at least 

in a case where, as here, the sovereign is 

neither making nor contemplating any use of 

the allegedly benefitted land and has neither 

received nor requested the services rendered 

by the assessing agency. (Footnotes omitted.) 

& at 206-07. 

The Maverick case did not need to determine whether a 

special assessment is a tax within article XI, section 9, of 

the constitution. See also Attorney General Opinions JM-523 

(1986); WW-551 (1982) (did not reach question because no 

statutory authority for assessment). Nonetheless, its 

references to this issue suggest that we cannot confidently 

rely on the holding in m that article XI, section 9, of 

the Texas Constitution, exempts publicly-owned property used 

for public purposes from special assessments. The mverick 

decision actually rests on the absence of legislative 

authorization for imposing the special assessment on the 

state. The decisions in both && and in Citv of Garland 

are also supported by this non-constitutional ground -- the 

absence of express statutory authority for imposing the 

special assessments on a political subdivision -- as well as 

their interpretation of article XI, section 9. 

The atv of Garlti.case, which saidw~~u~;~ri~;:;;;- 

1_ tutional holding in -1s Countv v. Bovd 

was designated "writ refused, no reversible errorH by th6 

supreme court. The m crick questioned the 

holding in &y& and was ~esignat~?writ refused.,, AlthlttE 

the supreme court has not explicitly reconsidered &y& yours 

question requires us to form an opinion on how the supreme 

court might rule on it in the future. In the more than one 

hundred years since Harris Countv v. Bovd was issued, Texas 

courts, except for the Citv of Gaw court, have disregarded its constitutional holding or emphasized the 

alternative basis for the decision. These courts have had 

the benefit of legal scholarship and judicial decisions on 

special assessments which did not exist when m was 

decided. We believe the supreme court, if it were to 

consider this question again, would rule that the article 

XI, section 9 tax exemption does not encompass special 

assessments. Accordingly, article XI, section 9, of the 

Texas Constitution does not bar 

imposing capital recovery fees on 

the city of Houston from 

its waste water system. 

a state agency for using 

p. 5360 
Mr. Perry L. Adkisson - Page 10 (JM-1035) 

We also conclude that the legislature has authorized 

the city to impose such fees on state agencies that use its 

waste water system. Statutory authority for charging the 

fees is found in chapter 26 of the Water Code, which was 

enacted as part of the Texas Water Quality Act of 1967 and 

codified in the Texas Water Code. m Acts 1967, 60th Leg., 

ch. 313, at 745 (adopting Texas Water Quality Act of 1967); 

Acts 1971, 62d Leg., ch. 933, at 2850 (amending Texas Water 

Quality Act to include predecessor of section 26.176(b)); 

Acts 1971, 62d Leg., ch. 612, at 1978, 1985 (repealing 

chapter 933 of Acts 1971 and incorporating predecessor of 

section 26.176(b) into Texas Water Code). 

Local governments are granted certain authority under 

chapter 26 to provide for water quality within their area. 

Water Code fS 26.171-26.177. Section 26.176 authorizes 

every local government which owns or operates a sewage 

disposal system to adopt rules to control the discharge of 

waste into the system. In the event of any conflict between 

its provisions and any other laws, the provisions of section 

26.176 shall control. Water Code 5 26.176(e). Section 

26.176(b) provides as follows: 

(b) The local government in its rulethE; 

establish the charges and assessments 

may be made to and collected from U nersons 

who discharge waste to the disposal system or 

who have conduits or other facilities for 

discharging waste connected to the disposal 

system, referred to in this subsection as 

*users. * The charges and assessments shall 

be equitable as between all users and shall 

correspond as near as can be practically 

determined to the cost of making the waste 

disposal services available to all users and 

of treating the waste of each user or class 

of users. The charges and assessments may 

include user charges, connection fees, or any 

other methods of obtaining revenue from the 

disposal system available to the local 

government. In establishing the charges and 

assessments, the local government shall take 

into account: 

(1) the volume, type character, and guality of the waste of each user or class of 

users ; 

(2) the techniques of treatment required; 

p. 5361 
Mr. Perry L. Adkisson - Page 11 (JM-1035) 

(3) W debt-r.&irement 

exnenses of the disposal svstem reouired to 

raes w assegsments: 

(4) ,the costs of operating and maintaining the system to comply with this 

chapter and the permits, rules, and orders of 

the commission: and 

(5) ~othertaattributable 

Water Code 5 26.176(b). 

This statute expressly authorizes the local government 

to take into account capital cost of the disposal system in 

establishing charges and assessments, such as the 

recovery costs in question. 

capital 

Moreover, these charges and 

assessments are to be collected from ,,a11 persons,, using the 

disposal system. In the context of section 26.176(b), "all 

personaH includes state agencies. 

