TIEE ATTORNBY GENERAL 

OF TEXAS 

Auerrx~ ai, THgAa 

This Opinion 

Modifies Opinions O-5270 & 

o-5937 

Honorable S. K. Long 

County Attorney 

Jefferson County 

Beaumont, Texas 

D6ar Sir: Opinion Bumbsr O-6765 

Re: Allocation of money reoeived 

from governmental departments and 

agencies as "payments in lieu of 

taxes.' 

You request the opinion of this department upon the question presented in your letter of August 14, whiohwe quote as follows: 

"A question has arisen as to the propsr application snd the breakdown of payments made by the government or departments of the government in lieu of taxes, both state end county. It is my opinion that this payment is handled the 

ssme as taxes snd should be broken down and applied to the proper funds as if 

it were the direct ad wlorau tax. 

"The authority for the paymsn t is Seotion 1546 of Title 42 of the United 

States Code Annotated, there being no court deoision that I have been able 

to find other than the Moore et al vs. Board of Education of Ruolid City 

School District, 57 N. E. (2d) 116, dealing with the meaning of 'in lieu.1 

Briefly, your question is: How should pymentr made by Federal 

housing authorities and similar Federal agencies in lieu of taxes be allooated by ths taxing units, recipients of such payments? 

The question you present is clarified somewhat by Senate Bill 

No. 61, pssed by the 49th Legislature, which is as follows: 

'Section 1. That all monies, funds, assets, or gifts authorized by Federal 

statute to be pid to the State of Texas in lieu of taxes or as a gift by 

the Federal Public Housing Authority or sny other Federal agency. bs and 

the same is hereby accepted by the Stats of Texas; that this acceptance applies to any such tenders, g ifts, or offers, whether they be mad? in the 

pest, present, or future. 

"S6ction 2. The Comptroller of Public Accounts is hereby dirsated and authorized to execute such instruments as may be proper or necessary to effect aocsptanoe of such monies, gifts, or assets, and when so received by 

the Comptroller, he shstll deposit ssme in the State Treasury to the credit 

of the General Revenue Fund. 
"Sec. 3. The Comptroller may direct that such monies, when so paid by the 

Federal Housing Authority, be remitted through the County Tax Assessor-Collector in the County where lands are located on which the paymmt or tender 

is made in lieu of taxes by such Federal authority, and require the Tax 

Assessor-Colleotor of such County to make remittance to the State Treasury 

in the ssme manner as he is now required to do *en rmitting for ad valorem taxes: but in no event shall any Tax Assessor-Collector or any other 

County or State official be entitled to any fee for services in handling 

these funda." 

It is si@ifioant to note that said Senate Bill NJ. 61 treats 

such payments in effect as ad valorsm taxer. We think the conclusion is 

obvious that since such payments are made in lieu of ad valoran taxes, the 

allocation should be to the respective funds to which the ad valorem taxes 

upon said property would be allocated as provided by law, the sams as the 

taxes would be if collected instead of a sum in lieu thereof. 

If the conclusions we here express appear to be inconsistent 

with tso prior opinions of this department, DOS. O-5937 snd o-5270, the 

paasege by the 49th Legislature of Senate Bill No. 61, occurring subsequent to these tvm opinions, render these inoonsistencies of no consequence. 

Taxes are not gifts, but a sovereie;n exaction upon citieens or propsrty to 

support the Goverwent, and is payment exaoted by legislative authority. If 

payments are made B Congressional consent in lieu of taxes upon property, 

otherrise immune except for such consent, we see no reason for treating such 

payments in any other manner than would be accorded the taxes on the property. If appropriation of public funds or property is for 9 public purpose, 

and we think the payments in question here fall in thet classification, 

there is no gift, Almeda Count 

County v, LaFuente, 129 Pao. (2 3 576; 

v. Jannsen, 106 Pac. (2d) 11; Los Angeles 

8 an Bernardino County v. Ray, 117 Pac. 

(26) 354; Housing Authority of Los Angeles 0Nnty v. Dockmailer, 94 Pet. (2d) 

794. 

Sumnarizing, we hold that payments by Federal housing authorities 

and other similar Federal agencies, made in lieu of taxes, should bs treated 

as such smd allocated as other ad~valmem taxes when paid to the collecting 

officials charged under the law of collecting the same. 

Very truly yours, 

AlTOR?IBYGBt?ERALOFTFXAS 

By /s/L. P. Lollar 

APPROVED .WP 12, 1945 

/a/ GFtOVEFt SELLERS 

ATTORNEY GENERAL OF TEXAS 

LPL/JCPgegw 

L, P. Lollar 

Assiwtent 

Approved 

Opinion Committee 

By F. D. 

chpirmen