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Hon, H. A. Triesch Couaty Attomiey Coma1 CoUnty New Braunfils, Texas

Da&r Sir! Opinion No. V-1161 Re: Exemption from advalorem taxes of Coma1 Plant, vailous properties used in connection therewith, and Kuehler Power Station Site, all owned by City of SanAntonio, We quote the following excerpt from your letter of Februrey 1, 1951:

“On October 24, 1942, the City of SanAntonio a@$uired all of the electric power plants and facilities t&ratefora operated by the SanAntonio Public Service COmpany, except the local distz~ibution systems located within the corporate limits ofother mcorporated towns and eLtfas. Among the propica-ties so acquired was the cllltctric generating plant inthe City ofN,ewBraunfels. commorly known as the Comai Plant, various tracts of land, electric transmission lines., transformers, easements, and other proP+rty used in connection therewith, all ofwhich is situated in Coma1 County, Texas. A forty-seven acre tract abutting on the Guadalupe Rive1 k@#wn as the Kuchler Power Station Site was included in the property that was acquired in the sale,

“At the time of the acquisition of these properties by the City of San Antonio it l?ased all ofthe properties in Coma1 County with the ,exception of three transmisdon lines to the Guadalupe-Blanco River Authority which l&ase is non-assignable except with the consent ofthe cityp buttthe lease does provide that it might be assigned to the Lower Colorado River Authority. This lease has been assigned by the G. B. R. A. tothe L. C. R. A. and the L..C. R. A. is now operating theee properties. “The history qf tk+ tramsactions by which these properties were acqbired by the city 01San Antonio is f&y act brth ln the opinion of Guadalupe-Blanco River Authority vs, City of San Antonio, 200 S.W. (2nd) 989..

Hon. H.A. Triesch, Page 2 (V-1161)

“All cf the properties with the exception of the three transmission lines are now operated by the L. C, R. A. under the lease agreement and all ofthe properties so operated by the L. C. R. A. with the exception of the Kuehler Power Station Site constitute an integral part of the system,

“Among the many provisions of the lease agreement, we find the following:

“ARTICLE V, Section 1: ‘The Authority agrees to supply and the City agrees totake and pay for all of the power and energy requirements of the City uptoa maximum requirement of 66,000 kilowatts over and above that supplied by its Station “B”, and such additional power and energy as the City may require and the Authority may have available.’

“ARTICLE V, Section 21: ‘If for any **cause** what**c.oever,** the Authority shall, at any time, be unable to supply the power and energy requirements ofall of its customers, including the City, the City is tobe entitled to receive, tothe extent of its requirements, as specified in this Article V, the entire output ofthe Coma1 Plant **not** inexcess of 66,000 kilowatts, and failure of the Authority tomake ava:ilable tothe City such output shall constitute a default within the meaning ofSection 1ofArticle VI hereof,’

“ARTICLE VI, Section 1; ‘Section 1. The city shall have the right tore-enter and take possession of 

### anyof the property dascribed in “Exhibit A” attached tothis Agreement and occupied and used by theAuthox - Ity (which has not then been purchased by and conveyed to theAuthority), upon the happening ofany of the following events: * * * l”(b) Ifduring the term ofthis contract theAuthority, except **for** causes ret **out** in Section 3ofAMcle VIII ofthin contract, fails or refurer todeliver to the City electric power’ and enexgy an provided inArticle V hereof.’

“The legality ofthe lease sgreemont between thr Clty ofSanAntonio and the 0. B. R. A. bar beon sdjudicated and was upheld as avalid leare in GuadalupeBlanc0 River Authority vs. City ofSanAntonio, 200 S.W. (2nd) 989. The right ofownership to the plant has also been adjudicated in the case of City of New BraunfelrHon. H.A. Triesch, Page 3 (V-1161)

vs. City ofSan Antonio, 212 S. W. (2nd) 817, ref. n.r.e.

“The assessor and collector of taxes has been listing and assessfag this property on his roll ever since the acquisition of the plant by the City of San Antonio and has been instructed by the Comptroller to continue listisg and assessiag the same even though the City of San Antorio refuses to list it because of their claim of exemption. “I am submitting the following three questions with the request that you be kind enough to give us your opinion thereon. “(1) Are the electrical generating plant, the lands onwhich the same is situated, easements, transmission lines, transformers and other facilities used in connection with the operation of said plant subject totaxation?

‘(2) Is the forty-seven acrs tract (Kuehltr Power Station Site) aubjsct to taxation?

‘(3) If any part ofthe property is exempt from taxation, should the prop&ties so exempt be listed and rendered by the alsessor in accordance with the provisions ofAzticle 7192 and Article 7193, R. C. S.? * The various properties covered by **your** first question **are** public properties held for public purposes and are clearly exempt from taxation. Tax. Const. Art. XI, Sec. 9; City ofNew Braunfele v. City of **San** Antonio, 212 S.W.Zd 817, 825 (Tex. Civ. App. 1948, error **x-e**.nz.8. ‘:A. h b.. Consolidated Independent School Dist. v. p 184S.W.Zd 914 (1945); Lower Colorado

u or tyv. Chemkai Bank &Trust Co., 144Tex. 3L6, 1YO

. . 40 (1945) s

In **your** letter requesting our opinion, you state the folIowIng facts relating, tothe Kuehler Power Station Site:

u

. . .it should be observed that the 47-acre,tract is not presently used in the operation of,the plant. None of the facilities ofthe plant are situated thereon. The same in fact, constitutes a small park that is being maintained and used by the employees of the L. C. R*.A. which Authority has charge ofthe property under the lease. Various local organizations are accorded the right to use it upon request and with permission ofthe Authority. The property was originally acquired by the San Antonio Public Service Company for a powers station site but theHon. H.A. Triesch, Page 4 (V-1161)

same was abandoned after purchasing the present Coma1 Plant site. While in the hands of the Public Service Company the same was used for Boy Scout purposes which use has been discontinued since the acquisition of the property by the City of SanAntonio.” The fact that theKuehler Power ‘State site is not presently used in connection with the operation of the Coma1 Plant does not make the property subject totaxation. At the time the City of SanAntonio acquired the properties of the SanAntonio Public Se’rvice Company, the City issued and sold revenue bonds in the sum ofapproximately $34,000,000.00 and used the funds topurchase the outstanding stock of the Public Service Company. The Trustees in Dissolution of the S.A.P.S. Company conveyed all of the assets of the Company tothe City. These facts just summarized are given in Guadalupe-Blanc0 River Authority v. City of SanAntonio, 145 Tex. 611, 200 S.W.Ld 989 (1941). The property which was purchased with money from a special fund, thi $34,000,000.00 bond issue, in excess of the portion required for actual operation of the electric power system is a-part of the special fund amdiS therefore held by:the Cityibf Sarxtin&eniofos a.l%&&c;prrrpos&and is exempt from taxation. State v. City ofHouston, 140S.W.2d 277 (Tex. Civ. App. 1940; error ref.). ThC answer toyour third question is,;as stated inyour brief, that theAssessor and Collector ofTaxes is without authority to list and assess the ejLempt properties for taxation. Article 7145, V.C.S. SUMMARY

The Coma1 electric generating plant, various tfacts of land, electric transmission lines, transformers, easements, and other property used in connection therewith, owned by the City of SanAntonio and opeeated by the Lower Colorado River Authority as assignee under a lease agreement with the City is public property held for public purposes and is exempt from taxation. Tex. Const. Art. XI, Sec. 9; City ofNew Braunfels v. City of SanAntonio, 212 S.W.2d 817, 8d.5 ~TCX,Clv., App. 1948, error ref. n.r.e.); A. &M. Consolidated Ind. School District v. City ofBryan, 143 Tex. 348 184 SW2d 914 (1945) Lower Colorado River Authoiity i. ?h;mical Bank &Trust G0.2 4 Tex. 326, 190 SWLd48 (1945).

. . The Kuehler Power Station site was acquiieb by the City of SanAntonio for public purposes~and is still held by the city as apart ofthe fund created.by the sale of revenue bonds. Such site is therefore exempt from taxation even though it is not presently. .

Hon. H. A. Triesch, Page 5 (V-1161)

used in connection with the operation of the Coma1 plant. State Y. City of Houston, 140S.W.2d 277 (Tex, Civ. App. 1940,error Pe sDl%s Assessor and Collector ofTaxes has noauthority tolisb and assess exempt properties for taxation. Art. 7145, V.C.S. Your8 very truly, PRICE DANIEL Attorney General

APPROVED: ,W.V. Geppert Taxation Divisiom -Mrs. MariettaMcGreg6r Creel Assistant

Jesse P. Luton, Jr. Reviewing Assistant Char&es D. Mathews First Assistant
MMC/mwb