GEFt4LDC.lUHN Au- ai. TEXAS 

.a-- ommmnA& 

Honorable Geo. H. Sheppard 

Comptroller of Public Aocounts 

Austin, Texas 

Dear Sirr Opinion No. O-2037 

Hei Liability bf! property owed by the 

LOrrei Colorado River Authority to State 

and county ad wlorem taxes. 

Lkder date of l&arch 4, 1940, you suhnit for the opinion of this 

Department the following question: 

'The Lower Colorado Bihr Authority purchased fromthe Texas Power and 

Light Canpany oe+ain real estate and power linesin Colorado County on 

which ad wloremtaxes had been previously levied and colleoted. Is 

this property now subject to ad valorsm taxes under the new ownership?" 

.Ho question is presented here as to the Vesting of title in the 

L&r ~tilorado River Authority to certain real estate and power lines in 

Colorado County by virtue of its purchase of ssme from the Texas Power & 

Light Company, or~of taxationthereof wh%le onned by grantor, but the only 

question before this Department is whether suoh real eatate be-es exempt from State and county ad valorem taxation in the hands of Authority, 

under oontrolling oonstitutional and statutory provisions. 

Artiole 8, Section 2, Constitution of Texas, provides that "the 

Legislatwe may, by general laws, extrnpt fromtaxation public property 

used for ~ublio purposes." Article 7150, Vernon's Annotated Civil Statutes, 

provides-'eertain exrrmptions from taxation, anong them "all property, 

*ether real or'personal, belonging exclusively to this State, or any 

political subdivision thereon, . . ." (Section 4). 

re now turn to pertinent constitutional and statutory provisions 

to ascertain if the Lover Colorado River Authority is "a political subdiVision" of the State, within the tax exemption afforded by Artiale 7150, 

Vernon!s Annotated Civil Statutes, so as to constitute the real estate in 

question "public property used for purlib purposes," within the intendment of Article~8, Seation 2, Constitution of Texas. 

The Lower Colorado River Authority is a body politic and corporate 

oreated under Article 16, Section 59a, Constitution of Texas, and the 

Enabling Act of the Legislature pursuant thereto, appearing as Olapter 7, 

Acts of the 4th Called Session, 43rd Legislatirs (Vennon's Annotated Civil 

Statutes, Article 8194 note). This smondment, known as the "Conservation 

Amendment" provides for the creation of conservation and reclamation districts as-follows,: 
Honorable Gee. H. Sheppard, Page 2 (O-2037) 

%ec. 59a. The conservation and development of all of the natural resources 

of this State, including the oontrol, storing, preservation and distr.ibution 

of %ts storm and flood waters, the waters of its rivers and strelrms, for irrigation, power and all other useful purposes, the reclamation and irrigation 

of its arid, s&-arid and other lands needing irrigation,the reclamation 

and,drainage of its over-flowed lands and other lands nee&ng drainage, the 

conservation and develousent of its forests. water and hvdro-eleotrio Dower. 

the navigation of its &land and aoastal waters, and the-preservation -&I - 

oonservation of all such natural resources of the State are earn and all here 

dealared publio rights and duties;and thelegislature shall pass all such law 

as may be appropriate tbreto. 

e(b) There may be orsated within the State of Texas, or the State maybe divlded Into such nuisber of conservation and realamation districts as may be determined to be essential to the accomplishent of the purposes of this amendment to 

the constitution, which distfiots &all be governmentai agencies and bodies politic and corporate with eooh powers of government and with the author%* to 

exercise such rights, privileges and functions oonoerning the subject matter of 

this amendment as may be oonferred by law." (Underscoring ours) 

The above bat, creating the Loner Colorado River Authority, declares, 

in Seotion 1 thereof, the nature and purposes of the Authority to be as follows8 

*sea. 1. There ia hereW oreated within the State of Texas. In addition to the 

distri& lnto~whioh the-state has heretofore been divided,.a conservation and 

reclamation distriot to be known a8 Qmer Colorado River ~Authority* (hereinafter called the District) and consisting of that part of the State of Texas 

whiah is iaoluded within the boundaries of the counties of Blanoo, Burn&, Llano, 

Travis, Bastrop, F'aytte, Colorado, Sharton, San SabP; and Matagorda. Such Distriot shall be snd is hereby deolared to be a goverrnnental agency and bomtic and corporate, with the powers of government and with the authority to 

exercise the rights, privileges and funations hereinafter specified. and the 

creation of such district is here@ determined to be essential to the accomplishnt of the purposes of oeotion 59 of Article 16 of the Constitution of the State 

5 Tyas, . . .(Undersooring ours) 

and with mferenoe to real estate mquired, owned snd held bythe Authority, 

subdivisions (e), (f), and (g) of Seotion 2 of the A& provide, respectively, 

as followsI. _ 

te) to'aoquire by purchase, lease, gift, nor in aw other manner (otherwise 

than by oondemnation) and to maintain, use and operate anymd all property 

of any kind, real, personal or mixed, or any interest therein,wlthin or 

without the boundaries of the Distriat, neoessary or convenient to the enerolse of the powers, rights, privileges and functions conferred upon it by 

this Aot; 

