,-, ? 

.TEEA'ITORNEYGENERAL ' 

OF ?IYExAs 

PRICE DANIEL 

ATTORNEY GENERAL 

hly 31, 1951 

Hon. Walter Oeltjen Opinion No. V-1224 

County Attorney 

Fayette bounty 

La Grange, Texas 

Re: 

Dear Sir: 

Continuation of State ad valorem tax levies in county in 

which tax donations were previously granted to Flood Control District which has no 

outstanding obligations, 

You have requested the opinion of this office as to 

whether the State Automatic Tax Board will cause to be levied annually in the Fayette County Flood Control District the full thirty 

cents State ad valorem tax for the year 1951 and thereafter until 

the expiration date of the grant of State ad valorem taxes heretofore 

made to said district. 

The boundaries of the Fayette County Flood Control 

District coincide with the boundaries of’Fayette County. H.B. 514, 

Acts 50th Leg., 1947, ch. 185, p0 314. 

Section l(b) of Senate’ Bill 77, Acts 49th Leg., 1945, ch. 

364, p. 654, reads as follows: 

“(b) For a period of-ten (10) years, commencing 

with September 1, following, the,adoption of this Act 

there is hereby donated and granted by the State of 

Texas to the Fayette County.Flood Control District 

one-half (l/2) of the state’ad v&rem taxes collected 

for general revenue purposes upon the property and 

from persons in Fayette County, which taxes when collected shall be used by the said county for the purposes 

of preventing the continued ‘public calamity caused by 

great floods, and to construct improvements to control 

flood waters in the said county for the protection of life, 

property, soil, forests, and Rublic highways lying within the said county.” 

Section l-a of Article ,VIII of the Constitution of the State 

of Texas, adopted November 2, 1948,‘provides that from and after 

January 1, 195i. no State ad valorem tax will be levied upon any property within the State for general revenue purposes. It also authorizes a new county tax and further provides “that in those counties or 

political subdivisions or areas of the State from which tax donations 
C 

I-Ion. Walter Oeltjen, Page 2 (V-1224) 

have heretofore been granted, the State Automatic Tax Board shall 

continue to levy the full amount of the State ad valorem tax for the 

duration of such dona.tion, or until all legal obligations heretofore 

authorized by the law granting such donation or donations shall have 

~been fully discharged, whichever shall first occur; provided that if 

such donation to any such county or political subdivision is for less 

‘than the full amount of State ad valorem taxes so levied, the portion 

~of such taxes remaining over and above such donation shall be retained by said county or subdivision.” 

Article 7048a. V.C.S., enacted in pursuance to the authortiation of Se&ion l-a, provides enabling machinery for the new 

county~ tax. Acts 51st Leg., R.S. 1949, ch. 464, p. 849. Section 10 

(a)(l) of Article 7048a reads as follows: 

“Beginning in the year 1951 and each year thereafter the State Automatic Tax Board created by Article 

7041 of the Revised Civil Statutes of Texas, 1925, shall 

cause to be levied annually in each county, political subdivision or other defined area. the full thirty cents (30$) 

State ad valorem tax for general revenue purposes, the 

proceeds of which heretofore were donated and granted 

by the Legislature to certain counties, political subdivisions or other defined areas for the purpose of carrying 

out and performing actions of preventing calamities, improving, protecting and reclaiming certain areas for and 

on behalf of the State as more fully declared in each applicable law or laws making such donation or grant and 

said Board shall continue to levy such tax at said rate 

,in each such designated area until the bonds or other obligations of said areas authorized or incurred in connection with the performance of such action on behalf of the 

State shall have been fully paid or discharged or until 

the expiration date of such donation or grant as may be 

determined from the law or laws making such grant or 

donation, whichever shall first occur. ” 

In the brief which you submitted for our consideration 

in connection with your request, you state that the Fayette County 

Flood Control District has never issued any bonds and does not have 

any outstanding indebtedness, the flood control program in Fayette 

County having been operated on a cash basis since the program was 

inaugurated. We quote the following excerpt from your brief: 

“In my opinion that clause in the Constitutional 

Amendment, hereinbefore mentioned, which states ‘for 

the duration of such donation’ and the clause in Article 

7048a Sec. 10 (a) (1) which states ‘until the expiration 

date of such donation’ would not have been included in 
^. 

