November 25, 1969

Honorable J.W. Edgar Commissioner Texas Education Agency Austin, Texas Opinion No. M-519
**Re: Local**  fund credit tobe assigned a school district containing a federal-wned **military reservation**  following annexation of

Dear Dr. Edgar: another district pursuant to Sections 16.76 and 19.262 of theTexas Education Code.

You have requested an official opinion regarding the above stated matter. We quote from your letter as follows:

"Pursuant toArticle 280313(nowinChapter 19, Section 19.262, Texas Education Code) aprerequisite petition has been presented to the El Paso County Judge (underArticle 26883.acting in the capacity of a county school board) requesting that an election be called to annex Canutillo Independent School Dis**trict** to the adjoining El Paso Independent School District.
"In linewith Section 19.262 of the Code, the County Judge has asked the Board ofTrustees of El Paso Independent School District for its consent or approval to theproposed annexation required by subsection (c)prior to the calling of an election, and the El Paso district is in theprocess of gathering and studying information prior tomaking itsdecision. 11

....

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"TheCanutillo district proposed tobe annexed to El Paso district has 964 square miles of territory, none ofwhich is federal-owned military lands. Currently, El Paso district's local fund assignment credit formilitary lands approximates 49 per cent. If Canutillo district iscombined with the El Paso District, the resulting El Paso Independent School District, so enlarged would have by virtue thereof 3044 square miles of territory and the combined district would have a reduced military land credit on its local fund assignment approximating 34%. "Thus,we are informed that should the Canutillo district be annexed, the El Paso district so enlarged would realize $334,244 less from Foundation School Funds occasioned by the percentage change in themilitary land credit, than it iscurrently realizing in its present status, ... "TheBoard ofTrustees of theEl Paso Independent School District acting through its superintendent has requested thisAgency to submit for an opinion from the Office ofAttorney General the following question:

"Must the local fund assignment credit for federal-owned military reservations be proportionatelycomputed on the basis of total territory inadistrict enlarged by annexation, under Chapter 19, Section 19.262, Texas Education Code, or can the language inSubsection (k)be construed to authorize computation of such credit otherwise." Section 16.76 of theTexas Education Code sets out the formula tobe used indetermining the local funds tobe charged to the various school districts. House Bill 959,Acts of the 61st Legislature, Regular Session, 1969,pages 2698 et seq.. amended Section 16.76, and the pertinent provisions ofH.B. 959 are quoted as follows:

"Provided, however, that inany district containiraqState University-owned land. State-owned prison land,

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Honorable J.W. Edgar,'page 3 (M-519)

Federal-owned forestry land, Federal-owned reservoirs, Federal-owned recreation areas, Federal-owned military reservations orFederal-owned Indian reservations, the amount assiqned to such school district shall be reduced in the proportion that the area included in the abovenamed classification bears to the total area of the district. Provided further, that no local fund assignment shall be charged to the Boys Ranch Independent School District inOldham County; Texas, the Bexar County School for Boys Independent School District inBexar County, Texas, and the Bexar County School forGirls Independent School District inBexar County, Texas." (Emphasisadded.) 1t~'seemsclear from the above,underlined language that in any school district containing a federal-owned military reservation, such as El Paso presently has, the amount of local funds thatthe,district isassigned to raise towa,rdfinancing its own school is reduced by apercentage that themilitary reservation bears to thewhole district. A discussion of the apparent purpose for such legislation can be found inCentral Education Aqency v. Independent School District of El Paso, 152Tex. 56, 254,,S.W.2d 357, (1953),and you are referred to the discussion in that case. This brings us to the question athand, and that is,what effect does the annexation of another district have on the local fund assignment of a receiving district which has a federal-owned military reservation or some other land, as set out inHouse Bill 959, aspart of the receiving district.
Answer to this question lies inan analysis of Certain provisions of Section 19.262 of the Texas Education Code, a codification ofArticle 2803b, Vernon's Civil Statutes, which authorizes and controls annexation of one school district by another in larger counties. Subsections (i), (j)and (k)of Section 19,262 of Chapter 19 of the~Texas Education Code control the effect of an annexation of existing school districts in larger counties. Subsections (i), (j)and (k)are quoted as follows:

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"(i)Title toall property, real and personal, of the annexed district shall vest in the receiving district. The receiving district shall have complete authority over and management of the public schools in the territory annexed. "(j)The receiving district shall assume all outstanding indebtedness of the annexed district, bonded or otherwise. Any tax ineffect in the receiving independent school district shall continue andbecome effective and apply to the entire independent district as constituted after annexation is completed. "(k)The independent receiving district shall continue as the same district and operate inall respects as itwas prior to the annexation except that the annexed territory shall become liable for all indebtedness, subject to all taxes, and be apart~thereof for all purposes as though oriqinally included in the independent district." (Emphasis added.) The above quoted sections construed as awhole would give the receiving district (ElPaso) title to all the property and authority over all the personnel of the district tobe annexed (Canutillo). and El Paso district would assume all debts of Canutillo district and property owners in Canutillo district would be immediately subject to the indebtedness, ifany, and tax rate, etc. effective inEl PasoDistrict. Furthermore, the two districts would be treated as one district as if they had originally been setup as one district. Therefore, the effect of one district (ElPaso) annexing another (Canutillo) is the same as if the districts were originally set up as one district. It is, therefore, our opinion that the Commissioner of Education must look to thewhole district, including the annexed territory, and determine what proportion of thewhole district is composed ofmilitary or other charge free land, indetermining what the local fund assignment must be.

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Honorable J.W. Edgar, page 5 (m-519)

This construction follows your longdepartmental interpretation and practice, which we do not believe the Legislature intended to change inadopting the Texas Education Code.
SUMMARY The local fund assignment credit for federal-owned military reservations must be proportionately computed on thebasis of total territory inadistrict, including territory resulting from the annexation of another school district.

Prepared by James C.McCoy Assistant Attorney General
APPROVED: OPINION COMMITTEE
Kerns Taylor, Chairman George Kelton, Vice-Chairman Malcolm Quick Ed Esquivel Scott Garrison Jack Goodman
MRADE F. GRIFFIN Staff Legal Assistant
NOLA WHITE First Assistant

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