HonorableHenry Wade Opinion No. C-533

DistrictAttorney County Records Building Re: Whether Dallas County Junior Dallas, Texas College DistrictMay Tax the IntangiblePropertyand Rolling Stock of Railroads or TransportationCompanies
Dear Mr. Wade: and Other Questions Relating to Such District.
You have requested that we reconsider Opinion No. C-458 of this office dated June 21, 1965, pertaining to the taxation by the Dallas County Junior College District of intangible assets and rolling stock of railroads or transportationcompanies. Said Opinion C-458 Is hereby withdrawn and the following is substitutedtherefor.
You ask the opinion of the Attorney General In answer to the following five (5) questions relating to the levy and assessmentof ad valorem taxes by Dallas County Junior CollegeDistrict: 1. Can a valid contract for the assessment and collectionof taxes be entered Into by the Board of Trustees of Dallas County Junior College District and the County of Dallas for the Tax Assessor and Collector of Dallas County to assess and collect the taxes for the Junior College District? 2. In the event that the answer to Question No. 1 is In the affirmative,what fees and commissionscan the Tax Assessor and Collectorof Dallas County legally charge the Dallas County Junior College District for the assessment and collectionof the above referred to taxes? 3. Can taxes be levied and collected for the year 1965? -2546-HonorableHenry Wade - Page 2 Opinion No. C-533

4. May the District tax lntatiglble properties within Its boundaries?
5. Can the District assess and levy a tax on the rolling stock of a railroad or transportationcompany? The relevant facts are as follows: The Dallas County Junior CollegeDistrict (hereinafter referred to as District) was created on May 25, 1965, pursuant to the provisionsof Article 2815h of Vernon*sCivil Statutes. The boundaries of the District are cotermlnous with the boundariesof Dallas County. eat the election,the voters elected a Board of Trustees of the District and granted them the authority to assess and 'levy a tax for the support and maintenanceof the District and to Issue bonds to'be paid,for by a tax which was also authorized.
We answer your questionsIn the order in which,youask them. 1.
Your first questionasks If the Districtmay contractwith the Tax Assessor and Collectorof Dallas Coun,ty to assess and collect ita ad valorem taxes. Our answer Is that It may enter into &&ah a contractpursuant to the provisionsof Sec. 7b(c) of sald Article 2815~ This Article in Its relevantportlolis reads as followsr

"When a majority of the Board of Educationof such Junior College District prefer to have the taxes of their district assessed and coll&atedby the County Assessor and Collector,or by the City Assessor and Collectorof an Incorporatedcity or town In the limits of which the Junior College District or a part,thereofIs located, or collectedonly by the County or City Tax Collector,same may be a@,ses?ed and collected, or collectedonly, as the case may be, by said county or city officers,as may be determined by the Board of Education of said Junior CollegeDistrict,and turned over to the Treasurerof the Junior College District fo: which such taxes have been collected.

. . .

-2547-HonorableHenry Wade - Page 3 Opinion No. C-533

2.
Your second questionasks what fees and commlsslons may be paid In the event we'answer**your** first question In the affirmative. Our answer Is that the followingprovisionof said Article 2815h, Sec. 7b(c) sets forth these fees and commissionsIn the followinglanguage: When the County Assessorand Colleciorare required to assess and collect the taxes on Junior College.Dlstrlcts they shall respectivelyreceive one (1%)per cent for assessingand one (1%) per cent for collectingsame;
. . .'

3. **Your** third questionasks whether the District can levy and collect taxes for the year 1965. Our answer Is that it can. Under the followingauthorities,the levy and assessment of taxes by the Mstrict~ is governedby the same laws governing t.axatlon

by independentschool districts. a) Section 7 of said Article 2815h provides, in part:

I, The issuanceof the bonds for Junlor'C&.iege

purposes.,,

and the provision of the sinking fund for the retirement thereof, and the payment of ln,terest and the levying of t,axes for the support and maintenanceof the Junlor College, shall In so far as same is applicable, be In accordancewith the general election laws ax&the laws governing the Issuance of bonds Andy

the levying of taxes fin the IndependentSchool Dlstrlc~t,

. . . b) Section 7a of said Article 2815h (Acts, 1937, 45th Leg.9 p. 248, oh. 130,. sea. 3~).

further provides, In part: ?!he Assessor and Collectorof such

. Junlo~r CollegeDlstrlct shall assess the taxes and collect the same in the manner now provided by law for, the collection

