. 

TEE ATTORSEY GEXERAL 

OF TEXAS 

April 14, 1987 

Mr. F. E. Williams 

Chambers County Auditor 

P. 0. Box 910 

Anahuac, Texas 77514 

opinion NO. .1X-677 

Re: Calculation of maximum tax 

attributable to the road and 

bridge fund 

Dear Mr. Williams: 

Chapter 26 of the Tax Code sets forth the method by which each 

taxing unit must calculate an "effective tax rate" and the procedures 

that each taxing unit must follow in adopting a tax rate. The "effective tax rate" is the tax rate that will produce both the revenue 

necessary to satisfy the taxing unit's debt payment obligations for 

the year in which the rate is calculated and the same amount of 

operating revenue levied on properties taxed in the previous year and 

taxable in the current year. See Attorney General Opinion m-495 

(1982). We understand you to askhree questions about the calculation of the effective tax rate for a county. We will answer each of 

your questions in turn. 

Generally, the total county tax rate vll result from the tax 

rates sat for three different property taxes. Article VIII. sections 

l-a and 9 of the Texas Constitution impose a ceiling on each individual rate and provide that the total rate cannot exceed $1.25/$100 

valuation. The three individual taxes are: (1) the fund for farm-tomarket road/flood control (lateral road fund), with a rate ceiling of 

$.30/$100 valuation (section l-a); (2) the general fund, the permanent 

improvement fund, the road and bridge fund. and the jury fund, with a 

rate coiling of $.80/$100 valuation (section 9); and (3) the fund 

for the further maintenance of public roads, with a rate ceiling of 

1. We note that other statutory and constitutional provisions 

permit counties to 1-Y additional property taxes in certain 

instances, a, for jails, courthouses, sea wall const.ruction, fire 

fighting, and other special purposes. For convenience. we are 

limiting our answer to the first question to the three most widely 

imposed constitutional taxes. If a county levies any of these additional property taxes, the assessor calculates an effrctive tax rate 

for each additional tax under the reasoning we adopt herein and adds 

it to the county's total effective rate. 

p. 3107 
Nr. F. E. William - Page 2 (JM-677) 

$.lS/$lOO valuation (section 9). We understand you to ask first 

whether the tax rate rollback election provisions set forth in section 

26.07 of the Tax Code may be invoked when the increase in either the 

general fund, the permanent improvement fund, the road and bridge 

fund, and the jury fund component of the tax rate exceeds the 

effective tax rate for that fund by eight percent or more or whether 

the tax rate rollback election provisions can be invoked only when the 

total county tax rate exceeds the total county effective tax rate by 

eight percent or more. For two Gns. we conclude that section 

26.07 of the Tax Code may be invoked only when the tocal couuty tax 

rate exceeds the total county effective tax rate by eight percent or 

more. 

First, courts generally will confer great weight to an agency's 

interpretation of a statute, unless it is obviously contrary to the 

statute's clear and unambinuous meaninn. Teacher Retirement Svstem v. 

Duckworth. 260 S.W.2d 632;~ 636 (To=.-Civ. App, . - Fort Worth 1953), 

aff'd. 264 S.W.2d 98 (Tex. 1954); Pacific Employers Insurance Co. v. 

Gon. 242 S.W.2d 185, 189 (Tex. 1951); Dallas Title and Guaranty 

Co. v. Board of Insurance Commissioners, 224 S.W.2d 332, 336 (Tex. 

civ. ADD. - Austin 1949. writ ref'd). The contemmraneous 

construction of a statute by those charged with the responsibility of 

its administration will be respected, especially when the construction 

has been sanctioned by long acquiescence. Stanford v. Butler, 181 

S.W.Zd 269, 273 (Tex. 1944). The State Property Tax Board has always 

construed sections 26.05 and 26.07 of the Tax Code to require that 

each component of the tax rate be calculated as an independent rate 

and then added together for a total rate. 

