JIM MATTOX 

Attorney General 

Supreme Court Building 

P. 0. BOX 12548 

Austin. TX. 78711. 2548 

51214752501 

Telex 9101874-1387 

Telecopier 5W475-0288 

714 Jackson, Sulle 700 

Dallas, TX. 7520245M 

214l742.8944 

4824 Alberta Ave., Suite 180 

El Paso, TX. 799052793 

9151533-3484 

100, Texas, Suite 700 

Houston, TX. 77002-3111 

71312235888 

WE Broadway. Suite 312 

Lubbock, TX. 79401-3479 

8OW47.5238 

4309 N. Tenth, Suite B 

McAllen, TX. 78501-1685 

51216824547 

200 Main Plaza, Suite 400 

San Antonio, TX. 78205-2797 

51212254191 

An Equal OppOrtunityI 

Affirmative Action Employer 

The Attorney’ General of Texas 

March lg.'1986 

Bowsable Guy Jarm?o Gray 

Criminal District Attorney 

P. 0. Box 1329 

opinion No. JM-453 

Re: Applicability of article 2351a-6, 

Jasper, Texas 7!i951 V.T.C.S., to the withdrawal of a city 

from a rural fire prevention district 

Dear Mr. Gray: 

You ask for the opinion of this office concerning the right of a 

city within a nmal fire prevention district to withdraw from the 

district. You a&r:tse us that the Jasper County Rural Fire Prevention 

District Ho. 4. composed of a portion of Jasper County. was created 

under the provisf(ms of article III. section 48-d, of the Texas 

Constitution and a.rticle 2351a-6, V.T.C.S. The city of Jasper was 

included in the original boundaries of the district. In 1983, the 

voters of the proposed district, including the voters of the city of 

Jasper, voted in xcordance with the provisions of article 2351a-6 to 

confirm the organ:Lz:ation of the district and to authorize the levy of 

a tax not to exceed three cants on the $100 valuation of property. 

V.T.C.S. art. 235l.er6, $12. 

Except for the issuance of bonds or notes which are authorized by 

sections 12A-12G of article 2351a-6, a rural fire prevention district 

may not contract :Eor an indebtedness in any one year in excess of 

funds then on hand or in excess of an amount which may be satisfied 

out of current rrrenues for the year. V.T.C.S. art. 2351a-6, 512. A 

fire prevention di:strict is authorized to issue bonds and notes that 

are payable from and secured by liens on and pledges of ad valorem 

taxes, or revenueiI, income, or receipts of the district, or a combination of taxes, revenues, incoma, and receipts. V.T.C.S. art. 2351a-6, 

512A(a). The sta!:ute provides that if bonds or notes are payable from 

ad valorem texes, the Board of Fire Commissioners, at the time of the 

authorization of the bonds or notes, shall levy a tax sufficient to 

pay the principal of and interest on the bonds or notes and to provide 

reserve funds. Sets. 12A(j), (k). Bonds or notes secured by taxes 

may not be authorbred until approved by the voters of the district at 

an election for that purpose. Seci 12B. Section 14a of the act 

provides for expansion of the area of a district. Effective September 

1. 1985, section 14b was added to the act to authorize the exclusion 

of a city from a Eire prevention district's territory. Section 14b 

provides that 

p. 2057 
Honorable Guy Jamas Gray - P,age 2 (JM-453) 

(a) The governing body of a city that has an 

area within its corporate or extraterritorial 

jurisdiction included within a rural fire prevention district my, on agreeing to provide fire 

protection to the area as provided by Section 8B 

of this Act, or if the area is designated au 

industrial distrLct under Section 5, Municipal 

Annexation Act (Article 970a. Vernon's Texas Civil 

Statutes), notif!, the secretary of the board of 

fire commissione:rs in writing that the area is 

excluded fromthe district's territory. 

(b) On receipt of the notice under Subsection 

(a) of this section. the board shall cease to 

provide further :rarvice to the area, exclude the 

area by order from the district, and redefine the 

district's boundaries. 

Subsequently, on October 28, 1985, the city of Jasper notified 

the Jasper County Rural Fire District No. 4 that the city had adopted 

a resolution to exclude the arca within its corporate and extraterritorial jurisdiction from the fire prevention district's 

territory. 