-2548-HonorableHenry Wade - Page 4

of ad valorem taxes.by County: ~Assessors and Collectorsand where. there: is not ,herein containedany.speciflc provision, or directionas to how anything connected with the assessmentand collect,ion of taxes shall be done, then the provision; of the General Law shall prevail. '.
. . ., cl The case of Shepherd v. San Jacinto Junior College District, 363 S.W.2d.742 (Tex.Sup.1963), holds that Section 3 of ArticleVII of our State, Constitution

pertainingto taxation for benefit of schools and school districts is-applicableto Junior College Districts. Although the collegedistrictwas not createduntil %y 25: 1965. the districthas the authority to levy and collect taxes for ~the

year 1965 on ~allpropertywithin such newly created districtwhich was owned by the taxpayers on January 1st. Blewitt v. Megargel County Line Ind. Sch. Dist., 285 S.W. 271 ‘(Comm.App.

1926); .Afferbach,

12 S.W.

. ...185 S.Wi, 367 (Tex.. The Court in Blewittv. Megargel, 'supra, stated: : : ,f

. . . when an independentschool district is createdafter the 1st of ,: January of a ~given year, all property :: within such newly createddistrict, which wasowned by t.he, taxpayer on January 1st of that year, 'IS subjectto' any tax authorizedby.law, whether such taxes have been authorizedtheretofore or may be authorizedduringthe year, and can,be levled~bythe body :
. . given the power to levy $t any time during the year;'
. . . (Underscoring added.) 4. and 5~.
In your fourth questionyou ask if the Districtmay tax intangibleproperties. within its boundaries;,,.(You do not mention intangibleassets of railroads or other companies). We presume that In your fourth ,questionyoumeant to ask whether the Districtmight use the Intangiblevalues determined by the State Tax Board for rallroadsand other companies

-2549-.

HonorableHenry Wade - Page 5 Opinion No. C-533

enumeratedIn Articles7105 and 7105a of V.C.S. We will answer this question acting upontis presumption. The other companiesmentioned are ferry companies.bridge companies, turn plke companies,toll companies,oil pipe'llne companies, all common carrierpipe line companiesof ,every character whatsoeverengaged in the transportation of oil, motor bus companies, commonmotor carriersoperatingunder certificates of convenienceand necessity Issued by the Railroad Commission, and contractmotor carriersoperatingunder contractmotor carrier permit,s

issued by the Railroad Commission. We answer this question in the ne~gatlve.
In answer to the fifth que~stlon, the Districtmay not tax the rolling stock of railroads. As to the taxation of rolling stock of other tr.ansportation companies,we express no opinion as It is necessary to know the facts in each particular case, ~8inc.e the taxationof .said~property falls within the same general.

categoryof taxing per,sonal property of any owner except railroadsand other companies above mentioned. There is no parti,cular provision In the statutesproviding for the .sltus

and valuationof rolling stock of other transportation companies and that 1s to be determinedby t.he general law with reference to the sltus of personalproperty for taxation. For that reason 'we decline to pass upon that matter without 'knowing

'the ,speclfic

facts pertaining to each company. ArticleVIII, Sec.. 8 of the Texas Constitutionprovides as follows.: "RailroadProperty;How Assessed.. - All prope~rty

of railroadcompanies shall be assessed, and the taxes collectedin the several counties in which ,sald

property Is situated, including so much of the roadbed and fixtures as shall AbeIn each county. The rolling .stock may be assess~ed

in gross In the county where the prlncipal office of the company 1s located,, land the county tax paid upon It ahal, be apportioned by the Comptroller:, in proportion to the dis- ,tanae such road may run .through any such County, among the .several counties through which the road.passes,as part of their tax asse,ts. Article

### ma, v.c.s., provides for the sworn renditionof propertymade,by railroads to the county assessor and provides for rendition of all personal property of a railroad except the rolling stock.

,- 2550-HonorableHenry Wade - Page 6 Opinion No. C-533

Article 7169 provides that ~the value determinedby the County in whlch:.the principaloffice .ofthe road is located shall be certified to the.StateComptrollerand by him certified and apportionedto each county-inproportion~tothe mileage of the railroad in each county. Articles $205 - 7113, inclusive, V.C.S., provide for the determination

of the value of the intangibleassetsof railroads and other companiesby the State Tax Board and for apportionment

of the values between the countiesaccording to the mileage of the road in each county. The intangible values of motor bus companies,common carriermotor carriers, and contrac,t

motor carriers are'likewise apportionedin the counties in proportionto the distance the lines traversed by said carriers in each respectivecounty. The original Act (now Article 7105, V.C.S.) provided for the taxationof.the intangibleassets of railroadsonly, but said Act has been amended, as shown by said Article, to include ferry companies,bridge companies,turn pike or toll companies, oil pipe line companies,oil common carrierpipe line~.companies of every character,motor buacompanies, and common carrier motor carriers:ogerating undercertificates ,issued by the Railroad Commission.,

