Court Opinion

ID: 4130193
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:01:23.340398+00
Date Added: 2024-06-11T14:19:38.430605
License: Public Domain

December        27, 1990

Honorable  Charles D. Penick                 Opinion   No.   JM-1276
Criminal  District Attorney
804 Pecan Street                             Re:       Authority   of road
Bastrop,  Texas   78602                      district to borrow money,
                                             of   county    to   guarantee
                                             its repayment,     and relat-
                                             ed questions      (RQ-1792)

Dear   Mr.   Penick:

      Based upon the    following   factual representations,       YOU
have asked that we     address fourteen questions     dealing    with
the relationship   of Bastrop County      (and the members of      its
commissioners   court) to a    county road district wholly       con-
tained within    the county    and created    pursuant to     article
III, section 52,     of the Texas    Constitution   and the    proce-
dures set forth in the      County Road and Bridge Act,       article
6702-1, V.T.C.S.1

      In May   of 1987,     the   commissioners   court   of   Bastrop
County received a petition       calling for an election to create
a road   district   and   to issue     bonds in   an amount    not   to
exceed $360,000.2      Following     the hearing   on the    petition,
the court issued     its order authorizing       an election   on   the
creation  of   the   district,    the   issuance   of bonds     in  the
amount of    $400,000,   and    the levying    of a tax in     payment

      1. Disputed fact      issues         are not   determined   in  the
opinion process of this     office.         We merely apply the   law  to
the facts given us.

      2.   The County Road and Bridge Act does not require the
creation   of a road district     to be initiated by a petition   of
interested     property   owners.     See  V.T.C.S.  art.   6702-1,
5 4.413(a)    (commissioners   courts "in their sole   discretion"
may establish     road districts).    A petition must be   offered,
however,   prior    to  an election    on whether to   issue    road
district   bonds.    Id. 0 4.416.

                                      P.    6825
Honorable    Charles     D. Penick   - Page   2     (JM-1276)

thereof.   The election was held     and the voters   in the   ter-
ritory of the proposed    district approved   the creation   of the
district and the    issuance   of $400,000   in bonds to   finance
improvements  to the roads.     You state that the bonds were to
be repaid by the collection     of ad valorem taxes.

      Following   sale of    the bonds and      during the course       of
construction,    it was determined     that more work was needed to
complete the roads, and a change order authorizing             the addi-
tional work was approved       by the commissioners      court in their
capacity as ex-officio      directors   of the road district.3           It
was later    determined     that   the $400,000      approved     by   the
voters at    the    bond   election would      not   cover    all    costs
related to the      road project,    including     costs of    construc-
tion, bond     issuance,   engineers    fees, and      attorneys     fees.
The-deficiency    amounted   to $50,000, money that the          district
does not have.

      To remedy this, a proposal was brought before the         com-
missioners  court asking that     they "resolve to stand     behind
the Road District    in an   attempt to borrow    $50,000 from     a
bank," because   the bank would not make the loan without        the
county's guarantee.    As we   understand   it, the proposal     has
not been acted upon and the $50,000 remains unpaid.

      Finally,   you   state that   the commissioners     court   has
levied taxes in an amount      sufficient   to repay the    $400,000
according   to the terms of amortization     contained   in the bond
documents.     In addition,   the commissioners     court levied     a
tax sufficient    to collect the $50,000 that remains outstand-
ing over a period of five years.

      With    the    foregoing   facts   in mind,   we turn     to your   gues-
tions.

      You    first    ask:

      3.  The commissioners     court acts as the     administrative
body of the road district.         see id. §§ 4.435 (contracts       of
over $50 must be approved      by the commissioners    court), 4.457
(commissioners    court shall levy      taxes to pay road    district
bonds): see also 36 D.       Brooks, Countv and Soecial      District
Law 5 40.39     (Texas   Practice     1989).  A  road   district     is
nevertheless   a   separate   and   independent  political    entity,
declared   a body corporate    with the power to sue and be sued,
V.T.C.S.   art. 6702-1, 0 4,432, contract,      and hold    property.
Brooks, suora 5 40.36.

                                         Pm 6821
Honorable    Charles        D. Penick     - Page   3   (JM-1276)

         1. Is the   election    valid even though the
            notice   that   was   posted calling   for  a
            public   hearing     stated an    amount   of
            $360,000 and     that amount was changed   at
            the public hearing to $400,000?

         Section 4.417 of article       6702-l authorizes    the    com-
missioners    court to "change the amount of the bonds proposed
to be    issued* if,     on  the hearing     of  a petition     for   an
election    required    by  section    4.416(b) of   the    act,    "the
change is found-necessary       or desirable."    See Attorney      Gen-
eral Opinion      WW-462 (1958).     Thus,    the election    was    not
rendered    invalid because the amount of the bonds to be voted
upon was changed as a result of the required public hearing.

      Secondly,         you ask:

          2. Can the Road    District created under   art.
             6702-l   [V.T.C.S.]    borrow  money  in  any
             other manner than through the issuance     of
             bonds as set out in the statute?

      We conclude    that road    districts  may   borrow money   by
methods  other than    through the issuance      of bonds, but   the
creation  of such    debt is governed     by article III,   section
52,   of  the   Texas    Constitution    and  legislation   enacted
pursuant  to that provision.

      Article   III,            section   52, provides     the     following   in
pertinent   part:

                (b) Under Legislative     provision    . . . any
            defined district    . . . upon    a vote    of   two-
            thirds majority of the resident property         tax-
            payers voting    thereon   . . . in    addition     to
            all other debts, may issue bonds or otherwise
            lend its credit in any      amount not to      exceed
            one-fourth  of the    assessed valuation     of    the
            real property of such district      . . . and levy
            and collect taxes to pay the interest thereon
            and provide a sinking fund for the redemption
            thereof, as   the Legislature      may   authorize,
            and in such   manner as it may authorize           the
            same, for the following purposes       to wit:

                .   .   .   .

                (3) The  construction,   maintenance                  and
            operation of macadamized,   graveled   or               paved
            roads and turnpikes,  or in aid thereof.

                                            P. 6828
Honorable     Charles D. Penick        - Page    4     (JM-1276)

Tex.   Const.    art.   III,   5    52(b) (3).

      County road     districts are "defined districts"         within
the meaning of article      III, section 52.     See Anderson   Countv
Road,                              296 S.W. 1062 (Tex. 1927);      cf.
V.T.C.S.    art.   6702-1,      9 4.445(a)    (". . . in any      road
district   or other defined      district").    A road district     may
therefore   issue bonds or "othewise       lend its credit" upon      a
two-thirds   majority   vote under legislative     provision.

       Section    4.411(b)     of    the road    and    bridge     act   provides
that

            any road district    may issue bonds, tax antic-
            ipation notes,     bond anticipation      notes,   or
            other obligations      for   the  purpose     of  the
            construction,      acquisition     by      purchase,
            maintenance,   and   operation    of   macadamized,
            graveled,   or paved roads and turnpikes       or   in
            aid of these purposes      . . . .

      Bonds llshall be issued in the manner provided         in   1part
2 of this act] and as contemplated        and authorized    by Article
III, Section     52, of    the Texas    Constitution."      Negotiable
bond anticipation     notes   and tax anticipation      notes may    be
issued in the event funds are not available          to pay principal
and interest     obligations    on bonds (and       an  emergency     is
declared   regarding   the matter) "or to meet any other needs."
V.T.C.S.   art. 6702-1,    § 4.411A(a).

      Bond anticipation   notes may    be issued for any     purpose
for which    the district's    bonds   may have   previously     been
approved or     for the  refunding    of previously    issued    bond
anticipation   notes.    The commissioners     court may    covenant
with purchasers    of the notes    that it will use the     proceeds
of the sale    of any bonds    yet unissued   for   the purpose    of
refunding   the notes.    &&   5 4.4llA(c).     Because you     state
that all bonds of     the road district     in this instance     have
been sold, it may not take advantage of these instruments.

      Tax anticipation   notes   may be issued     for any     purpose
for which the road     district may levy     taxes under the      act.
These notes are secured with the proceeds        of the taxes to be
levied by the district     in the succeeding    12 months,   but    the
notes are   not   expressly    required to    mature    within    that
period.   See id. § 4.411A(b).       The commissioners     court    may
covenant with purchasers     that it shall levy a tax sufficient

                                         P. 6829
Honorable    Charles     D. Penick      - Page   5    (JM-1276)

to pay principal  and interest            on the notes     and     the   costs   of
collecting  the taxes.  &4

      Road districts     can only levy     taxes for the purpose          of
paying principal     of and interest on its bonds, id.            5 4.425,
and bonds    may    only be     issued   following    approval     of   the
requisite   number of voters.       &    S 4.422.     m    36 D. Brooks,
Countv an d Soecial       District Law     § 40.40      (Texas    Practice
1989).    The    ability     of   a road    district      to   issue    tax
anticipation    notes is thus tied to the previous           approval     of
district   bonds by the voters, and the value of such notes is
necessarily    limited    by    the amount    of   outstanding      bonded
indebtedness.     Moreover,      the power    of a road district          to
borrow in this      manner is     subject to     voter approval       under
article III, section 52.         &l~ Attorney    General Opinion O-763
(1939) (road district      may issue time warrants        if approved     by
voters and if     tax sufficient       to pay    interest and      provide
sinking fund is levied).

