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# .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 ofState advalorem 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 tobe levied annually in the Fayette County Flood Control District the full thirty cents State advalorem tax for the year 1951and thereafter until the expiration date ofthe grant ofState advalorem taxes heretofore made to said district.

The boundaries ofthe Fayette County Flood Control District coincide with the boundaries of ’Fayette County. H.B. 514, Acts 50th Leg., 1947, ch. 185, p0314.

Section l(b) ofSenate’ Bill 77,Acts 49th Leg., 1945, ch. 364, p. 654, reads as follows:

“(b) For aperiod 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 tothe Fayette County.Flood Control District one-half (l/2) ofthe 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 ofpreventing the continued ‘public calamity caused by great floods, and to construct improvements to control flood waters in the said county for the protection oflife, property, soil, forests, and Rublic highways lying within the said county.”

Section l-a ofArticle ,VIII of the Constitution ofthe State ofTexas, adopted November 2, 1948,‘provides that from and after January 1, 195i. noState advalorem 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 ofthe State from which tax donationsC

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 advalorem 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 ~beenfully discharged, whichever shall first occur; provided that if such donation to any such county or political subdivision is for less

‘than the full amount ofState advalorem taxes so levied, the portion ~ofsuch taxes remaining over and above such donation shall be retained by said county or subdivision.”

Article 7048a. V.C.S., enacted in pursuance tothe authortiation ofSe&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) ofArticle 7048a reads as follows:

“Beginning in the year 1951 and each year thereafter the State Automatic Tax Board created byArticle 7041 ofthe Revised Civil Statutes ofTexas, 1925, shall
cause tobe levied annually in each county, political subdivision or other defined area. the full thirty cents (30$) State advalorem tax for general revenue purposes, the proceeds ofwhich heretofore were donated and granted by the Legislature to certain counties, political subdivisions or other defined areas for the purpose ofcarrying out and performing actions ofpreventing calamities, improving, protecting and reclaiming certain areas for and
onbehalf ofthe 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 ,ineach such designated area until the bonds or other obligations of said areas authorized or incurred in connection with the performance of such action onbehalf ofthe 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 acash basis since the program was inaugurated. We quote the following excerpt from your brief:

“In my opinion that clause inthe Constitutional Amendment, hereinbefore mentioned, which states ‘for the duration of such donation’ and the clause inArticle 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 ifthe 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 ofthe 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 acash basis, itwsald 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 ofthe donation in our countyymust 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 ofthe donation period or the discharge ofthe legal obligations outstanding, either ofwhich will eaase the levy of the advalorem tax to terminate. Since ,in?be :zise ofthe Fayette County Flood Control District !he second condition cannot occur since there are no !egst obligations todischarge, then it appears that the grant should continue until the first condition occurs, namri;~ the expiration date ofthe 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&“‘ isbroad enough to cover any contractual agreement or undertaking which hatjlbeen 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 noreason to limit the meaning ofthe phrase “legal obligations” tobond 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~swhichever shaP1first occur.”Hon. Walter Oeltjen, Page 4 (V- 1224)

Ofcourse, itwas not necessary for the Legislature to embody this provision in Article 704ga because the constitutional provision for ,thecontinued levy is amandatory one; and, going a step further, had Section l-a omitted this requirement, itwould 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, itwas their desire to **cut** off all donations which were not required by law tobe continued. Inthis view of the matter, Fayette County Flood Control District is no more penalized by virtue ofthe fact that ithas operated on a “cash basis” than itwould be had it issued bonds which matured in 1950and were retired. You recognize the unquestioned termination ofa grant in the latter instance.

You are therefore advised that the State Automatic Tax Board should nolonger levy the State ad valorem tax in Fayette County.
SUMMARY

Since the Fayette County Flood Control District has nooutstanding indebtedness, it has discharged all legal obligations authorized by the law granting it atax donation from Fayette County. The State Automatic Tax Board should not continue to’levy the State advalorem **tax** in **Fayette** County f r the duration ofthe donation. Tex. Const., Art. VIII, %ec. 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