Second, the clear terms of the Tax Code provisions require that 

the eight percent tax rate increase triggering the tax rate rollback 

election apply to the county's effective rate, not to the effective 

rate of each component of a county's rate. Section 26.04(d) of the 

Tax Code provides in pertinent part: 

The designated officer or employee shall calculate 

the tax rate that if applied to the total taxable 

value submitted to the governing body leas the 

taxable value of new property would impose the 

amount of property taxes determined as provided by 

Subsection (c) of this section [which essentially 

determines the amount of operating revenue levied 

on properties taxed in the previous year and 

taxable in the current year]. . . . (Emphasis 

added). 

See also Tax Code 526.042 (governing calculation of effective tax rate 

in a county imposing a sales and use tax). 

p. 3108 
Mr. F. E. Williams - Page 3 (JM-677) 

Section 26.05 of the Tax Code provides the following in 

part: 

(a) By September 1 or as soon thereafter as 

practicable, the governing body of each taxing 

unit shall adopt a tax rate for the current tax 

year and shall notify the assessor for the unit of 

the rate adopted. The tax rate consists of two 

components, each of which must be approved 

separately. The components are: 

(1) the rate that, if applied to the total 

taxable value, will impose the amount of taxes 

needed to pay the unit's debt service as 

described by Section 26.04(e)(3) of this code; 

and 

(2) the rate that, if applied to the total 

taxable value, will impose the amount of taxes 

needed to fund maintenance and operation 

expenditures of the unit for the next year. 

(b) a taxing unit may not impose prop.erty 

taxes in any year until the governing body has 

adopted a tax rate for that year, and the annual 

tax rate must be set by ordinance, resolution or 

order, depending on the method prescribed by law 

for adoption of a law by the governing body. . . . 

pertinent 

(c) The governing body may not adopt a tax 

rate that exceeds the tax rate calculated as 

provided by Section 26.04 of this code by more 

than three- percent until it has held a public 

hearing on the proposed increase and has otherwise 

complied with Section 26.06 of this code. The 

governing body of a taxing unit shall reduce a tax 

rate set by law or by vote of the electorate to 

tberate calculated as provided by Section 26.04 

of this code and may not adopt a higher rate 

unless it first complies with Section 26.06 of 

this code. (Emphasis added). 

And finally. section 26.07 of the Tax Code sets forth the 

procedures that must be followed in order to conduct a 

rollback election to repeal the rate increase. The section 

in pertinent part: 

(a) If the governing body of a taxing unit 

other than a school district adopts a tax rate 

that exceeds the rate calculated as provided by 

tax rate 

provides 

p. 3109 
Mr. F. E. Williams - Page 4 (JM-677) 

Section 26.04 of this code by more than eight 

percent, the qualified voters of the taxing unit 

by petition may require that an election be held 

to determine whether or not to reduce the tax 

rate adopted for the current year to a rate that 

exceeds the rate calculated as provided by 

Section 26.04 of this code by only eight percent. 

(Emphasis added). 

A reading of chapter 26. as a whole, indicates that the tax rate 

rollback election provisions of section 26.07 may be invoked only in 

an instance in which the total tax rate adopted exceeds the total 

effective tax rate by eight percent or more. If the legislature had 

intended that a county's component rates individually be limited to 

the three percent-eight percent rate increase lixitations. it could 

easily have so provided. But it did not. Because we are required to 

give effect to the evident intent of the legislature, Bernard l-lanyard 

Enterprises, Inc. v. McBeath. 663 S.W.Zd 639. 643 (Tex. App. - Austin 

1983, writ ref'd n.r.e.); Chemical Bank v. Commercial Industries 

Service Co., 662 S.W.Zd 802. 804 (Tax. App. - Rouston [14th Dist.] 

1983), writ ref'd n.r.e., 668 S.W.2d 336 (Tex. 1984). we are compelled 

to conclude that the tax rate rollback election provisions set forth 

in section 26.07 may be invoked only when the total tax rate adopted 

pursuant to section 26.05 of the code exceeds the total effective tax 

rate as calculated by section 26.04 by eight percent or more. 

We understand your next question to be whether the construction 

that we have adopted in answer to your first queation permits, in 

effect, the "transfer" to another fund of tax money that must be used 

only for purposes authorized by the qualified voters of the county in 

the first election permitting the imposition of the tax. Our answer 

is that it does not. Your coucern apparently arises from the language 

contained in the relevant constitutional provisions authorizing the 

imposition of the taxes at issue. 

Article VIII, section l-a, of the Texas Coustitution provides the 

following in pertinent part: 

Sec. l-a. From and after January 1, 1951. uo 

State ad valorem tax shall be levied upon any 

property within this State for general revenue 

purposes. From and after January 1. 1951, the 

several counties of the State are authorized to 

levy ad valorem taxes upon all property wlthin 

their respective boundaries for county purposes, 

except the first Three Thousand Dollars ($3,000) 

value of residential homesteads of married or 

uomarried adults. male or female, including those 

living alone, not to exceed thirty cents (30~) on 

each One Hundred Dollars ($100) valuation, in 

p. 3110 
Mr. F. E. Williams - Page 5 (JM-677) 

addition to all other ad valorem taxes authorized 

by the Constitution of this State, provided the 

revenue derived therefrom shall be used for 

construction and maintenance of Farm to Market 

Roads or for Flood Control, except as herein 

otherwise provided. (Emphasis added). 

Article VIII, section 9. of the Texas Constitution sets forth the 

following: 

Sec. 9. The State tax on property, exclusive 

of the tax necessary to pay the public debt, and 

of the taxes provided for the benefit of the 

public free schools, shall never exceed Thirtyfive Cents (35~) on the One Hundred Dollars ($100) 

valuation; and uo county, city or town shall levy 

a tax rate in excess of Eighty Cents (80~) on the 

One Huudred Dollars ($100) valuation in any one 

(1) year for general fund, permanent improvement 

fund, road and bridge fund and jury fund purposes; 

provided further that at the time the Commissioners Court meets to levy the anuual tax rate 

for each county it shall levy whatever tax rate 

way be needed for the four (4) constitutional 

purposes; namely, general fund, permanent improvement fund, road and bridge fund and jury fund so 

long as the Court does not impair any outstanding 

bonds or other obligations and so long as the 

total of the foregoing tax levies does not exceed 

Eighty Cents (80~) on the One Hundred Dollars 

($100) valuation in any one (1) year. Once the 

Court has levied the annual tax rate, the same 

shall remain in force and effect during that 

taxable year; and the Legislature may also 

authorize an additional annual ad valorem tax to 

be levied and collected for the further maintenance of the public roads; provided, that a 

majority of the qualified property taxpaying 

voters of the county voting at an election to be 

held for that purpose shall vote such tax. not to 

exceed Fifteen Cents (15~) on the One Hundred 

Dollars ($100) valuation of the property subject 

to taxation in such county. Any county may put 

all tax money collected by the county into one 

general fund, without regard to the purpose or 

source of each tax. And the Legislature may pass 

local laws for the maintenance of the public roads 

and highways, without the local notice required 

for special or local laws. This Section shall not 

be construed as a limitation of powers delegated 

p. 3111 
Mr. F. E. Williams - Page 6 (JM-677) 

to counties, cities or towns by any other Section 

or Sections of this Constitution. (Emphasis 

added). 

The underscored sentence of article VIII, section 9, was added by 

a constitutional amendment in 1967. Acts 1967, 60th Leg.. H.J.R. No. 

3. at 2979. Prior to the 1967 amendment it was well established that 

the general fund. permanent improvement fund, road and bridge fund, 

and jury fund, the four so-called "constitutional funds" of article 

VIII. section 9. could not be comminaled or used for ourooses other 

than-that for which each was levied.- See First State Bank and Trust 

Company of Rio Grande City v. Starr Couafy, 306 S.W.2d 246 (Tax. Civ. 

