Honorable Leo C. Buckley

CcuntgAttorney Zapata County Zapata, Texas

Dear Sir: OpinionNo. O-4174 -. Rk: Authorltg'fbra common school district bond tax to be levied and collected on Intangible assets and property of oil pipe line companies andcommon carrier pipe line companies.

We have received and consideredyour request for an opinion from this department. We quote from your request:

f'tM&y the~~tax

voted bg.a Common SchoolDlstrlct f6r the retirement of school bondsbe assessed and collected against intangibleproperty?'
"Heretofore,Zapata County has had.'no"'school ~. tax whatever, but In September of this year, Conimon School-Dlstrlct~

No. One of Zapata Countyvoted a $100,000.00bond issue for schoolpurposes;Andy-the Commissioners Court of Zapata County has ordered the assessment and collection of a tax of $0.30per hundred dollar valuation for the retirement of'sald bonds and payment of interest thereon. Such tax has been assessed against the intangibleproperty apportioned to this county, but a number of the 011 companies have already protested against this assessment.

"The tax collector of Zapata County has requestedme to advise him as to whether or not this Common School District schoolbond tax shouldbe assessed against such intangible propertg;but after reviewing the statutes and authorities, I still find them somewhat confusing."

The question as presented Is very broad. However, from a considerationof the.other facts set out in your inquirywe believe that the request was meant to be limited to the power of the commissioners' court to levy and collect a school dls-Honorable Leo C. Buckley, page 2 o-4174

trict bond tax upon the Intangible assets and property of those oil companies covered in Article 7105, Revised Civil Statutes of Texas, 1925, and this opinion Is written upon that premise.

From the facts shotinIn your inquiry it Is presumed that the election authorizing the issuance of the common school district bonds was held pursuant to the authority of Artlcie 2784,Revised Civil Statutes, 1925. The pertinent provisions of said statuteprovide:

"Thecommissioners' court for the common schooldistricts In its county,

. . . shall have power to levy and cause to be collected the annual taxes and to issue the bonds herein authorized subject to the following provisions:
"(5) All property assessed for schoolpurposes In a common school district shallbe assessed at the rate of value of property as saidproperty Is assessed for State and county purposes."

Article 2787, Revised Civil Statutes, 1925,provides:

"If the proposition to Issue said bonds of
a common school district carries at an election held therefor, the commissioners' court assumes thereafteras practicable shall fssue saidbonds
on the face and credit of said common school dlstrlct.

. . . .At the time of the Issuance of said bonds and each year thereafter so long as any of saidbonds are outstanding, the ~saldcourt 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 shallbe determined by the trustees of the district and county superintendentand certifiedby the county superintendentto the commissioners' court, and said court shall levy the tax~at said rate until
a change Is recommended~ by said school officers. Said tax shallbe assessed and collected as provlded by law for the assessmentand collection of special local tax for the maintenance of public free schools."

Article 7105, as amended, Revised Civil Statutes of 1925, provides:

"Each Incorporated e

. . oil pipe line companies, and all common carrier pipe line companies of every character whatsoever, engaged In the trans-Honorable Leo C. Buckley, page 3 O-4174

portation of oil,

. . . in addition to the ad valorem taxes on tangible propertieswhich are or mag'be lmposed upon them respectively, by law, shallpay an annual tax to the State; beginningwith the 1st day of Sanuary of each year, on their Intangibleassets and property, and local taxes thereon to the counties in which Its business is carried on;

. . ."

Article 7111,Revised Civil Statutes, 1925, provides that the board shall make an apportionment of such taxes to the respective counties In accordancewith the'method thereinprovided for. Article 7113, Revised Civil Statutes, 1925,provides that within a specified time the board shall certify the amount of Intangibleswhich It finds to be taxable to the respective county assessors In which such property ls located and to which an amount of the tax Is prorated. The statute further provides:

"Thatassessments,valuation and apportlonment,of such Intangible assets so fixed,determlned, declared and certifiedby such board shallnot be subject to review, modlflcatlon or changeby the tax assessor of such county, nor by the board of equalization of such county; and the state and county taxes there6n shall be collected by the tax collector of such county and the county thereby In the samemanner and uiiderthe same'.penalties as taxesupon other property. All state and county 

### ad valorem taxes upon all intangibleproperty in this State belong;ingto an Individual, company, corporationor association embracedby this chapter, shallbe assessed under Its provisionsand not otherwise;but ad valorem taxes upon all otherproperty of any and all such Individuals,companies, corporationsand associations shallbe assessed as Is or as may be provided by law-"

The case of State.v. Houston atid T. C. Railway Company, (Clv.App.), 209 S.W. 

