THE ATITORNEY GENERAL 

OFTEXAS 

Honorable Fred T. Porter 

County Attorney 

Kaufman county 

Kaufman, Texas 

Dear Sir: Opinion dumber O-883 

Re: Maxlmum~tax~~rate under charter 

of Gity of --,__ %kr@;~authority to 

plGdge net profits of municipal 

light plant, together with ad 

valorem taxes to services general 

obligation bonds of ~the city; 

authority under ~the city charter to 

levy a tax other than thatprovided. 

for in bections 17, 18, 21, and 22i,~ 

for the payment of streetimprovement bonds. 

We have your letters of May 25th and June 13th, in ' 

which you request our opinion on the following questions: 

1. Under the present city charter of Terre11 is the 

maximum tax rate that can be levied by the 

poses $2.25 or $2.65 on the $100 valuation? 

city for all pur2. Can the City of Terre11 add the net profit of the 

municipal light plant to the maximum amount possible to derive 

from taxation in determining the amount of general obligation 

bonds the city may legally issue? 

3. Can street improvement bonds be paid and serviced 

by a tax levy other than that provided for in Sections 17, 18, 

21 and 22 of Article 29 of the charter? 

In reply to your first question, we must first state 

that in view of the inhibitions of Article 11,'Section 5 of the 
Honorable Pred. T. Porter page #2 O-883 

Constitution, and Article 1165 of the Revise Civil Statftes. 

t?je legal.tax limit can not be in excess of 8 2.50 on the $100 

valuation, notwithstanding any provisions of Terrell's charter. 

It appears from the charter provlslons outlined In your letter 

that the electors intended that the total tax rate for any and 

all purposes for any one year ehould never exaeed 62.25 on the 

$100 valuation, except that an addltional tax aould be levied 

for the building of sidewalks. & the language of the provislcns, it 1s evident that a maxlmb tax levy of 25# on the " 

$lOtivaluation could be levied for the'buildlng of sidekalks. 

We arrive at this figure by subtracting the total amount'authorlzed,to be levied ($2.25), exalusive of sidewalk building tax, 

from the $2.50 maximum allowed by law to be levied. 

Ry another provision of the charter, as set forth in 

your letter, the City Commission is charged with the duty of 

annually,levylng and collecting a tax ofU35$'on-the~ $100 valuat'ion,~ theretofore authorized by' the electors, forthe support 

and malntenanoe of the public free schools. It 'further provides 

that *hen authorized by a majority vote of the qualified ~taxpayfaiable property in+the city for any one.year; exclus~ive of the 

t a x 1evSed for the building of sidewalks'; ~&id inclusive .of"'all 

tam levied for bond is8ues.e This, we think, clearly limits 

the maximum tax that may be levied for any and all purposes 

exolusive of that which may be levied for the building of sidewalks. 

$e do not think that the case of the City of Fort Worth 

v. Curetcm,' 222 S. W., 531, is in point with the contention mentioned In your letter. Terre11 has assumed full control'of its'.' 

schools, the boundaries'~being coextensive with those of the~clty, 

and that the City Commission has the authority to levy and collect 

taxes for the support and maintenance of the schools. We,therefobe, 'think thatunder the wording of the charter, any tax levied 

for school purposes would operate to reduce the amount that may 

be levied for all other purposes, exclusive of the tax authorized 

to be levied for the building of sidewalks. In our opinion, the 
Honorable Fred T. Porter,'page #3 O-888 

total now avalla le'for other 'purposes, exclusive of sidewalks 

Is $1.50 on the B 100 " valuation, for the reason that the charted 

sets $2.25 as .the' limit for all purpoees,~exalusIve~of'sIde~ 

walks, and that 76$ has been authoriaed'ior sahool'purposes; 

leaving a ,balanae of $1.50 avallable~ for'other purposes, subject 

to restrlotions elsewhere in the charter. 

