THE 

### ATITORNEY GENERAL
OFTEXAS

Honorable Fred T. Porter CountyAttorney 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, togetherwith ad valorem taxes to services general obligationbonds of ~thecity; authorityunder ~thecitycharter 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 leviedby 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 improvementbonds 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 inhibitionsof Article 11,'Section 5 of theHonorable Pred. T. Porter page #2 O-883

Constitution,and Article 1165 of the Revise Civil Statftes. t?jelegal.tax limit can not be in excess of 82.50 on the $100 valuation,notwithstandingany provisions of Terrell's charter. It appears from the charterprovlslons 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 aouldbe levied for the building of sidewalks. & the language of the provislcns, it 1s evident that a maxlmb tax levy of 25# on the " $lOtivaluationcould be levied for the'buildlngof sidekalks. We arrive at this figure by subtracting the total amount'authorlzed,tobe levied ($2.25),exalusive of sidewalkbuilding 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 chargedwith the duty of annually,levylngand collectinga tax ofU35$'on-the~ $100 valuat'ion,~ theretoforeauthorizedby'the electors, forthe support and malntenanoe of thepublic free schools. It 'further provides that *hen authorizedby 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'; ~&idinclusive.of"'all tam levied for bond is8ues.e This,we think, clearly limits themaximum 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 pointwith the contentionmentioned Inyour letter. Terre11has assumed full control'of its'.' schools, the boundaries'~being coextensivewith those of the~clty, and that the City Commissionhas the authority to levy and collect taxes for the support and maintenance of the schools. We,therefobe,'thinkthatunder the wording of the charter, any tax levied for school purposeswould operate to reduce the amount thatmay be levied for all otherpurposes, exclusive of the tax authorized to be levied for thebuilding of sidewalks. In our opinion, theHonorable Fred T. Porter,'page#3 O-888

total now avalla le'for other 'purposes,exclusive of sidewalks Is $1.50 on the 100 valuation, for the reason that the charted

B " sets $2.25 as .the' limit for all purpoees,~exalusIve~of'sIde~ walks, and that 76$has been authoriaed'iorsahool'purposes; leaving a ,balanaeof $1.50 avallable~ for'otherpurposes, subject to restrlotionselsewhere 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 Indebtednessmust be serviced out of ad valbrem taxed'; and waxes must be l=dTo th t extent;The oharterof %&mvz notsx aaidemy &Ioular Dart of the'ad'valor~eti

_ _ _~~~
_ ~~~~ .~~~~~~ ~~~ taxes authorized tobe levied for bond purposes alone, and neither does it set aside any particularpart thereof for other purposes. ,It must follow that the law requires that a sufficientpart of the ad valorem taxes must first be,allocated to servicing out- &&ding bbnas'or other Indebtednessee. Any balancemay 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+ZeAM@jWon

‘krhsad;;h%zw& Barb ae3mmiA ,I lunWbh&let@,gq~2 ae?el!@ SQ@@$$S Wfatithorized to be lievied for indebtednessor other purposes only." We~interpret the holding In thI$ case tomean that In deters&.ng themaxlmym amount of general obligationbonds 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. creatingpowerhas-been reached and ap arently absorbed al-lof the ad valorem taxes, leaving an -Insu fiaient amount with nblah to pay operatin K You are, therefore,advised that in our opin on, f expenses of the city.
sources of revenue other than that obtained through the levy'of ad'valorem taxes
cannot be considered In determining the amount of general obllgatlon bonds that,may be issued by,the city..

In answer3 0 your third question,we advise that in our opinion the City of errellmay anthorlze the Issuance of bonds for street Improvementsand levy a tax inpayment thereof fromHonorable Fred. T. Porter, page #4 O-883

any other souroenot otherwise restricted. Sections 17 to 22 of %iIol6 29 of the aharterprovide certain taxes and c&taIn tax limitations for the pbrmanent an& upkeep-of the streetsand 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 Improvementpurposes. We interpretthis 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 Improvementpurposes, and oannot oon- -struefrom the language of aaid amendment that any restrlotlon ::'.yas .+i&t@ed,to be imposedupon the Com$SsiOn. ~, _ .,. " Jo, .' I. '1 We think,however, that the total amount whlah may be lwS&Yfo'? street iti! btildge @wpos,@@ is l~mit&d"by'the~ l*.uage .af:Ssdtlon'18'l,_whloh,,in part,,provid6s -- Fl?hist 6he amouA ~.. __, ,16X&d fd+'street and brld 8 pur@o%ii,-, as hi&Iri,i&t"fbrthj to-. g&$herwlth'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


### ATTORNEYGENERAL OF v

Olarenoe E;-Ctid%i(j

Assistant C=+S/Pcup

_ ,., AppRovED JDL 21, 1939 V. F. Moore FIRST ASSISTANTATTORNEY GENERAL

Approved OpInIoti

Committee dy T.D.R., Chairman