You first inquire whether section 14b of article 2351a-6 applies 

only to rural fire prevent:Lon districts created after September 1, 

1985. We believe that whwl section 14b became law on September 1, 

1985, it became applicable on that date to all rural fire prevention 

districts created and then existing under article 23518-6. 

Where the legislature makes no exceptions to the provisions of a 

statute, it is presumed that the legislature intends no exceptions. 

It is well settled that ~zxceptions in statutes are not ordinarily 

implied. See Spears v. City of San Antonio, 223 S.W. 166, 169 (Tex. 

1920); Stubxv. Lowrey's II:&, 253 S.W.2d 312, 313 (Tex. Civ. App. - 

Eastland 1952, writ ref'd n.r.e.). We find nothing in the act to 

indicate that the legislature intended section 14b to apply only in 

the case of rural fire prevention districts created after September 1, 

1985. 

Your second question <asks for which year a withdrawal notice 

under article 2351a-6, section 14b, becomes effective for tax 

purposes. It is our opinLon that a city's withdrawal from a district 

subsequent to January 1 hat no effect on the assessment or collection 

of taxes by the district for the year in which the withdrawal occurs 

and would be effective on.Ianuary 1 of the year following withdrawal. 

The status of property for taxation is fixed on January 1 of each 

year. See Hedgecroft v. City of Houston, 239 S.W.2d 828, 830 (Tex. 

p. 2058 
Honorable Guy James Gray - Piage 3 (JM-453) 

Civ. App. - Galveston 1951). rev'd on other grounds, 244 S.W.2d 632 

(Tex. 1951); Attorney General Opinion O-4589 (1942). 

The board of a rural fire prevention district shall annually levy 

and cause to be assessed and collected a tax on all properties, real 

and personal, situated within the district and subject to district 

taxation in an amount not to exceed three cents on the $100 valuation 

for the support of the di:jtrict and for the purposes authorized by 

article 2351a-6. Sec. 12. Real property is taxable by a taxing unit 

if located in the unit on January 1. Tax Code 921.01. Except for 

railroad rolling stock, tr.ngible personal property is taxable by a 

taxing unit on January 1, iC it is located in the unit on January 1 

for more than a tanporary period or it normally is located in the 

unit, evan though it is outside the unit on January 1, if it is outside the unit only temporarily. Tax Code 921.02. 

Your third question asks, if article 2351a-6, section 14b. is not 

applicable, must the withdrawal be by a majority vote in an election 

of those living within thle corporate limits and extraterritorial 

jurisdiction of the city. Article 2351a-6 provides both for expansion 

of an existing rural fire p,cevantion district and for dissolution of 

such a district. sees. lQf1, 19-22. Except for section 14b, which 

became effective on September 1, 1985, the act contains no provisions 

which authorize the withdrawal of any territory from an axisting rural 

fire prevention district. The act requires ratification of the 

annexation of territory to a district by a majority vote of the 

electors at a separate election held in the existing district and by a 

majority vote of the electors at a separate election held in the 

territory proposed to be added. Sec. 14a(S)(s). The act also 

requires an election to :onfirm the dissolution of a rural fire 

prevention district. Sec. 21. But neither section 14b. which 

provides for the exclusion of corporate limits and extraterrltorial 

jurisdiction from the boundaries of an existing fire prevention 

district, nor any other provision of article 2351a-6 contains either a 

requirement or authority for an election by the voters residing in a 

territory that will be uithdrawn from an existing district. We 

conclude that the act doe11 not authorize an election to confirm or 

accomplish the withdrawal of any territory from the boundaries of an 

existing rural fire prevantion district. 

You advise us that the fire prevention district made purchases of 

equipment and incurred InddMedness based on its ability to pay with 

its existing tax base, and that the withdrawal of city property values 

from the tax base jeopardizes the district's ability to repay its 

previously incurred indebtedness. Your last question is: 

What protection does the district have in this 

situation? 

p. 2059 
Honorable Guy Jamas Gray - ~?age 4 (JM-453) 

Since the legislature expreszsly provided that, except for the issuance 

of authorized bonds or notes, no indebtedness may be contracted in any 

one year in excess of funds ,then on hand or which may be satisfied out 

of current revenues for ,:he year, we assums that the district's 

concern involves its abilj.ty to repay indebtedness incurred by the 

issuance of bonds or notes. Hence, the issue includes the protection 

of bondholders of the district. 