..,_ _ 

Your seoond question can be answered in the language of 

Judge Crltz, speaking for the Supreme Court In the case of the 

City of Houston vs. McGraw, 113 S. W. (2nd) 1512 -- "As already 

shown. the maxlmum and valorem taxing lI.mlt of the. 6lty is $2.00/ 

All bonded Indebtedness must be serviced out of ad valbrem taxed'; 

and waxes must be l=dTo th t extent;The oharter of 

%&mvz notsx aaidemy _ &Ioular _ Dart _ ~~~ of _the'ad'valor~eti ~~~~ .~~~~~~ ~~~ 

taxes authorized to be levied for bond purposes alone, and neither 

does it set aside any particular part thereof for other purposes. 

,It must follow that the law requires that a sufficient part of 

the ad valorem taxes must first be, allocated to servicing out- 

&&ding bbnas'or other Indebtednessee. Any balance may be .levled 

and used for general operating expenses. Of course, when a city 

-slm~e&?l~ iJh~pwzlsb~~rnd#.a arIukf3aw a$&fiIlWlt 

~~~18lsu~p~~~eo~i~~~ttje’~aamfi~~~8tPP 

Shde&itednBeseYa ,t&her~para&9ppm~ms~ecbe~ a~lZf$z+Z eAM@jW on 

‘krhs ad;;h%zw& Barb ae3mmiA ,I lunWbh&let@,gq~2 ae?el!@ SQ@@$$S 

Wfatithorized to be lievied for indebtedness or other purposes 

only." 

We~interpret the holding In thI$ case to mean that In 

deters&.ng the maxlmym amount of general obligation bonds that 

may be Issued by a city, sources of revenue other than that obtalned by reason of the levy of ad valorem taxes must be oonsidered only &hen the cIty*s~ debit. creating power has-been reached and 

ap arently absorbed al-l of the ad valorem taxes, leaving an -Insu K fiaient amount with nblah to pay operatin 

You are, therefore, advised that in our opin f on, 

expenses of the city. 

sources of revenue other than that obtained through the levy'of ad'valorem taxes 

can not be considered In determining the amount of general obllgatlon bonds that,may be issued by,the city.. 

In answer 

3 

0 your third question, we advise that in our 

opinion the City of errell may anthorlze the Issuance of bonds 

for street Improvements and levy a tax in payment thereof from 
Honorable Fred. T. Porter, page #4 O-883 

any other souroe not otherwise restricted. Sections 17 to 

22 of %iIol6 29 of the aharter provide certain taxes and 

c&taIn tax limitations for the pbrmanent 

an& upkeep-of the streets and bridges of the said 

Terrell; Article 22 belong an amendment which clearly authorlzgs 

the City ConnuIssIon to use the funds provided In Seotlcm 19 for 

the payment of prtiofpal and interest of bonds of th& city voted 

and issued for street Improvement purposes. We interpret this 

amendment to authorize the City Commission to appropriate suoh 

money a8 may be needed to pay the prinoipal and Interest on 

bonds Issued for street Improvement purposes, and oan not oon- 

-strue from the language of aaid amendment that any restrlotlon 

::'.yas .+i&t@ed,to be imposed upon the Com$SsiOn. ~, _ .,. 

" Jo, .' 

I. '1 We think, however, that the total amount whlah may be 

lwS&Yfo'? street iti! btildge @wpos,@@ is l~mit&d"by'the~ l*.uage 

.af:Ssdtlon'18'l,_whloh,,in part,,provid6s -- Fl?hist 6he amouA ~.. __, 

,16X&d fd+'street and brld 8 pur@o%ii,-, as hi&Iri,i&t"fbrthj to-. 

g&$her wlth'the amount lev ed for 

reseed in ang one ,. year fih8~SUp, ?f ~~.~~~lt~~~~~~~~;s~~~:~On"ser 

..' &usting that ihe above aiswers your questions, i8 are 

Veq truly yours 

ATTORNEY GENERAL OF v 

Olarenoe E; -Ctid%i(j 

Assistant 

C=+S/Pcup _ ,., 

AppRovED JDL 21, 1939 

V. F. Moore 

FIRST ASSISTANT ATTORNEY GENERAL 

Approved OpInIoti Committee 

dy T.D.R., Chairman