Source: https://www.texasattorneygeneral.gov/opinion/ability-of-a-school-district-to-make-payments-on-bonds-from-funds-other-tha
Timestamp: 2017-03-25 02:08:10
Document Index: 739600462

Matched Legal Cases: ['§ 3', '§ 45', '§ 45', '§ 45', '§ 45', '§ 311', '§ 45', '§ 45', '§ 45', '§ 1', 'art. 2827', '§ 1', '§45', 'art. 2827', '§ 45', '§ 42', '§ 42', '§ 45', '§ 45', '§ 45', '§ 42', '§ 105', '§ 105']

Opinions - Ability of a School District to make Payments on Bonds From Funds Other than a Tax Levied for the Pa
Re: Ability of a School District to make Payments on Bonds From Funds Other than a Tax Levied for the Payment of Debt Service
Question 2: May a School District Pay Debt Service on Bonds From the District's Unrestricted Fund Balance? The letter next asks whether a school district may pay debt service on bonds from the district's unrestricted fund balance, describing the unrestricted fund balance as representing current year maintenance tax collections, state aid, allowable administrative overhead on federal grants, and other local sources of revenue such as rentals, gate receipts, and investment income. (27) The use of unrestricted state aid will be discussed in response to the third question in the request letter.
See Letter from Robert Scott, Commissioner of Education, to the Honorable Greg Abbott, Attorney General of Texas (Aug. 17, 2009) (on file with the Public Finance Division) [hereinafter Request Letter]. The Request Letter distinguishes between voter approval of a maintenance tax and a tax to pay debt service on bonds. Request Letter at 1. We will therefore construe the Request Letter to be concerned with bonds described by section 45.001 of the Education Code for which voters have authorized the levy of a tax pursuant to section 45.003 of the Education Code.
Request Letter at 1-2.
See Geffert v. Yorktown Indep. Sch. Dist., 290 S.W. 1083, 1084 (Tex. Comm'n App. 1927, judgm't adopted) (explaining that independent school districts have only those powers specifically given or implied as a necessary incident to those expressly conferred and that their powers must be exercised in strict conformity with the mandatory direction of the Legislature); Fowler v. Tyler Indep. Sch. Dist., 232 S.W.3d 335, 338 (Tex. App.-Tyler 2007, pet. denied) ("a school district . . . exercises only such powers that are delegated to it by the state.")(quoting Braun v. Trs. of Victoria Indep. Sch. Dist., 114 S.W.2d 947, 950 (Tex. Civ. App. - San Antonio 1938, writ ref'd); Op. Tex. Att'y Gen. No. GA-0596 (2008) at 2 n.2 (same).
Tex. Const. art. VII, § 3(e).
See Madeley v. Trustees of Conroe Indep. Sch. Dist., 130 S.W.2d 929, 933 (Tex. Civ. App. - Beaumont 1939, writ dism'd judgm't cor.) (citing Love v. City of Dallas, 40 S.W.2d 20 (Tex. 1931)).
Tri-City Fresh Water Supply Dist. No. 2 v. Mann, 142 S.W.2d 945, 948 (Tex. 1940) (quoting Frosh v. City of Galveston, 11 S.W. 402, 404 (Tex. 1889)); see also Geffert, 290 S.W. at 1084 (stating that the power to tax is a special grant of authority that must be exercised in "strict conformity with the mandatory direction of the Legislature"); Op. Tex. Att'y Gen. No. JC-0291 (2000) at 4.
Tex. Educ. Code Ann. § 45.002 (Vernon 2006).
Tex. Educ. Code Ann. § 45.001 (Vernon Supp. 2009).
Tex. Educ. Code Ann. § 45.003(a) (Vernon Supp. 2009).
See generally Madeley, 130 S.W.2d at 933-34.
Madeley, 130 S.W.2d at 932-34.
Madeley, 130 S.W.2d at 933; see also id. at 934 (holding that surplus maintenance taxes could be spent on building improvements).
Request Letter at 2 (in which Commissioner Scott asks for clarification as to whether under the authority of section 45.105 of the Education Code a district may pay debt service on bonds from current maintenance taxation).
Tex. Educ. Code Ann. § 45.105(c) (Vernon 2006).
Tex. Gov't Code Ann. § 311.021(2) (Vernon 2005).
See, e.g., Tex. Educ. Code Ann. § 45.006(e) (Vernon 2006) (authority to issue bonds expired June 1, 1996)(authorizing a school district to levy additional maintenance taxes to pay judgment bonds issued by school districts under certain circumstances), Tex. Educ. Code Ann. § 45.108 (Vernon 2006) (authorizing a school district to issue notes payable from and secured by a pledge of available funds, including the proceeds of a maintenance tax), Tex. Educ. Code Ann. § 45.111 (Vernon 2006) (authorizing the issuance of certificates of indebtedness payable from an appropriation and pledge of local school funds derived from maintenance taxes levied and assessed under section 45.002).
See Act of June 2, 1969, 61st Leg., R.S., ch. 889, 1969 Tex. Gen. Laws 2735, 2905, 3025, §§ 1, 2(a) (repealing art. 2827 and codifying language into section 20.48(c) of Education Code); Act of May 27, 1995, 74th Leg., R.S., ch. 260, 1995 Tex. Gen. Laws 2207, 2439, § 1 (reenacting and revising Titles 1 and 2 of Education Code)(§45.105(c) amended 1997).
See Madeley at 933 (quoting sec. 2 of art. 2827); cf. Tex. Educ. Code Ann. § 45.105(c) (Vernon 2006).
Madeley at 933 (citing Love v. Rockwall Indep. Sch. Dist., 194 S.W. 659 (Tex. Civ. App.- Dallas 1917, writ ref'd)); Op. Tex. Att'y Gen. No. DM-178 (1992) at 5.
Madeley, 130 S.W.2d at 933, 934.
See generally Madeley, 130 S.W.2d at 933; cf. Op. Tex. Att'y Gen. No. JM-142 (1984) at 5 (construing chapter 51 of the Texas Water Code to permit the levy of a bond debt service tax in an amount sufficient to pay debt service, but not to create a surplus). A construction of section 45.002 of the Education Code that would authorize the levy of a maintenance tax for the purpose of paying bond debt service would enable a school district to create intentionally a surplus of maintenance taxes each year larger than the amount needed to pay current maintenance expenses, a purpose not provided in the statute.
Madeley at 934.
Op. Tex. Att'y Gen. No. JM-1265 (1990) at 2.
Request Letter at 3.
See Tex. Educ. Code Ann. § 42.101 (Vernon Supp. 2009) and compare with special allotments in Tex. Educ. Code Ann. §§ 42.151-.156 (Vernon 2006 and Supp. 2009).
Tex. Educ. Code Ann. § 45.105(c) (Vernon 2006) (providing in part that, "state funds not designated for a specific purpose may be used . . . for other purposes necessary in the conduct of the public schools determined by the board of trustees.").
See All Bond Counsel Letter, dated August 17, 1999, Attachment 1 (defining "T1A" as the basic allotment under subchapter B of Chapter 42 of the Education Code); Tex. Educ. Code Ann. § 45.0031(b) (Vernon 2006).
Tex. Educ. Code Ann. § 45.0031(d) (Vernon 2006).
Tex. Educ. Code Ann. §§ 42.151(h), 42.153(b) (Vernon 2006), 42.152(c), 42.154(a-1), (c), 42.1541 (Vernon Supp. 2009).
19 Tex. Admin. Code § 105.11.
19 Tex. Admin. Code § 105.12.