ATTORNEY GENERAL OF TEXAS 

GREG ABBOTT 

The Honorable Rene O. Oliveira 

Chair, Committee on Ways & Means 

Texas House of Representatives 

Post Office Box 2910 

Austin, Texas 78768-2910 

Dear Representative Oliveira: 

February 9, 2010 

Opinion No. GA-0758 

Re: Whether the South Texas Water Authority may 

adopt an effective tax rate under the provisions of 

chapter 26 of the Tax Code (RQ-0815-GA) 

You ask whether the South Texas Water Authority ("STWA") may adopt its taxes pursuant 

to the provisions of sections 26.04, 26.05, and 26.07 of the Tax Code.l You explain that the STWA 

currently calculates and adopts its effective tax rate pursuant to chapter 49 of the Water Code but 

would instead like to use these specific provisions within the Tax Code. Request Letter at 1-2. You 

suggest that the STW A enabling statute may allow it to do so. Id. at 2. 

The STW A is a conservation and reclamation district created pursuant to article XVI, section 

59 of the Texas Constitution. Act of May 24, 1979, 66th Leg., R.S., ch. 436, § 1, 1979 Tex. Gen. 

Laws 984, 984-85. "District" is defined for purposes of chapter 49 of the Water Code to include, 

with certain exceptions not relevant here, "any district or authority created by authority of ... Section 

59, Article XVI, Texas Constitution." TEx. WATER CODE ANN. § 49.001(a)(1) (Vernon 2008). 

Thus, STWA qualifies as a district, and it is subject to chapter 49 of the Water Code except to the 

extent that chapter 49 "directly conflict[ s] with a provision in any other chapter of [the Water Code] 

or any Act creating or affecting a special law district," whereupon "the specific provisions in such 

other chapter or Act shall control." Id. § 49.002(a). 

Section 49.l07 of the Water Code addresses operations and maintenance taxes levied by 

districts and certain procedures associated with the levy and collection of both operation and 

maintenance taxes and debt service taxes. Id. § 49.107(a). Specifically, subsection (g) of that 

section states that "[s]ections 26.04,26.05, and 26.07, Tax Code, do not apply to a tax levied and 

collected under this section or an ad valorem tax levied and collected for the payment of the interest 

on and principal of bonds issued by a district." Id. § 49.107(g); but see id. § 49.236(d) 

lRequest Letter at 2 (available at http://www.texasattomeygeneral.gov). 
The Honorable Rene O. Oliveira - Page 2 (GA-0758) 

(incorporating procedures under Tax Code section 26.07(b)--(g) in certain circumstances)? 

Therefore, unless another provision of the Water Code or the act creating STWA directly conflicts 

with this provision, STW A may not utilize the procedures set forth in sections 26.04, 26.05, and 

26.07 of the Tax Code when adopting its tax rate. 

You indicate that the language in the act creating STW A may conflict with subsection 

49.107(g) such that the provisions of the Tax Code may be used by STWA when adopting its tax 

rate. Request Letter at 1-2. In particular, you point to section 24 of the act creating STW A, which 

addresses taxation and states, "[t]he laws of this state applicable to general law cities and towns may 

be adopted and shall be used to the extent pertinent and practicable." Act of May 24, 1979, 66th 

Leg., R.S., ch. 436, § 24( c), 1979 Tex. Gen. Laws 984, 996. Sections 26.04,26.05, and 26.07 of the 

Tax Code establish procedures to be utilized by certain taxing entities when calculating effective and 

rollback tax rates, adopting a tax rate, and holding a rollback election. The provisions are applicable 

to general law cities. As a result, you suggest that the language in section 24 is in direct conflict with 

subsection 49.107 (g) of the Water Code and may trump the application of subsection 49.107 (g) to 

STW A. Request Letter at 2. 

We disagree that the language in the act creating STWA directly conflicts with subsection 

49.107(g) such that STWA may utilize the procedures set forth in sections 26.04, 26.05, and 26.07 

of the Tax Code. Where possible, we are to construe language used in statutes so as to harmonize 

all relevant laws, not create conflicts. See La Sara Grain Co. v. First Nat 'I Bank of Mercedes, 673 

S.W.2d 558, 565 (Tex. 1984). In creating STWA in 1979, the Legislature in general terms 

authorized it to adopt laws "applicable to general law cities" as well as laws "applicable to levy, 

assessment, and collection of county taxes ... to the extent pertinent and practicable." Act of May 

24, 1979, 66th Leg., R.S., ch. 436, § 24(c)--(d), 1979 Tex. Gen. Laws 996 (emphasis added). By its 

later enactment of subsection 49.1 07(g) and section 49.236, the Legislature established a separate 

set of procedures by which taxing entities that are defined as districts under section 49.001 of the 