      We   are   aware  of    no other               legislative         provision
authorizing    a road district to incur              debt.

      Your   third     question   is:

            3. Can the Road District    borrow money in  an
               amount in excess of the amount voted on by
               the residents  of the Road District without
               the necessity  of another election?

      4.   This provision      may have     been meant    to allow     the
creation   of short-term     debts payable with current         revenues,
thereby    avoiding     the   constitutional      restriction     on   the
assumption   of    debt   without establishing       an   interest     and
sinking fund     and levying      a sufficient     tax therefor.       See
Tex . Const. art. XI, 5 7; McNeil1          v. Citv of Waco, 33 S.W.
322 (Tex.     1895).    Such   debts must,     however, be      satisfied
with revenues     from the current budget year: taxes           collected
in future budgets years cannot be pledged as security              within
the meaning of this prohibition.          See senerallv     Citv of Fort
Worth v. Bobbitt,      41 S.W.2d 228, 232 (Tex. Comm'n App. 1931,
original   opinion adopted);      McClellan    v. Guerra, 258       S.W.Zd
72 (Tex. 1953).       See also    Bolton v. Wharton,     161 S.E. 454,
459 (S.C. 1931) ("tax anticipation          notes"    are not bonds, to
which the general credit of the municipality            is pledged,    but
are merely     obligations     payable solely      out   of   particular
taxes, and must be       issued before taxes are        due and in     the
year in which they are collectible).

                                          P. 6830
Honorable     Charles     D. Penick     - Page     6    (JM-1276)

      Bonds issued in excess  . - of the amount
                                           _-      - authorized
                                                         ._.    - by   the
voters are treated as void.             Ball     . Pre idio County      29
S.W. 1042    (Tex.    1895).5    Anyas      thz disctssion        of  bond
anticipation   notes and tax anticipation         notes   observed,    the
amounts a road     district    may borrow     through these means        is
limited either to the amount of unissued bonds or the amount
of bonds    outstanding.       Article    III, section       52,   of  the
constitution    authorizes    such   districts    to    incur such    debt
only upon a two-thirds       vote    of the    electorate.       The  road
district therefore     must obtain voter approval to incur            debt
in excess of the amount originally         authorized     by the voters.

      Next,    you    ask:

            4. Can Bastrop         County   loan   money   to the   Road
               District?

      Section 4.401 of article     6702-l authorizes   the   commis-
sioners court of a county to invest sinking funds accumulat-
ed for the    redemption   and  payment of bonds     issued by    the
county in bonds (of proper maturity)       of any road district     of
the   state.     a     V.T.C.S.     art.   842a-2   (Public     Funds
Investment   Act);   V.T.C.S.   art.    4413(34c)   (investment    of
local funds).

      But, otherwise,   a county has no authority      to loan money
to a road district.      In the eyes of      the law they are     dis-
tinct and separate     governmental    units.    Subsection    (a) of
article III, section 52, of the constitution         states that the
legislature   shall have no power      to authorize   any county     to
lend its credit    or grant    public money     to any    individual,
association,   or corporation     whatsoever   except as    otherwise
constitutionally   provided.    See Harris Countv Flood        Control
Dist. v. Mann, 140 S.W.2d 1098, 1105 (Tex. 1940).

      Your    fifth     question     reads:

            5. If the Road District can borrow money in a
               manner other  than the  issuance of  Bonds

      5.   The m      case concerned   courthouse   and jail   bonds,
and was decided under       a law that required     an order of    the
commissioners    court, rather than     an election,   to   authorize
the   bonds.     Bond   elections     now   perform   the    function
previously   performed    by such    orders of    the  commissioners
court.   &8   San Saba Countv v. McGraw, 108 S.W.Zd 200          (Tex.
1937) (taxing power delegated      to voters).

                                            p.   6831
Honorable    Charles       D. Penick   - Page   7   (JM-1276)

               can the Commissioners        Court   guarantee   the
               note?

      The other legislatively    sanctioned   methods of borrowing
by a   road  district   --  bond   anticipation     notes   and  tax
anticipation   notes -- were discussed      in our answer to    your
second question.    In  light of     that response,     we need  not
address this question.

      Your sixth       question  asks   about the  authority of       a
county to borrow       money for a period in excess of one year.

            6. Can the county    borrow money  from a   bank
               for a period of more than one year if     the
               note is set up to come due and be    renewed
               on an   annual   basis within  the  county's
               budgetary  year?

      Counties may incur such debt only for county          purposes,
only by obtaining    the   necessary   consent of the     electorate,
when applicable,    see Henderson     Countv v. Allred,    40 S.W.2d
17, 19    (Tex.   1931),   and   by   establishing    the   requisite
sinking fund and taxation provisions.         See Tex. Const.     art.
XI, 5 7; McClellan      v. Guerra, m;         cf. Local Gov't     Code
§ 271.053   (certificates   of   obligation).     A note   reasonably
anticipated   to   be paid    from current    funds of    the   county
during the    county's    budgetary    year   does   not   create    an
article XI, section 7 debt, however.         See McNeil1 v. Citv of
Waco
-,     33 S.W. 322     (Tex. 1895).    However,   a note set up      to
come due and be renewed on an annual basis would not            appear
to meet this requirement.

      You    also   ask:

            7. Can the   tax  collector    and   the   Commis-
               sioners Court levy a tax on the       residents
               of the   Road District    created under     art.
               6702-l to collect    monies over the      amount
               voted on by the residents     in the   election
               creating  the Road District and authorizing
               the issuance of Bonds?

      In accordance   with  our previous     answers,   the   commis-
sioners court may levy and collect road district         taxes    only
in an amount 'sufficient    to pay the principal      of and   inter-
est on"   bonds   of   the  district.     V.T.C.S.     art.   6702-1,
55 4.425, 4.457.     Taxes in excess of that amount may be         le-
vied to discharge    any authorized,   tax-secured,     indebtedness
left unpaid as    a result    of casual loss     (for example,     the
failure of the county depository).       Henson v.     Commissioners

                                        P. 6832
Honorable     Charles   D. Penick     - Page    8     (JM-1276)

court of Henderson  County,  56    S.W.Zd 240 (Tex. Civ. APP.     -
Dallas 1932, writ   ref'd).    Your description    of the   facts,
however, does not indicate     that any loss    of tax funds   has
occurred.   Rather, it appears     that the funds authorized    by
the voters were inadequate   to    meet the need for which    they
were authorized.

      Question    number   eight      is:

            8. Once the tax rate     is established   and   the
               tax is levied and     it is determined   to   be
               an   illegal   tax,   can   the  Commissioners
               Court change that tax on their own       motion
               or on the motion     of a property owner,     or
               does the    property  owner   have to   file    a
               lawsuit to enjoin     the tax collector     from
               collecting   an illegal tax?

      When the commissioners     court levies     a tax   illegally,
the remedy of injunction     is available   to a taxpayer prior to
the time the   tax plan     is put into    effect and    intervening
rights have vested.      See Citv of    Arlinaton v. Cannon,      271
S.W.Zd 414 (Tex.    1954).    We think    the commissioners     court
may do voluntarily   what it properly     can be required to do by
a writ of injunction    and that it has no authority      to collect
an invalid levy.    See, e.q     Mataoorda   Countv Drainace    Dist.
No. 1 V. Commissioners    Cour; of Matauorda     Countv, 278 S.W.2d
539 (Tex. Civ. App. - Galveston      1955, writ ref'd n.r.e.).

      The ninth      question   is:

            9. Can the    Commissioners    be   liable    indivi-
               dually for     their   actions    as   ex-officio
               directors   of the    Road District     if it    is
               determined   that    they   were   negligent     in
               their actions?

      Whether county commissioners       in   a particular   case    may
be held personally    liable in     damages for negligence      in the
handling of    road district      affairs can    be determined     only
upon a review of facts      beyond those provided us.        See   q    -
erally 35 D. Brooks, Countv and Snecial District Law             5 2e:o
 (Texas Practice    1989).    Questions     such as   this cannot     be
usefully addressed    in   an opinion of      the attorney    general,
but should instead be answered         by the legal advisor to       the
commissioners   court    upon   the    development    of   appropriate
facts.    &8  Attorney General Opinion JM-1224        (1990) at 15.

      Your    next   question   reads:

                                            p. 6833
Honorable     Charles   D. Penick   - Page      9    (JM-1276)

            10. What   duty   does    the   Criminal    District
                Attorney    have   to    represent    the     Road
                District   in   any litigation     if the     Road
                District    was    represented     by     private
                counsel from its inception?

