Honorable Gib Lewis Speaker Opinion No.JM-835

Texas House ofRepresentatives Re: Whether section 26.08 P.0. Box 2910 of the Tax Code, which Austin, Texas 78769 permits a tax rate rollback election to limit school taxes, isunconstitutional (RQ-1286)

Dear Speaker Lewis:

Section 26.08 of the Tax Code provides that if the governing body of a school district adopts a tax rate that exceeds the so-called "effective tax rate" calculated pursuant to either section 26.04 or section 26.042 of the Tax Codebymore than eight percent, the qualified voters of the taxing unit by petition may require that an election beheld todetermine whether or not to reduce the tax rate adopted for the current year to a rate that exceeds the l'effective rate" by no more than eight percent. See Attorney General Opinions JM-792 (1987); JM-574 (1986). Section 26.085 of the Tax Code permits a tax rate rollback election, limiting the percentage of the total tax levy ofa school district dedicated by the governing body of the school district to a junior college district under section 20.48(e) of the Education Code.

InAttorney General Opinion JM-792, we concluded that section 26.07 of the Tax Code,which authorizes such atax rate rollback election fortaxing units other than school districts, isunconstitutional insofar as itapplies to counties. you ask whether sections 26.08 and 26.085 of the Tax Code likewise areunconstitutional. We conclude that they are not.
Section 26.08 of the Tax Code sets forth the followingrelevant provisions:

(a)Ifthe governing body of a school district adopts arate that exceeds the rate calculated asprovided by Section 26.04 of

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this codeby more than eight percent, the qualified voters of the district bypetition may require that an election be held to determine whether or not to limit the tax rate the governing bodymay adopt for the following year. . . .

. . . . (e)Ifamajority of the qualified voters voting on the question inthe election favor the proposition, the governing bodymay not adopt atax rate inthe following year that exceeds the rate calculated asprovided by Section 26.04 of this code for that year by
more than eight percent, except than in making the calculation under Subsection Cd) of Section 26.04 of this code, the assessor shall use the amount of taxes determined as provided by Subsection (c)of Section 26.04 of this code intheyear inwhich the tax increase th~at initiated the referendum occurred rather than the year inwhich the calculation occurs.
(f)Forpurposes of this section, local tax funds dedicated to a junior college district under Section 20.48(e), Texas Education Code, shallbe eliminated from the calculation of the tax rate adopted by the governing body of the school district. However, the funds dedicated to the junior college district are subject to Section 26.085 of this code.

Section 26.085 of the Tax Code contains the following relevant provisions:

(a)If the percentage of the total tax levy of a school district dedicated by the governing body of the school district to a junior college district under Section 20.48(e), Texas Education Code, exceeds the percentage of the total tax levy of the school district for the preceding year dedicated to the junior college district under that section, the qualified voters of the school district bypetition may require that an election be held to determine whether to limit the percentage of the total ?

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p tax levy dedicated to the junior college district to the samepercentage as the percentage of thepreceding yearts total tax levy dedicated to the junior college district.

. . . . (e)Ifamajority of the qualified voters voting on the question inthe election favor theproposition, thepercentage of the total tax levy of the school district for theyear towhich the election applies dedicated to the junior college district isreduced to the same percentage of the total tax levy thatwas dedicated to the junior college district by the school district inthe preceding year. . . .
In Attorney General Opinion JM-792 (1987), we concluded that section 26.07 of the Tax Code, which authorizes a tax rate rollback election under certain circumstances for taxing units other than school districts, isunconstitutional insofar as itapplies to counties. We based ourdecision upon specific language in article VIII, sections l-a and 9, of the Texas Constitution that confers explicit authority on commissioners courts to set tax rates and levy ad valorem taxes upon property inthe counties.

Article VIII, section l-a, of the Texas Constitution contains the following relevant language:

Prom and afterJanuary 1, 1951, the several counties of the State are authorized to levv advalorem ws unon allarovertv within their resvective boundaries for countv purnoses . . .not toexceed thirtv cents (30C)on each OneHundred Dollars ($100) valuation, in addition to all other ad valorem taxes authorized bv the Constitution of this State, provided the revenue derived therefrom shallbeused forconstruction and maintenance of Farm To Market Roads or for Flood Control, except as herein otherwise

. provided.

