OFFICE OF THE ATTORNEY GENERAL OF TEXAS 

AUSTIN 

Ronorabla Lee Bra&y 

BElnklng ComlsdoIler 

Austin, %exa6 

Deer 1Er. Bradyr 

t of your letter noat on four ~ertfonm. 

8 aa followr: 

ion aad Rso&mngovermmn6al ageaoy, 

io aad wrpom6r, under 

Lsglelature , Seoond 

sd bon48 pursuant to the 

dlstriot, and both &ate and 

avesting la these bonds, and 

rmoeesary to Uetmrilne whab 

ve been plaoad by law on them 

IlvClutentr.” 

amum that you have refermoe to the .!G,OOO,- 

8 authorized by the Board 01 Direotore of the 

Bra~oa District a,nO which are recured by an6 piyabla out of 

the State taxes grantad to the diatrlot by the law oreating 

Sam. 

our opinion ie requested on the tollodng four 

pueetiona t 
1. “1s eeld dlstriot a munialpal oorporatlon or a dietrlot created for rohool or any 

other state or looel purpose, wlthln the 0x089- 

tion to Article 5% of the Penal Code of Texas, 

aa anended?” 

i3. *Does this distrlot have the aoverslgn 

power of taxetion, or power ot taxation derived 

fron: the aovarelgn, lnoludlng the incidental 

pow4r to oompsl payment?* 

3. *Is the State of T4xar liable on these 

bondln” 

la 2; lofin limit 

“Are bonds 

c. 3. R. 3.9' 

iesuetl by aaid dietriot withpmvldad u5d4r Seation 6136, 

X4 ahall answer the queetiom in 

ret OUL. 

hlative to your first quertlon, 

Penal Code of Texa11, aa ammded, Yoraoa*a 

Statutes, reads, in part, a4 iollcnr8t 

the order abovo 

Arti 864 of the 

Aanotawd civl.1 

“No lnoorporated bank or trurrt oonqmay, 

obertered under the law6 of thi6 State, #hall 

loan itrr lilonrp dlnotly or lnbirmotlg or permit 

any individual, private corporation, company or 

rim, to beooum, at aqp th4, indebted or liable 

to it in a 4uni exoeedlng twentpriv4 per 04nt 

(8561 of its oauital stook aotual4 paid in anb 

We think there oan be no queatloa but that the obrigor on a muni~lpsl bond lsl a debtor in the mmao oontemplat~ 

by the above quoted artiole, and that, thenSore, in the abnenoe of the 9rovlao undtwaroored tn the above quotti Aot, the 
Honorable Lee Brady, page 63 

~aatrlotlon theraof muld apply to tns purohaae ct muniolpl bonds a8 an inveatmnt by any beak 80 chartered. It 

844~~ olear that tha above underaoorsd proviso removaa the 

reatrlctlon and would pennlt of unllmlted iaveatmat la 

munioipal bonda; provided, ot wuree, that the lamlag polltic41 imbdtvldon oo?z.oa within the meaning oi the phrase 

%unlcip41 oorporatlon, oounty or any dlatriot orsat for 

l ohool or any other State or looal publio purpoaaW. The 

Brazoa River Conssrvation and Reolemation Dlstriot was 

created by an Aot of tbe Ssaond Called S4aalon, Forty-first 

Laglalatun,, oompiled as Chapter 19 - Seotlon I! thbnof ma&- 

lag, la part, as r0llwar 

*The Braeoa River Conaervatlon and R4olaaatlon Diatrlot is or4atad as a go~orameatal asnoy, i 

a muafafpelity, body politio and oorporate, vati& 

with 411 the authority a4 auoh under ths Conatitutloa aad lawa ot th4 State; it shall have knd be 

reoognised to exeroiae all ot ths pow4ra ot mob 

govpsrmental agency and body polltlo and oorporata, 

as are 4xpr48aly autborlr4d by the provlaio~a~of 

#a Conetitutloa, Sleotion 89 of Art1014 16 i 

and shall have and be reaognlzad to exerolaa all 

the rlghta end pcmrs ot an indapendant gOvS-tal ag4nog, mnlolpallty, body polltlo and 4orporat4, 

to formulatbl any an4 all p&na,b*e4~d 4884ntla1 to 

the operatlon ot the dietriot . 

R'S thfnk that Seation 1 at this Aot, h4ralnaft4r 

wotad, will auftlclently attest to th4 fsot th a l tald d.l8- 

trlot is organized for a State 9urpoae. Sootion 1, r-da, 

in part, 46 follows: 

*It, being dsolsrsd by aoostltutional provision tha policy of the Stats of T4x4a to provid4 for thee conservation and dwslopent of all 

the natural resourOeS ot th4 state * * * Olld th4 

prsaarvntlon and eonaervatlon of all auoh aatu~ral 

r6Bouro4a, are 4a4h and all hareby d4olared polioy 

rights and duti48 whloh map be etfoot4d thrOUgh 
42’; 

the oreation within the State or the dlvlelon of 

the State into such number of conservation and 

reclamation di&rlots n1) may be determined to be 

esrentlal to the acoonpllshment of the purpoaem 

of the policy expressed ln the Conetltutlon of the 

Stats * * * and funotlons aa may he conferred by 

laW, there is hereby created the Braxoa River Con8ervation end Reclamtlon Distri ot .- 

