### ATTORNEY GENERAL OF 

### TEXAS
GREG ABBOTT

The Honorable Cheryl1 Mabray Llano County Attorney Llano County Courthouse 801 Ford, Room 111 Llano, Texas 78643 August 30,2004

Opinion No. GA-0242

Re: Whether a commissioners court may hold an election that creates an emergency service district and imposes asales and use tax within the proposed district’s boundaries (RQ-0202-GA)

Dear Ms. Mabray:

You askabout creating anemergency services district (“ESD”) pursuant toHealth and Safety Code chapter 776.’ You state that Llano County called for an election to create anESD in2002, but itwas not approved because the citizens did not want more ad valorem taxes. See Request Letter, supra note 1,at 1;Tex. Att’y Gen. Op. No. JC-0392 (2001) (concerning creation ofanESD inLlano County). Many voters have stated that they would vote for an ESD funded with aone cent sales and
use tax because everyone pays it, unlike an ad valorem tax paid only by property owners. See Request Letter, supra note 1, at 1. You also state that Llano County citizens have considered adopting a county health services sales and use tax under Tax Code chapter 324, and you ask whether the county may do so. See 

### id. at 2.

We first address the creation of an ESD. The Llano County Commissioners Court wishes to call an election with apetition that includes the following wording:

The ESD will provide for emergency medical service within the district. The district is to be created and is to operate under Article III, Section 48-e, Texas Constitution with alevy on the ad valorem property situated in said district not to exceed zero cents (0) on the One Hundred Dollars ($100) valuation for the support thereof; provided that no tax shall be levied in support of said district until approved by vote ofthe qualified voters residing herein. Said district istobe created and isto operate under the adoption ofanot to exceed
one cent (1) sales and use tax.


### Id. Accordingly, you ask whether the commissioners court may call an election to create an emergency services district and atthe same time call an election for asales and use tax not to exceed
one percent in the emergency service district boundaries. See 

### id. at 1.

‘Letter from Honorable Cheryl1 Mabray, Llano County Attorney, to Honorable Greg Abbott, Texas Attorney General (Mar. 1,2004) (on file with the Opinion Committee, also 

### available at hnp://www.oag.state.tx.us) [hereinafter Request Letter].The Honorable Cheryl1 Mabray - Page 2 (GA-0242)

Texas Constitution article III, section 48-e, provides for establishing ESDs as follows:

Laws may be enacted to provide for the establishment and creation of special districts to provide emergency services and to authorize the commissioners courts ofparticipating counties to levy
a tax on the ad valorem property situated in said districts not to exceed Ten Cents (106) on the One Hundred Dollars ($100.00) valuation for the support thereof; provided that no tax shall be levied in support of said districts until approved by avote of the qualified voters residing therein. Such a district may provide emergency medical services, emergency ambulance services, rural tire prevention and control services, or other emergency services authorized by the Legislature.

TEX.CONST.art. III, 548-e (added Nov. 3,1987; amended Nov. 2,1999). Pursuant to section 48-e, the legislature adopted Health and Safety Code chapter 776, authorizing the creation of ESDs in counties with apopulation of 125,000 or less. See TEX.HEALTH& SAFETYCODEANN. 5776.003 (Vernon 2003); see also 

### id. ch. 775 (Vernon 2003 & Supp. 2004) (authorizing the creation of ESDs without apopulation restriction). Llano County has apopulation of approximately 17,500 persons. See Request Letter, supra note 1,at 1.’

To create an ESD located wholly within Llano County pursuant to chapter 776, “apetition signed by at least 100 qualified voters who own taxable real property in the proposed district must be filed with the county judge.” See TEX.HEALTH& SAFETYCODEANN. 5776.01 l(a) (Vernon 2003). The petition must show “that the district is tobe created and is to operate under Article III, Section 48-e,” the proposed district’s name and boundaries, the services it will provide, that its creation complies with Health and Safety Code section 776.021, which pertains to overlapping districts, and certain information pertaining to the petitioners. 

