Court Opinion

ID: 4138438
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:36:24.114895+00
Date Added: 2024-06-11T14:45:34.728151
License: Public Domain

OFFICE      OF

                    THE AIYTORNEY'             GENEIUL
                                AUS~N,     Taxis
PRICE  DANIEL                     Augus~t8, 3.947
NTORWEV GENERAL

         Honorable L. A:Woods,
         State Superintendentof Public Instruction,
         Austin; Texas
         Attention: Hon. T. M. Trimble, First Assistant
                                   Opinion No. V-334
                                   Re: Is~suanaeof bonds and
                                       levy of taxes by Dallas
                                       IndependentSchool Dis-
                                       triot.
         Dear Mr. Woods:
                     In'your letter of.August 1, 1947, you state
         that the~City Council of the City of Dallas on November
         14, l945, callea ad election to be,held on December.0,
         1945, on the quest&n whether bonds in the,pr,lncipala-
         mount of ten million aollars should be issued for sohool
         purposes. The election was duly and regularly lield~,and
         a majority.votewas cast in favor of the proposition.
         On July 29, 1947, an election.was.helaunder the authpr-
         ity of Senate Bill No. 364, Acts Fiftieth Legislature,
         which resulted in the separation of the school system
         from the city of Dallas, and the district is now'known
         as the Dallas IndependentSchool'Distriot. Prior to the
         separationelection, the city issued two hundred thousand
         dollars of the authorized ten million dollars, ana in
         conn+?tionwith the uq-issued balance you ask our opin-
         ion upon the following question:
                        ?The question concerning the fore-
                  going is whether or not the .saidten mi-l-
                  lion dollar bona issue, heretofore voted,
                  can now be issued ana a tax in payment
                  thereof levied by the Board of Trustees
                  of the Dallas IndependentSchool District
                  without further submittingsame to a vote
                  of the qualified electors? "
                   ~The ordinance of November 14, 1845, to which
        you refer called an election on separate propositions
                                                            -   .

Hon. L. A. Woods - Page 2   (V-334)

 covering seventeen issues of bonds. The s&o01 bona is-
 sue was Proposition No. 1. In connectionwith bonds
that have been issued, this departmenthas heretofore
examined all the prooe.edings relating to this eleotion.
We have re-examinedthese proceedingsin connectionwith
this opinion request,~andyou are advised that   it is~our
opinion that the authority to issue the balance,of the
ten million dollar issue ceased with the separation of'
the school district from municipal control. In this con-
nection, we wish to state that we have not been furnish-
ed copies of the separationelection proceedings,and
we express no opinion regardingwhether the election-
duly called and held. For the purposes of this opinion,
we will assume that the electionwas in all things prop-
      We have been advised that the reason we have not
Ek    furnished copies of such proceedings is that the
compilationof the same would necessarilytake time, and
that as the fall semesterwill open in shortly over's
month, aeoisions must be reached prior to that time; we
have also been advised that our rendering.thisopinion,
based upon the above-mentionedassumption,meets with
the approval of the board.of trustees of the district.
            Prior to the'electionon July 29, 1947, the
district was a municipallycontrolled school distriot.
Keeping this fact in mind, let us exemink the prooeed-
ings relating to the voting of the bonds. -'Theordinani?e
of November 14, 1945 (No.'3722)provided in its caption
that the election 3s to be "participatedin by the qual-
ified voters of the City of Dallas ooming within the pro-
visions of Article~6, Sect on 3-A of the Texak Constitu-
tion for the purpose of determiningupon t.heissuance of
ooupon bonds in the respectiveamounts set ofltherein
and for the purposes particularlyset forth . . .* (Em-
phasis added).  Section 2 providea.that"there shall be
submitted to the qualifiedvoters of the City of 'Dallas
who are qualifiedvoters of the City of Dallas domi
within the provisions of Article 6, Section 3-A of ?he
Texas Constitution,the question of the issuance of var-
ious vends as follows + . ." (Emphasisadded. Then fol-
lows descriptionof the seventeenproposed bona issues).
Section 3 provided that in the event the bonds we're
authorized,"the City Council of the City shall at the
time of issuance and sale of &aid bonds providk for a
levy of a tax sufficient . . .*
           Section 4 provided as follows:
.   -

             Hon. L. A. Woods - Page 3   (v-334) ',               189

                          "That the bonds herein submitted,,,,
                   if authorized, shall be,issued in the .I
                   denominationof qil,OOO.OO peachand pay+-
                   able in'not~more than..fort,y(40) years:
                   after date, or if authorized and ordered
                   i~ssued,the city council shall have the
                   power to issue same'9eriallyas in-their
                   discre'tionmay be deemed-bestana pro-'
                   viae for iidurities thereof atany time
                   not to exceed forty (40) years. Said
                   bonds shall bear interest not to exceed
                   the rate of 5% per annum which shall be
                  'payable semi-annuallyas it accrues at
                   such place as me& be designatedby'the
                   Cit$,Councilof the City of Dallas, and
                   said sonas *all'be issue'sand exeoutea
                  ~inaocordance with the~terms of the City
                   Charter of the City of Dallas with ref-
                   erenoe to.the issuance of :bonds,and the
                   general laws of,the State of Texas appli-
                   cable thereto. ~That the bonds here sub-
                   mitted shall, when authorized,be issue&
                   in accordance with the applicable terms
                   of the City Charter of the City of Dallas
                  ,and the'Stat6 law."
        -8
                         Section.5 provided for the'o,fficial
                                                            'ballot
             in the foll.owingform:
                   "For:     The proposition-ofthe issu-
                             ance of ~$10,000,000.00in
                             coupon bonds of the,City of
                             Dallas'for the purpose of
                             obtainingmoney for publ$c
                             school improvements . . .
                   "Against: The propositioh . . . (same
                             as above) . . ."
                         Section 7 provided that, in the event the
             bonds were authorized at the election, nthe City Council
             of the City of~Dallas may issue for sale any portion of
             said amount . . ." 'Seotion8 ptiovided that,Ydie'manner
             of holding said election and making the returns shall be
             in accordance~withthe ordinances and the charter bf the
             .Cityof Dallas relative thereto and.the general laws of
             the State of Texas applicable to the holding of such an
             election . . ."'
Hon. L. A. Woods - Page 4   (V-;334)

            On July 26, 1946, the City Council of the
City of Dallas enacted OrdinanceNo. 3870 which~author-
ized the issuanae of bonds in the amount of two hutiked
thousand aollars (part of the ten million dollarsof
bonds authorized at the election on Deoember 8, 1945).
That ordinance in hitsoaption provide& "for.the issu- _
ante end sale of Two Hundred Thousand ($200,000)Dol-
lars in negotiablecoupon bonds of'the City of Dallas
heretofore authorizea . . .* The first preamble clause
of the ordinanceprovided in part as follows:
            "WHEREAS,in accordancewi?h the
      charter of the City of Dallas and the
      applicableState Statutes, and in ac-
      oordancewith an ordinance passed Qy.
      the governing body of the City of Dal-
      las oh the 14th day of November,A. D.
      1945 . . . a.propositionto issue Ten
      Million (810,000,000.00) Dollars in
      bonds of the City of Dallas . . .n
           'Section1 of the ordinanceprovided that
"there be and is hereby ordered issued negotiable Mu-
pon bonds of the City of Dallas . . ." The printed
bonds which were issued in accordanoewith the ordinenoe
aha which Were approve& by the Attorney General were
called *City of Dallas School ImprovementBonds."
            'We have goqe to great length in setting out
excerpts from the ordinancesenacted by the City Coun-
~11~of the City of Dallas in an.effort to show how the
bonds were ~authorizedand issued. We would lib to add,
at this point, t,kt the ordinancesW&e enacted and the
eleotion was held in accordancewith the city charter
and with the provisions of Title.22 of the Revised Civ-
,ilStatutes of Texas, as emended, which governs the his-
suance of bonds by a aouqty or an incorporatedcity or
town.
            Can it be said as a matter of law that the
qualifiedvoters at the eleotion held on December 8,..
1945, authorized'the.Boara of Trustees of~the'Dallas
Independent School District, as it siow exists, by vir-
tue of the separationelection held seventeenmonths
after the @ona election, to issue the bonds in question?
We think that the answer is in the negative. It is our
'opinionthat the proceedingsclearly show that the.vo-
ters authorized the City of Dallas (as a municipally
controlleaindependentschool district) and only thaii
    Hon. L. A. Woods - Page 5   (V-334)                  ,191