Water Code set their tax rates. In adopting this separate set of procedures, the Legislature implicitly 

determined that it was not "pertinent and practicable" for districts like STWA to utilize Tax Code 

sections 26.04, 26.05, and 26.07. Section 24 of the act creating the STWA and Water Code 

2Section 26.04 provides a method for governing bodies to calculate the effective tax rate and publish that rate 

to property owners within the taxing unit. TEx. TAX CODE ANN. § 26.04( c)-{ e) (Vernon 2008). Section 26.05 outlines 

the procedures for governing bodies to adopt a tax rate each year and outlines notice requirements before that adoption 

takes place. Id. § 26.05 (Vernon Supp. 2009). Section 26.07 authorizes the qualified voters ofa taxing unit to petition 

for an election to reduce the tax rate if the adopted rate exceeds the rollback rate calculated under section 26.04. Id. § 

26.07 (Vernon 2008). The Water Code establishes a separate set of calculations and procedures for water .districts 

subject to chapter 49 to utilize in adopting a proposed tax rate, and those procedures differ from the procedures set out 

in seetions 26.04, 26.05, and 26.07 of the Tax Code. See TEX. WATER CODE ANN. §§ 49.107(b)-{d) (Vernon 2008) 

(requiring a district's operation and maintenance tax be approved by voters); 49.236 (outlining the notice requirements 

for a district before it adopts a tax rate); compare TEX. TAX CODE ANN. §§ 26.04 (Vernon 2008), 26.05 (Vernon SUpp. 

2009),26.07 (Vernon 2008). 
The Honorable Rene O. Oliveira - Page 3 (GA-0758) 

subsection 49.107(g) can be harmonized by construing subsection 49.107(g) to create a limited 

exception to the STWA's general ability to adopt laws applicable to general law cities and towns.3 

The legislative history associated with the adoption of chapter 49 of the Water Code, and 

section 49.107 (g) in particular,supports this construction. In 1995, sixteen years after the creation 

of STW A, the Legislature enacted chapter 49 of the Water Code to address the "lack of procedural 

uniformity between the different types of local water districts," recognizing that the procedural 

"inconsistencies [led] to confusion among citizens, district board members, and state agency 

personnel." SENATE COMM. ON NATURAL RESOURCES, BILL ANALYSIS, Tex. S.B. 626, 74th Leg., 

R.S. (1995). It enacted section 49.107(g) to specifically provide that "certain procedures for 

calculating tax rates and levying taxes do not apply to any district's or authority's maintenance tax 

or taxes levied and collected for the payment of the interest on and principal of bonds issued by a 

district." SENATECOMM.ONNATURALREsOURCES,BILLANALYSIS, Tex. S.B.1444, 77thLeg.,R.S. 

(2001) (emphasis added). Instead, the Legislature created a separate set of procedures and 

calculations for districts subject to chapter 49 to utilize in adopting tax rates. See TEx. WATER CODE 

ANN. § 49.236(a)(2)(D)--(F) (Vernon 2008). Pursuant to section 49.107(g), the Legislature has 

required STW A to utilize these separate procedures and calculations rather than those outlined in 

Tax Code sections 26.04, 26.05, and ~6.07 in adopting its tax rate. 

3The Texas Comptroller of Public Accounts has similarly interpreted subsection 49.1 07(g) to prohibit authorities 

such as the STWA from using Tax Code sections 26.04, 26.05, and 26.07 to calculate an effective rate, adopt a tax rate, 

and have a rollback election. See Truth-in-Taxation: A Guide for Setting Tax Rates for Taxing Units Other Than School 

Districts, TEx. COMPTROLLER OF PUBLIC ACCOUNTS (available athttp://www.window.state.tx.usJtaxinfo/proptaxitnt091) 

("The taxing units to which Tax Code Sections 26.04,26.05, and 26.07 do not apply are defined in Water Code Section 

49.001 and include any district or authority created by ... Section 59, Article XVI, Texas Constitution."). 
The Honorable Rene O. Oliveira - Page 4 (GA-0758) 

SUMMARY 

Pursuant to subsection 49.107(g) of the Water Code, the 

Legislature has prohibited the South Texas Water Authority from 

utilizing the procedures and calculations in sections 26.04, 26.05, and 

26.07 of the Tax Code to adopt its tax rate. 

ANDREW WEBER 

First Assistant Attorney General 

JONATHAN K. FRELS 

Deputy Attorney General for Legal Counsel 

NANCY S. FULLER 

Chair, Opinion Committee 

Virginia K. Hoelscher 

Assistant Attorney General, Opinion Committee