Article VIII, section 9,of the Texas Constitution sets forth the following:

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[N]ocounty, city or town shall levy a E;t rate inexcess ofEighty Cents (SOC)on One Hundred Dollars ($100)valuation in any one (1) year forgeneral fund, perman;;: improvement fund, road andbridge fund jury fundpurposes: provided further that at the time the Commissioners Court meets to ew the annual tax rate for each countv it -1 lew whatever tax ratemav be needed for the four (4) constitutional Durnoses; namely, general fund,permanent improvement fund, road andbridge fund and jury fund so long as the Court does not impair any outstanding bonds or other obligations and
so long as the total of the foregoing tax levies does not exceed Eighty Cents (8OC)on the OneHundred Dollars ($100)valuation in any one (1)year. (Emphasis added.)

We concluded that both provisions confer authority, not on thevoters, but on the commissioners court, and the legislature by statute cannot remove governmental power conferred by the constitution. Tex. Const. art.V, 518. Se aenereJJy BBgerson v. Wood, 19L) 152 S.W.2d 1084 (Tex. ;Dodson v.Marshall, 118 S.W.2d 621 (Tex.Civ. APP.

-Waco 1938,writ dism'd). Because the legislature does nothave the power to enact any law contrary to a provision of the constitution, Citv of ort Worth v. Howerton, 236 S.W.2d 615 (Tex. 1951), we zoncluded that section 26.07 of the Tax Code isunconstitutional insofar
as itapplies to counties.

Inanswering your question, the first issue that we must address is whether the relevant constitutional provisions governing school districts confer the sort of authority on the school districts' trustees that sections l-aand 9ofarticle VIII confer on county commissioners courts.

Article VII, section 1, of the Texas Constitution sets forth the following:

Section 1. Ageneral diffusion of knowledge being essential to the preservation of the liberties and rights of thepeople, it shall be the dutv of the leaislature of the State to establish andmake suitable nrovision for the suuvort andmaintenance of an efficient svstem of DubliC free schools. (Emphasis added.)

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Article VII, section 3,of the Texas Constitution contains the following language:

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of taxes inall said districts and for the Iggnaaementand control of the nublic school
or schools of suchdistricts, whether such districts are composed of territory wholly within acounty or in parts of two or more counties, and the Legislature may authorize
an additional ad valorem tax tobe levied and collected within all school districts heretofore formed or hereafter formed, for the further maintenance of public free schools, and forthe erection and equipment of school buildings therein: provided that a majority of the qualified property taxpaying voters of thedistrict voting at an election tobeheld for that purpose, shallvote such tax not to exceed in any one year one ($1.00)dollar on the onehundred dollars valuation of the property subject to taxation in such district, but the limitation upon the amount of school district tax herein authorized shall not apply to incorporated cities or towns constituting separate and independent school districts, nor to independent or common school districts created by general or special law.

Theunderscored language of article VII, section 3 does notdirectly authorize school districts to set tax rates and levyproperty taxes. Instead, the provision authorizes "the Legislature
. . .to pass laws for the assessment and collection of taxes in all said districts.
. . .'I See. e.a., Brown v. Truscott Indenendent School District, 34 S.W.2d 837 (Tex. 1931): Desdemona Indeoendent School District v. Howard, 34 S.W.Zd 840 (Tex.1931); Cainv. Lumsden, 204 S.W. 115 (Tex. Civ. App. - Amarillo 1918, nowrit). A school district's taxing authority issubject to the legislature's power to enact laws setting tax rates and providing for the assessment and collection of taxes. Section 26.08 of the Tax Code issuch a law.

Ithasbeen suggested that article VII, section 3-b of the Texas Constitution confers upon school trustees

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authority which cannot be circumscribed by section 26.08 of the Tax Code. Wedisagree.

