bonds, obligationfr, or pledgesexcept those of the United Statee, the State of Texas, and the Universityof Texas, shall be 80 purchasedwhen the indebted- ness of the oounty,city? precinctor districtiseuingsame, . .
State Board of Education,page 3 (O-4490)
lncluelveof those so offered,shall exceed seven (7%) per cent of the aeseesedvalue of the real estate therrln. If defaultbe madeIn the paymentof Intsreetdue upon ruoh bondr, obllg8tlone,or pledges,the State Board of Eduo8tionmay at - any time prior to the psymentof euoh overdueInteresteleot to treat the prlnclpalae due, and the s8me mhall thereupon, at the option of said Board, become due and payable;and paymentof both such principaland Interestehall In all 0888s be enforcedIn the manner providedby law, and the right to enforaesuch collectionshall never be barred by 8ny law or limitationwhatever."
The wordingof the above provisionhas bwn changed to some extent since its originalenactmentIn 1905 in the couree of three amendmentsend two codifloations(1909,1911, 1925, 1929, and 1939), but except for changesto make eligiblethe bonds of additionalgovern- mental agencies,the apparentpurposeof the underlined portionof Article2671 8s quotedabove is no differentfrom what It was 86 orlgi- nally enacted In Section4 of S.B. 218, Chapter 124, page 263, Acts 1905, RegularSession,29th Legislature,reading: ". . . and no countybonds or bonds of any incorporated city or Independentschooldistrictshall bs purchgsedas an investmentfor the permanentpublic free school fund when the Indebtedness of such county, incorporatedaity or Independent school distriot,Inclusiveof the bonds so offered,shall exceed seven per cent of the aeeessedvalue of the 'realestate in such county or incorporated city or independentschooldistrict,. . ."
It is to be noted that the eligibllltyof bonds for purchaseby the permanentpublic free school fund (as defined In the originalenaot- ment In 1905 and In all subsequentamendmentstheretoIncludingArticle 2671, R.C.S., 1925, as now constituted)does not requirethat the real estatewithin the politicalsubdivisionconstitutingthe ieeuIngagency shall not be encmbered beyond 7% of its assessedvalue for 811 public debts; but It requiresonly that the debt ratio of the part&i& politIca subdivisionwhose bonds are consideredfor purchasebe not In exaeeeof 7% of the assessedvalue of the real estatewithin that partlaularaub- division. For example,the real estatewIthIn particular Independentschooldistrictmay be issuers UI UN county,a road districtand a drainagedistrIct"embraoing or overlapping this same real estate,constitutinga tot81 Indebtednessfar In excess of 7% of its assessedvalue, and yet the bonds of the Independentschool districtwould still be eligibleso long as the schooldistrictIndebted- ness (consideredindependently of the Indebtednessof other overlapping politicalsubdivisions) did not exceed 7% of the assessedvaluationof the school district. Our pr6blem,therefore,is to determinewhether the Independentschool districtcreatedwhen a city assumesoontrolof the schoolswithin its limits (under the authorityof Article 11, Section 10 of the Constitution)is in fact an Independentsohooldistrict and a . .
State Board of Education,page 4 (o-4490)
separatepoliticalentity as dlatIngulehedfrom the munlcip8litywhich has assumedoontrolthereof. If such a sohool districtconstitutes 8 "dietriot"as dietingulehedfrom 8 "oity,"aa thoeewords are found In Article2671, then the Indebtedneeeof the city for munioipalpur- poses'ienot to be lumpedwith the Indebtedness of the olty In Its aapacity8s 8n Independenteohool districtIn applyingthe'7$ debt ratio requirement. It may be helpful to 8soert8Inthe legisl8tlveIntentwith respectto the 7% debt ratio limitationby