We are interested.only in the question as to whether the district.maytax the intangibleassets of,a railroad and other transportation companiesabove mentioned. Opinions of the AttorneyGeneral'soffice ranging as far back as 1909 and court decisionshold that the rolling stock and intangibleassets of a railroad are note subject to taxation~by~

school districts.andother subdivisions of the county.
In AttorneyGeneral'sDepartmental Opinion No. 2794, Rook 63,,page lg28-1g3o

;: 20, dated December 20, 1929; (page 286 Biennial Report itwas held thatthe intangible property and rolling stock of .&ilroads are not subject to taxationby a school districteven though the district comprisesan entire county.
In Opinion dated ,January 24, 1938 (Let,ter

Book 379, pages 779-783) it was held that the **Nueces** County NavigationDistrict No. One, which district had the same~boundaries as the county, could not tax the intangibleassets of railroadsand pipe line companiesfor the reason that such tax would not be a State and County tax.
In Opinion No. b-7469 dated October 29, 1946, it was held that a junior college district which has boundaries coextensive with the county cannot tax the intangibleassets or rolling stock oft

a railroad.

-2551-HonorableHenry Wade - Page 7 Opinion No. C- 533

Opinion No. S-184 dated December 30, 1955, held that the rolling stock and intangibleassets of a railroad are not subject to taxationby the Dexar County HospitalDistrict which is coextensivewith the boundariesof the county.
We approve the holdings in said four opinions.
In State v. H. & T. C. Ry. Co., 209 S.W. 820 (C.C.A.1919) it was held that the intangibleproperty and rolling stock of a railroad were not subject to taxationby a navigationdistrict in Harris County, even though the boundariesof the district and the county were the same, and it further said that the district had no power of taxationexcept as is expressly conferredupon it by the law of its creation. The Court also said:

"!Phe intangibleassets and rolling stock of appellee is not property 'within said district,'within the meaning of the Constitutionand statutes,and, the power of the district to tax same not being expressly granted by the act of its creation, the tax proposed to be levied is unlawful."
In order forthe rolling stock and intangibleassets of a railroad to be taxed, it is necessary that the tax be a county tax. In Dell County v. Hines, 219 S.W. 556 (C.C.A.1920, error ref.), the Court di ti I h d the H & T. C. Ry. Co. case above mentioned. Th: f"a%ss% that case are that Be11 county, under the constitutional provision,Article III, Section 52 and Act of 1907 (Article778a, et seq., V.C.S.), voted bonds for the constructionof roads and since the tax therebybecame a county tax, the Court held that the intangibleassets and rolling stock of railroads are subject to taxation. In this case, Bell County.alone had voted bonds under the same act as the two counties in the case of S.W.2d 81 (Tex.Com.App. 1933), case said:
'We do not think that the case of State

v. Railway Co., 209 S.W. 820, is an authority as to the issue involved in this case. That was a suit to collect taxes for the use and benefit of the Harris county Ship channel navigationdistrict, on the intangible ,assets and rolling stock of the railway company which had been apportionedto Harris county. The boundaries of the navigationdistrict

-2552-.

HonorableRenry Wade - Page 8 Opinion No. C$33

were the same as the boundariesof Harris county,but it was not Harris county. On the contrary,it was a body corporate,a separatelegal entity, capable of suing and being sued as such. In that case the court held that, while the Legislature might have authorizedthe district to levy a tax on the intangibleassets and rolling stock of the railway company, it had not done so, for the reason that it had,authorized the tax to be levied upon property 'withinsaid district'; and, while recognizing the power,

of the Legislatureto fix the situs for taxationof all personalproperty, as it had not fixed the situs of rolling stock and intangiblevalues for taxationfor districtpurposes in any district, the navigation companyhad no power to tax such property. Referenceis here made to the case above referred to, and 'the authoritiesthere cited, for a full discussionof the questionof taxing intangibleassets and rolling stock.
"For the reason that we have concludedas a matter of law that the road bonds issuedby Bell county were county bonds, issued for a county purpose; that the tax levied by the commissioners1

court is a county tax, and that the intangibleassets and rolling stock of appellee apportionedto Ball county for state and county taxationare the property of such county for the purpose of taxation, the judgmentof the trial court is here reversed and judgment is here renderedfor appellant."
In State v. T. & P. Ry. Co., supra, the Court said:

