Court Opinion

ID: 4143482
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:34:11.529011+00
Date Added: 2024-06-11T14:34:10.396587
License: Public Domain

OFFICE OF THE ATTORNEY GENERAL OF TEXAS
                             AUSTIN

Ronorabla Lee Bra&y
BElnklng ComlsdoIler
Austin,   %exa6

Deer 1Er. Bradyr

                                           t of your letter  no-
                                           at on four ~ertfonm.
                                           8 aa followr:
                                            ion aad Rso&mn-
                                         govermmn6al ageaoy,
                                      io aad wrpom6r,    under
                                      Lsglelature , Seoond
                                   sd bon48 pursuant to the
                               dlstriot,    and both &ate and
                              avesting la these bonds, and
                            rmoeesary to Uetmrilne whab
                        ve been plaoad by law on them
                        IlvClutentr.”

                 amum that you have refermoe       to the .!G,OOO,-
                  8 authorized by the Board 01 Direotore of the
Bra~oa District a,nO which are recured  by an6 piyabla out of
the State taxes grantad to the diatrlot   by the law oreating
Sam.
          our opinion    ie requested   on the tollodng    four
pueetiona t
         1. “1s eeld dlstriot   a munialpal oorpora-
    tlon or a dietrlot   created for rohool or any
    other state or looel purpose, wlthln the 0x089-
    tion to Article    5% of the Penal Code of Texas,
    aa anended?”

         i3. *Does this distrlot   have the aoverslgn
    power of taxetion,   or power ot taxation derived
    fron: the aovarelgn,   lnoludlng the incidental
    pow4r to oompsl payment?*

           3. *Is the State       of T4xar liable      on these
     bondln”

           “Are bonds iesuetl by aaid dietriot                with-
    la 2; lofinlimit pmvldad u5d4r Seation                   6136,
    c. 3. R. 3.9'

           X4 ahall     answer the queetiom         in the order      abovo
ret OUL.
          hlative  to your first  quertlon, Arti  864 of the
Penal Code of Texa11, aa ammded, Yoraoa*a Aanotawd civl.1
Statutes,  reads, in part, a4 iollcnr8t
          “No lnoorporated     bank or trurrt oonqmay,
     obertered under the law6 of thi6 State, #hall
     loan itrr lilonrp dlnotly    or lnbirmotlg or permit
     any individual,    private corporation,     company or
     rim,   to beooum, at aqp th4,       indebted or liable
     to   it   in a   4uni exoeedlng   twentpriv4      per   04nt
     (8561 of its       oauital   stook aotual4       paid   in anb

         We think there oan be no queatloa but that the obri-
gor on a muni~lpsl bond lsl a debtor in the mmao oontemplat~
by the above quoted artiole,  and that, thenSore,   in the ab-
nenoe of the 9rovlao undtwaroored tn the above quotti Aot, the
Honorable Lee Brady, page 63

~aatrlotlon    theraof muld apply to tns purohaae ct muniol-
pl bonds a8 an inveatmnt           by any beak 80 chartered.      It
844~~ olear that tha above underaoorsd proviso removaa the
reatrlctlon    and would pennlt of unllmlted iaveatmat          la
munioipal    bonda; provided, ot wuree,       that the lamlag poll-
tic41 imbdtvldon       oo?z.oa within the meaning oi the phrase
%unlcip41     oorporatlon,     oounty or any dlatriot   orsat      for
lohool or any other State or looal publio purpoaaW. The
Brazoa River Conssrvation and Reolemation Dlstriot            was
created by an Aot of tbe Ssaond Called S4aalon, Forty-first
Laglalatun,,     oompiled as Chapter 19 - Seotlon I! thbnof          ma&-
lag,   la   part,   as   r0llwar

            *The Braeoa River Conaervatlon      and R4olaaa-
       tlon Diatrlot   is or4atad as a go~orameatal       asnoy,            i
       a muafafpelity,   body politio   and oorporate,     vati&
       with 411 the authority a4 auoh under ths Conatitu-
       tloa aad lawa ot th4 State; it shall have knd be
       reoognised   to exeroiae all ot ths pow4ra ot mob
       govpsrmental agency and body polltlo         and oorporata,
       as are 4xpr48aly autborlr4d     by the provlaio~a~of
       #a Conetitutloa,     Sleotion 89 of Art1014 16            i
       and shall have and be reaognlzad      to exerolaa     all
       the rlghta end pcmrs ot an indapendant gOvS-t-
       al ag4nog, mnlolpallty,      body polltlo     and 4orporat4,
       to formulatbl any an4 all p&na,b*e4~d 4884ntla1           to
       the operatlon ot the dietriot              .
          R'S thfnk that Seation 1 at this Aot, h4ralnaft4r
wotad,   will auftlclently  attest to th4 fsot th a ltald d.l8-
trlot is organized for a State 9urpoae. Sootion 1, r-da,
in part, 46 follows:
            *It, being dsolsrsd  by aoostltutional  pro-
       vision tha policy of the Stats of T4x4a to pro-
       vid4 for thee conservation   and dwslopent    of all
       the natural resourOeS ot th4 state * * * Olld th4
       prsaarvntlon   and eonaervatlon of all auoh aatu~ral
       r6Bouro4a, are 4a4h and all hareby d4olared polioy
       rights and duti48 whloh map be etfoot4d     thrOUgh
                                                                                42’;

