R-248 

~IEATTORNEY GENERAL 

Q,F TEXAS 

PRICE DANIEL 

ATTORNEY GENERAL 

, 

.1 

Mar. 31, 1947 

Hon. Ben J. Dean 

District Attorney 

Stephens County 

Breckenridge, Zi’&xas 

Opinion No. V-ll8 

Re: Issuance of imPas by %.Qpheas Cow&y payable mt 

of Permanent Improvement 

Taxes. 

Dear Sir: 

We have received your letter of March 15, 1947, relative 

to a certain contemplated hospital bond issue in the amount of 

$120,000. You state in your letter that “On August 25, 1945, by a 

proper vote of the citizens of Stephens County, the Constitutional 

Fund provided for under Section 9 of Article 8 af tbs Coastitutlon 

*as re-allocated as follows: 

Jury Fund 5 cents on the $100 valuation 

Road and Bridge 

Fund, 8 cents on the $100 valuation 

General Fund 38 cents on the $100 valuation 

Permanent Improvtmtnt Fund 3 cents on the $100 valuation 

You fuither state that the Commissiontrs’ Court of Stepbhns County “has not entered its order issuing the Hospital Bonds, 

but contemplate’s doing so and they txpect to pay the inttrett on 

such bonds until 1951 out of 3 cent6 now allocated to permanent improvement, and beginning with 1951 to starts retiring the bonds. It is 

contemplated that at tht time the order is entered they will provide 

for a tax sufficient to pay the interwst aad sinking fund on such Hespita1 Bonds. * 

You mention in your letter that there are certain cow!+ 

house and jail refunding bonds now outstanding and that these are 

the only bonds which are paysblt out of the permanent knpsrvearti 

tax. 

tions: 

Izi connection with these facts you ask the follc*ring Q~S- 

‘1. Would this meth~od of paying the bonds meet w%h 

the requirements of law and the election order? 

“2. Since the order will provide for the levying and 

colkactling of a sufficient tax ta pay the intereM and 
Hon. Ben J. Dean - Page 2 Opinion No. V-118 

sinking fund on these bonds, could any re-allocation 

election held hereafter under the provision of Section 

9, Article 8 of the Constitution prevent the court from 

levying and collecting sufficient taxes to pay the Hospital Bonds? In other words, since the order would 

be entered with the thought that in 1951 the Ptrmantnt 

Improvement Fund would automatically revert to 25 

cents on the $100.00 valuation, could any re-allocation 

election between now and said time in any way impair 

the order of the court so that the money could not be 

collected for these bonds? 

“3. If said order of the Commissioners’ Court of 

Stephens County, made in pursuance of this election, 

provides for the levying and collecting of taxes to 

pay the interest and sinking fund, would this authorize the Commissioners’ Court to collect such taxes 

for such purposes, regardless of the fact that the reallocation order now of record author&es only 3 cents 

on the $100.00 valuation to be collected for parmanent improvements. 

‘“4. Would the Commissioners” Court be authoriead 

to pay the interest on the Hospital Bonds as it accrued 

up until 1951 from the General Fund? 

“‘5. Assuming that the provisions of the law with respect to the voting and issuance of such Hospital Bonds 

have been carried out, and the bonds were issued in 

the manner herein proposed, would the same meetwith 

the approval of the Attorney General? R 

Section 9 of Articlt VIII of the Constitution of Texas, aa 

amtnded in November. 1944, authorizes the re-allocation of the Constitutional taxer upon a majority of the qualified property taxpaying 

voters of a county voting at an election for that purpose, 

It is also provided that *such re-allocations and changes 

shall remain in force and effect for a period of six (6) years from 

the date of the electionat which the same shall be approvtd, unle,ss 

the same again shall have been changed by a majority vote of the 

qualified property taxpaying voters of such county, voting on the 

proposition, after submission by the Commissioners Court at a genera1 or special election for that purpose.“” 

It follows that for a period of six years from the date of 

the election the various constitutional tax limits are those specified 

in the election ‘“unless the same again shall have been changed by a 

majority vote of the qualified property taxpaying voters of such county.w In Stephens County the Permanent Improvement tax was reallo,cated to an am,ount not to exceed 3$ on the $100.00 valuation. 
Hon. Ben J. Dean, Page 3 ; Opinion No. V-118 

We have been advised by the Comptroller of Public Accounts that the assessed valuation of Stephens County, bss,& upon 

the latest approved rolls, is $,10,529,220. A 3$ tax appZMI +e &is 

valuation would realize, even komputed at 100~ collect&n, only 

$3,15!3.76. The Constitution of Texas, in Seation 6 of Art’irle XI, 

provides that no debt for any purpose shall have be,en incurred in 

any marmer by any city or county “unless provision is made at t&e 

time of creating the same for levying and collecting a eufficient 

tu to pay the interest thereon and provide at leant 2% a# a &&king 

fund.” 

You do not state wha; rate of interest it i8 proposed that 

the bonds are to bear, but it is aosumed that such interest ,rate will 

be at Ieast 1%. A 1% intereut charged against $120,000 would amount 

to $~200. Add to this $1200 2% for the canatitwtien~l sinking fund 

($2400) and the total amount is $3600. It is obvious, therefore, that 

the county does not have sufficient taxing power to meet the canstitutional requirement. This conclusion is rare&d, even without considering the bonded indcbtedneris of the county already outstandingagainst 

its Permanent Improvement Fund. We might add, however, that in 

Opinion No. O-6863 the proposition is clearly set forth that a county 

cannot by a re-allocation of taxe$ infringe upon an existing contract. 

A copy of Opinion No. O-6863 is enclosed herewith for your consideration. 

In view of the foregoky, yru are advised that Stephen6 

County is without sufficient taxing power to warrant the i,ssuance of 

the contemplated bonds. As we have reached the conclusion that the 

be&s may not be issued, the answeriag of your specific questions is 

rendered unnecessary. You are advised, however, that in connection 

with Queetioa No. 4,’ with respect to the payment of the interebt on the 

bonds with moneys from the General Fund, the Cernmieaioners’&art 

laar no power to transfer moneyr from the General Fund to the Permanent Improvement Fund, or to expend for permanent improvement 

purposes tax moneys which were raised for general purpores. 11 Rx. 

Jur. 609; Carroll v. Williunr, 109 Tex. 155, 202 9. W, 504. 

SUMMARY 

I 

As Stephens County has m-allocated its taxes under 

the authority of Section 9, Article VIII, Constitution of 

Texas, whereby the permanent improvement tax was 

reduced to an amount not to exceed 3$ on the $100.00 

valuati.on, said county does not have sufficient taxing 

power to warrant the issuance of contemplated Hospital 

Bonds in the amount of $120,000. It followa that or&ah 
Hon. Ben Jo Dean, Page 4 

bonds may not be legally issued. 

GWS-a: sl 

Enclosure 

Yours very truly 

ATTORNEY GENERAL OF TEXAS 

I 

George Vi. Sparks ’ 

Assistant 

APPROVED APR 1, 1947’ 

ZL 22 

ATTORNEYGENERALOFTEXAS 

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Opinion No. V-118 

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