In the ease of Brazes River Conservation and Rechmatlon Dlatrlat va. LEcCraw, 91 5. W. (Ed) 66, the Supreme Go& 

in an axhmmtlv6 opinion upheld the ralfdity or the Act areatlng the dietriot, a6 Well a8 tAie bonds lsnued pursuant theMto, 

E;hAiyds are eeoured by a pledge of State taxea donated by 

Ifi rererrlng to the origin and purpose 0r thla typo 

dlatrlot: the Supren\a Court raid that it wa8 bacrfoly a publio 

enterprim, orated by the Legihila~ for the gener81 governmental purpose of erfeotuating the objeot 0r the oonserv~tioa 

emondment to the Con& 1 tut ion. 

Vfe, therefore, oonolude, in answer to your flrrt qua+ 

tion that the Rrasos River Diatrfot is, a *dlstrtot oroated for 

* * 4 State pub110 purpo80N within the exoeptlon to brtiole 554 

or the Penal Code ai T&as, aa a&ended. 

Answering your eeoond queatlon, we a&Ire that la our 

opinion the power of taxation haa been oonferred upon the Brnzo8 

Rlter Coneermtion end Reolamtlon Dlrtriot, end that auah parr 

include8 the lnoideatal power to oczcpel payment oi 8uah tax*@. 

However, as will be notad rrom a reading of the Act OreatlBg thr 

diatriot the power to levy tam8 cannot be ererolaed until 4uah 

propoeition shall hare been submitted to the qudliiled propsttr 

taxpayln6 roterr or the dlatrlot and approved by a nu1ori.W of 

mob elector@ voting thereon. Seotlon 10 or the Act Oreating 

the dintriot, reads PB r0ilow6: 

*‘phe Brason River Conaermtdon and Reolamatlon “:2 :z: ‘. 1:~ :

Diatriot shall not be authorize4 to ia8ue bond@, Mr 

incur any rorm or contlnulng obligation or indebtedness ror purposes 0f efreotlng Iirwoveatente conwehended In the plan 0r organlzatlon and adalnlrtratiofi 

or the dlstrlct, nor Inour any Indebtedness in the 

c 
gaaorable Lea Brady, pago #!5 

r0mi or u oontlnulng charge upon lands or propertiea within the diatrlot unless suoh progoaltion shall hate been sublufttsd to the qualtiisd 

property taxpaying votora of the district and 

approved by a majority ot such eleotora voting 

thecean.n 

Seotion 4 of Chapter 19 of the A&s or the Regular 

Srsion, Forty-fourth Leilislature, omoadlng Seotioa 9 or 

Chapter 13 of the Ssoond Called Eleaslon of the Forty-first 

&sgislature, reads, in part, aa tallows: 

This district shall have the power to provide and maintain improvements for the oomrson 

benerlt of aaid district aa a whole, subjeot 

only in appropriata oaaea to the oonstltutlonal 

and otatutory provision8 sonosrnlsg a vote bl 

the qualified electors cf ths dlatrlotn. 

a% think thst rr0m a awading or the roregolng it must be aonoludodthatthe teglslature has oonterred upon the diatrbt 

ths power cb taxation, subjeot, or oour5e, to the approval 

thereor by a maJorlty or the quallried eleoltors voting at aa 

sleotlcn oallsd for that purpose, and that suoh power or taration Includes t&e Incidental power to compel the paymmt of 

bares levied. 

In rsply to your third question, we advise that It 

should be amwered lo the riegatire. In ths Bras08 River Conservatfon and Reolamatlon 3istrlot oaso, supra, ths qumsbioa 

was raised that the Agt oreating the dlstrlot ooastltuted as 

attempt to authortie the Board or ths district to ortmte a 

drbt lc behalt or the State, or land the oredlt or t&s Stats 

in 7iol~tfon 0r the inhibitory provisicms 0r 30ctlons 49 and 

50 or Artiola 3 cf the Constitution. The Suprem+ Court stated 

tersoly - 

YTo debt on the prt cS tho Stats la to be 

oreated, nor fs the State oredlt loaned for thst 

purpose. Theo6 queatlons am roreoloaed in the 

oplalon or this oourt in the eve or ~24%~ al Arsnsas ?a88 ml. XelMng, R4V S. ati 818eH 

1 .Y 
Eonomblr Lee Brady, pege #a 

With reierenoe to the fourth qucmtlon, above quoted, 

we conoluda that to answer sane would place ue :n the pomition of advising as to the law governlrg ~etional Banking 

~reociations, wiiich Is beyond our proper sphere. Therefore, 

we do not answer the question. 

Vary truly YOUrS 

9,6A~.~W 

Clarence E. Crow8 

Amsistant 

CBC.4 APPROVEDDEC 18, 1940 

&-WS-- 

ATTORNEY GENERAL OF TJi:'<p,: