Hon. Be8uford B. Jester &wernor of Texas Austin, Texas Opinion No. V-204 lte: Power of the Automatic Tax Board,to set anad valorem tax rate for the Available School Fundexcept for text books where sufficlent Dear Governor Jester: money is available in the clearance fund. Your request for opinion dated May2, 1947., reads in part es follows:

“Several authorities have expressed to metheir graqe doubt as to whether, under the provisions of House Bill 301, recently enacted by the Legislature3 the Autoutic Taxboard can set any ad valorem tax rate for the Available School Fund, except that portion needed for free textbooks.

“This question is raised in relation to the foll&ing language of the bill: ”t the’re is hereby approprlated, sll&itidj transferred and credited to the Available School Fundsuch a sum which whentaken together with the total of all other statutory and constitutional amounts to accrue to the Available School Fund 11111equal to such atotal as maybe needed to pay a Fifky-five dollar ($55) per.capita

. a. .

“The suggest ion tide to meis that if there should be sufficient moneyavollable in the clearance fund to pay the $55, the .Automatic TaxBoard could not levy the ad valopem tax of 35 cents for schools Ds 0e. .

Eon. Reauford Ii, Jester, Page 2, V-204

“I shall’,be grateful for your opinion onthe matter.” The Constitution of Texas, Section 3, Article VII, provides in part as follows:

%ne-fourth of the revenue derived from the State occupation taxes and poll tax of one dollar a00shall be set apart annually for the benefit of the public free schools; and In addition thereto, there shall be l.evled and collected anannual advalorem State tax of such anamount not to exceed thirty-five cents on the one hundred ($100.00) dollars valuation, es with the available school fund arising from all other sources, vi11 be sufficient to maintain end support the public schools of this State for aperiod of not less than six months in each year, and it shall be the duty of the State Board of Education to set aside asufficient amount out of the said tax to provide free text books for the use of children attending the public free schools of this State; provided, howRetterating the sources of funds for the support of the public free schools, the Con&itution provides for the foll.owlng:

1. One-fourth of the occupation taxes, 2. Thepoll tax. 3. Other sources available to the school fund. These “other sources’ (Article 2823, lt. C. 5,) Include interest onbonds andother funds;Hon. Beauford Ii. Jester, Page 3, V-204

interest onproceeds from the sale of land; moneys from leases; andall direct appropriations to the Available School Fund, except such final appropriation (5 below)
as maybe necessary to makeUPthe deficit In the total sumrequired to maintain end support the publtc schools, 4. Advalorem tax not to exceed 35 cents onthe hundred dollar valuation. 5. Appropriations from the general revenue to makeupthe "deficit", if the four above listed sources are Insufficient. Under the Constitution, the general reve'nue maybe used for the support of the publFc free schools in twoways. First, direct appropriations maybemade from the general revenue to the Available School Fund andbe included as one of the "other, sources’ (item 3 above) to be considered by the Automatic TaxBoard In fixing the advalorem tax rate for school purposes, This is in accord with the Interpretation of Article VII of the Texas Constitution madeover along periodHon. Beauford Ii. Jester, Page 4, V-204

of years by the Legislature and the Courts, In defining what shell constitute the Aveil,able School Fscd, Article 2823, 

### v.C.s.,the Legisls,ture said thatt ir should include “other Available School Funds prcrlded by Iaw,” Thehistory of educational legislation 1.n Texas shows that the provisions o.fArtlck XI, -,ke edncat:lonel Artic1.r of t.heCon.stitotioc,, ?mve never bets regardcld as lin~ltetic~:~s ‘bg~impll.cat.lon on tnc
gEC?l.ei'al power af tk Legl.s~.st:ure t3 appropriate mou e.;:fern the general Lundar:d fPOlli0tk5P sources ti.r,- act to the Avalleble School Fundor to ctkr schcoi p!lrpuse3. Onmanycccaslocs the Texe:sLegislature has madedirect apprcprietions from the generai revsue to the Available School Fund, end on several occasions larger percentages then oc.e fcurth of the occupation taxes have been assl.gned to the Schcol Fund. These Acts, and this Ieglslatlve interpretation. of the Constltut ion, have been approved by our courts 0 See, Mummevs. Marra,; 120Tex. Reports 383, When such direct appropriations are madeto tfie Available School Fundbefore the ad valorem tax Is set, it 1s clear that they are to be considered In arriving at the rate of ad veiorem tax needed for school purposes.

The second manner in which appropriations maybe madefrom the general revenue is outlined InHan; Beauford H. Jester, Page 5, V-204

the last phrase of that portion of SectIon 3, APtitle VII, quoted above, for the purpose of making upthe deficit, if any, after totaling the estimated
revenue from all of other sources namedabove, lncludlng the ad velorem tax (Items 1, 2, 3, and 4 above) S WhenIt is clear that such appropriations
are madeby the Legislature only for the purpose of raising the total available funds to the amount required to meet the necessary per capita apportlonment, obviously they should not be considered by the Automatic TaxBoard Inflxing the advelorem tax rate for school purposes. Such appropriations could not be credited to the Available School Fund until after the ad valorem tax rate has been set and the estlmated deffelt , If any, has ‘been determined,

Therefore, it remains for us to determine what typs of appropriation was contemplated andectuallg medeby the 50th Legislature In House Bill 301. Thebill provides, in pert, as followsz

“‘(4-e) After the above allocations and payments have been madefrom such Clearance Fund, beginning with the fiscal year September 1, 1947, end annually thereafter, there is hereby appropriated, allocated, transferred, and credited to the Available State School Fund such asumwhich when taken tonether with the’ total of all other statutory and c true to the AvaHon. Beauford H. Jester, Page 6, V-204

to such atotal as maybe needed to D y aFifty-rive Dolla capita ip- ;r:;zynt for eagh’f%‘e%y scholastic

tate-approved school census for

vision of this Act by taking into account his estimate of such other constitutional and statutory amounts to accrue to the Available School Fundas madeat the beginning of each fiscal year. Thereafter the Comptroller shall allocate, transfer, and credit monthly in equal monthly installments from the Clearance Fundto the Available State School Fund such amount as so determined

. The Comptroller Is hereby authorized to modify from time to time during the fiscal year his estimates of the revenue to accrue to the State Available School Fund in any one year, and shall la the light of the revised estimate or estimates increase, diminish, or suspend any remaining monthly payment or paymsnts from the Clearance Fund to the Available School Fund, provided by the close of each fiscal year there shall have been paid from the Clearance Fund to the Available School Fund such anamount as maybe neaded to enable the Available State School Fundto pay said Fifty-five Dollar ($55) pel;,capita apportionment annually in full e Clearly, webelieve that the Legislature intended by this Act to provide the second type of approprlation above discussed. This bill contemplates the transfer of nomoney to the Available School Fund until after “the total of all other statutory and constitutional amounts” have been considered, determined, and credited to the School Fund. go part of such allocation should be considered by the TaxBoard inHon. Beauford H. Jester, Page 7, V-204
setting the ad valorem tax rate for school purposes, TheBoard should set the rate of such an amount as with all other sources of school revenue, will meet the $55.OOper capita set by the Legislrt ure, and, without considering any portion of the funds that maybaallocated thereafter under House Bill 301 to makeupthe balance, if any, necessary to pay such per capita apportionment 0

That this was the intent of the,Legislature in House Bill 301, i3 shownby the fact that the Comtroller Is not authorized to transfer any of the money from the Clearance Fund until September 1, the beginning date of each fiscal year0 Prior to that time, within five days after July 15th of each year, the Tax Board is required byArticle 7043, V0C. 3,9 to meet and calculate the ad valorem tax rate for school purposea for the next fiscal year. Only after that has been done and not before September 1st of the aan year maythe Comptroller transfer money from the Clearance Fund, if needed to pay the full $55”00 per capita apport ionmeat s

Therefore, the Automatic TaxBoard must mset Inaccordance with Article 7043, V, C, 3,, aad levy anad valorem tax of such anamount, not to exceed 35# on the $lOO,OO valuation, as with the availableHon. Beauford Ii. Jester, Page 8, V-204

school fulla arising from all other sources (not including the allocation in Ii. B. 301) will be sufflclent to pay the $55.00 per capita for maintenance and support of the public schools. Thereafter, if the total of the advalorem tax and all of these other aourcea is Insufficient to pay the $55.00 per capita, and only in such event, the Comptroller Is authorized by 11.B. 301 to transfer such aurns as maybe necessary to makeupthe full per capita of $55.00 set by the Isglslature. In noevent is the Comptroller authorized to determine the amount to be transferred or to makeany portion of such transfer from the Clearance Fund until the beginning date (September 1st) of each fiscal year. SUMMAHY Theallocations authorized in House Bill 301, 50th Legislature, from the Clearance Fund to the Available School Fundare limited to such amounts as maybe necessary to pay the $55.00 per capita apportionment after the Automatic TaxBoard has levied anadvalorem tax for school purposes not to exceed 359?onthe $100.00 valuation. The Automatic Tax Board must levy the ad valorem tax without regard to any suma that maybecome available later from the Clearance Fund. TheState Comptroller is not authorized to transfer any moneyfrom the Clearance Fund until September 1st of each fiscal year, such date being subsequent to calculation and levy of the ad valorem tax by the Automatic Tax Board.Hon. &auford H. Jester, Page 9, V-204
Sincerely yours, /s/ Price Daniel Price Daniel Attorney General PD:sh:mrj
The foregoing opinion was considered and approved in Confere9ce composed of Assistant Attorney Genera' Fagan Dickson, Chester Qlllson, Gr+enhlll, Chester Qlllson, Joe Gr+enhlll, J. C. Davis, Jr., and Ocie Speer.

/a/ Fagan Dickson Fagan Dickson First Assistant Attorney General Chairman of the Conference Approved: May19, 1947 Attorney General of Texas
This Opinion aonsidered and approved in limited conference.