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) 

Dear Mr. Hartel: 

Your letter requesting an opinion of this office asks: 

Does a Rural Fire District have the authority 

to borrow Money from a bank, without a public 

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 ad valorem taxes? 

(No additional taxes will be raised to 

support the loan.) 

If the above question is yes, can the bank 

secure the loan with a lien on the financed 

property or must it be secured with a pledge 

of tax receipts? 

Rural fire prevention districts were formerly regulated 

by article 2351a-6, V.T.C.S. In 1989, a non-substantive revision of the law carried the provisions of that statute 

into the new Health and Safety Code as chapter 794 thereof. 

See Acts 1989, 71st Leg., ch. 678, at 2230, 3122. Subchapter E of chapter 794 concerns the financial transactions 

of such districts. The new code became effective September 

1, 1989. Id. ch. 678, § 15, at 3165.1 

1. The 71st Legislature repealed article 2351a-6, 

V.T.C.S., when its provisions were incorporated into the 

Health and Safety Code, but it also passed an amendment to 

(Footnote Continued) 

P. 5937 
Honorable A. J. Hartel - Page 2 (JM-1128) 

We understand that the district intends to borrow an 

amount considerably in excess of its funds on hand or the 

amount anticipated to be on hand from tax collections (or 

other sources) for a single year. It is to be repaid over a 

ten year period, but the amount scheduled to be repaid in a 

single year would not exceed the amount anticipated to be 

collected in taxes for that year. 

Section 794.071 of the Health and Safety Code provides: 

Except as provided by Section 794.072 and 

Sections 794.076-794.081, a district may not 

contract for an amount of indebtedness in any 

one year that is in excess of the funds ~then 

on hand or that may be paid from current 

revenues for the year. 

This provision prevents the proposed transaction, unless it 

is authorized by one of the sections mentioned, because the 

indebtedness incurred would exceed the funds of the district 

then on hand or that might be paid from anticipated current 

revenues for the year. 

We have examined sections 794.072 and 794.076 through 

794.081, and there is no provision in any of them that would 

permit the district to obligate itself by contract to assume 

a monetary obligation payable over several years from future 

ad valorem 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 so amended, revised, 

or reenacted. 

Although the amendment is tangentially pe~rtinent to the 

issue at hand, it does not affect the conclusion we reach. 

See Acts 1989, 71st Leg., ch. 1132, at 4676. 

p. 5938 
Honorable A. J. Hartel - Page 3 (JM-1128) 

electorate. See Attorney General Opinion JM-453 (1986). 

Section 794.077(a) expressly states: 

A district may not authorize bonds and 

notes secured in whole or in part by taxes 

unless a majority~ 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 

not possess authority to borrow money repayable from ad 

valorem taxes to be 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 to borrow money 

repayable from ad valorem taxes to be collected in future years. 

Very truly yo J & J/a 

JIM MATTOX 

Attorney General of Texas 

MARY KELLER 

First Assistant Attorney General 

LOU MCCREARY 

Executive Assistant Attorney General 

JUDGE ZOLLIE STEAKLEY 

Special Assistant Attorney General 

RICK GILPIN 

Chairman, Opinion Committee 

Prepared by Bruce Youngblood 

Assistant Attorney General 

p. 5939