GEFt4LDC.lUHN Au- ai.TEXAS

.a-- ommmnA& Honorable

Geo. H. Sheppard Comptroller

of Public

Aocounts Austin,Texas

Dear Sirr OpinionNo. O-2037 Hei Liability

bf! property

owed by the LOrrei Colorado

RiverAuthority

to State and countyad wlorem taxes.

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

the following

question:

'The Lower Colorado Bihr Authority

purchased

fromthe Texas Power and Light Canpanyoe+ain real estateand power linesin Colorado County on which ad wloremtaxes had been previously leviedand colleoted. Is this property

now subject

to ad valorsmtaxes under the new ownership?"

.Ho question

is presented

here as to the Vesting of title in the L&r ~tilorado

RiverAuthority

to certain

real estateand power lines in Colorado

Countyby virtue of its purchase of ssme from the Texas Power & Light Company, or~of taxationthereof wh%le onned by grantor, but the only question

beforethis Department is whether suoh real eatatebe-es exempt from State and countyad valorem taxationin the hands of Authority, under oontrolling

oonstitutional

and statutory

provisions.

Artiole 8, Section2, Constitution of Texas, provides

that "the Legislatwe may, by generallaws, extrnpt fromtaxation publicproperty used for ~ubliopurposes." 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 Authorityis "a politicalsubdiVision" 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 purlibpurposes," within the intendment of Article~8, Seation2, Constitution of Texas.

The Lower Colorado

RiverAuthority is a body politicand corporate oreated

under Article 16, Section 59a, Constitution of Texas,

and the Enabling

Act of the Legislature pursuant

thereto,

appearing

as Olapter7, Acts of the 4th Called Session, 43rd Legislatirs

(Vennon's

Annotated

Civil Statutes,

Article8194 note). This smondment, known as the "Conservation Amendment"

providesfor 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 floodwaters, the waters of its riversand strelrms, for irrigation,

power and all other usefulpurposes, 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 naturalresources of the State are earn and all here dealared

publiorights 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 Statemaybe 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 bodiespolitic and corporate

with eooh powersof 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 abovebat, creating the Loner Colorado RiverAuthority,

declares, in Seotion1 thereof, the nature and purposesof 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 herebydeolaredto be a goverrnnental agencyand bomtic and corporate,

with the powersof government and with the authority to exercise

the rights,privileges and funations

hereinafter

specified.

and the creation

of such districtis 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 estatemquired, owned snd held bythe Authority, subdivisions

(e), (f), and (g) of Seotion2 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 operateanymd all property of any kind, real,personal or mixed, or any interest therein,wlthin or withoutthe boundaries of the Distriat,

neoessary

or convenient

to the enerolseof 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 withoutthe boundaries ofHon. Geo. H. Sheppard, page 3 (o-2037)

the District (otherthan 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 GeneralLaw pursuant to SeCtiOn 59 Of k'Glde 16 Of the Constitution

of the State of Texas;
"(g) Subjectto the provisions of this Aot from time to time sell or othertrlse disposeof any property of sny hind, real, personal or mixed, or aw interest

thereb, ,vhich

shallnot 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 countythe power and authority to assessand collect taxes, state and county, on the.dams,

reservoirs,

canals, ditches,

and other property

neoessary

for the conservationanddistribution of waters In the District?

"It is provided

by article8, g 2, of the Constitution of Texas, that the Legislature

may by generallaws exempt frantaxation publicproperty

used for publiapurposes,

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,*

shallbe exempt Pram taxation. The very statutoryrequirements

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 throughagencies of the state,the cou&y .i*ge,the ccennissioners' oourt, the electioninstrumentalities, the district courtto establish.the validityof 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

powersprovided

for in detail by law. The districtis not an ordinary

corporation

organized

for purposes

of gain to its members,but is

a publiaagency,

using the money ntised by taxation

to advanoethe interests of the landowners

within its jurisdiction. It is a golitioal corporation

or division

of the statewhich has principally for its object the administration of the government,

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

havebeen delegated."

The analogybsheen the Lower Colorado River Authority,= a conservation

and reclamation

district.,

snd the wter improvement districtinvolved in the above case, in regardto this tat exemption question,

is established~by~our

SupremeCourt in the ease of Lower Colorado River Authorityvs. NcGraw, 83 S.W. (Zd) 629,wherein the court stated that saidHonorable Geo. H. Sheppard,

Page 4 (o-2037)

Authoritg"was created a conservation

and reolamation

district,

and as a governmental agenoy and body polltioand 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 RiverAuthority,

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

Court of CivilAppals, the 'alterego ofths State Itself," aptly descrived saidAuthority

as and, with referenceto 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 appliedto the trial oourt for a hearingon the facts,after noticeto this public authority, before seeking

the issuanae of a temporary

injunotion

so mandatoryin oharaoter, rather than that of appellant

to move for a dissolution thereof

beforeappealing;

. . ."

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 "politloalsubdivdslonsof the State of Texas withinthe 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