May13,1988

Honorable D.C. Jim Dozier Montgomery County Attorney Courthouse Conroe, Texas 77301

DearMr. Dozier: Opinion No. JR-902
Re: What constitutes an "improvement district" for purposes of article 1667, V.T.C.S. (RQ-1253)

You have asked questions concerning article 1667, V.T.C.S. This statute, enacted in 1915 andmost recently amended in 1941,provides inrelevant part:

Inall counties which have ormay have a County Auditor and containing apopulation of [llO,OOO] ormore . . .and inwhich counties there exists or inwhich there may be created any improvement, navigation, drainage, or road or irrigation district, or any other character ofdistrict having for its purpose the expenditure ofpublic funds for improvement purposes, or for improvements of any kindwhether derived fromthe issuance. of bonds or through any character of special assessment, the County Auditor shall exercise such control over the finances of said district ashereinafter provided. [SeeV.T.C.S. art. 1668 et sea.]
You expressed concern about the effect of this statute on certain districts inMontgomery County, which has a population exceeding 110,000. Your letter states:

We find no clear authority defining the 'improvement districts' to which article 1667,V.T.C.S., on its faceapplies. Accordingly, we ask the following questions: 1. What constitutes an 'improvement district' as contemplated by the statute?

p.4445Honorable D.C. Jim Dozier -Page 2 (JR-982)

2. Isan emergency communication district created pursuant to article 1432e, V.T.C.S., an improvement district subject to the financial control of the county auditor? 3. Isacounty hospital district an improvement district subject to the financial control of the county auditor? 4. Isa rural fire prevention district created pursuant to article 2351a-6, V.T.C.S., an improvement district subject to the financial control of the county auditor?
5. Isthe county entitled to reimbursement from improvement districts under the financial control of the county auditor for the salaries of such additional assistant auditors asmay be required toperform the duties imposed by article 1667?
Inanswer toyour first question, wehave found no precise definition of "improvement district" inTexas statutory or case law. However, definitions of "improvement" found elsewhere may beuseful. Black's Law Dictionary (5th ed. 1979) defines an improvement as:

Avaluable addition made toproperty (usually real estate) oran amelioration in its condition, amounting tomore thanmere repairs or replacement, costing labor or capital, and intended to enhance its value, beauty or utility or to adapt it for new or further purposes. . . . An expenditure to extend the useful life of an asset or to improve its performance over that of the original asset. This definition essentially addresses the subject matter of real estate, land or property. An improvement generally involves a "permanent addition" or "betterment" of real property that enhances its capital value and involves expenditure of labor andmoney and isdesigned to make property more useful orvaluable. Richview Nursina Home v. Minnesota Dewartment of Public Welfare, 354N.W.2d 445, 458 (Minn.App. 1984). An improvement must bepermanent and it

p.4446Honorable D.C.Jim Dozier -Page 3 (-902)

must enhance thevalue of thepremises forgeneral purposes.

- Overcase v.Akra, 197Mont. 76, 642 P.2d 1058, 1062 (1982).

An improvement involves achange in the condition of property or real estate from a lesser developed stage to a more developed stage. Improvement means the state of improved, being

especially enhanced invalue of excellence. Mvra Foundation v. Harvey 100N.W.2d 435, 439, (N.D. 1959). In order foran improv;ment tobe made there must previously have been something to be improved. An improvement consists inthe amelioration orbetterins of certain wremises. Provident Mutual Life Insurance Co; of Philadeiwhia v. Douaherty, 125 N.J. Eq. 442, 6A.2d 184, 187 (N-J. ch. 1939).

P

P Adefinition ofan improvement district that takes into

consideration the legalmeaning of "improvementl'as it has been traditionally interpreted by the courts will necessarily imply a type of special district that is concerned with the permanent enhancement or betterment of real property tomake itmore useful orvaluable. An improvement district isthus concerned with the enhancement or betterment of real property from a lesser developed stage to a more developed stage. This definition describes the intent andpurpose of the various types of special districts that arementioned inarticle 1667,V.T.C.S. drainage, road and Navigation, irrigation districts are all established in basically order to enhance the value of increasing itsusefulness. land by

The Texas Constitution includes two provisions that pertain to thebetterment or enhancement of land through the establishment of special districts. These provisions are found inarticle III, section 52, and article XVI, section 59. Article III, section 52 generally empowers cities, counties,

towns or other political corporations or subdivisions to issue bonds, levy and collect taxes for the following purposes:

