December 28, 1989

Honorable A. J. Hartel Opinion No. JM-1128 Liberty County Attorney P. 0. Box 9127 Re: Authority of a rural fire Liberty, Texas 77575-9127 prevention district to borrow money without holding an election (RQ-1704)
DearMr. Hartel:
Your letter requesting an opinion of this office asks:
Does aRural Fire District have the authority toborrow Money fromabank, without apublic election to approve the loan, if the amount of repayment per year is less than the revenues to be received per year from 3 cent[s] per $100 evaluation advalorem taxes? (No additional taxes will be raised to support the loan.) If the above question isyes, can the bank secure the loanwith a lien on the financed property ormust itbe secured with a pledge of tax receipts? Rural fireprevention districts were formerly regulated by article 2351a-6, V.T.C.S. In 1989, anon-substantive revision of the law carried theprovisions of that statute into thenew Health and Safety Code as chapter 794 thereof. SeeActs 1989, 71st Leg., ch. 678, at 2230, 3122. Subchapter E of chapter 794 concerns the financial transactions of such districts. Thenew codebecame effective September 1, 1989. Id. ch. 678, § 15,at 3165.1

1. The 71st Legislature repealed article 2351a-6, V.T.C.S., when itsprovisions were incorporated into the Health and Safety Code, but italso passed an amendment to (Footnote Continued)

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We understand that the district intends toborrow an amount considerably inexcess of its funds onhand or the amount anticipated to be onhand from tax collections (or other sources) for a single year. It is tobe repaid over a ten year period, but the amount scheduled tobe repaid in a single year would not exceed the amount anticipated to be collected intaxes for thatyear. Section 794.071 of the Health and Safety Code provides: Except asprovided by Section 794.072 and Sections 794.076-794.081, adistrict may not contract foran amount of indebtedness in any oneyear that is inexcess of the funds ~then onhand or that may bepaid from current revenues forthe year. This provision prevents theproposed transaction, unless it isauthorized by one of the sections mentioned, because the indebtedness incurred would exceed the funds of the district then onhand or thatmight bepaid from anticipated current revenues for theyear. We have examined sections 794.072 and 794.076 through 794.081, and there isnoprovision inany of them that would permit the district to obligate itself by contract to assume amonetary obligation payable over several years from future advalorem taxes without first securing the approval of the

(Footnote Continued) the repealed statute. The amendatory provision has been saved notwithstanding the repeal because section 311.031(c) of the Government Code provides:

(C) The repeal of a statute by a code does not affect an amendment, revision, or reenactment of the statute by the same legislature that enacted the code. The amendment, revision, or reenactment is preserved and given effect as part of the code provision that revised the statute soamended, revised, or reenacted. Although the amendment istangentially pe~rtinent to the issue athand, itdoes not affect the conclusion we reach. See Acts 1989, 71st Leg., ch. 1132, at 4676.

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electorate. See Attorney General Opinion JM-453 (1986). Section 794.077(a) expressly states:

Adistrict may not authorize bonds and notes secured in whole or in part by taxes unless amajority~of the district's qualified voters who vote at an election called for that purpose approve the issuance of the bonds and notes. cf. Tex. Const. art. III, 9 52(d).-
We advise that a rural fire prevention district does notpossess authority to borrow money repayable from ad valorem taxes tobe collected in future years without first securing the approval therefor from the electorate. We do not reach your second question.

SUMMARY Without first securing approval therefor from the electorate, a rural fire prevention district is not authorized toborrow money repayable from ad valorem taxes tobe collected in futureyears. Very truly yo 

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& JIM MATTOX Attorney General ofTexas
MARY KELLER First Assistant Attorney General LOUMCCREARY Executive Assistant Attorney General JUDGE ZOLLIE STEAKLEY Special Assistant Attorney General RICK GILPIN Chairman, Opinion Committee Prepared by Bruce Youngblood Assistant Attorney General

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