Article VII, section 3-b, of the Texas Constitution ? provides the following:

Sec. 3-b. No tax for themaintenance of public free schools voted inany independent school district and no tax for the maintenance ofa junior college voted by a junior college district, nor anybonds voted inany such district, but unissued, shall be abrogated, cancelled invalidated by change of any kind Ti the boundaries thereof. After any change in boundaries, the governing body ofany such district, without the necessity of an additional election, shall have the power to assess, levy and collect ad valorem taxes on all taxable property within the boundaries of the district as changed, . . .in the amount, at the rate, or not to exceed the rate, and in themanner authorized in the district prior to the change in its boundaries, and further in accordance with the laws under which all such bonds, respectively, were voted. . . . 1

By itsvery terms, article VII, section 3-b, applies only inthose instances in which there has been a change ina school district's boundaries. The amendment, as originally adopted in 1962,was intended tovalidate bonds issued by school districts in Dallas County whose boundaries had been changed. Acts 1961, 57th Leg., S.J.R. No. 6,at 1301. Section 3-bwas amended in 1966 to apply to all counties and to include specifically junior colleges. Acts 1965, 59th Leg., H.J.R. No. 65, at 2230.

In the only supreme court case construing article VII, section 3-b, the Texas Supreme Court declared:

This constitutional provision was added in 1966 to eliminate the need for new voter approval ofbonds and taxeswhen authorized changes aremade intheboundaries of school districts. Once taxation h b authorized. a chancre in the school dyzn trict's power to tax. ?

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. . . . Article VII, section 3-b authorizes independent school districts to tax for school purposes inthose instances in which the subject district was formedwholly by disannexation from an existing independent school district that possessed the power to tax. (Emphasis added.)

. . Fr S.z?2d y88 at 490 (Tex. li84).001 Di ic naes, 677 Inotherwords, article VII, section 3-b, authorizes taxation without the holding of anelection to authorize such taxation as required by article VII, section 1, inthose instances inwhich taxation has alreadv been authorized by the requisite number ofvoters. Itdoes not transfer to school districts any power conferred upon the legislature by article VII, section 3. We conclude that section 26.08 of the Tax Code isnot inconsistent with article VII, sections 3and 3-b, of the Texas Constitution.

It isalso urged that section 26.08 of the Tax Code unconstitutionally violates article III, section 1,of the Texas Constitution, by effecting an improper delegation of legislative authority, and article I, section 28, of the Texas Constitution, by effecting a suspension of the laws. It isurged that section 26.08 improperly delegates to the voters the authority to settax rates and improperly suspends section 26.05 of ,theTax Code,which authorizes the governing body of taxing units to adopt atax rate. We now turn to these constitutional provisions.

Article III, section 1, of the Texas Constitution provides: "The Legislative power of this State shall be vested in a Senate andHouse ofRepresentatives, which together shall be styled 'TheLegislature of the State of Texas.fI1Article I, section 28,of the Texas Constitution provides the following: "No power of suspending laws 

### in this State shall be exercised except by the Legislature."

It isa maxim ofconstitutional law that the power conferred upon the legislature tomake the laws cannot be delegated by that department to any other body or authority. *

Te s a 'o Mccraw, 126 S.W.2d 627 (Tex.1939); Brownv.Humble Oil hRefininq co., 83 S.W.2d 935 (Tex.1935), r e eh arina denied 87 S.W.2d 1069 (Tex. 1935). The principle of non-delegition has certain important qualifications. See aenerally Annot., "Permissible limits ofdelegation of legislative

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power," 79 L.Ed. 474 (1935). For example, the legislaturemay delegate to municipalities local legislative power that isadequate to carry out the purposes forwhich theywere created. See. e.a., Stanfield v. State, 18 S.W. 577 (Tex. 1892). The United States Supreme Court declared almost acentury ago:

It isacardinal principle of our system ofgovernment that local affairs shall be managed by local authorities, and general affairs by the central authority, andhence, while the rule isalso fundamental that the power tomake laws cannot be delegated, the creation ofmunicipalities exercising local self-government has never been held to trench upon that rule. Such legislation is not regarded as atransfer ofgeneral legislativs power, but rather as the grant of the authority to prescribe local regulations, according to immemorial practice, subject, of course, to the interposition of the superior incases ofnecessity.

Stoutenbauah v. l?ennic&,129U.S. 141 (1889).

Article III, section 1, of the Texas Constitution requires that a lawmust be so complete in all of its terms andprovisions when it leaves the legislative branch that nothing is left to the judgment of the recipient of the delegated power. See. e.a., Commissioners Court of Lubbock County v.Martin, 471 S.W.2d 100 (Tex.Civ.App. - Amarillo 1971, writ ref'd n.r.e.); Gerst v. Jefferson Countv Savinas and I~$oan Ass'n, 390 S.W.2d 318 (Tex. Civ. APP. - Austin 1965, writ ref'd n.r.e.). The rights, duties, privileges, or obligations granted or imposed must be definitely fixed ordetermined, or the rules by which they are tobe fixed and determined must be clearly and definitely established, when theact ispass-d. &L The test iswhether the legislature has prescribed sufficient standards toguide thediscretion conferred. commissioners Court of Lubbock Countv v.Martin, Citv ofUnG' sunra; Moodv v.

itv.&?&, 278 S.W.Zd 912 (Tex.Civ.App. - Dallas 1955,writ ref'd n.r.e.).

Section 26.09 clearly sets forth sufficient standards both with regard to the calling of an election and with regard to the consequences ifan election were successful: whatever discretion is set forth in the section relates only to its execution. Texas courts have upheld, under article VII, section 3, of the Texas Constitution, the .

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authority of the legislature to create school districts, I.&l Frassv.-Darrouzett is ict, 277 S.W. 751 ITex.Civ.ADD. - Amarillo 1926, nowrit): to chanae their boundaries;-Tad (Tex. 1925); to enactV Citv ofHouston, i76 S.W. 419 curative statutes validating a district's existence, L o vf ee V. illamar Indenendent School District, 34 S.W.2d 854 (Te:. 1931);and todelegate toboards of trustees the authority to maintain public schools. Weaarael County Line Indeoendent School District v. Blewett, 278 S.W. 516 (Tex.Civ.App. - FortWorth 1926), m, 285 S.W. 271 (Tex. 1926). We seeno reason why the legislature could not also delegate tovoters the authority to compel the boards of trustees of school districts to reduce adopted tax rates upon a successful rollback election.

While the results of early Texas cases are inconsistent, see, e.a., State Swisher 17Tex. 441 (1856) Stanfield v. tate 18v.S.W. 577' (Tex. and 1892), at least since 1920, Texas &urts have upheld delegations of authority tovoters or some other body in instances inwhich a statute whose complete execution and application to the subject matter was made to depend on the assent of those voters or some other body. @S Trimmier v. Carlton, 296 S.W. 1070 (Tex.1927); S Dears, 223 S.W. 166 (Tex.1920); D eat'0 of c Aaencies Othe Than State Administrative Bodies, 16 Tex. L. Rev. 494r (1937). Analogously, we conclude that sections 26.08 and 26.085 effect no impermissible delegation of legislative authority in violation of article III, section 1,of the Texas Constitution.

The prohibition inarticle I, section 28, of the suspension of lawsunless it isdone by the legislature is frequently invoked when analyzing delegations of this sort. See, e.a., Attorney General Opinion H-1080 (1977); 16Tex. L. Rev. 494, sunra. It is urged that sections 26.08 and 26.085 of the Tax Code effectively suspend section 26.05,which authorizes the governing bodies of taxing units to adopt tax rates. If sections 26.08 and 26.085 actually provided that section 26.05 be inapplicable inthose taxing units inwhich a successful rollback election occurred, perhaps an article I, section 28, argument could bemade. But sections 26.08 and 26.085 do not sooperate. The relevant provisions of subsection (e)of section 26.08 provides:

Ifamajority of the qualified voters voting
on the question inthe election favor the proposition, the aovernina bodv mav not

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ado& atax rate inthe following year QI&

- calculated asprovided by

. P-J mor t an eiaht percent. . . . *(&hasis addzd.jh -3

Section 26.085 also contains the underscored language. Section 26.08 and 26.085 do not effect any suspension of the governing body‘s authority to adopt atax rate; they merely place aone-year ceiling or limitation on the rate that agoverning body may adopt. The power to adopt a rate isstill reposed with the governing body of a taxing unit, even in the event that a rollback election is successful. We conclude that sections 26.08 and 26.085 do notviolate article I, section 28.

SUMMARY
Sections 26.08 and 26.085 of the Tax Code, which authorize ad valorem tax rate rollback elections for school taxes, are constitutional.

Very truly yo , 

# L/)rl.JGc

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JIM MATTOX Attorney General ofTexas

MARYKELLER Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLKY Special Assistant Attorney General

RICK GILPIN Chairman, Opinion Committee
Prepared byJimMoellinger Assistant Attorney General

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