Honorable Leo C. Buckley 

Ccuntg Attorney 

Zapata County 

Zapata, Texas 

Dear Sir: Opinion No. O-4174 -. 

Rk: Authorltg'fbr a 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 considered your 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 intangible property?' 

"Heretofore, Zapata County has had.'no"'school ~. 

tax whatever, but In September of this year, Conimon 

School-Dlstrlct~ No. One of Zapata County voted a 

$100,000.00 bond issue for school purposes; Andy-the 

Commissioners Court of Zapata County has ordered 

the assessment and collection of a tax of $0.30 per 

hundred dollar valuation for the retirement of'sald 

bonds and payment of interest thereon. Such tax 

has been assessed against the intangible property 

apportioned to this county, but a number of the 011 

companies have already protested against this assessment. 

"The tax collector of Zapata County has requested me to advise him as to whether or not this 

Common School District school bond tax should be 

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 consideration of the.other facts set out in your inquiry we 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 shotin In 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 statute provide: 

"The commissioners' court for the common 

school districts 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 school purposes In a common school district shall be assessed at the rate of value of property as said property 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 

thereafter as practicable shall fssue said bonds 

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 

said bonds are outstanding, the ~sald 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 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 properties which are or mag'be lmposed upon them respectively, by law, shall pay an 

annual tax to the State; beginning with the 1st day 

of Sanuary of each year, on their Intangible assets 

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 accordance with the'method therein provided for. Article 7113, Revised Civil Statutes, 1925, provides 

that within a specified time the board shall certify the amount of Intangibles which 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: 

"That assessments, valuation and apportlonment,of such Intangible assets so fixed, determlned, declared and certified by such board shall not 

be subject to review, modlflcatlon or change by 

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 same manner and uiider the same'.penalties as 

taxes upon other property. All state and county 

ad valorem taxes upon all intangible property in 

this State belong;ing to an Individual, company, 

corporation or association embraced by this chapter, shall be assessed under Its provisions and not 

otherwise; but ad valorem taxes upon all other property of any and all such Individuals, companies, 

corporations and associations shall be 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-extensive with the 

bound~arles of said county, was unauthorized uudeb the law to 

collect a tax on the value of'the rolling stock-.and intangible 

property of the rallr~oad compang'whlch values had been fixed 

by the State Tax Board, apportionedby Itand~~eFtlfled to the 

tax~assessor of that county for taxation purposes-; 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 

In Article 7105, supra, suuect to taxation by school districts 
Honorable Leo C. Buckley, 

and other subdlvlslons of 

rected to that portion of 

length will not be copied 

page 4 O-4174 

the county. Your attention Is dlthe opinion which because of Its 

heeeln. The case also cites with 

approval a ruling of the Comptroller of Public Accounts of 

Texas holding that an Independent sdhool district was not authorized to tax Intangible assets and properties oft torpor: .. 

atlons coining under the particular provisions of the intanglble tax law, which IS now Article 7105, supra. TRe oplnron 

likewise cites with approval an oijlnlon written by Luther 

Nichols, Assistant Attorney General, which holds: 

_ 

"Replying to yours second~~questlon, I will say 

that the Intangible assets and the'rolling stbck of 

the railroad company are not subject to the local' 

school'dlstrlct taxes. They are'llable for county 

taxes proper, but not for taxes levied by subdlvlslons of counties." 

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

556, writ of error refused; holds thata road district has no 

power tb tax the Intangible values of a railroad whose lines 

run through It. 

_~ -., _. -- 

The case of State of,Texas v. 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. lri each of-the 

codritles, xespectlvely'" was' suffl~lent~~authorlty'~t6‘au?3i~rizea..coimty tolevy'S I'oad bond tax on the'bdlllng~'stobk iifidlti=~-- 

tauglbliFassetssof a'raSlroad~6oniijany everi thought the 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 take for county pii*poses proper 

which the court recognized in this particular case. 

In our opinion No. O-1777 this department held: 

"With respect to your sec,ond question, you- .- 

are advised that Artltile 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 county within 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 Supply District No. 2 v. Mann, 142 S.W. (26) 948, 

held: 

"The power to tax belbngs &the soverelgnty.. It can only be exercised by subordinate 

corp6rat.e body when delegated to lt'elther by 

the constitution or the Legislature, and when so 

delegated, It lrmst be exerdised for those purposes only which are dlstltictly included In the 

tionstltutlonal or the legislative provisions. 

. Such power when so conferred 'is to be 

~t&tly construed and must be closely followed."' 

For all of the reasons'~'dlscussed in the foregolug authorities, you are advised that It Is the opinion of~thlsdepaxttientthat oil companies, and their Intangible assets-and 

property, contemplated and coming wlthln~the p~ovlslons 'of 

Ai.tlcle 7105., supra, are not subject to a oommon school district bond tax on their Intangible assets 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 Committee By s/BWB Chairman