### 820,held that a navigation district of Harris County,whose boundaries were co-extensivewith the bound~arles

of said county,was unauthorizeduudeb the 

### law to collecta tax on the value of'the rolling stock-.and intangible property of the rallr~oadcompang'whlchvalues had been fixed by the State Tax Board, apportionedby Itand~~eFtlfled to the tax~assessor of that county for taxationpurposes-; The case discusses In detail the history of various legislat~oh that had~been-'introduced in the~leglslature,but which had~failed t6 pass and-become the law, which sought to make the property of railroads and the property of other corporations specified InArticle 7105, supra,suuect to taxationby schooldistrictsHonorable Leo C. Buckley,

and other subdlvlslonsof rected to that portion of lengthwill not be copied 

### page 4 O-4174

the county. Your attention Is dlthe opinionwhich because of Its heeeln. The case also cites with approval a ruling of the Comptroller of PublicAccounts of Texas holding that an Independent sdhool districtwas not authorized to tax Intangibleassets and properties ofttorpor:

.. atlons coining

under the particularprovisions of the intanglble tax law, which ISnow Article 7105, supra. TRe oplnron likewise cites with approval an oijlnlon written by Luther Nichols,AssistantAttorney General,which holds:

_

"Replyingto yourssecond~~questlon, I will say that the Intangibleassets and the'rolling stbck of the railroad company are not subject to the local' school'dlstrlcttaxes. They are'llable for county taxes proper,but not for taxes levied by subdlvlslons of counties."

The case ofBell County v. Hines, (Civ.App.)‘219~S.W; 

### 556,writ of errorrefused; holds thata road district has no power tb tax the Intangiblevalues of a railroadwhose lines
run through It. _~ -., _. --

The case of State of,Texasv. Texas-and Pa~lflc“RaSl~ - way'company, (Cob. Am.).; 

### 62 S.W. (2d) 

### 81,held that a-statute authorizing a road.boud tax agalnst"pr'opei?ty. lrieach of-the codritles,

xespectlvely'"

was'suffl~lent~~authorlty'~t6‘au?3i~rizea..coimty

tolevy'S I'oad

bond tax on the'bdlllng~'stobk iifidlti=~-- tauglbliFassetssofa'raSlroad~6oniijany everi thoughtthe road dlstx372t'was

00mij0ea’ of'twb~couiitles.We do not thlnk‘that 'the-. ho1aing.m thatdase IS coutrary to themFiiles laid doim~Fn'the other cases'referr'ed to heeelu for the reason thata-bounty '- niay'levy,

assess'

aid collecta takefor county pii*poses proper which the court recognized in this particular case.

In our opinionNo. 

### O-1777this department held:

"Withrespect to your sec,ond question, you- .- are advised thatArtltile

### 7105 of the-~'R.C.S.Di.ovides for au annual tax.upori the lntariglble

properties of corporations, such-.as oil pipe lilie conipanles,

In favor of the State and of the county. The tax therein authorized In favor of the county
means the county as such. There appears to be no authority for the lmposl~tlon of the tax upon such Intangibles in favor of districts or subdlvlslons of a county. In the present case the entire county Is embraced in the countywide equalization--dlstrlct, but, nevertheless, it is a districtand not
a countywithin the meaning of this tax law.Honorable Leo C. Buckley, page 

### 5 O-4174

The Supreme Court of Texas In the case of Trl-City.' Fresh Water SupplyDistrict No. 2 v. Mann, 142 S.W. (26) 948, held:

"Thepower to tax belbngs &the soverelgnty.. It can only be exercisedby subordinate corp6rat.e

body when delegated to lt'eltherby the constitution or the Legislature, and when so delegated, It lrmst be exerdised for those purposes only which are dlstltictlyincluded In the tionstltutlonal

or the legislativeprovisions.

. Such powerwhen so conferred 'isto be ~t&tly construed and must be closely followed."'

For all of the reasons'~'dlscussed in the foregolugauthorities,you are advised that It Is the opinion of~thlsdepaxttientthat oil companies, and their Intangibleassets-and property, contemplatedand coming wlthln~the p~ovlslons 'of Ai.tlcle7105.,

supra, are not subject to a oommon schooldistrict bond tax on their Intangibleassets and property. ~,~.~~.. We trust that In this manner we have fully answered your Inquiry.

Yours very truly

ATTORNEYGENERALOF TEXAS
By s/I-IaroSd

Mi:Cracked Raeold-'Mc

Cracken Assistant

HM:db:wc

APPROVRD JAN 

### 5,~

1942 s/Grover Sellers FIRST ASSISTANT ATTORRRYGENRRAL
Approved Opinion CommitteeBy s/BWB Chairman