The language of section 26.176(b) was adopted in 1971, 

as an amendment to the Texas Water Quality Act of 1967. 

Acts 1971, 62d Leg., ch. 933, at 2850. 

Act defined 

The Water Quality 

,,personw to mean "individual, 

organization, 

corporation, 

government or governmental subdivision or 

agency, business trust . . . or any other legal entity,, 

unless the context required a different result. Acts 1969, 

61st Leg., ch. 760, at 2229 (amending Water Quality Act of 

1967). The legislature intended npersonn in section 

26.176(b) and its predecessors to include governmental 

agencies in order to enable local governments to qualify for 

federal grant funds under the federal Water Pollution 

Control Act. The provisions of the Water Quality Act 

demonstrate the legislature,6 intent to enable state and 

local governments to receive grants under federal water 

pollution control legislation. &9 Water Code S 26.035 

(Water Commission may receive federal assistance, grants, or 

loans for water quality control activities including waste 

disposal facilities); S 26.175 (local government 

contract with commission for transfer of money for waZ 

quality control functions and for construction, 

maintenance, 

purchase, 

and operation of sewage disposal systems). 

See also Attorney General Opinions M-1069 (1972);' M-894, 

M-822 (1971); M-32 (1967) (discussing state authority under 

Texas Water Quality Act to contract for federal grants for 

p. 5362 
Mr. Perry L. Adkisson - Page 12 (JM-1035) 

local governments under federal Water Pollution Control 

Act). 

The Environmental Protection Agency has authority to 

make grants to states and municipalities to build publicly 

owned treatment works. 33 U.S.C. 5 1281(g)(l). However, an 

applicant may not receive a grant unless he has adopted or 

will adopt a system of charges designed to assure that each 

recipient of waste treatment 

tionate share 

services will pay its propor- 

"of the costs of operation and maintenance 

(including replacement) of any waste treatment services 

provided by the applicant . . . .w 33 U.S.C. 

Federal regulations 

5 1284(b)(l). 

adopted under this provision further 

describe the user charges which must be collected from 

recipients of waste treatment services and demonstrate 

that governmental agencies must pay such charges. & 40 

C.F.R. 5 35.905 (definitions of "industrial user' and "user 

charge"); f 35.929-1(b) (4) (iii). 

Section 26.176(b) of the Water Code authorizes a local 

government to establish the 'user charges,w which it must 

adopt to qualify for a federal grant for sewage treatment 

works. The purpose underlying this section shows that it 

must be read to apply to governmental as 

entities. 

well as private 

When the Texas Water Quality Act was codified in the 

Water Code, the definition of wpersonw was deleted from its 

list of definitions. However, the language of section 

26.176(b) was incorporated into the Water Code by an 

enactment which included a provision making 

subject to all provisions 

it expressly 

of the Code Construction Act. 

Acts 1971, 62d Leg., ch. 612, S 2, at 1985. See also Water 

Code S 1.002 (application of Code Construction Act to code). 

The Code Construction Act defines "person" as follows, 

unless the context requires a different definition: 

\Person* includes corporation, organization, 

nt or aovernmW subdi ision or 

aQencY.. . and any other legal en:ity. 

Gov't Code 5 311.005(2). 

As shown by our discussion of the history of section 

26.176(b) of the Water Code, 

vision, 

in the context of that pro- 

,,persoM must be defined to 

agencies. Accordingly, 

include governmental 

section 26.176(b) of~the Water Code 

expressly authori~xes a local government to require users of 

its sewage disposal system, including a state agency, to pay 

charges based in part on the capital costs of the system. 

p. 5363 
m. Perry L. AdkiSSon - Page 13 (JM-1035) 

The city of Houston may collect a capital recovery fee from 

a state agency for the use of its waste water system. 

SUMMARY 

A special assessment is not a tax within 

article XI, section 9, of the Texas Constitution, which exempts property owned and held - 

for public purposes from taxation. Thus, 

this provision of the constitution does not 

prohibit the imposition of a special assessment on a state agency. 

In the absence of express statutory 

authority, a city may not impose a special 

assessment on .a state agency. Section 

26.176(b) of the Water Code provides express 

authority for the city of Houston to 

users of its sewage disposal system, 

charge 

including a state agency, a "capital recovery fee,, 

for certain capital costs of the sewage 

disposal and treatment system. 

WARYKELLER 

JIM MATTOX 

Attorney General of Texas 

First Assistant Attorney General 

IOU MCCRBARY 

Executive Assistant Attorney General 

JUUGE ZOLLIE STEAXLF.Y 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Susan L. Garrison 

Assistant Attorney General 

p. 5364