      We understand    you  to ask about     the duty to     represent
the road district      in civil litigation,      since the    criminal
district   attorney would be     required to represent      the   state
in any    criminal proceedings      involving the     road   district.
Gov't    Code   5 44.111(a)    (criminal    district    attorney     of
Bastrop County     shall represent      the state    in all   criminal
matters before     the district     and   inferior courts     and   any
other court in which the county has pending business).

      The criminal      district    attorney    of Bastrop      County      is
assigned   "all the powers, duties,         and privileges     in    Bastrop
County that     are conferred       by law    on county    and     district
attorneys   in the various        counties    and   districts.,,        Gov't
Code 5 44.111(b).       It   is not one      of the county      attorney's
prescribed   legal    duties     to    represent the     county      in    its
general legal business       or in     the conduct of ordinary          civil
actions.    Hill Farm.                                   425 S.W.Zd       414
(Tex. Civ. App. - Waco 1968), aff'd             on o;her srounds,          436
S.W.2d 320 (Tex.       1969).    The    same rule    prevails when        the
duties of the county attorney           are discharged    by a criminal
district attorney.      -See Tarrant     Auoraisal   Dist. v.      Colonial
Countrv Club, 767 S.W.Zd         230, 236 (Tex.      APP-   -  Fort     Worth
1989, writ denied).        Since the criminal district         attorney     of
Bastrop County      can not     be compelled      to represent       Bastrop
County in ordinary civil actions,           we conclude he is under no
duty to represent      a road    district    of the county in        similar
circumstances.      See    Attorney     General Opinion       s-03     (1953)
 (criminal district     attorney      for Harris County       is under      no
duty to    represent    county    flood control      district     in    civil
cases).

      Your    next   question   reads:

            11. Is the county responsible   for any of    the
                debt that   was  incurred by   the   Commis-
                sioners acting as   ex-officio  members    of
                the Road District?

      Bastrop County and the       road district are separate     and
distinct governmental     units.    Neither is responsible   for the
debts of the other, although       it is possible for the    county,
according    to  sections      4.451-4.453     of  article   6702-1,
V.T.C.S.,   to issue "compensation      bonds,,, upon a vote of   the

                                         P.   6334
Honorable     Charles   D. Penick    - Page    10   (JM-1276)

county      electorate,    to   *lpurchasell the   district's          roads,
thereby     relieving   the district   of its debt.

       If the road district       is indebted   to the contractor      as a
result of the actions of members of the commissioners                court
purporting     to act for the road      district,     it is a road     dis-
trict, and not a        county, debt.     Nor   is the county      respon-
sible if the       members of    the court     have become     personally
liable as      a result      of actions    taken    for    the  purported
benefit    of   the    road   district,   which    were    not  in   their
capacities     as officers     acting for the      entire county.       See
my            V.T.C.S.   art.   6702-1, 5 4.432;       Rar
                                                       r    is
Gerhart,    283 S.W. 139 (Tex. 1926): Attorney General             Opinion
JM-153    (1984).

      The    twelfth    in your   series    of questions     is:

            12. Can   the  Commissioners    Court   hire    an
                attorney and    pay   that attorney   out   of
                county funds to defend them in any action
                brought against them in their capacity as
                ex-officio  directors   of the Road District
                or do the   funds for representation      have
                to come from the Road District?

      We advise that county   funds may not                be used for   such
purposes,  and whether road district    funds              may be spent   for
such purposes must be   determined   in light               of the facts   of
the case.

      As amended in 1989,         section     157.901   of the Local     Gov-
ernment Code reads:

                (a] A county official    or employee sued by
            any entity, other than the county with       which
            the official    or  employee    serves,  for     an
            action arising from the performance     of public
            duty is   entitled to    be represented   by    the
            district attorney     of the  district  in which
            the county is    located, the county    attorney,
            or both.

                (b)  If additional   counsel is necessary       or
            proper in the case of an official        or employee
            provided legal counsel      under Subsection       (a)
            or if   it  reasonably   appears     that    the  act
            complained  of   may   form the     basis    for  the
            filing   of  a criminal      charge     against   the
            official or employee,    the official or employ-
            ee is entitled     to   have    the    commissioners

                                       P. 6835
Honorable     Charles   D. Penfck    - Page    11    (JM-1276)

            court of the    county    employ        and pay   private
            counsel.

                (c) A county official or employee is   not
            required to accept the legal counsel provided
            in this section.

      This  provision  does   not apply    to non-county    officers
and employees.     &S  Attorney    General Opinion MW-252      (1980)
(predecessor    to section 157.901     does not apply to    district
offices).     It is therefore    inapplicable  to   members of    the
commissioners    court  for  action taken in    their capacity     as
administrators    of the road district.

      Section 157.901 is declaratory          of part of a common rule
regarding    the employment     of legal     counsel by a public       body
for its officers and employees,          but it does not supplant        the
common-law    rule.    Attorney    General Opinions JM-824,          JM-755
(1987):    MW-252).      The    common-law     rule    allows     a public
entity, such      as a county or        special district,       to   employ
attorneys    to defend public       officers and employees       when    its
governing    body believes that the legitimate           interests   of the
public entity -- and not merely             the personal     interests    of
the officer or employee -- require the assertion               of a vigo-
rous legal defense       on behalf of       the public interest.         See
Attorney   General     Opinions    JM-824,    JM-755     and   authorities
cited    therein.      The   governing       body    may   provide      such
representation     when it determines       that the public officer or
employee   acted    in good     faith and     within the      scope of    an
official   duty.    Id.    Whether    a particular     lawsuit     involves
the legitimate     interests     of either the       county or the      road
district    is always a question of fact           that must await       the
good faith determination        of the governing      body of the county
or road district      in light of all relevant        facts.    Id.

      Two other things should     be noted about the       common-law
rule.    First, it is permissive     -- it   does not recuire      the
public body to     employ attorneys   to   represent   its   officers
and employees.6     Second, the common-law     rule does not     limit
a county to employing     legal  counsel only for officials        and
employees    of the county government.     It would, for     example,
allow a county     to pay costs   adjudged   against the     district

      6.   Section 157.901,      on   the       other  hand,   "entitles"
county officials     and   employees   to       legal representation    by
the   county    or   district    attorney        under  the    conditions
described   therein.

                                       P. 6836
Honorable   Charles    D. Penick   - Page   12   (JM-1276)

attorney   and   certain     fees   relating    to    a   lawsuit     filed
against him,     provided     the commissioners court          reasonably
believed   the county's interests were         at stake and the        law-
suit arose from      actions taken by      the district      attorney     in
the performance      of his public       duties.      Attorney     General
Opinion MW-252:      see   also Attorney      General     Opinion     H-544
(1975) (county's authority to pay legal expenses              of district
judge in defending      lawsuit arising from conduct         of court     of
inquiry by judge).       The county's     authority     to pay for     such
matters on     behalf of     non-county   officials,      however,     must
arise    either    expressly     or  impliedly     by    statute,     a,
statutory   provisions    requiring   the county to pay the expens-
es of the district       attorney's   office or expenses        connected
to courts of inquiry.        See Attorney General Opinions NW-252;
H-544.

      Since the expenses      of the   road district      in this   in-
stance are not borne by the county, neither section            157.901
nor the common-law     rule would authorize       the county to     pay
for the defense     of members    of the    commissioners    court   in
lawsuits arising    from   actions taken in their        capacity    as
ex- officio    directors   of   the road    district.    Whether    the
commissioners   court, acting     as directors    of   the road    dis-
trict, may spend road district       funds to employ attorneys       to
defend their actions is       a question   of   fact that cannot     be
determined   by this office.

      Another   provision    that should     be consulted      is section
102.004 of     the    Civil   Practice and      Remedies     Code.      This
section allows      a local     government     (which    is    defined    to
include a     county    or   special district)       to    provide     legal
counsel to represent       a defendant    for whom the local        govern-
ment may    pay damages      under chapter      102, i.e.      current    or
former officers     and employees,     or their estates.        Civ. Prac.
& Rem.     Code    g 102.004(a):      see   also    id.     55 102.001(1)
(definition    of    "employee"),     102.002(a),      (b)    (payment    of
actual damages,       attorneys    fees, and     court     costs    awarded
against an "employee,') . The         county thus is not        authorized
under section 102.004 to pay          for the representation        of   the
commissioners     court in these circumstances.          The counsel may
be the local government's         regularly   employed     counsel,     pro-
vided there is no potential        conflict of interest between the
local government       and the    defendant,     in which      case    other
counsel may be employed.         Id. 5 102.004(a).

