JIM MATTOX Attorney General 

# The Attorrwy General of Texas

July 17, 1986

Supreme Court Building P. 0. BOX12546 Austin, TX. 7671% 2546 512,4752501 Mr. Llas B. "Bubba" Siteen ExecutiveDirector State PurchasingandGeneral OpinionNo.JM-523

Re: Whether the city of Austin Telex 9101674-1367 Telecopier 512/475-0268 Services Commiss:.on may assess a capital recovery P. 0. Box 13047,Cal'itol Station fee on state constructionproAustin,Texas 787:.1. jects

714 Jackson, Suite 700 Dallas. TX. 752024506 214/74&3344 Dear Mr. Steen:

4624 AlbeRa Ave., Suite 164 El Paso. TX. 799052793 9151533-3464

pl Texas. Suite 700 ston, TX. 77002~3111 I ,Y223-5866

604 Broadway, Suite 312 Lubbock. TX. 79401.3479 80617476236

4309 N. Tenth, Suite S McAllen, TX. 76601-1665 512,662-4547

200 Main Plaza, Suite 400 San Antonio, TX. 762052797 5121225-4191

An Equal Opportunity/ Affirmative Action Employer You ask whethlnra home rule city may legally assess capital recovery fees against state constructionprojects. The city requires that the owner of anynew constructionmust pay a capitalrecovery fee at the time a water t:ap ispurchased. The amount of the fee isdetermined by the size and type of water meter required for the project. The fees are intentledto include both the actual costs of providing
new service to a specific site and the estimatedproportional cost of building and maintaining the generalwater infrastructureto meet the collective demands o:Eall new development. You assert that the city may not assess these fees against state constructionprojects.
The question ,p:cesented is one raised but left unanswered in Maverick CountyWatlz:Control and ImprovementDistrictNo. 1v. State, 456 S.W.2d 204 (Tel:. Civ. App. - San Antonio 1970. writ ref'd) and Attorney General Opinion l&-551 (1982). A central question in Maverick involved the nature of the charges -- whether they constltuted a tax or a special assessment. Special assessmentsdiffer from general taxes insof,sr as special assessments are levied only on land, the amount based on the benefits conferred to the land; a special assessmentisuniqw as to time and locality.See generally456 S.W.2d 204, note 4 (cases cited therein);Londerholm V. City of Topeka, 443 P.2d 240 (Kan. 196,s). The Maverick court held that state statutes clearly exempt stat,eproperty from taxation by a water control and improvementdistrict so long as the state holds full legal title to the property. 456 S.W.2d at 206 (relyingon article 7150,V.T.C.S., now replacedby Tex. Prop. Code 111.11);see also Tex. Const. art. XI, 59; City of Beaumo:z:v. Fertitta, 415 S.W.2d 902 (Tex. 1967). The court acknowledged1:hat the legal ramificationsof specialassessments differ from those of a tax, noting Wichita County Water Improvement District No. 2 v. l:ityof Wichita Falls, 323 S.W.2d 298 (Tex. Civ. APP

. - Fort Worth r359. writ ref'd n.r.e.) in which the court held

__ that a city was 1:tablefor special assessments levied by a water

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district. The court inWichita County reasoned that a specialassessment is not a tax withinthe meaning of constitutionaland statutory provisions exempting public property from taxation. 323 S.W.2d at 300. The Maverick court found it unnecessary to determine whether a special assessment is a tax for thosepurposesbecause it adopted the common law rule that a polil:ical subdivisionof the state cannot levy a special assessment against state property without express legislative authority. 456 S.W.;:dat 206-07. Attorney General Opinion MW-551 applied this reasoning to a home rule city and decided that a home rule citymay not legally levy a drainage fee against state-owned property.

