JIM MATTOX 

Attorney General 

Supreme Court Building 

P. 0. BOX 12546 

Aus!in, TX. 76711. 2546 

5121475-2501 

Telex 910/874-1367 

Telecopier 5121475.0266 

714 Jackson, Suite 700 

Dallas, TX. 75202-4506 

214/742-8944 

4624 Alberta Ave., Suite 160 

El Paso, TX. 79905.2793 

9151533.3464 

PO1 Texas, Suite 700 

Juston, TX. 77002-3111 

7131223-5686 

606 Broadway, Suite 312 

Lubbock, TX. 79401-3479 

6061747-5236 

4309 N. Tenth, Suite B 

McA,,en, TX. 76501~1665 

512/662-4547 

200 Main Plaza, Suite 400 

San Antonio, TX. 76205.2797 

51212254191 

An Equal Opportunity/ 

Affirmative Action Employer 

The Attorney General of Texas 

August 13, 1984 

Honorable T. R. Ba"d:r 

Nueces County Attonwy 

Courthouse 

Corpus Christi, Texas 78401 

Opinion No. JM-189 

Re: Whether an area to be developed 

for tourist purposes within its 

extraterritorial jurisdiction may 

be designated by a city as a" 

industrial district 

Dear Mr. Bandy: 

You advise tha: certain areas along Mustang Island in Nueces 

County are being e:r:ensively developed for tourist-related purposes 

(through the const,ruction of hotels, condominiums, vacation home 

subdivisions, and rw:reation facilities). You ask: 

May the governing body of a cj~ty designate as a" 

industria:l district under the Municipal Annexation 

Act certain areas within its extraterritorial 

jurisdict:lrm which it determines are primarily 

utilized :ior the tourist industry? 

The Municipal Iumexation Act, article 970a, V.T.C.S., was enacted 

in 1963. See Acts; 1963, 58th Leg., ch. 160, at 447. Section 5 

thereof states in pertinent part: 

Sec. 5. The governing body of any city shall 

have the right, power, and authority to designate 

w par: of the area located in its 

extraterr:it:orial jurisdiction as a" industrial 

district, .XS the term is customarily used, and to 

treat witi such area from time to time as such 

governing body may deem to be in the best interest 

of the city. Included in such rights and powers 

of the governing body of any city is the 

permissive right and power to enter into contracts 

or agreemwts with the owner or owners of land in 

such intcstrial district to guarantee the 

continuat:1on of the extraterritorial status of 

such distr:.ct, and its immunity from annexation by 

the city for a period of time not to exceed seven 

(7) years, and upon such other terms and 

p. 825 
Honorable T. R. Bandy - Pagr, 2 (JM-189) 

considerations iw the parties might deem 

appropriate . . . . (Emphasis added). 

The term "industrial distri':,:" is not defined by article 970a, but is 

to be understood "as the telxl is customarily used." 

In Calvert v. Austin Liulndry and Dry Cleaning Co., 365 S.W.Zd 232 

(Tex. Civ. App. - Austin 19c3, writ ref'd n.r.e.), the meaning of the 

undefined term "industrial cperations," as used in a taxing statute, 

was at issue, Declaring th:.t the word "industrial" has a meaning of 

its own, and that the 1egis:l;lture is presumed to have used the word in 

the sense ordinarily underxood, the court held that the operations of 

laundrv and drv cleanine xlants were "industrial onerations." The 

court relied ;pon Nortlh 'Side Laundry Co. v. Board of Property 

Assessment, Appeals and RevTew, 79 A.2d 419 (Pa. 1951), which held a 

commercial laundry to be an'sdustrial plant" within the meaning of a 

Pennsylvania taxing statute. Cf. State ex rel. Keystone Laundry and 

Dry Cleaners, Inc. v. McDomxll~26 S.W.Zd 11 (MO. 1968). --* 

The Pennsylvania Suprenle Court in the North Side Laundry case, 

responding to an argument tlat the Pennsylvania statute as construed 

in a prior case unco"stit,lrionally discriminated against a laundry 

because other "service induj:ries" were not equally taxed, explained: 

[T]he fact that tte businesses to which plaintiff 

referred are rometimes generically called 

'industries' is Lrrelevant to the issue here 

raised. The question is whether their establishments are industrisl plants. 

The answer to that question is self-evident. 

By no stretch oE the imagination could a bank 

building, a hate:., a theater or any of the other 

business establir;l,ments referred to by plaintiff 

be considered ar industrial plant. It is true 

that we sometimelr speak of 'the movie industry', 

'the hotel industry' or 'the banking industry', 

but that is merf,~ly a loose use of language to 

convey that idea that the particular business is a 

sizeable one. Iri spite of that colloquialism, we 

do not speak o!: the buildings housing such 

businesses as '::"dustrial plants'. Plaintiff 

attempts to gi~ve to that phrase a legal meaning 

that goes far beyond anything that was 

contemplated by the Courts when they pronounced 

this rule and by the legislature when it adopted 

it in the Act of 1933. The law can do no better 

than to define ar industrial plant as that type of 

establishment whj.(,h the ordinary man thinks of as 

p. 826 
: . 

Honorable T. R. Bandy - Page 3 (JM-189) 

C 

such. Certainly a commercial laundry comes within 

that definition bdt the other businesses here 

mentioned do not. 

See also Union Mutual Life Irsurance Co. v. Emerson, 345 A.2d 504 (Me. 

1975); State Police DepartmelG: v. Hargrave, 237 N.E.Zd 269 (Ind. App. 

1968); Attorney General Opinlcn MW-552 (1982). 

Similarly, the question here is not whether businesses catering 

to tourists might be regardccl as engaged in "the tourist industry." 

The question is whether an srea primarily utilized for the tourist 

industry can be properly regarded as an "industrial district" within 

the meaning of the statute. 

We do not think the leE;jslature intended to allow the extension 

of a city's powers, in the mrner contemplated by section 5 of article 

970a. to embrace every extraxrritorial are+ occupied by a commercial 

venture that might be considt:.red part of some "industry" in the broad 

sense. As the Supreme Court: of Maine noted in Union Mutual Life 

Insurance Co., supra, where 'Lndustrial plant" status was claimed for 

the home office of an in3llrance company because it was highly 

capitalized, had a large labcr force, and other indicia: 

If the argument ai.xanced were to be adopted, it 

would seem that an:! general office building could 

in theory qualify 5,s an industrial plant. 

345 S.W.Zd 507. The Maine Court relied upon and quoted from the 

Indiana case of State Police Department v. Hargrave, m, to the 

effect: 

[Tlhe ordinary man rrould understand an industrial 

plant to be any factory. business or concern which 

is engaged primarily in the manufacture or 

assembly of good!; or the processing of raw 

materials, or both. 

We believe an "industrial district," as the term is customarily 

used, is an area where indujrrial plants are located, as contrasted 

with areas that are merely commercial in character. If the term 

"industrial" were synonymous with the term "commercial" in ordinary 

usage, it would be idle for osr statutes to refer to them separately. 

See V.T.C.S. art. 

5190.6, 

1349 (":mxnercial or industrial" clubs); art. 

§2(10) ("manufacturing and industrial facilities," and 

"commercial development," in addition); art. 5186 ("business and 

industrial development"). Cf. V.T.C.S. art. 5190.1, 52(j) 

("manufacturing or industrial enterprise"); art. 5190.2, §2(=) 

("manufacturing or industrial enterprise"). Article lOlla, V.T.C.S.. 

grants certain cities zonin;: power over land "for trade, industry, 

p. 827 
Honorable T. R. Bandy - Page 4 (JM-189) 

residence, or other purpose." Distinctions between cormnercial zones 

or districts and manufacturing or industrial districts have been 

readily applied. City of Corpus Christ1 v. Jones, 144 S.W.Zd 388 

(Tex. Civ. App. - San Antonio 1940, writ dism'd judgmt car.). See -. 

also City of Amarillo v. :;'&, 109 S.W.Zd 258 (Tex. Civ. App. - 

Amarillo 1937, writ dism'd). Cf. City of Amarillo v. Stapf. 101 

S.W.Zd 229 (Tex. Comm'n App. 1937,pinion adopted). 