      A local government  may pay damages that result from       an
act or omission   of the employee or officer in the course and
scope of   his employment   and   that arise    from a cause     of
action for negligence.    Id.   102.002(a).   The local    govern-
ment may    not, however,   pay   damages   awarded   against    an

                                     p. 6837
Honorable     Charles    D. Penick    - Page    13   (JM-1276)

officer or employee  that   arise from a     cause of action    for
official misconduct  or   from a cause    of action involving      a
wilful or wrongful   act or    omission or an     act or  omission
constituting  gross negligence.     &   102.002(C).

      You do not indicate what possible causes of action        may
be brought   against the    commissioners court, and we    decline
to speculate   on such    possibilities.  The foregoing    discus-
sion, however,    should assist you in determining    the duty   of
the road district     to pay for the legal representation   of the
county commissioners     in their capacity as ex-officio    direc-
tors of the road district.

       Your   thirteenth     question     is:

            13.   If the answer to number 12 is no and         the
                  Criminal   District Attorney    cannot    repre-
                  sent the    Road    District,   can   the   Road
                  District obtain funds from any source for
                  legal representation       other than   through
                  the issuance of' bonds after an        election
                  authorizing    same?

      In view of our answers            to your second, third, and tenth
questions,   it is unnecessary           to address this question.

       Your   final     question   reads:

            14. Can the method of    taxation    of the   resi-
                dents in the     Road District     be   changed
                from an Ad Valorem Taxation to a tax on a
                per lot   basis without     another   election
                authorizing   the change,    since the    bonds
                were issued    based   upon   an   Ad   Valorem
                method of taxation?

       Section 4.425 of article  6702-1, V.T.C.S.,               the   County
Road   and Bridge Act enacted in 1983, provides:

                Each   year   that    bonds    are   outstanding,
            taxes shall be levied       sufficient    to pay    the
            principal    of   and    interest    on   the   bonds.
            Taxes shall be levied in accordance          with   the
            procedures    for taxation    set forth in Sections
            51.502 through      51.506, Water      Code.   To   the
            extent that the provisions        of this Act     refer
            to ad valorem taxes, such provisions          shall be
            deemed to refer to taxes levied on any            basis
            of taxation     for   which provision       is herein
            made if the commissioners       court determines      to

                                         P. 6838
Honorable     Charles     D. Penick        - Page   14    (JM-1276)

            levy on     a basis       other     than     an    ad    valorem
            basis.

      The sections of  the Water Code    referenced  in   section
4.425 require the conduct of    a public hearing to     determine
"whether the taxes  to pay  the construction   bonds and mainte-
               .         _ .
nance, operation,  and acministrative    costs of the    district
shall be levied, assessed,   and collected   on:

                (1) the    ad valorem        basis;

                (2) the     basis     of     assessment       of    specific
            benefits:

               (3) the basis        of assessment         of benefits      on
            an equal sum per        acre: or

                (4) the ad valorem  basis for part                   of  the
            total tax or defined area or property                    and  on
            the benefit basis for   the other part                   of  the
            tax or defined  area or property.

Water Code 0 51.502.     Chapter 51    of the Water Code      relates
to water   control and    improvement   districts,     which may    be
created under    either article    XVI,  section    59,   or  article
III, section    52,   of  the   constitution.      See   Water    Code
5 51.011.

      Section      4.427      of       article        6702-1,        provides   the
following:

               When the bonds are     issued for and on     the
            faith and credit    of a political     subdivision
            or road district,   the taxes shall be assessed
            and collected   in the   same manner as for     the
            assessment  and   collection   of  common    school
            district taxes.

Common school district      taxes are levied    strictly on an    ad
valorem basis.    Educ. Code §§ 20.01, 22.11.       It is  unneces-
sary to consider    whether   sections    4.425 and   4.427 are   in
conflict,  because the commissioners       court in this   instance
is prohibited   from changing    the basis on which the taxes     of
the road district are levied.

     The order of the    commissioners court calling the                        1987
bond election in the road district contains the question                          to
be submitted  to the voters and reads in pertinent  part:

                                             P. 6839
Honorable     Charles   D. Penick   - Page    15   (JM-1276)

            Whether  or not   the bonds       of Bastrop  County
            Road District   No. 3 shall      be  issued . . . to
            bear interest at such rate or          rates . . . as
            in its discretion    the Commissioners'        Court of
            Bastrop County,     Texas    shall     determine    and
            shall ad valorem taxes be levied [sic] on all
            taxable property    in said District subject         to
            taxation   for   the    purpose     of    paying    the
            interest  on   said    bonds    and    to   provide   a
            sinking   fund     for    their      redemption      at
            maturity?