### Id. 5776.013. After the countyjudge receives the petition and tiles itwith the county clerk, the commissioners court schedules ahearing to consider the petition. See 

### id. 5776.015(a)-(b).

Notice of the hearing must state, among other things, that the district is to be created and operate under Texas Constitution article III, section 48-e, the name ofthe proposed district, and its boundaries and functions. See 

### id. § 776.015(c). At the hearing, the commissioners court “shall consider the petition and each issue relating to the creation ofthe district,” and any interested person may appear “to support or oppose creation ofthe district.” 

### Id.5776.016(a)-(b). “Ifafter the hearing the commissioners court finds that the proposed district is feasible, will benefit the territory in the district, will secure the public safety, welfare, and convenience, and will aid in conserving the real property or natural resources
. , the commissioners court shall grant the petition and fix the district’s boundaries.” 

### Id. 8776.017(a). On granting apetition, the commissioners court “shall order
an election to confirm the district’s creation and authorize the levy of atax not to exceed the rate allowed by Section 48-e, Article III, Texas Constitution.” 

### Id.776.019(a). “Ifamajority ofthe votes

‘See U.S. Census Bureau, Texas QuickFacts Llano County, 

### nvailoble athttp://quickfacts.census.gov/qfd/states /48/48299.html (visited July 29, 2004).The Honorable Cheryl1 Mabray - Page 3 (GA-0242)

cast inthe election favor confirmation, the district is created.” 

### Id. 776.020(a). The commissioners court of a county in which a single-county district is located appoints a five-member board of emergency commissioners to serve as the district’s governing body. See 

### id. 5776.033(a) (Vernon Supp. 2004). Attorney General Opinion JM-1010 addressed legislation implementing Texas Constitution article III, section 48-e. The commissioners court, acting under the predecessor ofHealth and Safety Code chapter 775, wished to limit the tax to be levied in support of an ESD to amaximum rate of six cents per $100 valuation and to provide for that amount in the election order. See Tex. Att’y Gen. Op. No. JM-1010 (1989) at 1(addressing former article 235la-8, Revised Civil Statutes). The statute stated that “the commissioners court shall call an election to confirm the organization and authorize the levy ofan ad valorem tax in an amount not to exceed ten cents on the $100 valuation.” See Act ofMay 22, 1987,7Oth Leg., R.S., ch. 673, 58, 1987 Tex. Gen. Laws 2495,2496 (formerly codified as section 8, article 2351a-8, Revised Civil Statutes). Opinion JM-1010 found the statute to be ambiguous as to whether itrequired the election order to include the maximum constitutional rate often cents on the $100 valuation or allowed the commissioners court to set alower maximum tax rate in the election order. See Tex. Att’y Gen. Op. No. JM-1010 (1989) at 3. AAer reviewing the relevant provisions in context, the opinion concluded that the statute did not allow the commissioners court any discretion astothe maximum tax rate and the election order must track the statutory language as to tax rate. See 

### id. at 4. Attorney General Opinion JC-0392 also concluded that an election order to establish anESD must strictly conform to statutory language stating the tax rate. See Tex. Att’y Gen. Op. No. JC-0392 at 4 (construing aprior version of Health and Safety Code section 776.019). More importantly, opinion K-0392 determined that article III, section 48-e did not bar the legislature from adopting statutes authorizing the levy of atax less than ten cents on the $100. See 

### id. at 5.

Amendments tochapter776 that became effective following the issuance ofopinion JC-0392 allow the commissioners court to setthe maximum property taxrate for anESD atless than ten cents per $100 valuation. See Act ofMay28,2001,77th Leg., R.S., ch.1140, 56,200l Tex. Gen. Laws 2542, 2543-44. Section 776.019(a) was amended to provide as follows: “On the granting of a petition, the commissioners court shall order an election to confirm the district’s creation and authorize the 

