OFFICEOFTHEATTORNEYGENERALOFTEXAS AUSTIN

Ronorabla Lee Bra&y BElnklngComlsdoIler Austin, %exa6
Deer 1Er.Bradyr

t of your letter noat on four ~ertfonm. 8aafollowr: 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 vebeen plaoad by law on them IlvClutentr.”

amum that you have refermoe to the .!G,OOO,- 8authorized by the Board 01 Direotore of the Bra~oa District a,nOwhich are recured by an6piyabla out of the State taxes grantad to the diatrlot by the law oreating Sam.

our opinion ie requested on the tollodng four pueetiona t1. “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 Codeof 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; lofinlimit

“Are bonds

c. 3.R. 3.9' iesuetl by aaid dietriot 

### withpmvldad u5d4r Seation 

### 6136,

X4ahall 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 lilonrpdlnotly or lnbirmotlg or

# permit any individual, private corporation, companyor **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

Wethink there oan be no queatloa but that the obrigoron a muni~lpsl bond lsl a debtor in the mmao oontemplat~ bythe above quoted artiole, and that, thenSore, in the abnenoe of the 9rovlao undtwarooredtn the above quotti Aot, theHonorable Lee Brady, page 63

~aatrlotlon theraof muld apply to tnspurohaae ct muniolpl bonds a8an inveatmnt byany beak 80chartered. 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 polltic41imbdtvldon oo?z.oawithin 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 byan 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 amuafafpelity, body politio and oorporate, vati& with 411 the authority a4 auoh under ths 

### Conatitutloa aadlawa 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 89of Art1014 16 i and shall have and bereaognlzad to exerolaa all the rlghta endpcmrs ot an indapendant gOvS-tal ag4nog, mnlolpallty, body polltlo and 4orporat4, toformulatbl any an4 allp&na,b*e4~d 4884ntla1 **to** the operatlon ot the **dietriot**

. R'Sthfnk that Seation 1 at this Aot, h4ralnaft4r wotad, will auftlclently attest to th4 fsot that l ald d.l8- trlotis organizedfor aState9urpoae. Sootion1, r-da, in part, 46follows:

*It, being dsolsrsd by aoostltutional provision tha policy of the Stats of T4x4a to provid4 for theeconservation and dwslopent of all the natural resourOeS ot th4 state * * * Olldth4 prsaarvntlon and eonaervatlon of all auohaatu~ral r6Bouro4a, are 4a4h and all hareby d4olared polioy rights and duti48 whloh mapbe etfoot4d thrOUgh

## 42’;

the oreation within the State or the dlvlelon of the State into such number of conservation and reclamation di&rlots n1)maybe 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 SupremeGo& in an axhmmtlv6 opinion upheld the ralfdity or the Act 

### areatlng the dietriot, a6Well a8 tAie**bonds**lsnued pursuant theMto, E;hAiyds are eeoured by apledge of State taxea donated by

Ifi rererrlngto the origin and

### purpose 0r thla typo dlatrlot: the Supren\aCourt raid that it wa8bacrfoly apublio enterprim, orated by the Legihila~ for the gener81 governmental purpose of erfeotuating the objeot 0r the oonserv~tioa emondmentto the Con&1tution.

Vfe, therefore, oonolude, in answer to your flrrt qua+ tion that the Rrasos River Diatrfot is, a *dlstrtot oroated for * * 4 State pub110purpo80Nwithin the exoeptlon to brtiole 554 or the Penal Code ai T&as, aa a&ended.

Answering your eeoond queatlon, wea&Ire that la our opinion the power of taxation haa been oonferred upon 

### the Brnzo8 Rlter Coneermtion end Reolamtlon Dlrtriot, end that auahparr 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 ererolaeduntil 4uah propoeition shall hare been submitted to the qudliiled propsttr taxpayln6roterr or thedlatrlotand approved by a nu1ori.W of mob elector@ voting thereon. Seotlon 10or the Act Oreating the dintriot, reads PBr0ilow6:

*‘pheBrason 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


# cgaaorable 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 amajority ot such eleotora voting thecean.n Seotion 4 of Chapter 19of the A&s or the Regular Srsion, Forty-fourth Leilislature, omoadlng Seotioa 9or 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 andmaintain improvements for the oomrson benerlt of aaid district aa a whole, subjeot only in appropriata oaaea to the oonstltutlonal andotatutory 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 bya maJorlty or the quallried eleoltors voting at aa sleotlcn oallsd for that purpose, andthat suoh power or taration Includes t&e Incidental power to compel the paymmt of bares levied.

In rsply to your third question, weadvise that It should be amwered lo the riegatire. In ths Bras08 River Conservatfon andReolamatlon 3istrlot oaso, supra, ths qumsbioa wasraised 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 50or 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 loanedfor thst purpose. Theo6 queatlons am roreoloaed in the oplalon or this oourt in the eve or ~24%~ al Arsnsas ?a88 ml. XelMng, R4VS. ati818eH 1 .YEonomblr Lee Brady, pege #a

With reierenoe to the fourth qucmtlon, above quoted, weconoluda 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, wedo not answer the question.

Varytruly YOUrS

9,6A~.~W

Clarence E. Crow8

Amsistant CBC.4 APPROVEDDEC 18, 1940

&-WS-- ATTORNEY GENERAL OF TJi:'<p,: