ATTORNEY GENERAL OF TEXAS GREG ABBOTT

The Honorable Rene O. Oliveira Chair, Committee on Ways & Means Texas House ofRepresentatives Post Office Box 2910 Austin, Texas 78768-2910
Dear Representative Oliveira: February 9, 2010
Opinion No. GA-0758 Re: Whetherthe SouthTexas WaterAuthority may adopt an effective tax rate under the provisions of chapter 26 ofthe Tax Code (RQ-0815-GA)

You ask whether the South Texas Water Authority ("STWA") may adopt its taxes pursuant to the provisions ofsections 26.04, 26.05, and 26.07 ofthe Tax Code. l You explainthatthe STWA currently calculates and adopts its effective tax rate pursuant to chapter 49 ofthe Water Code but would instead like to use these specific provisions withinthe Tax Code. RequestLetter 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 conservationandreclamationdistrictcreatedpursuantto article XVI, section 59 ofthe Texas Constitution. Act ofMay 24, 1979, 66th Leg., R.S., ch. 436, 

### § 1, 1979 Tex. Gen. Laws 984, 984-85. "District" is defined for purposes ofchapter 49 ofthe Water Code to include, withcertainexceptionsnotrelevanthere, "anydistrictorauthoritycreatedbyauthority 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 ofthe Water Code except to the extent that chapter49 "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 ofthe 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) ofthat section states that "[s]ections 26.04,26.05, and 26.07, Tax Code, do not apply to a tax levied and collected underthis section or an advalorem tax levied and collected for the payment ofthe 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

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(incorporating procedures under Tax Code section 26.07(b)--(g) in certain circumstances)? Therefore, unless another provision ofthe 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 ofthe 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 ofthe Tax Code may be used by STWA when adopting its tax rate. Request Letter at 1-2. 

### Inparticular, you point to section 24 ofthe act creating STW A, which addresses taxation and states, "[t]he laws ofthis state applicable to general lawcities and towns may be adopted and shall be used to the extent pertinent and practicable." Act ofMay 24, 1979, 66th Leg., R.S., ch. 436, 

### § 24( c), 1979 Tex. Gen. Laws 984, 996. Sections 26.04,26.05, and 26.07 ofthe TaxCode establishprocedurestobeutilizedby certaintaxing entities whencalculating effective and rollbacktax rates, adopting a taxrate, and holding a rollbackelection. Theprovisions are applicable to general lawcities. As aresult, you suggestthatthe language in section 24 is in direct conflictwith subsection 49.107(g) ofthe Water Code and may trump the application ofsubsection 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 ofthe 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. FirstNat 'IBankof 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 ofcounty taxes
... to the extent pertinentand practicable." Act ofMay 24, 1979, 66th Leg., R.S., ch. 436, 

### § 24(c)--(d), 1979 Tex. Gen. Laws 996 (emphasis added). By its later enactment ofsubsection 49.1 07(g) and section 49.236, the Legislature established a separate set ofprocedures by which taxing entities that are defined as districts under section 49.001 ofthe Water Code settheirtax rates. 

### Inadopting this separate set ofprocedures, 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 taxrate and publish thatrate 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 ofataxing unit to petition for an election to reduce the tax rate ifthe adopted rate exceeds the rollback rate calculated under section 26.04. Id. § 26.07 (Vernon 2008). The Water Code establishes a separate set ofcalculations and procedures for water .districts subjectto chapter 49 to utilize in adopting a proposedtax rate, and those procedures differ from the procedures set out in seetions 26.04, 26.05, and 26.07 ofthe Tax Code. See TEX. WATER CODE ANN. §§ 49.107(b)-{d) (Vernon 2008) (requiring a district's operation and maintenance taxbe approvedby 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

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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 ofchapter 49 ofthe Water Code, and section 49.107(g) inparticular,supports this construction. 

### In 1995, sixteen years after the creation ofSTW A, the Legislature enacted chapter 49 ofthe Water Code to address the "lack ofprocedural 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 ofthe interest on and principal ofbonds 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 subjectto chapter49to utilize in adoptingtaxrates. See

## TEx. WATERCODE 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 Comptrollerof PublicAccountshas similarly interpreted subsection49.107(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 atax rate, and have arollbackelection. See Truth-in- Taxation: A Guide for Setting Tax Rates for Taxing Units Other Than School Districts, TEx. COMPTROLLEROFPUBLICACCOUNTS (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

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### SUMMARY Pursuant to subsection 49.107(g) of the Water Code, the Legislature has prohibited the South Texas Water Authority from utilizingtheprocedures andcalculationsinsections 26.04, 26.05, and 26.07 ofthe 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