A statute authorizing a bond issue and providing the means for 

its repayment constitutes part of a contract with bondholders that may 

be enforced by bondholders. See Cochran County v. Mann, 172 S.W.2d 

689, 690 (Tex. 1943). Subllequz legislation that removes the source 

of repayment to bondholders without substitution of something of equal 

efficacy _ mav - imnair _ the ohl~ination of contract and. therefore. come 

under constitutional condauiation. See U.S. Coast. -art. I. 510, cl. 

1; Tex. Const. art. I, 116; City of r Ensas Pass v. Keeling, 247 S.W. 

818. 821 (Tex. 1923); Burn, v. Dillcp 

District, 295 S.W. 1091. 

County Line Independent School 

6% (Tex. Comm'n App. 1927, ludgmt adopted); 

Attorney General Opinion O-1205 (1939). The-courts have said that the 

most certain test of whetha:r an imoairmant of a contract has occurred 

is whether the value of the! ccntra& has been diminished. See Dallas 

County Levee Improvement D:ietrict No. 6 v. Rugel, 36 S.W.2d 188, 189 

(Tax. Comm'n App. 1931, :u.dgmt adopted). In Determan v. City of 

Irving, Texas, 609 S.W.2d 565 (Tex. Civ. App. - Dallas 1980, no writ), 

the court found that a charter amendment limiting the taxing authority 

of a city lessened the security of bondholders and constituted impairmant of the obligation of coattact. It is, however, the bondholders 

who have standing to raise the question of impairment of the obligation of contract. See U.S. - -- 

Trust Co. v. New Jersey, 431 U.S. 1 

(1977). 

In the case of the e?+amsion of a rural fire prevention district 

that has outstanding debt,3 or taxes, article 2351a-6 requires the 

voters of proposed additional territory to agree to assume the additional territory's proportian of the debts or taxes. Sec. 14a(S)(h). 

Following voter approval to dissolve a rural fire prevention district, 

article 2351a-6 requires the: board to continue levying and collecting 

a tax on the property in th'e district until all outstanding debts of 

the district are paid. Sec. 22. Article 2351a-6 contains no express 

provision for payment of tbe excluded territory's pro rata share of an 

axisting district indebtedness. Cf. Water Code S953.268, 54.731 (on 

payment of pro rata share of axiszg district indebtedness, excluded 

territory and irs taxpayers are released from liability to the district and payment of taxes). It is our opinion that article 2351a-6, 

as recently amended to allthorize the exclusion of a city from a 

district, is not facially unconstitutional. In particular situations 

where the obligation of contract to bondholders would be impaired, the 

statute may be unconstitutional as applied without the collection of 

taxes from the excluded arca to pay its pro rata share of obligations 

p. 2060 
Eonorable Guy James Gray - Page 5 (JM-453) 

to bondholders that are in existence at the time the city is withdrawn 

from the district. See Attorney General Opinion MW-337 (1981). - 

SUMMARY 

Section 14b of article 2351a-6, V.T.C.S., applies 

to all rural fire prevention districts. A city's 

withdrawal from a ,mral.fire prevention district is 

effective for tax :purposes on January 1 of the year 

following withdrawal. Article 2351a-6 does not 

require or author::ze an election by voters of a city 

to confirm or accomplish withdrawal of the city from 

a district. A statute authorizing a bond issue and 

providing the mems for its repayment constlrutes 

part of a contnm with bondholders that may be 

enforced by bondholders. 

JIM MATTOX 

Attorney General of Texas 

JACK HIGHTOWER 

First Assistant Attorney Gmeral 

MARYKELLER 

Executive Assistant Attommy General 

ROBERT GRAY 

Special Assistant Attorney General 

RICR GILPIN 

Chairman, Opinion Coumlttetr 

Prepared by Nancy Sutton 

Assistant Attorney General 

p. 2061