(1) The improvement of rivers, creeks and streams toprevent overflows, and to permit of navigation thereof, or irrigation thereof or inaid of suchpurposes. (2) The construction andmaintenance of pools, lakes, reservoirs, dams, canals and waterways for the purposes of irrigation, drainage or navigation, or inaid'thereof.

p.4447Honorable D.C.Jim Dozier -Page 4 (m-902)

(3) The construction, maintenance and operation ofmacadamized, graveled or paved roads and turnpikes, or inaid thereof.
Tex. Const. art. III, 552(b). This constitutional provision relates to the general improvement of lands. Bonds may be raised by a local government orby a special district. Article XVI, section 59, of the Texas Constitution specifically deals with the establishment of special districts for conservation and reclamation purposes. It provides that:

(a) The conservation anddevelopment of all of the natural resources of this State, including the control, storing, preservation and distribution of its storm and flood waters, thewaters of its rivers and streams, for irrigation, power and all other useful purposes, the reclamation and irrigation of itsarid, semi-arid and other lands needing irrigation, the reclamation anddrainage of its overflowed lands, and other lands needing drainage, the conservation and development of its forests, water andhydro-electric power, the navigation of its inland and coastal waters, and thepreservation and conservation ofall such natural resources of the State are each and all hereby declared public rights and duties: and the Legislature shall pass all such laws as may be appropriate thereto. (b) There may be created within the State ofTexas, or the Statemay be divided into, such number of conservation and reclamation districts asmay be determined.to be essential to the accomplishment of thepurposes of this amendment to the constitution, which districts shallbe governmental agencies and bodies politic and corporate with suchpowers of government and with the authority to exercise such rights, privileges and functions concerning the subject matter of this amendment asmay be conferred by law. Improvement districts that are established under article III, section 59, and article XVI, section 59, are

p.4448P Honorable D.C. Jim Dozier -Page 5 (m-902)

classified as "natural resource special districts" by the United States Census Bureau. The Census Bureau has established twelve functional classifications for special districts. These classifications arebased on two criteria.

(1) The name ofthe entitv involved which in many instances, such as for housing authorities andhospital districts provide a specific guide.

. . . (2) the function or functions reported as being performed bv individual units.

. . . (Emphasis added.) United States Census Bureau of the Census, Census ofGovernments: 1977,Vol. I,No. 1,Governmental Organization (U.S. Government Printing Office, Washington D.C., 1977), at 5. Using this criteria, the United States Census Bureau has established a classification that includes twelve types of special district. They are as follows:

(1)

(2) (3) (4) (5) (6) (7) (8) (9) Natural Resources Soil Conservation Drainage Irrigation, Water Conservation Flood Control Other Natural Resources Fire Prevention Urban Water Supply Housing andUrban Renewal Cemeteries Sewerage School Building Authorities Parks andRecreation Highways (10)Hospitals (11)Libraries

p.4449Honorable D.C. Jim Dozier -Page 6 (-902)

(12)Other Single-Function andMulti-Function Districts ? Since improvement districts are fundamentally concerned with the amelioration or change inthe character of land, they generally fall within the "natural resources" type of special district. Improvement districts servevery distinct functions that are exclusively related to improvements in land. In our opinion, an "improvement district" for purposes of article 1667, V.T.C.S., pertains to a district which is primarily concerned with the enhancement or betterment of the land or other natural resources. ment districts Improveare distinguishable from fire prevention, hospital and emergency communications districts. Fire prevention districts are created under the provisions of article III, section 48-d. This article provides: The Legislature shall have thepower to

provide for the establishment and creation of rural fire prevention districts and to authorize atax on the advalorem property situated in said districts.

. . . These districts are created to combat fires inrural areas through thepurchase of modern fire-fighting equipment and thehiring ofnecessary personnel. Hospital districts are created under theprovisions of article XI, section 9, of theTexas Constitution. This article states:

Sec. 9. The Legislature may by law provide forthe creation, establishment, maintenance and operation of hospital districts

. . .providing that anydistrict so created shall assume full responsibility for providing medical and hospital care for its needy inhabitants.

. . . Providing medical facilities and services is the primary purpose of ahospital district. -.