APP. - San Anconio 1957, no writ); Carroll v. Williams, 202 S.W.2d 504 

(Tax. 1918); Attorney General Opinion Nos. O-6948 (1945): O-5422 

(1943); O-4763 (1942): After the-adoption of the 1967 amendment, the 

courts and this office consistentlv construed the amendment to nermit 

commingling or consolidation of the article VIII, section 9, funds. 

Lewis v. Nacogdoches County, 461 S.W.2d 514 (Tex. Civ. App. - Tyler 

1970. no writ); Attorney General Opinion Nos. H-530 (1975); h-194 

(1974) ; M-1250, M-1195 ~(1972); M-892 (1971); M-369 (1969); M-207 

(1968). but not to permit the commingling or consolidation of any of 

the article VIII, section 9, funds with the articlr VIII, section l-a 

fund. Attorney General Opinion Nos. H-530 (1975); M-1250 (1972). 

The matter of commingling funds is entirely separate from the 

matter of determining the effective tax rate. As indicated. the 

county may raise the effective tax rate by eight percent without 

triggering the rollback election provisions. There is no requirement, 

however, that any tax increase be apportioned among the funds for 

which taxes are raised. All or none of the increase may go to the 

lateral road fund. Ouce the taxes are assassad and collected for the 

lateral road fund, however, that money may not be commingled with the 

other funds. 

Your final question is about the effect of the adoption of 

article VIII, section 21. of the Texas Constitution on the tax rate 

ceilings set forth in article VIII, section l-a and 9. Article VIII, 

section 21 provides the following: 

Sec. 21. (a) Subject to any exceptions prescribed by general law, the total amount of 

property taxes imposad by a political subdivision 

in any year may not exceed the total amount of 

property taxes imposed by that subdivision in the 

preceding year unless the governing body of the 

subdivision gives notice of its intent to consider 

an increase in taxes and holds a public hearing on 

the proposed increase before it incraases those 

total taxes. The legislature shall prescribe by 

law the form, content, timing, and methods of 

p. 3112 
Mr. F. E. Williams - Page 7 (JM-677) 

giving the notice and the rules for the conduct of 

the hearing. 

(b) In calculating the total amount of taxes 

imposed iu the current year for the purposes of 

Subsection (a) of this section, the taxes on 

property in territory added to the political 

subdivision since the preceding year and on new 

improvements that were not taxable in the preceding year are excluded. In calculating the 

total amount of taxes imposed in the preceding 

year for the purposes of Subsection (a) of this 

section. the taxes imposed on real property that 

is not taxable by the subdivision in the current 

year are excluded. 

(c) m= legislature by general law shall 

require that, subject to reasonable exceptions. a 

property owner be given notice of a revaluation of 

his property and a reasonable estimate of the 

amount of taxes that would be imposed on his 

property if the total amount of property taxes for 

the subdivision were not increased according to 

any law enacted pursuant to Subsection (a) of this 

section. The notice must be given before the 

procedures required in Subsection (a) are instituted. (Emphasis added). 

The "general law" required by article VIII. section 21 (or rather 

the "exceptions" to the specific formula calculations set forth 

therein) is the effective tax rate calculation detailed in section 

26.04 of the Tax Code. See Attorney General Opinion MW-495 (1982). 

Your concern apparently ar=s from the recent decline in the value of 

real property in Texas. When article VIII. section 21. of the Texas 

Constitution and its companion statute, now-repealed article 7244~. 

V.T.C.S. (the predecessor statute to section 26.04 of the Tax Code). 

were euacted in 1978. real property valuations in Texas were rising. 