Order of the Commissioners     Court of Bastrop County,       calling
for a bond election      in Bastrop County     Road District   No.    3
(June   22,  1987).      This  language,     though   ungrammatical,
clearly conveys the understanding        that the bonds issued       by
the road district    would be retired through the collection         Of
ad valorem taxes, and the      voters who approved the       issuance
of the bonds on     this basis are entitled       to the benefit     of
that understanding.

      In San    Saba Countv     v. McGraw,       108 S.W.Zd      200   (Tex.
1937), the    supreme    court     ruled   that    the    conditions     and
safeguards   surrounding     a   tax    voted.    upon    by   the   people
pursuant to constitutional         provision     become a part of        the
election   itself   and cannot      be    impaired and       destroyed    by
subsequent   legislatures.      The   law  treats    such  conditi0r.s     as
a contract with the voters, and any attempt to substan:ially
alter the    rights and     expectations      of   the voters      will    be
treated as     a violation      of    the   constitutional        provision
authorizing    the vote    and of     article I,      section    16,   which
prohibits   laws impairing     the    obligation     of contracts.       Id.
at 203.

      The rule expressed       in San Saba     Countv v. McGraw     also
applies to     the order    adopted    by the    commissioners     court
calling for an election      on whether to issue bonds for public
roads.    A   long   line of    cases   holds that     the   conditions
expressed    in the   order become     a solemn     contract with    the
voters, and the voters are entitled to receive substantially
all of    the   benefits   and   security     of the   contract.     See
Fletcher v. Howard,       39 S.W.2d 32 (Tex.     Comm'n App.    1931,
opinion adopted):      Moore    v.   Coffman,   200 S.W. 374   (Tex.
1918).

       The commissioners      court    is therefore    prohibited     by
 article I,    section   16,    of  the constitution     from   levying
 taxes for the road district        on the benefits basis     pursuant
 to section 4.425      of the    County Road and    Bridge Act.      San
 Saba Countv v. McGraw,      m.

                                       P. 6840
Honorable     Charles   D. Penick    - Page   16   (JM-1276)

                              SUMMARY
                A county    road district     bond election      is
            not rendered     invalid     if the   amount    to   be
            voted upon is changed after a public hearing.
            A county road     district may      borrow money     by
            issuing    tax   anticipation      notes   and     bond
            anticipation    notes as well     as bonds, but      it
            may   not   do   so   unless    authorized     by   the
            electorate    in accordance     with    article    III,
            section 52, of the constitution.          It may    not
            borrow money in excess        of the amountof       the
            amount so authorized.

               A county     is not    responsible     for   debts
            incurred    by   members   of   the   commissioners
            court acting for a county road district.              A
            county may not loan money to a road district,
            but it may invest sinking fund monies in           the
            bonds    of  the   road   district.     Nor    may    a
            commissioners    court, acting     for the    county,
            guarantee   the   note of   a road    district.      A
            county can borrow money for a period of          more
            than a year by complying      with   constitutional
            requirements.

               The tax   collector   and   the  commissioners
            court cannot ordinarily     levy or collect a tax
            in a road   district   in excess   of the   amount
            voted by the electorate.

                Whether members of       a commissioners       court
            may be personally      liable for their management
            of road district       affairs cannot be       answered
            in an    opinion of     the attorney      general.      A
            criminal    district     attorney       is under       no
            obligation    to   represent    a road district        of
            his   county     in civil      proceedings.       County
            funds may not      be used to      pay for the     legal
            representation      of   members     of   the    commis-
            sioners court      for   actions     taken    in   their
            capacity as      ex-officio    directors    of a     road
            district;    whether road district       funds may     be
            spent for     such    purposes    is  a question       of
            fact.

               The ad valorem    basis of  taxation in    the
            county road district cannot    be changed to     a
            "benefits" basis if the order of the     commis-
            sioners court   calling   the election   on   the

                                       P- 5841
Honorable     Charles     D. Penick     - Page   17   (JM-1276)

                                                 Very
                                                   truly
                                                      ,
            issuance of the bonds states that such                 bonds
            will be retired through the collection                of   ad

                                                 J A;,
                                                     h
            valorem taxes.

                                                             Y

                                                 JIM     MATTOX
                                                 Attorney General       of Texas

MARY KELLER
First Assistant         Attorney     General

MU MCCREARY
Executive Assistant         Attorney     General

JUDGE ZOLLIE STEAKLEY
Special Assistant  Attorney            General

P.ENEA HICKS
Special Assistant         Attorney     General

RICK GILPIN
Chairman,  Opinion        Committee

Prepared by Steve Aragon
Assistant Attorney General

                                           3. 6812