### levy of a tax not to exceed 

### the rate allowed by Section 48-e, Article ZZZ, Texas Constitution.” TEX.HEALTH& SAFETYCODEANN.5776.019(a) (Vernon 2003) (adopted by Act of May 28,2001, 77th Leg., R.S., ch.1140, 5 6, 2001 Tex. Gen. Laws 2542,2544) (language of amendment emphasized). Although the amendment to section 776.019(a) does not expressly state that the election order may authorize amaximum tax rate of less than ten cents on the $100 property valuation, the legislative history isexplicit on this point. Abill analysis states that the 2001 enactment amends the Health and Safety Code to provide that the tax rate of an ESD “is any rate allowed by the Texas Constitution.” HOUSECOMM.ONCOUNTYAFFAIRS,BILLANALYSIS,Tex. H.B. 2744, 77th Leg., R.S. (2001). Moreover, the same 2001 enactment included another provision regarding the maximum tax rate for an ESD. Section 776.0755 provides as follows:The Honorable Cheryl1 Mabray - Page 4 (GA-0242)

Aboard [ofemergencycommissioners]3mayorderanelection toincrease the maximum taxrate ofthe district to any rate atorbelow the rate allowed by Section 48-e, article III, Texas Constitution. The proposition on the ballot must state the proposed maximum tax rate to be authorized atthe election.
TEX.HEALTH&SAFETYCODEANN. 3776.0755(a) (Vemon2003)(adoptedbyActofMay28,2001, 77th Leg., R.S., ch.1140, §6,200l Tex. Gen. Laws 2542,2544). This provision must mean that an ESD may be created with amaximum property tax rate ofless than ten cents on the $100 valuation. Otherwise, the ESD board could not possibly seek to increase the maximum tax rate and the above provision would be meaningless. See TEX. GOV’T CODEANN. 5 311.021(2) (Vernon 1998) (presumption that the entire statute isintended tobe effective). The commissioners court’s election order may authorize amaximum property tax rate at any rate up to and including the ten cents on $100 valuation allowed by article III, section 48-e. Of course, once an ESD is established, it may tax in any year at less than the maximum rate that ithas adopted. See Tex. Att’y Gen. Op. No. JM1010 at 5; see also TEX.HEALTH& SAFETYCODEANN. $776.075(a) (Vernon 2003) (board shall annually impose an ad valorem tax on real and personal property in the district for the district’s support and the purposes of chapter 776).

Atax rate of zero isnot unprecedented. SeeN.

### ShoreMRZCtr.v.Ill.Dep ‘tofRevenue, 723 N.E.2d 726, 728 (Ill. App. Ct. 1999) (zero percent tax rate for certain goods provided by statute); Op. MO.Att’y Gen. No. 69-2004 (ambulance district set its property tax rate at zero in shifting to support by sales tax). We assume that the newly created ESD will not have anybonded indebtedness
or obligations to third parties that will bejeopardized by the absence of any property tax support.
However, the commissioners court is not authorized to call an election to adopt a sales tax to support an ESD. No sales and use tax may be adopted until after adistrict has been confirmed and the commissioners court has appointed its board. See TEX.HEALTH& SAFETYCODEANN. 

### §776.033(a) (Vernon Supp. 

### 2004). “A 

### district may adopt a sales and use tax

. at an election held asprovided by Section 776.0752.” 

### Id. 5776,0751(a) (Vemon 2003) (emphasis added). “An election [to adopt a sales and use tax] is called by the adoption of aresolution by 

### the board.” Id. 5776.0752(b) (emphasis added). At the election, the ballot shall permit voting “for or against the proposition: ‘The adoption of alocal sales and use tax in (name of district) atthe rate of (proposed tax rate) percent.“’ 

### Id. 5776.0752(c).

We conclude in answer to your question that the commissioners court may not order an election to create an emergency service district and at the same time impose a sales and use tax within the proposed district’s boundaries. Ifthe election order sets the maximum property tax rate at zero, the board is unlikely to have the funds necessary to pay board members’ expenses or the expenses of an election to adopt asales and use tax. But see 

### id. §776.031(5) (district may accept and receive donations). Thus, while there may not be alegal impediment against setting the taxrate at zero, itmay be impossible as apractical matter to establish an ESD with azero tax rate.

