Honorable W. 0. Reed, chairman Appropriations Committee House of Representatives Austin, Texas
Dear 3ir: OpinionNo. O-3450 Re: Payment of taxesby the State to schooldistrlcts in Cherokee County, Texas; on Texas State Railroad lands.
Your letter of April 24, 1941, submits the following question for the opinionof this department:



### as, "At the request of themembers of the Appropriations Committee,please informme whether or not the Legislature Is obligated to pay taxes to the schooldistricts in Cherokee County, where the old Texas State Railroad is located, by authority of Article 2784-B, Revised Civil Statutes." Article 2784b,Vernon's Revised Civil Statutes of Texreads as follows:
"Sec. 1. That from,and after the passage of thisAct, all land in Cherokee County, Texas, owned by the State of Texas and Prison Commission of Texas, except the land heretofore set aside for the Rusk State Hospital, but including the land heretofore set aside to theAgricultural& Mechanical i;ollege for re-forestation purposes, shallbe subject to taxation for school purposeswhere any such land is embracedwithin the metes and bounds of any independentor common schooldistrict.
"Sec.2. Where any such land is embraced within the metes and bounds of any independ,ent or common schooldistrict, the Trustees of the IndependentSchoolDistrict, of the Commlssionem 'Court for a Common SchoolDistrict, are hereby authorized to levy and cause to be assessed and collected taxes for schoolpurposesHonorable W. 0. Reed, Chairman,page 2 g-3450

for the amount and in the manner prescribedby the General Laws for the levy of school taxes.
“Sec. 3. The taxes herein provided for shallbe assessed and collected in the manner now orescribedbr General Laws for the assessment-and collection of school taxes." Article 1, Section vides: 3, of the Texas Constltutlon,pro-

"All free men, . . no man, or set of men, .have equal rights, and Is entitled to exclusive ._ separatepublic emoluments, or privileges,

. . .ll Article III, Section 51, provides:
"TheLegislature shallhave no power to make any grant or authorize themaking of any grant of publicmoney to any indlvldual,assocFatlon of Individuals,myicipal 02;: other corporationswhatsoever,

. . Except grant of aid in cases of public calamity. .~, Article III, Section 56, proh,ibFts the passing of loc'al or special laws:

"Regulatingthe affairs of

. . . . school districtsj".

. . .

,,

. . .Prescribing the powers and duties of officers in

. . . schooldistricts." "Regulatingthe management of public schools, the building and repairing of school ho$ses, and the raising of money for such purposes. "Exemptingproperty from taxation." ArticleVIII, Section 2, authorizes the exemption of public propertyused f;r public purposes from taxation,but only 'bygeneral laws.

There is nothing ln our Constitutionprohibiting the Legislature from conferring the power to tax State propertyupon schooldistricts. This power, however, in our opinion, cannot be conferred upon some schooldistricts and withheld from others,without violating the above constitutionalprovisions -- at least, in the absence of a statute classifying school districts for the purpose of conferring such authority,. .

Honorable W. 0. Reed, Chairman, page 3 O-3450

on the basis of characteristicswhich, considering the object and purpose of the law, affords a reasonablebasis for extending the right to those possessing the characteristicsati' denglng it to thosewho do not.

Article 2784b confers the power to assess and collect taxes on State owned lands from the State only upon school districts situated in Cherokee County; Texas. No classiflcation of school districts Is attempted, only designation according to geographical location of the districts andlands involved. It is obvious that mere geographical locationbears no reasonable relation to the objects and purposes of the law, so as to authorize this power and privilege to be conferred upon Cherokee County SchoolDistricts and withheld from other school districts in other countieswherein State owned lands may be located. Miller v. El Paso County,by the Texas Supreme Court, not yet officiallyreported.

Subjecting State lands to taxationby certain school districts necessarily involvesthe idea that State funds shall be appropriated to the payment of such taxes. Our Constitution does not contemplatethat the inhabitantsof particular school districts (in the absence of public calamity) shall receive the benefit of the application of State funds to the purposes of the districts,when Inhabitantsof other school districts, similarly situated, are denied the benefits thus accorded. The constitutionalguaranty of equal rights to all is violated as effectivelyby extendingprivileges to local go-vernmental

units in one area of the Statewhich are denied to similar local governmentalunits similarly situated, in other sections,as by conferring specialprivilegesand benefits upon the inhabitantsdirectly. Our constitutionalprovisions are designed to prevent unreasonablediscrimination between units of local self government, An appropriation of State moneys to certain schooldistricts,when no similarappropriation ismade to schooldistricts similarly situated, operates to confer a specialbenefit upon and unduly favor the citizens and taxpayers of those districts, to the prejudice of the citizens and taxpayers of the schooldistricts not thus favoredby the State. 68 S. W. (26) 943. Hill v. Snodgrass, (Tenn.)

