Court Opinion

ID: 4143508
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:34:30.884069+00
Date Added: 2024-06-11T14:49:49.603643
License: Public Domain

Mr. H. D. Dodgen      Opinion No. O-2864
Chief Clerk           Re : Liability of Game, Fish & Oyster
Game, Fish & Oyster   Commlssion to Water Improvement District
 Commission           for "flat rate water service charge,"
Austin, Texas         for customary charge for water used, and
                      for sinking fund taxes.
Dear Sir:
          This will acknowledge receipt of your letter of Octo-
ber 26 1940, wherein you request the opinion of this department
as to 8ertain matters therein set out. We quote your letter as
follows:
          "The State of Texas owns 40.57 acres of land lying
     within the boundaries of the Bexar-Medina-Atascosa Counties
     Water Improvement District No. 1. There has been built on
     this land a fish hatchery which is now in operation. The
     hatchery is being supplied with water from an irrigation
     canal operated by the above water improvement district.
          "We respectfully request your opinion on the following
     questions:
          "1. Should the Game, Fish and Oyster Commission be
     required to pay the flat rate water service charge custom-
     arily assessed against owners of land lying within this
     district?
          "2. Is the Game, Fish and Oyster Commission required
     to pay the customary charges for water used, such charge
     being in addition to the flat rate charge?
          "3 . Is the Game, Fish and Oyster Commission required
     to pay sinking fund taxes assessed by the Water Improvement
     District?
         "4. Does the Bexar-Medina-Atascosa Counties Water
    Improvement District No. 1 have authority to furnish water
    without charge to the State Fish Hatchery located within
    that district?
                                                                     29

Mr. H. D. Dodges, Pago 2

          ‘3.  fs the CIaw, Fish and Oyster Commis-
     sion roqulrod to pay sinking fund taxes assessed
     by the Water Inprovewnt Di8triOtT
          '4. Does the Bexar-&dine-Ataesosa Countlos
     Water ImprovemaatDlstriOt Ilo.1 hare authority
     to furnish water without sharge to the Stats
     Fish Iiatohery looated withln that dfmtrlot?
          Tour attention is oaUed to t.b lxlstenoe
     of sn agreewnt the orlglnal copy OS whloh is
     belieredto be In tb file of the'AttorneyGen-
     eral's Offloe, relative to the supply of water
     to be furnished the State Fish Batolmry located
     within the boundaries of the Bexar-Medina-Atasoosa
     Countiss Water Iaprorewnt Dirtriot lo. l.*
          We shall dlsouss the agrsement referred   to In   mother
portion of this opinion.
          Under our 86atutes when a water oontrul and improve-
ment dietriot is organlead,  it is rspuired  to set up two funds.
Ona of those, prorlded  for in Article 9115, R. C. 3.. 1925, 18
            the wlntcrest alld sinking fund,” and the other ,
denozninated~
authorized b;l Article 7714, 8. C. S., 1925, is the %aintenanoe
and operating rund."
            Artiolm 9712, B. c. S., 1925, empowere the direotors
to levy a tax upon all propsrty within tha distriot suffiolent
to pay the lntsrest on its bonds and to provide a slnklng fund
to pay off the bonds at maturity. The dlreotors of tlm Dls-
trlct under   Artlols 1113 are required to plaoe in tha first
fund above menttoqed money reallsod iron taxes.'
          Moneys ior ths wlntenanoe  and operating fund are
derived rrom two typss or oharges ror water servioe. The
direotors OS the Distrlst wider the provisions of Artiole
7152, R..U. ,S.,1925, are require4 to estimate the operating
and Oaintenanoeexpense at tb    beginning of eaoh year, A’
portion ot the neoessarg fund is then to be raised by assess-
aents against all lrrlgablr lsnds within the dirrtriot; pro
rata per aore, and the remainder is to k paid by porsonc
taking water.
          We assume that what loa refer ta as tlm “flat rate
water oharge* is the pro rata assesswnt levied against -Oh
Mr. H. D. Dodgen, page 3   (O-2864)

the State government in the absence of provisions of theconsti-
tution or statutes specifically granti ng them relief thereform.
The exemption from taxation may not be construed to relieve them
of such other burdens. See 40 Tex.Jur. 109 and authorities
cited.
          We doubt that It could   be seriously contended that the
customary charge for water used,   even remotely approaches any
of the accepted definitions of a   **tax." This charge is nothing
more than a fee for a service to   be paid only by those making
use of such service.
          There might have been some doubt as to whether the as-
sessments or "flat rate water charge" Is a lltax,"had not our
Appellate Courts already foreclosed the question. This assess-
ment is levied against all irrigable lands within the District
without regard to whether the owners of such lands avail them-
selves of the water service or not.
          However, the statute authorizing this charge scrupu-
lously refrains from designating this charge as a 14taxwand, as
stated, our Courts, in the few instances when the,question was
before them, have pointed out that this assessment is not a tax."
          In Brady vs. Hidalgo County Water Control and Improve-
ment District (Civ.App., San Antonio, 1932) 36 S.W.(2d) 298;
affirmed by the Commission of Appeals in 91 S.W. (2d) 1058, the
court used the following language:
          "The district cannot levy taxes except to provide
     interest upon its bonds and sinking fund for the retire-
     ment of its bonds. Its operating expenses, after construc-
     tion expenses, must come from water rentals and service
     charpes."
          In Western Metal Manufacturing Company of Texas vs.
Cameron County Water Improvement District (Civ.App. Fort Worth,
1927) 105 S.W.(2d) 700, error dismissed, the'court makes the
following observation:
          "The prayer in plaintiff's petition asking for a man-
     damus to require the assessment and collection of fees,
     against land in the district for the purpose of raising
     funds to pay the current maintenance and operating expense
     of the district was fully justified, if recovery should be
     had by it. We have shown that by the provisions of arti-
     cle 7752, it is the duty of the directors to estimate the
     current expense for the year and to collect it from the
     land owners in the district in the manner and proportions
     therein set out. .*** It will be noted, however, that the
                                                                              .      -

,--               Mr. H. D. Dodgen, page 4   (O-2664)

                      prayer in the petition asks for the writ of mandamus to
                      require the collection of .‘taxes’as well as assessments
                      against the property in the district to raise revenues
                      for the purpose of paying plaintiff’s debt. If the writ
                      is granted it should not require the collection of ‘taxes’
                      .for the purpose mentioned, since taxes can only be cr
                      lected to cay interest and to create a sinking fund to re-
                      tire the bonds when due.”

                            The following language from.Texas Jurisprudence also
                  adheres to this distinction:
                           “While taxation is the source of the funds used for
                      the payment of interest on the district’s bonded indebted-
                      ness and the accumulation of a sinking fund, expenses of
                      maintaining and operating the water system cannot be met in
                      this way. Such expenses mustbe paid, in the case of water
                      improvement districts at least, from a fund known as the
                      ‘maintenance and operating fund, I which is created by levy-
                      ing pro rata assessments against all irrigable lands within
                      the districtand by making charges for all waters delivered
      ,‘-             to water users.” 44 Tex.Jur. 295.
                                                                                         .(,
                                                                                         /j,
                           Another opinion by the Commission of Appeals declared:
                            “The only provision in the chapter expressly authoriz-
                       ing a tax for any purpose is to be found in Article 5107-
                       69 (now Art. 7712)” Creager et al v. Hidalgo County Water
                       Improvement Dist. No. 4. 283 S.W. 157.
                            It becomes apparent, therefore, that the answers to
                  your first and second questions are that the Commission is re-
                  quired to pay both the “flat rate water service charge” assessed
                  against all irrigable land in the district and the customary
                  charge for water used-unless the District has by the contract
                  mentioned above relieved the Commission of the burden of these
                  charges.
                            The agreement to which you have directed our attention
                  recites that the Commission agreed to locate a fish hatchery
                  within the boundaries of the Bexar-Medina-Atascosa Counties
                  Water Improvement District No. 1 and that the directors of the
                  District agreed to furnish the land and water necessary for so
                  long as the property was used for a hatchery. By a resolution
                  of the Board of Directors of the District,,which was incorpor-
                  ated into the agreement, the District agreed to furnish water
                  to the Commission “without charge.”
            :-~
                            Two possible constructions of the language “without
                  charge” occur to us--that neither the “flat rate” nor the
. -_

       hr. H. D. Dodgen, page 5   (o-2864)

       "customary service charge" would be paid or that the Commission
       would be relieved only of payment of the "customary service
       charge." The District has apparently adopted the latter con-
       struction, while the Commission has adopted the former.
                 We have no way of knowing which construction those who
       made the agreement intended or whether the meaning of this
       phrase was even discussed. However, at all events, it appears
       to be undisputed that the parties intended to relieve the Com-
       mission at least of the burden of paying the customary service
       charges based upon the amount cf,water used. In the absence of
       more ,evidencewe feel constrained'to.ado~pt.thatconstruction.
                 Under such a construction, the answer to your first
       question is Iryes",while the answer to your second question is
             and you are so advised. The obvious answer to your third
       rlnolV,
       question, under the pertinent authorities cited above is "no."
                 Your fourth question concerns the authority of the
       directors of the D1stric.tto donate water service to theCommis-
       sion. We find nothing in the statutes which msy be construed
       as authorizing the directors to dispose of water service other-
       wise than by.sale. Sound public policy would mi.litateagainst
       a presumption of such authority. See Jones v. Wi.lliams,121
       Tex. 94, 45 S.W. (2d) 130 79 A.L.R. 983; Llano County v.
       Knowles, et al, (Civ.App.$ 29 S.W. 549; and Dreeben vs. White-
       hurst (Comm.App., 1934.)68 S.W. (2d) 1025.
                 We have?reached tbc:conclusion however tha,tyour ob-
       ject in asking the fourth o,?l?st~ion
                                           was to determine whether
       the District may furnish weter t,othe Commission witbout charge
       under the agreement to which you directed our attention ,inyour
       letter, and we will answer i ::under that assumption. Tht1t
       agreement, as pointed out above, recites as a consideration the
       promise on the part of the Commission to locate a fish hatchery
       within the boundaries of the District. 'WCknow of no reason
       why this would not be valid consideration upon which the Dis-
       trict would be authorized to furnish the water service.
                  The bi~ndingeffect 01 i~r,i:<
                                             coni,rac
                                                    t might be upheld
       on still another basis. It war.bold in a recent case that even
       though a contract enter4 into ky7 dir~c.tcr::of a Water Improve-
       ment District is prohibited by the Cons,titutlonand laws of the
       ,State, yet if it was deliberately entered into by the proper
       District officials, thereunto lawfully auti,cl;~iz?d
                                                          and the other
       party was induced thereby to perform service:;exacted of it in
       rel~ianceupon the contraci:and the District accepted such serv-
       ices and benefits derivable therefrom, the District was bound
       by the terms of the contract. Nagle, Witt, Rollins Engineering
       Co. vs. La Salle Water Improvement District NC. 1 (Civ,App.,
ur.   Ii. D. Dodgen, Page 8