“‘Board”meanstheboardofemergencycommissioners. S~~TD(.HEALTH&SAFE~CODEANN. ~776.001(1) (Vemon2003).The Honorable Cheryl1 Mabray - Page 5 (GA-0242)

You also ask whether Llano County may adopt asales and use tax under Tax Code chapter 324, which authorizes acounty with apopulation of 50,000 or less to adopt aone-half percent sales and use tax to provide health services in the county. See Request Letter, 

### supra note 1, at 2; TEX. TAXCODEANN. $4324.021-.022, .081 (Vernon2002) (tax shall beadoptedorabolishedbyelection inthe county). A county may not adopt the sales and use tax ifas aresult “the combined rate ofall sales and use taxes imposed by the county and other political subdivisions having territory in the county would exceed two percent 

### atanylocation inthecounty.” TEX.TAXCODEANN.§324.021(b) (Vernon 2002) (emphasis added). You state that the one-half percent tax rate authorized by Tax Code chapter 324 combined with the rate of sales and use taxes established in the City of Llano would exceed atwo percent tax rate within the city. See Request Letter, 

### supra note 1, at 2. Chapter 324 requires the sales and use tax tobe established throughout the county. Itmust be approved “at an election held in the county,” and the ballot shall permit adopting a “local sales and use tax in (name of county).” TEX.TAXCODEANN. 5s 324.021(a), .061(b) (Vernon 2002). These chapter 324 provisions may be contrasted with Health and Safety Code section 776.013(3), which requires the petition to establish an ESD to describe the “proposed district’s boundaries as designated by metes and bounds or other sufficient legal description,” and section 776.020(d), requiring the commissioners courts’ order recognizing the ESD’s creation to “insert description [of district] unless the district is countywide.” TEX.HEALTH& SAFETYCODEANN. §§ 776.013(3), .020(d) (Vernon 2003). Nothing in chapter 324 provides for establishing the sales and use tax in an area less than the entire county. Llano Countymaynot adopt the sales and use tax authorized by Tax Code chapter 324 if that tax, when combined with the rate of sales and use taxes imposed by the county and other political subdivisions having territory in the county, would exceed two percent anywhere in the county. See TEX. TAXCODEANN. 5 324.021(b) (Vernon 2002). 

### Seegenerally Fitzgerald v.Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864, 865-66 (Tex. 1999) (court construes astatute by looking to the plain meaning ofits language). Ifthe one-half percent tax rate authorized by Tax Code chapter 324 combined with the rate ofsales and use taxes established inthe City ofLlano would exceed atwo percent tax rate within the city, Llano County may not adopt the sales and use tax authorized by chapter 324.The Honorable Cheryl1 Mabray - Page 6 (GA-0242)

SUMMARY

Health and Safety Code chapter 776 does not authorize a commissioners court to call an election to create an emergency service district and atthe same time call for an election for asales and
use tax in the emergency service district boundaries. The election order must provide for an election to confirm the district’s creation and authorize the levy ofaproperty tax, setting the maximum tax rate at any rate that does not exceed the ten cents on the $100 valuation allowed by Texas Constitution article III, section 48-e. Only the district board may call an election to adopt asales and use tax.

Tax Code chapter 324 provides for a county-wide sales and
use tax to fund county health services. A county may not adopt the chapter 324 tax if the tax rate authorized by that chapter combined with the rate of all sales and use taxes imposed in any city within the county exceeds two percent in that city. Very truly yours,

Attorney General ofTexas

BARRY R. MCBEE First Assistant Attorney General

DON R. WILLETT Deputy Attorney General for Legal Counsel

NANCY S. FULLER Chair, Opinion Committee

Susan L. Garrison Assistant Attorney General, Opinion Committee