Bonoreble T. Y. Trimble, FirstAssistant

State Superintendentof Publio Iastruotioa Austin, Texas

Dear Mr. Trimblea %%$k%!ty of Sherman be authoriced by a charter amendment adopted by a majority of the qualified voters of said oity to levy taxes for muaioipal purposes noteexoeeding’#2.SO,and for sahoal purposes not exceeding #1.50? ‘~

Ke aoknonledge~

receipt ofyour opinion request of May 3rd, togethernith,a letter **from** Mr. J.‘Tip Ikwell, President of the Board of Trustees of the Sherman IndependentSohool Diatriat,and the opinions of Meesrs. Gibaoa and Gibson and the HonorableGeorge L. Hamilton,‘City Attorney of Shennaa.

We quote from Mr. Xewellta latter a8 followa:

“The Board of Trustees of the Sherman IndependentSchool Distriothas requestedthe City Commission of the City of Sherman to call elections for the purpose of amending the Charter of,the City of Sherman to,remove tha limitations on the amount of taxerrthat,may be levied for sohoolpurposels under the Charter as it now reads. and a separate eleotion : of the qualified property tai pyin,gvoters for the purpose, of authorizing the levy of ‘atax for school purposesnot to exceed 41.50 per )lOO.OO of assessedvaluation. I enclose herewith oopy of the aineadmentr proposed **by** the aohool board and **a** oopy of a draft of. a resolutionpresented to the Gity Commission 0r.1

April 22, 1946,

and adopted by the commission in substance. Publication **of** ‘theform of notioe oontained **in** the resolutionwas started on April 24.

“After the adaption ,ofthe resolutiok (inwbstance) 8 question has oome up a8 to the legal effect of the procedure.-’ In order to dlarif’y thismatter it is requested that you obtain from the Attorney ‘Genciral **aamers:** to the followingquestionsr

“1. **Can** the City of Sherman by aliminating the limitations in its Barter and after approval of the proposed sohool tax by the qualifiedproperty tax paying voters levy andHon. T. M. Trimble. page 2

a88e86 taxes formunicipal purposesup to the two and onehalf per oeat limit imposed by aeotion 5 of Artiole II of the Constitutionof Texas, and in addition to that amount, taxes for aohaol purposesup to one and one-half per cent of the taxable property of the oity? In otherwords oan the City of Sherman a6 a munioipality oonstitutionallylevy taxes at the rate of two and one-halfper cent nhile at the 8ame time as an IndependentSohool tintriot levying taxes at the rate of one and one-half **per** oent,making a total authorired tax limit formunloipal and sohool purposes of four per oent?

“2. ail1 the proposed amendments to the Charter of the City of Sherman, taken in oonjunotionwith a vote of the qualified property tax payingvoters of Sherman authorizing
a sohool tax rate not to exoeed one and one-halfper oent be suffioientto authorize the City of Sherman to levy taxes for municipal purposesup to two and one-halfper cent and in addition thereto taxes for school purposesup to one and orehalf per cent?

“3. In the absenoe of an eleotionunder Art. 2783b R r 5

.I..

. for separating the schools from munioipal oontrol,who would have authority to call the election for determining the amount of sohool taxes, the City Comnisaionor the Sohool Board?

*In oonneationwith the foregoingquestionsyou are furnished the following infonnations

“The City of Sherman on Maroh 6, 1916 adopted a Home Rule Charter containing the followingprovisions,as now amended:

“Seotion 166. *The City of Shennan ia oonatitutedand shall oontinueto be a separateand independent 8ohool district, and the City Camnission is vested with power to maintain, regulate, direot and govern all the publio free aohoolsnow established or hereafter to be sntablishedwithin the limits, and it is further authorized to pass suoh ordinanoes,rulea and regulations, not inoonai8teatwith the Goartitutionand laws of this State, a8 may be **neoeessary** to govern the same, establish
new aehools,purahase building sites, oonstruot s,ohool **houses.** and generallyto promote free publio education within its limits.’

“Seotion 106. ‘TheCommission shallhave the powerwithin the City to annually levy and oolleot taxes for the following purpose6* (1) For generalpurpores and ourrant expenses not exceeding 606 on the $100 aclclerred value of all real and pers~onal estate and property in the Citynot exempt from taxation by the Constitutionand Lawa of the State.Hon. T. M. Trimble,page 3 O-7060

(2) For the maintenance and support of public free sohoolsnot exceeding SQ! on the #lOOAssessed valuation of real and personal estate and property in the City not exempt fram taxation by the Constitutionand lams of the State. (3) For the establishment,maintenanoe and,widening, extension and improvtientof its streets, alleys and bridges not exceeding 20# on the $100 assessedvaluation.of all real and personal estate and property in the City not exempt from taxation by the Constitutionand laws of the State. (4) For the purpose of paying the City'spromissory notes, bonded indebtedness,public improvements,and for the purposes set out in Section 173 hereof, to includebonds now outstandingand bonds hereafter legally issued for the purposes named in this Charter, and. as the Conmissionmay deem necessary, and for the best interest of the City, not exceeding $1.60
on the $100 assessedvaluation of all real and personal estate and property in the City not exempt from taxation by the Constitutionand laws of the State. Said amount shall be apportioned as the Cnmnission shall ordain and deem to be for the best interest of the City.' "Section 107. The taxes that may be levied for all purposes for any one.yeaf;'tfy said City shallnever exceed two and one-half per cent of the taxable property in said City, inclusive of the tax to pay the bonded indebtednessof the Texas & Paoifio and the Houston ECTexas CentralRailway Companiesand
no taxes exceeding said per cent shall ever be levied and collected.'

"It is proposed to amend Section 106 either to read as followsr 'Section106. The Commission shall have the power within the city to annually levy and collect taxes for the followingpurposesr (1) For generalpurposes and currentexpenses not exceeding 504 on the $100 assessedvalue of all real and personal estate and property in the City not exempt from taxation by the Constitution and laws of the State. (2) For the establishment,maintenance and widening, extension and improvement of Its street,allays and bridges not exceeding 20$ **on** the $100 assessedvaluation of all real and personal estate and property in the City not exempt from taxation by the Constitutionand laws of the State. (3) For the purpose of paying the City'spromissory notes, bonded indebtedness,public improvements,and for the purposes set out in Section 173 hereof, to inoludebonds now outstandingand bonds hereafter legally issued for the purposes named in this charter.and as the Commission **may** deem necessary, and for the best interest of the City,not exceeding#l-60 **on** the $100 assessedvaluation of all real and personal estate and property in the -Citynot exempt from taxation by the Constitution and laws of the Sta'te. Said amount shall be apportionedas the Commission shall ordain and deem to be for the best interest Of the City.'Hon. T. M. Trimble, page 4 O-7060

or to repeal paragraph 2 of Section 106
‘(2) Forthe maintenanoe and support of the public free schoolsnot exceeding 65d on the $100 assessedvaluation of real and personalestate and property in the Citynot exempt from taxation by the Conrtitutioaend Laws of the State.’

It is proposed to amend Seotion 107 to read as followsr

‘Section107. The taxes that may be levied for all purposes exoept schoolpurposes for any oneyear by said oity shall never exceed two and one half per cent (2&) of the taxable property in said city, and no taxes exceeding said per cent, exolusive of taxes levied for schoolpurposes, shall ever be levied and oolleoted.’

“The City of Sherman has never extended its boundaries for sohoolpurposes,and no effort haa ever been made to separate the schools frommunioipal oontrol.

“It is not desired to separate the sohoole from municipal control if the necessary tax levies oan be legally authoriaedwithout taking that step.
“Sinoe the notice for calling the elections for amending the Charter have already been published it will be greatly appreciated ifyou can obtain a ruling on the matter at your earliest convenienoe. Referenoe ismade to theAttorney General’s Opinion No. O-6069, whiohne believemay be helpful in determining the matter.

“Your aooperation in this matter will be greatly appreaiated.”

After a oareful study of Mr. Newell’s letter, the Charter of the City of Ghennan, the Constitutionand Statutes and oases pertaining to the question6 involved,we oonaur in the views expressed by Messrs. Gibcxm and Gibeon, but we cannot **agree** nith the conolu6ionreaohed by Mr. Hamilton.

,We haves determined that the City of 5herman is acting in a dual oapaoityand hae dual powerr. It is **a** munioipl oorporationand it is a separate and independent school dietriot. In like situations.the courts of this State have consistentlyrecognized the dual entities of cities and sohool diatriots,and **in** every inetanoe the aourthas given effect to the separate entitier involved.

Thue in Lovev. The City of Dallas, 40 6. W. (Zd) 2.0~ Chief Justioe Cureton deolared,Hon. T. M. Trimble, page 5 O-7060

"The City of Dallas is a municipal corporation, charteredunder the laws of the State, has assumed control of its public schools,' and as such is to be regarded as an independent sohool district."

In dealingwith schoolswhich are under the controland management of oities, the courts have consistentlyheld that the rate of tax whiohmay be levied for sohcclpurposes in suoh oities is limited by Article 7, Seotion 3 of the Constitutionof Texas,which relates to schools,and is not oontrolledby constitutionalprovision relating to cities and towns. In otherwords, in this respect the courts have treated schoolsunder themanagement and control of cities as school districts rather than as a part of the,oitiesunder whose control the sohoolsare operated.

The leading case announcing the dootrine of the dual nature of suoh a ciQ is City of Rockdalev. Cureton (Sup. Ct.) 229 S. HI.852. See also Houstonv. Gonzales IndependentSchool District (Comm. of Appeals), 229 S.W. 467; M.K. & T. Ry. Co. of Texas v. City of Whitesboro (Ccmn. of Appeals), 267 S. 1. 9043 City of Ft. Worth v. Zane-Cetti (Ccmm. of Appeals), 278 S.W. 1633 Treacoarv. City of Galvestion (GalvestonCt. of Civ. App.), 28 S.W. (2d) 887; City of Fort Northv. Cureton (Sup.Ct.), 222 S.W. 631: City of Beltonv. Rarris Trust & Savings Bank, 27s S.W. 194 (affirmedby the Texas Ccmm. of App.), 263 S. W. 164; Temple Ind. Sch. Dist.v. Procter, 97 S.W. (2d) 1047 (writ of error refused)1City of El Paso v. Carroll, 106 S.W. (2d) 251 (writ of errcr refused).

Taxation for municipal purposes in the City of Sherman is governedby Article 11, Section 6, of the Constitutionof Texas and Article 1165 of Vernon'sAnno. Civil Statutes. Said article and statute read in part as follows:

"Said citiesmay levy, asssss, and colleot such taxes
as have been authorized by law or by their charters,but no tax for any purposes shall ever be lawful for any one year which shall exceed two and one-half per cent of the taxable property of such oity."

Taxation for the management and control of public schools of school distriots is governedby Article 7, Section S of the Constitution of Texas. This Section authorizes a tax of $1 on the $100 valuation, but has a proviso that said limitation "upon ths mount of school district tax herein authorieed shallnot apply to incorporated cities or towna, constituting separateand independent school districts,nor to independentor ccmmon school distriots ,created by general or special law". Thus it is seen that all school districts ar exempted from the constitutional limit of $1 on the $100 valuation, and the Legislature is left free to fix such limit as it deems advisable.

Article 2784-e,Vernon's Annotated, Civil Statutes (Acts of 1945, 49th Legislature.page 486, Chapter 304. Section 1) authorizesHon. T. M. Trimble,pge 6 O-7060

$1.50 tax on the $100 valuation in all school districts except cities and towns which oonstitute separate and independent school districts. ~A$to these districts, the Legislaturehas left the rate to be fixed by the property taxpayingvoters. Article 2799,Vernon's Annotated Civil Statutes, reads as follows:

"Article 2799. The governingbody of any city or town whioh is a separate and independent school district, whether incorporatedunder any act of the Congress of the Republic or the Legislature of Texas, or under any act or incorporationwhatever, shallhave power by ordinance to annually levy and collect ad valorem taxes for the support andmaintenanoe of public free schools and for the erection and equipment of public free school buildings in the city
or town. The proposition suhnittedmay be for such a rate of ad valcrem tax not exceeding such per cent, as may be voted by a majority vote of all votes oast at any such eleotion. If the proposition is carried,the school tax shall be continuedto be annually levied and collected for at least two years, and thereafter,unless it be discontinuedat an electionheld to determinewhether the tax shall bs continued
or disoontinuedat the request of fifty property taxpayers of such independentdistrict. Ylhan the tax is continuedno eleoticn to disccntinue it shall be held for two years; when the tax is discontinuedno election to levy a tax shall be held during the same year."

In the case of City of Rcokdalev. Cur&on, supra, the following language is uaed:

"When these bonds were voted, the section concludedwith this alauser 'Butthe limitaticnupon the amount of school district tax herein authorized shallnot apply to incorporated cities or tovms. constituting separate and independent school districts,' This provision explicitlyrelieved independent school distriots oonstitutedby cities or town6 of the tax limitation imposedupon school districts otherwise constituted, and left the Legislatureunrestrainedby ocnstituticnalprovision in that particular. In keeping with it, the Legislature by the Aot of October 10, 1917 (Chapter 14,Aots of Third Called Session of Thirty-fifth "egislature)amendedArticle 925
sc as to provide that cities and towns constituting separate and independentaohool districtsmay levy and collect such ad valorsm tax for the support andmaintenance of their public free schoolsand for the ereotion and equipment of school buildingstherefor as their electorsmay determine."

There is no constitutionalor statutory limit on the rate a school district suoh as the Shennan &strict may levy and collect, so long as the tax is authorizedby a majority vote of the property taxpayingvoters.i:on.'I'. 1.'. 1rimhl.e, page 7 O-7060

A city to constitute "a separate and independent school distriat"must have boundaries identicalwith the school district. YIhen the boundariesare extendedto take in lands outside of the City,the ci~ty no longor constitutesa sap&rate and independent school distr<~ct, o~ld the tnx limit fixed by g,aneral!law is nppliccble.

rnview of the foregoing,your first question is answered i~rl tho aff’innativu.

In reply to your secondquestion,we have a serious doubt RS to the sufficiencyof the proposed cmendmentsquoted in Mr. ii'eaoll's letter to accomplish the intended purpose. 'Ihe proposed ameodmont to Sdctjon 107 clearlyauthorizes the City to levy $2.50 for city purposes, exclusive of taxes levied **for** sohoolpurposes, but leaves some doubt es to whether the City aould have a sohool tax should the subsequent schcol tax election fail. 'Thereis also some doubt ss to the authority of the '3ty Commissionto call such an electionwhere the Charter is silent 0onncrnj~nE;

same. Itmay be that the power is granted under the gonorc1 law, but we would suggest that you include in your proposed amend,:~~l~:1-:;
an amendment in'substantiallythe following lan~uago:

'?orthemaintenance and support of public free schools not cxocedingeighty-five cents on the $!.OO,assessed vnluo of all real and personal estate and property ih the City not 8.~ ompt from taxation by the Constitutionand laws of the State, such limi~tation

as to rate to apply until such ti~mos as tf:e nunlif"edproperty tax payers shsY.1 vote to incronse same.'

‘Y:hon nuthori,zed

by the qusljfiod uroperty tax pnyi.np; voters, the City !:ommiss.i on shallly ordiranoea:nnually l.cvy aridcolleqt a tax of not exceeding l-l/Z par cent of all.tho t:axshlo property of said Citynot exempted from tax by tho I'onstitution

and laws of the State of 'Texris for the suoport, naintennnoe, and operation of the free schools and provide
an interestand sinking fund sufficientto pay nt maturity all bonds heretofore or hereafter issued for the erection and nquipment of public free schoolswithin the City of Sherman." ,i If the oharter is amended in aooordancewith our first suggostion, the City could stillmaintain the eighty-five oent tax OS now provided in the charteruntil after the election to incrense same.

In reply to your third question,you are respectfullyadvised that it is our opinion that the school tax election shoul,d be called IV the City Commission, said Commissionhaving the power under the City Charter "to annually levy and oollsct 11 the authorized taxes, and also being "vestedwith the power tomaintain, regulate, direct and **govern** all the publia free sohoolsnow established or hereafter to be established .withinthe limits, ">i and it is further authorized to pass such ordinances,Hon. T. M. Trimble, page 8 O-7060

rules and regulations,not inconsistentwith the Constitutionand laws of this State, 88 may be necessary to govern the same, establishnew sohools,purchasebuildings sites, construct school houses, and generally to promote free public educationwithin its limits."

Trusting that this answers your questions,we 81'8

Yours very truly

ATTORNEY GENiZAL OF TEXAS

Hy s/Claud 0. noothman

Assistant

c3!3:v:wo

APPROWD MAY 9, 1946 s/Carlos C. Ashley FIRST ASSISTANT I1'TTORNEY

GENERAL
Approved Opinion CommitteeBy GWB Chairman ~-