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 

### ofimPas by %.Qpheas Cow&y 

### payable mt ofPermanent Improvement Taxes.
Dear Sir: We have received 

### your letter ofMarch 15, 1947, relative to a certain contemplated hospital bond issue inthe amount of $120,000. You state inyour letter that “On August 25, 1945, by 

### a proper vote ofthe citizens of Stephens County, the Constitutional Fund provided for under Section 9ofArticle 8af tbs Coastitutlon *as re-allocated as follows:

Jury Fund 5 cents on the $100 valuation Road and Bridge Fund, 8 cents onthe $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 1951out of 3cent6 now allocated to permanent improvement, and beginning 

### with 1951to startsretiring the bonds. Itis contemplated that at **tht** time the order is **entered** they will provide for atax sufficient to pay the **interwst** 

### aadsinking fund on such Hespita1 Bonds. *

You mention inyour letter that there are certain cow!+ house andjail refunding bonds now outstanding and that these are the only bonds which **are** paysblt out of the permanent knpsrvearti **tax.**

tions: Iziconnection with these facts you ask the follc*ring Q~S-

‘1. Would this meth~odofpaying 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 andHon. 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 8of 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 1951the Ptrmantnt Improvement Fund would automatically revert to 25 cents onthe $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 ofthe Commissioners’ Court of Stephens County, made inpursuance of this election, provides for the levying and collecting of taxes to pay the interest and sinking fund, would this authorize 

### theCommissioners’ Court to collect such taxes for such purposes, regardless of the fact that the reallocation order now of record author&es only 3cents onthe $100.00 valuation tobe collected for parmanent improvements.

‘“4. Would the Commissioners” Court be authoriead to pay the interest onthe Hospital Bonds as itaccrued upuntil 1951from 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 oftheAttorney General? R Section 9ofArticlt VIII ofthe Constitution 

### ofTexas, aa amtnded inNovember. 1944, authorizes the re-allocation ofthe Constitutional taxer upon amajority ofthe qualified property taxpaying voters of a county voting at an election for that purpose,

Itis also provided that *such re-allocations and changes shall remain inforce and effect for aperiod of six (6) years from the date ofthe electionat which the same shall be approvtd, unle,ss the same again shall have been changed by amajority vote 

### ofthe qualified property taxpaying voters of such county, voting on the proposition, after submission by the Commissioners Court at agenera1 or special election for that purpose.“”

It follows that for aperiod of six years from the date of the election the various constitutional tax limits are those specified inthe election ‘“unless the same again shall have been changed by a majority vote of the qualified property taxpaying voters of such county.w InStephens County the Permanent Improvement tax was reallo,cated to an am,ount not to exceed 3$ onthe $100.00 valuation.Hon. Ben J. Dean, Page 3 ; Opinion No. 

### V-118

We have been advised by the Comptroller ofPublic Accounts that the assessed valuation ofStephens 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, inSeation 6ofArt’irle XI, provides that no debt for any purpose shall have be,enincurred 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 tobear, but it is aosumed that such interest ,rate will be atIeast 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 

### meetthe 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 acounty cannot by a re-allocation oftaxe$ infringe upon an existing contract. A copy of Opinion No. O-6863 is enclosed herewith for your consideration. Inview ofthe 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 ofyour specific questions is rendered unnecessary. You are 

### advised, however, that in connection with Queetioa No. 4,’with respect to

### thepayment ofthe interebt 

### onthe bonds with moneys from the General Fund, the Cernmieaioners’&art laarno power to transfer moneyr from the General Fund to the Permanent Improvement Fund, or to 

### expendfor permanent improvement purposes tax moneys which were raised for general purpores. 11Rx. Jur. 609; Carroll v. Williunr, 109Tex. 155, 202 9. 

### W, 504.

SUMMARY I **As** Stephens County has m-allocated its taxes **under** the authority ofSection 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 

### doesnot have sufficient taxing power to warrant the issuance of contemplated Hospital Bonds inthe amount of $120,000. It followa that or&ahHon. Ben JoDean, 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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