Emergency communication districts are created under the ? provisions of the Emergency Telephone Number Act, article 1432~ of the Business Corporation Code. This actprovides:

p.4450Honorable D.C. Jim Dozier -Page 7 (JM-902)

Sec. 2. It isthepurpose of thisAct to establish the number 9-l-l as the primary emergency telephone number ofuseby certain local governments in this state and to encourage units of local government and combinations of those units of local government to develop and improve emergency communication procedures and facilities in a manner that will make possible the quick response to anyperson calling the telephone number 9-l-l seeking police, fire, medical, rescue, and other emergency services.

. . . . Sec. 5. An emergency communication district may be created asprovided by thisAct. There is nothing in the character or function of a hospital, fire prevention or emergency communication district that relates to the enhancement orbetterment of land. Their purpose is primarily toprovide a distinct service to a select population rather than tomake permanent changes to real property or land. Although itcan be argued that these districts result ingeneral improvements for the community at large, the courts have not defined "improvement" in traditionally this manner. A definition of "improvement district" that takes intoconsideration both the legal definition of "improvement" and the United States Census Bureau classification of special districts excludes ahospital, fireprevention and emergency generallycommunication district from itsmeaning. The auditing provisions of article 1672, apply to improvement districts V.T.C.S., and other similar districts thatmake improvements to land such asnavigation, tion, drainage and road districts. irrigaThey do hospital, fire prevention not apply to and emergency communication districts. Finally, you askwhether acounty isentitled to reimbursement by districts for salaries of assistants who aid in the auditing functions performed by the county auditor F- pursuant to article 1672. Asyoupoint out, former article

1673,V.T.C.S. (nowrepealed), authorized county auditors in counties with apopulation inexcess of 330,000 to apply for assistants tohelp carry-out theduties imposed by article 1667 et sea. No current statute expressly authorizes

p.4451Honorable D.C. Jim Dozier -Page 8 (-502)

assistants for these specific purposes. However, section 84.021 of the Local Government Codeprovides inpart:

(a) From time to time the county auditor may certify to the district judges a list stating the number of assistants to be ZErinted, the name, duties, qualifications, experience of each appointee, and the salary tobepaid each appointee. The district judges, after careful consideration of the application forthe appointment of the assistants and after inquiry concerning the appointees' qualifications, the positions sought tobe filled, and the reasonableness of the requested salaries, shall prepare a list of the appointees that the judges approve and the salary tobepaid each. The judges shall certify this list to the commissioners court, which shall order the salaries tobepaid on theperformance of services and shall appropriate anadequate amount ofmoney for this purpose. Article 1672,V.T.C.S., provides that county auditors shall receive for their services in auditing the affairs of special districts within article 1667

such compensation as the commissioners court may prescribe, which shall bepaid by the county out of thegeneral fund and reoaid to the county by such districts by warrants drawn upon theproper funds of such district. In such counties which have or may have as many as five such districts, the compensation allowed the county auditor forhis services onbehalf of such districts shall be not less than the sum of twelve hundred dollars per annum, tobeprorated among the districts in suchproportion as the commissioners court may determine. (Emphasis added.) ?

h

Your letter states that article 1672 "doesnot on its face authorize the payment of such assistants from funds to be reimbursed by the improvement districts." We believe, however, that such authority isat least implicitly conferred by section 84.021 of the Local Government Code in combination with article 1672,V.T.C.S. The former statute permits the hiring of needed assistants, and the latter

p.4452Honorable D.C. Jim Dozier -Page 9 @M-902)

authorizes compensation by special districts for the r "services@*of county auditors inauditing the affairs of

such districts. In our opinion, the services contemplated by article 1672necessarily include the services of needed assistants hired under the authority of section 84.021.
SUMMARY The provisions of article 1667, V.T.C.S., donot districtay~os;~t~~ d~~~=~~~Yorc~m~~=h~a~~~~ prevent& district. These districts are not "improvement districts" within themeaning of article 1667,V.T.C.S. Section 84.021 of the Local Government Code and article 1672, V.T.C.S., entitle a county to reimbursement from special districts for the salaries of such additional assistant auditors as may be required to perform the duties imposed by article 1667. Very truly yo 

# J NzJ7t

& - JIM MATTOX Attorney General ofTexas
MARY KELLER First Assistant Attorney General
LOUMCCREARY Executive Assistant Attorney General
JUDGE ZOLLIE STEAKLEY Special Assistant Attorney General

,- RICK GILPIN

Chairman, Opinion Committee Prepared by Karen C.Gladney Assistant Attorney General

p.4453