"(f) to acquire by condemnation any and all property of any kind, real, personal or mixed, or sny interest therein, within or without the boundaries of 
Hon. Geo. H. Sheppard, page 3 (o-2037) 

the District (other than such props4 or any interest therein without the 

boundaries of the Distflot as may at the time.be~ owned by any body Politic) 

necessa4 or wme~ent.t~ the exercise of the powers, rights, privileges 

snd funotions conferred upon it by this.Act, in the manner provided by 

General ~~with~~spe~t'.to oondemnation or, at the option of the District, 

in the manner provided by the statutes relative to oondesuWion.by Districts 

organi,ed m&r General Law pursuant to SeCtiOn 59 Of k'Glde 16 Of the 

Constitution of the State of Texas; 

"(g) Subject to the provisions of this Aot from time to time sell or othertrlse dispose of any property of sny hind, real, personal or mixed, or aw 

interest thereb, ,vhich shall not be necessary to the carrying on of the 

business of the District;~* 

Ii% think the language of the late Judge PIy.for the San Antonio 

Court of Civil Appeals, in the case of Bexar-Medina-Atascosa Counties Dater 

Improvement District No. 1 vs. State, 21 S.W. (2d) 747, is oonclusive of the 

instant questions. The Court said: 

"The ohly issue in this cause is: Has Medina county the power and authority 

to assess and collect taxes, state and county, on the.dams, reservoirs, canals, ditches, and other property neoessary for the conservationand distribution of waters In the District? 

"It is provided by article 8, g 2, of the Constitution of Texas, that the 

Legislature may by general laws exempt frantaxation public property used for 

publia purposes, and in pursuance of that authority enacted Rev. St. 1925, 

Art. 7150, in se&ion 4, of which it is provided: 'all property, whether 

real or personal,, belonging exolusively to this State, or any political sub 

division thereof,* shall be exempt Pram taxation. The very statutory requirements for the creation and formation of water improvement districts 

would seem to stamp them as politicial subdivisiors of the state. All the 

machinery used to form them is through agencies of the state, the cou&y 

.i*ge, the ccennissioners' oourt, the election instrumentalities, the district court to establish.the validity of the issuance of bonds, the powers 

Of taxation, restricting the use of suchtaxation to discharge the principal and interest of the bonds, the election of directors, all these are 

governmental powers provided for in detail by law. The district is not an 

ordinary corporation organized for purposes of gain to its members, but is 

a publia agency, using the money ntised by taxation to advanoe the interests 

of the landowners within its jurisdiction. It is a golitioal corporation or 

division of the state which has principally for its object the administration 

of the government, or towhich the powers of government, or a part of such 

powers, have been delegated." 

The analogy bsheen the Lower Colorado River Authority,= a conservation and reclamation district., snd the wter improvement district involved in the above case, in regard to this tat exemption question, is 

established~by~our Supreme Court in the ease of Lower Colorado River Authority vs. NcGraw, 83 S.W. (Zd) 629, wherein the court stated that said 
Honorable Geo. H. Sheppard, Page 4 (o-2037) 

Authoritg "was created a conservation and reolamation district, and as a 

governmental agenoy and body polltio and corporate, under and by virtue of 

Chapter 7, Acts 4th Called.Session, 

Civil Statutes, Article 8184 note)." 

43rd Legislature, (Veraon's Annotated 

Again, in the ease ofLower Colorado 

River Authority, et al vs. Gulf Cost Water Cornpam, 107 S.W. (2d) 1101, 

the Galveston Court of Civil Appals, 

the 'alter ego ofths State Itself," 

aptly descrived said Authority as 

and, with reference to the improvidenoe of an Injunction suit against It, state: 

'The appellant being such WI amu of the stete, in the exercise of a governmental funotion, and so in possession of the water impounded behind 

that dam. mith at least the color of title thereto under the oited oonstl~tio&l and statutory provisions, It was the bounden duty of the 

' appellee to have at first applied to the trial oourt for a hearing on the 

facts, after notice to this public authority, before seeking the issuanae 

of a temporary injunotion so mandatory in oharaoter, rather than that of 

appellant to move for a dissolution thereof before appealing; . . ." 

In the light of the foregoing constitutional and statutory provisions and the opinions of our courts construing same, the conclusion is 

inesapable that the Lorsr Colorado River Authority is a "politloal subdivdslons of the State of Texas within the quoted tax exemption statute, and 

property belonging exolusi~ly to it is "publie property used for publio 

purposes" and consequently exempt frae State and 00&y ad valoras taxation. 

Yours very truly 

ATTORREYGRER&LOFTRX&S 

Ry /s/ Pat M. Reff, Jr. 

Pat UI. Reff, Jr. 

Assist& 

iiPP%~MAR 28,184O 

Is/ GEBALD C. MtU?H 

ATTCRI'iSYGPRPRAL OF TSXAS 

AFFRovED 

Opinion hmnitt ee 

ByBKB 

Chairman