The standardby,which such apportionment'ikto be made by the board is prescribed in the act. .l&e conclusionreasonably follows that, by these apportionment provisions of the statutes,the Legislatureintended that such apportionment, when made as prescribed, would fix the situs of each portion in accordance with the allocationmade by the board. It is quite true, as contendedby counsel,that 3?i

-2553-.
HonorableHenry Wade - Page 9 Opinion No. C-533

the intangibletax law, it is provided in effect (article7105) that intar

pay the bonds, there provided for, shall be levied 'againstthe property in each of the counties,respectively.' Thls language, in the connectionused, plainly comprehendsall property situated,either actually or by operation,,of law, in any of the counties as such. (Emphasisadded.) The opinion concludedas follows:

"As regards the value of the rolling stock which under the provisionsof artiole 8, j$

8, of the Constitution, and of article 7169 of the statutes,was apportionedby the state comptrollerto El Paso county, the situs for taxation purposes became fixed in that county. The reasons upon which this conclusion is based are substantiallythe same as those upon which our conclusionrespecting intangibleassets is based. In both instances, the situs became fixed in the county at large, but not, of. course,,,in

any particularportion of the county.
We believe that the Court in the T. & P. case correctly held that the railroad was liable for the tax on its intangible assets and rolling stock and further believe that it could also have held that the tax was a county tax as held in the Bell County case above mentioned. We believe that this is pmly the reason the Supreme Court .only aQQroVed the judgment,and not the opinion, of the Commissionof Appeals. The Supreme Court refused writ of error in the Bell County case.

-2554-. HonorableHenry Wade - Page 10 OpinionNo. C-533

The Constitution,

Article III, Sec. 52, reads in part as follows: f,

. . . under legislative provision any county, any political subdivision of a county, any number of adjoining countiesor any political subdivision of the State or any defined districtnow or hereafter to be describedand defined within the State of Texas,
. . . uQon,a vote of a two-thirds majority of the residentproperty taxpayersvoting thereon who are qualifiedelectors of such district or territoryto be affected thereby, in addition to all other debts, may issue bonds or otherwiselend its credit in any amount not to exceed one fourth of the assessedvaluationof the real property of such districtor territory,except that the total bonded indebtedness of any city or town shall never exceed the limits imQOSed by other provisionsof this Constitution, and levy and collect such taxes to Qay the interestthereon and provide a sinking fund for the redemption thereof,as the Legislature

may authorize,and in such manner as it may authorizethe tame, for the followingpurposes, to wit: The Constitution

does not say that the two counties constitute a district,but says that each county may vote bonds and levy a tax for the same. This clearly shows, as held in the Eel1 Count that if the county issues the bonds, the H CtEiof is a county tax. tax or paymen The original enabling act under the above provision of the Constitution

was containedin the **act** of 1207, page 249, and only authorizedthe bonds to begissuedby a county or a political subdivisionof a county. A later act of 1909, page 271, amended the 1907 act so as to add "district,,,now or hereafter to be describedand defined,of a county. The original act of 1907 with the changesmade in 1909 were carried forward as Article 627, R.C.S., 1911.
It was not until 1927 that a separate act which is now Article 778a - 7781, V.C.S., authorizesbonds to be issued for roads by "any number of adjoiningcounties"and provides that the counties are authorizedto **issue** bonds for suCh,,Qurposes and "to levy and collect annually ad valorem taxes to pay for the same. It IS, therefore,relevant to notice that both the Constitutionand the Act of 1927 provide that the

-2555-Honorable Henry Wade - Page 11 Opinion No. C-533

counties are authorized to levy the taxes to pay for the bonds. We submit, therefore,that under the reading of the Constitution and the first section of the Act, it is clearly provided that the tax for the payment of the bonds is a county tax.
It is true that other sectionsof the 1927 act provide for what is denominateda "roaddistrict ComQoSed of two or more adjoining counties' (Articles778b, et seq.). However, even though the area of the adjoining counties are mentioned in the act as 'districts" , yet it is clear that it is intended that the tax levied to by Section 9 (Art. 7781Pay the bonds is a county tax as shown which reads as follows: "The amount of the bond tax to be levied annually shall be determined by the commissioners' courts of the respectivecounties before the period at.which the annual levy of taxes is made in the counties composing said district,an-the of the tax levied against the property in each of the counties,respectively,shall be levied by the commissioners' court of sumnty at the same time and in the same manner that other taxes in such counties are levied, and the levy and collectionthereof shall be governedby the same laws that govern the levy and collectionof county taxes.
. . ." (Emphasisadded.)
We submit that it is clear that the tax provided for under the 1927 Act for adjoining counties,even though called a district, is a county tax and that the Court properly held that the railroad was liable for the same as the district was Composedof El Paso and Hudspeth counties and could have given that reason for its holding. It was the 1927 Act that gave the two counties authority to levy the tax. This, then, brings us to the question as to whether the Act authorizingthe creation of the Dallas County Junior College District which has the same boundaries as Dallas County authorizes the district to tax the intangibleassets and rolling stock of railroads. This requires an examinationof the Junior College District Act. The statute authorizingthe creation of Junior College Districts is found in Article 2815h, V.C.S. Section 17 of the Act authorizesthe formationof County Junior CollegeDistricts in countieswhich would includeDallas County.

.

-2556-HonorableHenry Wade - Page 12 Opinion No. C-533

Article 2815h-3b,Section 1 provides that the governing boards of all public Junior Collegeshave power to **issue** bonds for the District and furtherprovides that the total amount of tax levied shall never exceed One Dollar ($1.00)valuationof property "In the Junior College District". Section 2a under the same Articleprovides for an annual ad valorem tax not to exceed One Dollar ($1.00)rate of taxable property "withinthe District"for the maintenanceof schools and further provides that the amount of maintenance and bond tax "of the district" shall never exceed the rate of One Dollar ($1.00). Section 22 of Article 281531 provides that all taxes levied for County Junior CollegeDistricts "shallbe assessed and collectedin the manner provided in Section 7b and 7c.' (A footnote to this Article,page 637, V.C.S., states that this Section probably should read 'Section7a and 7b'!. This is true for two reasons, to wit: There is no "Section7~“. There are two Sections "7a" at page 627 but the first applies only to districtsoperatingprior to October 1, 1936. Therefore, we will look to the other Section 7a and also to 7b.) Section 7a provides for assessingand collectionof taxes by the Assessorand Collector 'of the District",and for the Board of Educationto appoint a Board of Equalization to equalize the value of all property subject to taxation "in said District". Section 7b (c) provides that where a districthas the County Assessor to assess the taxes that it may be assessed at a 'gr%ater

value than that assessed for county and State i3isF9 and in such cases the Assessor shall assess the

or said districton separateblanks furn+shedby said district and prepare the rolls for said district

. (&Qhasis .m This shows that the tax is not for a county tax, or it would not and could not have separatevalues and separate rolls.
We see, then, that under the authorityof the above H. & T. C. Ry. Co. case, the intangibleassets and rolling stock of a railroad are not Droverts within the **junior college**  district even though the boundaries-ofthe district are the - same as the county boundaries,for the reason that in each of the Articles above mentioned, it is not provided for the taxationof property "in the county" as was done in the Act of 1927 and county wide bonds. For this reason, the decision in the T. & P. Ry. case has no application whatever to junior

-2557-”

.

Honorable Henry Wade - Page 13 Opinion No. C-533
college districts,even though the boundariesof the county and the district are the same. The statutesdo not "in effect", as stated in the T. & P. Ry. case, authorize the levy of taxes against all property "in the county", for the reason that the ttatutesprovide only for the levy of taxes "in the district. As stated by the T.& P. R the rolling stock and intangi y. case, the situs of ble assets of a rallroad are liable only for state and county taxes unless there is some other act in addition to the original act authorizingthe taxing of such property for other than State and County taxes.-

SUMMARY ---s--s Answeringquestionspertaining to Dallas County Junior CollegeDistrict, created pursuant to Article 2815h, V.C.S. on May 25, 1965: 1.

2.

3.

4.

5.

6.

7. It may contractwith the Tax Assessor and Collectorof Dallas County to assess and collect its ad valorem taxes. The fees and commissionsof such Tax AssessorCollector for his services are 14% ing and l$ for collecting. for assessThe Districtmay levy and collect year 1965. taxes for the

Said District does not have authority to tax the intangibleassets of railroads and other companiesmentloned in Articles 7105 and 7105a, V.C.S. Said District does not have authority to tax the rolling stock of railroads.
No opinion is expressedas to the taxation of rolling stock of other transportation companies. AttorneyGeneral'sOpinion No. C-458 (June 21, 1965) is hereby withdrawn and this opinion is substituted in lieu thereof.
Yours very truly,

-2558-HonorableHenry Wade - Page 14

HGC/fb

APPROVED:
OPINION cOmT!t!EE W. 0. Shultz, Chairman Kerns B. Taylor Paul Phy John Banks J. C. Davis APPPOVEDFORTHE ATTORNEYGENERAL BY: T. B. Wright Opinion No. C- 533

-2559-