In only two cases that we have found is there a suggestion that 

section 5 of article 970a might reach farther. See Mihailov v. City 

of Cedar Hill, 453 S.W.Zd 111: (Tex. Civ. App. - Dallas 1970. no writ) 

(mobile home site development); and Fox Development Co. v. City of San 

Antonio, 459 S.W.2d 670 (Tex. Civ. App. - San Antonio 1970). affirmed, 

468 S.W.2d 338 (Tex. 1971) (subdivision development). In the Mihailov 

case, supra, the court merelr held that the city could not be denied 

an opportunity to litigate the question of extraterritorial rights 

under sections 4 and 5 of article 970a. In the Fox Development Co. 

case, a, the Court o:i Civil Appeals said that because the 

appellant had not shown a co:.laterally attacked ordinance to be void, 

the trial court did not err in holding that the land in dispute was 

"within the extraterritoria:. jurisdiction of the City of San Antonio 

under Article 970a, 55." But in affirming the result of the Fox 

Development Co. case, the fupreme Court held that section 7 (not 

section 5) of article 970a was the operative section. 

Three cases to which Houston Endowment, Inc. was a party 

concerned unimproved land, used for agricultural purposes, that was 

considered subject to inclusion in an industrial district. We do not 

believe that they represent a different view, however, because the 

land was acknowledged to ,e "far more valuable for industrial 

development than for any otter use." City of Pasadena v. Houston 

Endowment, Inc., 438 S.W.Zd -52, 155 (Tex. Civ. App. - Houston [14th 

Dist.] 1969, writ ref'd n.r.a.). [The land was within territory held 

by a city under articles llfi:#-1187, V.T.C.S., which authorize limited 

annexations for improving navigation along navigable streams and for 

establishing and maintainin,: wharves, docks, railway terminals, and 

other facilities for aidin]: navigation or wharves. Article 970a, 

V.T.C.S., does not apply to s,lch territory, City of Houston v. Houston 

Endowment, Inc., 428 S.W.2d 706 (Tex. Civ. App. - Houston [lst Dist.1 

1968, writ ref'd n.r.e.), but article 1187-l. V.T.C.S., allows the 

designation of industrial disrricts there in words almost~identical to 

those of article 970a. -- Houston Endowment, Inc. v. City of Houston, 

468 S.W.Zd 540 (Tex. Civ. Ap:?. - Houston [14th Dist.] 1971, writ ref'd 

n.r.e.). Cf. City of Nassau Ba 

(Tex. Civ.App. 

y v. City of Webster, 600 S.W.Zd 905 

- Houston [ist Dist.] 1980), writ ref'd n.r.e.. per 

curiam, 608 S.W.Zd 618 (Tex. ,.980).] 

We are of the opinion, c.fter an examination of the statutes and 

cases, that the governing bo+ of a city may not properly designate as 

p. 828 
Honorable T. R. Bandy - Page 5 (JM-189) 

an industrial district unde:r the Municipal Annexation Act an area 

within its extraterritorial jurisdiction which it determines is to be 

primarily utiljzed for the tourist industry. 

SUMMARY .- 

The governing bclc.y of a city may not properly 

designate as an j.r.dustrial district under the 

Municipal Annexation Act an area within its 

extraterritorial jurisdiction which it determines 

is to be primarily utilized for the tourist 

industry. 

JIM MATTOX 

Attorney General of Texas 

TOM GREEN 

First Assistant Attorney General 

DAVID R. RICHARDS 

Executive Assistant Attorney :?neral 

Prepared by Bruce Youngblood 

Assistant Attorney General 

APPROVED: 

OPINION COMMITTEE 

Rick Gilpin, Chairman 

David Brooks 

Colin Carl 

Susan Garrison 

Jim Moellinger 

Nancy Sutton 

Bruce Youngblood 

p. 829