We therefore advise that, in OUP opinion,Article 2784b is unconstitutional.

Next we turn to the question whether taxesmay be due by the State upon the State Railroad land,s to the schooldistricts involved,under the provlslons of general laws applicable alike to all schooldistricts in the State., .

Honorable W. 0. Reed, Chairman,page 4 

### O-3450

Article 

### 7150,Revised Civil Statutes, provides In Sections 17 and 

### 18 thereof as follows:



### "17. State prLson property; school bona taxes.-- Provided that any~terrltory that has been acquired or may hereafterbe acquired,by the State of Texas, as a part of any state Prison Farm norproperty, shall not hereafterbe exempt from the payment of its pro rata. part of any bond tax of a public schooldistrict ofwhich the said territorywas a part at the time bonds of the said-districtwhich are now outstanding were issued, or whkh Is a part of said district at the time of the Issuanceof bonds which may hereafterbe voted; and the pro rata part of said tax that shall be paid by said territory shall be the proportionatepart that the assessed valuation of such territory for county purposes is of the total assessed valuation of the school district for the year inwhich taxes are assessed. Provided, also, that the saidbond tax shallbe paid by the governing board of management of the State Prison System out of any funds appropriated therefor by the Legislature. It is hereby specifically provided that the said bona tax shall be paid for each year that has elapsed since any such territory of a schooldistrictwas acquired by the State for and as a part of saidprison system if any bonds were then outstanding;Acts 1927, 60th Leg,, 1st C. S., p. 224, 

### ch:81, 1 1; Acts 1930, 41st Leg., 5th C. S., p. 191, ch. 49,
x 1.

### "18. State prison property; schoolmaintenance tax. -- Provided that any territory that has been acquired or may hereafterbe acquited, by the State of Texas, as a part of any State Prison Farm or property, shall not hereafterbe exempt from the payment of itspro rats part of any maintenance tax of a public schooldistrict of which the said territoryWRY a part at the time saidmaintenance tax of the saiddistrict which are now outstandingwas voted, or which is a part of said district at the time any malntenance tax may hereafterbe voted by said district; and the pro rata part of said tax that shallbe paid by said territory shallbe the proportionatepart that the assessed valuation of such territory for county purposes is of the total assessed valuation of the schooldistrictHonorableW. 0. Reed, Chairman,page 

### 5 O-3450

for the year inwhich such taxes are assessed. Provided, also, that the saidmalntenance'tax shallbe pald by the governing Board of Management of the State Prison System out of any funds appropriated therebyby the Legislature. It is hereby speciffcallyprovided that the safdmaintenance tax shallbe 

### paid for each year that has elapsed since any such territory of a school district was acquired by the State for and as a part of said-prison system. Leg., 5th C.S., p. 190, ch. 47, Acts 1930, 41st 1 1."
The property of the State here subjected to taxation is "StatePrison Farms or property". The property Involved, the lands of the State Railroad, is.no longer "StatePrLson property". Legislature,

Senate Bill 

### 267,Ch. 26, Acts Regular Sesslon, 37th took this property from the jurfsdictionof the Board of Prison Commissionersand placed it in the hands of a Board of Managers appointed by the LieutenantGovernor to be sold or leased. This property is now under twenty-year lease to the T. & N. 0.Railroad Company.

You are therefore advised that, in our opinion, the Legislature 1s not obligated for the payment of taxes upon this property under the provisions ofArticle 7150, Sections 17 and 

### 18.

Attention isdirected to the factthat under the provisions ofArticle 7173, Revised Civil Statutes, 1925, this property, belonging to the State and being leased for more than three years, is taxable to the lessee to the extent of the value of the leasehold interest. Daugherty v. Thompson, 71 Tex. 192; State v. Taylor, 72 Tex. 297.
Yours very truly
ATTORNEY GENERAL OF TEXAS

RWF:LM:wc
APPROVED MAY 16, 1941 s/Grover Sellers FIRST ASSISTANT ATTORNEY GENERAL By s/R.W. Fairchild R. W. Falrchild Assistant

Approved Opinion Committee By s/REK Chairman