           the oreation within the State or the dlvlelon     of
           the State into such number of conservation    and
           reclamation di&rlots    n1) may be determined to be
           esrentlal  to the acoonpllshment of the purpoaem
           of the policy expressed ln the Conetltutlon    of the
           Stats * * * and funotlons aa may he conferred     by
           laW, there is hereby created the Braxoa River Con-
           8ervation end Reclamtlon     Distri ot .-
               In the ease of Brazes River Conservation and Rechma-
    tlon Dlatrlat va. LEcCraw, 91 5. W. (Ed) 66, the Supreme Go&
    in an axhmmtlv6 opinion upheld the ralfdity          or the Act areat-
    lng the dietriot,       a6 Well a8 tAie bonds lsnued pursuant theMto,
    E;hAiyds        are eeoured by a pledge of State taxea donated by
                  Ifi rererrlng to the origin and purpose 0r thla typo
    dlatrlot:   the Supren\a Court raid that it wa8 bacrfoly a publio
    enterprim,      orated    by the Legihila~     for the gener81 govern-
    mental purpose      of erfeotuating   the objeot 0r the oonserv~tioa
    emondment to the Con& 1 tut ion.

             Vfe, therefore, oonolude, in answer to your flrrt   qua+
    tion  that the Rrasos River Diatrfot  is, a *dlstrtot oroated for
    * * 4 State pub110 purpo80N within the exoeptlon to brtiole    554
    or the Penal Code ai T&as, aa a&ended.
               Answering your eeoond queatlon, we a&Ire that la our
    opinion   the power of taxation haa been oonferred   upon the Brnzo8
    Rlter Coneermtion     end Reolamtlon  Dlrtriot,  end that auah parr
    include8 the lnoideatal    power to oczcpel payment oi 8uah tax*@.
    However, as will be notad rrom a reading of the Act OreatlBg thr
    diatriot    the power to levy tam8 cannot be ererolaed until 4uah
    propoeition   shall hare been submitted to the qudliiled   propsttr
    taxpayln6 roterr or the dlatrlot and approved by a nu1ori.W of
    mob elector@ voting thereon. Seotlon 10 or the Act Oreating
    the dintriot,   reads PB r0ilow6:
                *‘phe Brason River Conaermtdon and Reolamatlon “:2 :z: ‘.1:~:
           Diatriot   shall not be authorize4 to ia8ue bond@, Mr
           incur any rorm or contlnulng obligation    or indebted-
           ness ror purposes 0f efreotlng Iirwoveatente conwe-
           hended In the plan 0r organlzatlon   and adalnlrtratiofi
           or the dlstrlct,   nor Inour any Indebtedness in the

c
gaaorable       Lea Brady, pago #!5

     r0mi or u oontlnulng charge upon lands or pro-
     pertiea within the diatrlot   unless suoh progoal-
     tion shall hate been sublufttsd to the qualtiisd
     property taxpaying votora of the district   and
     approved by a majority ot such eleotora   voting
     thecean.n
           Seotion 4 of Chapter 19 of the A&s or the Regular
Srsion,    Forty-fourth  Leilislature, omoadlng Seotioa 9 or
Chapter 13 of the Ssoond Called Eleaslon of the Forty-first
&sgislature,    reads, in part, aa tallows:
         This district     shall have the power to pro-
     vide and maintain improvements for the oomrson
     benerlt of aaid district aa a whole, subjeot
     only in appropriata oaaea to the oonstltutlonal
     and otatutory provision8     sonosrnlsg a vote bl
     the qualified  electors    cf ths dlatrlotn.
a% think thst rr0m a awading or the roregolng it must be aon-
oludodthatthe    teglslature    has oonterred upon the diatrbt
ths power cb taxation,    subjeot,  or oour5e,     to the approval
thereor by a maJorlty or the quallried       eleoltors voting at aa
sleotlcn  oallsd for that purpose, and that suoh power or tar-
ation Includes t&e Incidental power to compel the paymmt of
bares levied.
           In rsply to your third question,      we advise that It
should be amwered lo the riegatire.         In ths Bras08 River Con-
servatfon    and Reolamatlon 3istrlot    oaso, supra, ths qumsbioa
was raised that the Agt oreating the dlstrlot        ooastltuted  as
attempt to authortie    the Board or ths district     to ortmte a
drbt lc behalt or the State, or land the oredlt or t&s Stats
in 7iol~tfon    0r the inhibitory   provisicms 0r 30ctlons 49 and
50 or Artiola 3 cf the Constitution.         The Suprem+ Court stated
tersoly     -

          YTo debt on the prt   cS tho Stats la to     be
     oreated, nor fs the State oredlt loaned for       thst
     purpose.   Theo6 queatlons am roreoloaed   in     the
     oplalon or this oourt in the eve    or ~24%~al     Arsn-
     sas ?a88 ml. XelMng, R4V S. ati 818eH
                                            1
                                           .Y
Eonomblr   Lee Brady, pege #a

         With reierenoe   to the fourth qucmtlon, above quoted,
we conoluda that to answer sane would place ue :n the pomi-
tion of advising as to the law governlrg ~etional Banking
~reociations,    wiiich Is beyond our proper sphere.  Therefore,
we do not answer the question.

                                          Vary truly YOUrS

                                      9,6A~.~W
                                              Clarence    E. Crow8
                                                         Amsistant
CBC.4        APPROVEDDEC   18, 1940

             &-WS--
             ATTORNEY GENERAL OF TJi:'