On the other hand, home rule cities have full authority to do anything the legislature could authorize them to do. Lower Colorado River Authority v. City of San Marcos, 523 S.W.2d 641, 643 (Tex. 1975). Accordingly, as a &neral rule, it is necessary to look to legislative limitations on thepower of home rule cities rather than to specific grants of pow=::..Id. The Maverick court dealt with a water control and improvementdistrict, a political subdivisionwhich holds only thepowers granted to it expresslyor by necessary implication by the constitution or statutes of this state. A home rule city’s powers, however, are limited to the area of Its jurisdictfon. The issue at hand has state-wide implications. Attorney General Opinion MW-551 applied the 'zaverickcase to a home rule city but did not address the different le:vels of powerheld by home rule cities and specialdistricts. The sources cited by theMaverick court, however, suggest that its holding was intended to be broad. See 456 S.W.2d at 207. note 6 (cases cited therein). Levying special assessments against the state requires authorization from the state legislature. See & Accordingly, we conclude that the Maverick rule applies to n political subdivisions,includinghome rule cities.
Nevertheless, the impact of Maverick is limited. The court stated:

Even if it be ,assumedthat a county or municipality is subject to special assessments levied by another political subdivisionof the State, it does not necessarily follow that a subordinatepolitical subdivision can impose an involuntary monetary obligation on the sovereign. It is generally held that, in the absence of clear legislativeauthorisadon. a political :subdivisionof the State has no power to levy a special assessment against State property. [Footnote omitted]. We adopt this view at least in a case where, as here, the sovereign is neither making no; contemplating any use of the allegedly benefittid land and has neither received

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nor requested the servicesrenderedby the assessing agency. (Emphasisadded).

456 S.W.2d at 207. Similarly, Attorney General Opinion MW-551 emphasized that it did not purport to address a situationwhere the state acted in amanner that indicatedawillingness to pay a fee. In the questionpresented, the :state is requestingwater service from the city.
Maverick stands for the proposition that the city cannot impose
an involuntary monetary &ligation on the state without express legislative authorization. Accordingly, the city cannot treat state property in the samemanner as privatepropertywith regard to special assessmentsfor local improvements. It doesnot follow,however, that the city cannot charge the state for the actual cost of extending servicewhich the state expressly requests. As indicatedpreviously, the fees in question are intended to includeboth the actual costs of providing new water service to a specific site and the estimated proportional cost of build:_ngthe general infrastructure. To the extent that the city can dc:termine the actual costs,both general and specific, attributable to faxtendingservice to the state, we do not believe that Maverick prevarntsthe city from requiring the state to pay those costs as a cond::tionof extending service. The city may not, however, assess the s1:atefor its pro-rata share of the cost of local improvements which provide benefits that are too general to specificallyapportion to eachuser. Further, we emphasize that any "exemption" for state property from special assessments by political subdivisions is limited to property used exclusively for public purposes. It is well-settled in Texas that the constitutLona1 and statutory exemption of state property from taxes applies onlywhen thenrouerty isused exclusivelv for public purposes,. See Satterlee V.-Gulf Coast Waste Disposal Authority, 576 S.W.2d 77nTex. 1978); StateV. Houston Lighting and Power Co., 609 S.W.2d 263 (Tex.Civ. App. - Corpus Christi 1980.writ ref'd7r.e.); Attorney C,eneralOpinion MW-430 (1982); see also -- CentralAppraisalDistrict of Erath CountyV. PecanValley Facilities, Inc., 704 S.W.2d 86 (Tex.App. - Eastland 1985.no writ). We belfeve that the courts of this statewould apply similarrestrictions to the common law "exemption" from special assessments announced in the Maverick case. This conclusion finds support in the sources relied upon in Maverick. For example, one such source states the general rule as follows:

Apart from constitutionalor statutoryauthorization public property

. . . used for public purposes is not liable to special assessment for local improvement:;..

. . . (Emphasisadded).

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14 McQuillin, Municipal Corporations (3d. ed., rev. 1970) §38.73 (citedinMaverick County, 456 S.W.2d at 207,note 6).

SUMMARY
Without express constitutional or legislative authorization, a 'home rule city may not levy special assessmen:s; against state property which is used solely fo,c public purposes. This general rule, however, i.oesnot prevent a city from c requiring the state to pay the actual costs

attributable to extending service to the state when the state recuests

JIM MATTOX Attorney General of Texas

JACK HIGHTOWER FirstAssistantAttorney General

MARY KELLER ExecutiveAssistantAttorney General

RICK GILPIN Chairman.Opinion Committee
Preparedby JenniferRiggs AssistantAttorney General

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