Hon. Walter Oeltjen, Page 3 (V-1224) 

the Constitutional Amehdrnent and Statute if the legislature had not intended that such clause should have 

some meaning or effect. The Fayette County Flood 

Control District which operates on a cash basis would 

now be penalized merely because it is operating on a 

cash basis and because it did not imm,ediately go into 

debt at the commencement of the donation perisd by 

issuing,bonds. 

“If,this county would have issued bonds and such 

bonds were paid off in a given year, then most ce’rtainly the donation would end in the year the bonds are paid 

off since in such case the discharge of legal obligations 

did ‘first occur.’ However, in our instance where the 

Flood Controi District is on a cash basis, it wsald be 

impossible for the discharge of legal’obligations to 

‘first occur* since there are no legal obligations to be 

paid off or to be discharged. Therefore, in my sepinion, 

the duration of the donation in our countyy must necessarily be for the fully ten year period. 

“There are two conditions set out in the Constitutional Amendment and the Statute, i.e. the expiration 

of the donation period or the discharge of the legal obligations outstanding, either of which will eaase the levy 

of the ad valorem tax to terminate. Since ,in ?be :zise 

of the Fayette County Flood Control District !he second 

condition cannot occur since there are no !egst obligations to discharge, then it appears that the grant should 

continue until the first condition occurs, namri;~ the expiration date of the donation.” 

We cannot agree with your conclusion for the following 

reasons. The constitutional requirement that the ievy shall continue “for the duration of such donation, or until all, legal obligations heretofore authorized by the law granting such donation or 

donations shall have been fully discharge&“‘ is broad enough to cover 

any contractual agreement or undertaking which hatjl been concluded 

by the Fayette County Flood Control District. Such legal obligations, though paid for at the time from past donations, have, necessarily, been ‘“fully discharged.” A bond issue is only one type of 

legal obligation, and we see no reason to limit the meaning of the 

phrase “legal obligations” to bond issues. Evidently the Legislature did not so interpret the phrase, since Section lo(a)(l), previously quoted, requires the Board to continue to levy the previously donated tax “until the bonds or other obligations of said areas a . D 

shall have been fully paid or discharged or until the expiration date 

of such donation or grant D ~ s whichever shaP1 first occur.” 
Hon. Walter Oeltjen, Page 4 (V- 1224) 

Of course, it was not necessary for the Legislature to 

embody this provision in Article 704ga because the constitutional 

provision for ,the continued levy is a mandatory one; and, going a 

step further, had Section l-a omitted this requirement, it would 

nevertheless have been read into Section 1-a by reason of the provisions of the State and Federal ,Constitution which prohibit impairing the obligation of contracts. In expressly providing the requirement for the continued levy, we think that the framers of the constitutional amendment sought to make clear that although existing 

contracts were not affected, it was their desire to cut off all donations which were not required by law to be continued. In this view 

of the matter, Fayette County Flood Control District is no more 

penalized by virtue of the fact that it has operated on a “cash basis” 

than it would be had it issued bonds which matured in 1950 and were 

retired. You recognize the unquestioned termination of a grant in 

the latter instance. 

You are therefore advised that the State Automatic Tax 

Board should no longer levy the State ad valorem tax in Fayette 

County. 

SUMMARY 

Since the Fayette County Flood Control District 

has no outstanding indebtedness, it has discharged all 

legal obligations authorized by the law granting it a tax 

donation from Fayette County. The State Automatic Tax 

Board should not continue to’levy the State ad valorem 

tax in Fayette County f r the duration of the donation. 

Tex. Const., Art. VIII, %e c. l-a. 

Yours very truly, 

PRICE DANIEL 

Attorney General 

APPROVED: 

W. V. Geppert 

Taxation Division 

Jesse P. Luton, Jr. 

Reviewing Assistant 

Charles D. Mathews 

First Assistant 

MMC/mwb 

BY @t&.&&-h”+0 &AZ& 

Mrs. MariettaMcGre or Creel 

Assistant