latter aonstruotion,   while   the Commission has adopted the
f ora4r.
            tie have no way of knowing which eonstruotlon
those who trade the agreemnt intended or whether the msn-
ing of this phrase was even discussed.      However, at all
4vent 8 ) it appears to be undieputed that the parties intend-
ed to relieve the Comiission at least of the burden of pipp
lng the customary service charges based upon the amount of
water used.     In the absence of more evidenoe we tee1 eon-
strained to adopt that oonstruotlon.
          Under such a construction,  the answer to your
rirat question is eyes?, while the answer to your seoond Ques-
tion is “non, and you are so advised.   The obvious answer to
your third question, under the pertinent authorities oited
above is “no. n

           Your fourth question eonoerns the authority of the
direotoro  of the Distriot  to donate water service   to the Corn-
mission.   be find nothing in the statutes which may be oon-
strued as authorizing   the dlreotors  to dispose of water serv-
ice otherwise thsn by sale.     Sound publlo polioy would mill-
tats against a presumption of suoh authority.      See Jones t.
Williams, 131 Ter. 94, 45 S. W. (9d) 130, 79 A. L. R. 983;
Llano County v. Rnowles, et al, (Civ. App.) S9 9. W. 349;
gi&Dreeben vs. Whitehurst (Comm. App., 1934) 68 5. W. (Rd)
      .
            We have reaahed the oonoluslon however that your
object In asking the fourth question was to determine wheth-
er the Distriot   may furnish water to the Commission without
aharge under the agreement to which you dlreoted    our atten-
tion in your letter,    ahd we will anewer it under that araruql)-
tlon.   That agreement, aa pointed out above, recites as a
consideration   the promlse on tho part of the Conm.lsalon to
locate a fish hatohery within the boumlaries of tlm Distrlot.
We know of no reason why this would not be valid oonaldera-
tion upon whioh the Dlstriot    would be authorized to furnish
the water eervioe.
           The bindlhg effeot of this oontraot might be Up-
held on still  another basis.    It was held in a reoent aaoo
that even though a contract entered Into by dimotors       of a
Water Improvement District    is prohibited by the Constitution
and laws of the State, yet if it was deliberately     entered
                                                   .

Mr. H. D. Dodgon, Pa&8 7

into by the proper Distriot oiiloials, themunto lawfully
authorized end the othar psrty was lnducpd thereby to par-
fo r msenlo ss lxaotsd of it In relianoe upon tb oontraot
and the Dirtriot aooeptod such ssnioss and benstlts ds-
Arable thereiron,the District was bound by the terms ot
the oontraot. Waglo, Witt, Bolllns EngInesrIng Co. vs.
La Salle Water Impror~msnt Dlstriot No. 1 (Clr. App., San
Antonio, 1931) 44 8. W. (Ed) 1033, error dismissed.   Sss
also Oltl 0i Tyasr f. Jester, 97 l's% 344, 78 8. W. 103S;
Sludsr w. Gitr of San Antonio (Corn.App.)  3 8. W. (Zd)
S4lj cab Eudspsth County Consenatlon & Reolanmtlon Dist.
T. Spars (Clr. Am., El Paso, 1931) 39 8. W. (2d) 94.
          You are advissd, therefore, that under th8 agree-
ment referred to, the Dlstriot is authorizedto furnish
water to tbr State Fish Eatohsry looated within that Dis-
trlot wwithout oharga.*
          Trusting that we hate sufrloientlyanswered           your
LnptirJ, ws are
                                        Yours wry      trn&y

                                    -   -
                                                Peter Manisoaloo
                                                       Assistant

             APiRCfVEDNOV27, 1940
                                            i
                              s
             ATTORNEY GENERAL OF TEXAS