As a result, the effective tax rates generally dropped from year to 

year. A simple example will illustrate (for purposes of brevity; we 

will discuss only the maintenance and operation component of the tax 

rate). If in 1978 a taxing unit's tax rate was $1.50/$100 valuation, 

with the taxable property on the tax roll having en appraised value of 

$10 million, the same taxing unit's effective tax in 1979, after a 

reappraisal that increased the appraised value of taxable property on 

the tax roll to $20 million, would be $.75/$100. & the rate that, 

when applied to the property taxed last year cud taxed this year at 

this year's appraised value. 

revenue produced last year. 

will produce the same amount of operating 

Obviously, when the appraised value .of 

real property dropsfrom one year to the next, the effective tax rate 

will necessarily rise. In those counties that suffer significant 

p. 3113 
Mr. F. E. Williams - Page 8 (JM-677) 

reductions in appraised value of property on their tax roll, it is 

conceivable that the effective tax rates of the various components of 

the county's total tax rate may exceed the constitutionally imposed 

tax rate ceilings. We understand you to ask whether article VIII, 

section 21. acts to supercede or impliedly repeal the tax rate 

ceilings set forth in article VIII, sections l-a and 9. The answer is 

"no. " 

Article VIII. section 21, of the Texas Constitution is a notice, 

provision; neither it nor its statutory counterpart prescribes any 

maximum tax rates. Together, they only require public notice if any 

tax rate adopted exceeds a certain calculated tax rate (the effective 

tax rate) by a specified percent and permit a tax rate roliback 

election in the event that the adopted rate exceeds the calculated 

rate by a larger specified percent. The Texas Supreme Court has 

enunciated the rule that 

[t]he Constitution must be read as a whole, and 

all amendments thereto must be considered as if 

every part had been adopted at the same time 

and as one instrument, and effec :t must be given 

to each Dart of each clause, exvlained and 

qualified-by every other part. [Citation omitted]. 

Different sections, amendments. or provisions of a 

Constitution which relate to the same subject 

matter should be construed together aud considered 

in the light of each other. [Citations omitted]. 

Purcell v. Lindsey, 314 S.W.2d 283, 284 (Tex. 1958); see also State v. 

Clement*. 319 S.W. 2d 450 (Tex. Civ. App. - Texarkaua 1958, writ 

ref'd). We do not perceive any conflict between the two constitutional provisions. mArticle VIII. section 21. requires that each 

taxing unit must calculate au effective tax rate and, if the tax rate 

that the taxing unit finally adopts exceeds a specified percent, must 

comply with certain public notice and public meeting requirements. 

The other two constitutional provisions, article VIII, sections l-a 

and 9, authorize the imposition of certain property taxes for certain 

purposes and impose a tax rate ceiling on each in the event that those 

taxes are imposed. In this instance, we must construe article VIII, 

sections l-a. 9. and 21. of the Texas Constitution together; the tax 

rate ceilings imposed by article VIII that are applicable to the tax 

rates that are actually adopted remain in effect. 

SUMMARY 

The tax rate rollback election procedures set 

forth in section 26.07 of the Tax Code way be 

invoked in a county only when cha total tax rate 

adopted by a county exceeda the total effective 

tax rate by a specified percent; it may not be 

p. 3114 
Mr. F. E. Williams - Page 9 (JM-677) 

invoked when the adopted tax rate of a component 

of the county's total tax rate exceeds that 

component's effective tax rate by a specified 

percent. When the adopted tax rate of a component 

of the county's total tax rate exceeds that 

component's effective tax rate, no i.mpentissible 

"transfer" of tax money occur*. Article VIII, 

sections l-e, 9. and 21 of the Texas Constitution 

should be construed together. In au instance in 

which the effective tax rate calculated pursuant 

to article VIII, section 21, of the Texas 

Constitution and section 26.04 of the Tax Code 

exceeds the tax rate ceilings set forth in article 

VIII, sections l-a and 9. the tax rate ceilings 

imposed by article VIII that are applicable to the 

tax rates that are actually adopted, are still in 

effect. 

Very J truly yours 

A 

JIM MATTOX 

Attorney General of Texas 

JACX HIGHTOWER 

First Assistant Attorney General 

MARYXELLER 

Executive Assistant Attorney General 

JUDGE ZOLLIE STEAXLF.T 

Special Assistant Attorney General 

RICK GILPIN 

Chairman. Opinion Committee 

Prepared by Jim Moellinger 

Assistant Attorney General 

p. 3115