    entity to istie the bonds. In a municipally controlled
    aistridt,'.the~~
                   CitJiCouncil,~issueEl-bonds
                                            ana,levies$axes.
    Pot8et.v'.Bridges, 248 5. %. 415: Thenvoters may have,
    ,exercisea,'a
                different choice if they had known~that the
    bonds ~~ould~~.beissued~by
                             a board 'oftrUstee$ of,,& inae-
    pendent~'di:stric~:i~nstead~'of
                                the City Council of ,theCity
    of Dallas+''~:
                Senate Bill No,.364.~doesnot proviae'that
    the succegsor d$strict may'issue the balance,of these
    bonds; therefore,we do not hqve to determinewhether
    thikptier'lies :withitithe legislative~~pre~~gativ~.
                                                       Seo-
    tion:~9,of~'thk'bill
                       prbvides as follows:
                 "All bonds issUed:by an&'Ot@tand-.
           i~&~&gai,tit~~&~'suohcii$oti.,.towli;
                                              as ~&~
        '~:schoola+trict',,anaall ob,llg&ions,
           oontracts,andindebtednessexisting a-:
         1:&iibsf the city'or town, as ~a~schocddis-,'.':'~
        ~.trictj shall,become the obligatio,ns a'nd '.
                                                     ,',
        : debtsof the'independent sohdol district          ,'
         ~:at.the'time of its ~separationftioin
                                              mud.- ,".,
           eipal control, and the said independent-
           school dis$rict, e.fterseparationfr&n
,      c..:
          :mu&icipal,cotitrol,'&hallbe'~held'tohave
          .,assumefl~the
                       dis,&ar&&,ofIall;such.obTi&
       _ ~.gations,,~
                    contracts'and.indebtedness, and' '."~
           the~same shall be,enforcekble~an& collect-
           i>&e~from,paid off end discharge8 by,       ~, "
           the~said independentschool di,strict, as
         .,if'originally create&by it as 'a separate
           and inaependent school district;,anait'
           shall not be.necessaryto call an elec-     :
          .tionwithin-and for such ,distriotfor
          the~,purpose of assWing such bonds and
           other,indebteaness."
                It will be noted that this section applies.
    to bonds which have been "issued,byn and are Youtstana-
    ing againstany such city oretown, as.~aschool district.*
    It'.ise~ide~tthat of the ten~million dollars only two
    hundrea~.thousandaollars of the bonas were issued and
    are outstanding..
                It is well settled that~the power to issue ~'
    negotiablebon&s may be exercise& only in the mode of
    the granted power and for the purposes .speoified~inthe
    grant. 'Gel V. PUlte (Corn.App.), 10 US.V?.(2) 694. It
    is our:opinionthat the qualifiedproperty~taxpaying
      Hon. L. A. Woods - Page,6 (V-334)
192
      voters did not grant the Board of Trustees of the pres-
      ently existing Dallas IndependentSchool Distriat the
      power to issue the bonds. This power was granted only
      to the City of Dallas as a municipally controlledschool
      district, ana not to its corporate,kuccessor. It is
      our opinion that the fact that the City of Dallas had
      extended its boundariesfor school purposes apes not al-
      ter what we have said. Poteet v. Bridges, supra.
                  To support the view that we have taken, we
      call your attention to the provisions of Seotiqn 208
      of the City Charter whereih the.tax rate is limitea to
      $2.50 on each $100.00~valuation,"and which said tax
      shall embrace all taxes for municipal purposes, inolu-
      sive of school taxes . . ." Can it be said that the
      qualifiedproperty taxpayingvoters'wouldhave author-
      ized these bbnds if they had known that the tax rate on
      their propertywould not be limited to $2.50 for~all
      purposes,but that it could be increased to $3.75 ($2.50
      plus $1.25 authorizedby:Seotion5 of Senate $111 No.
      364)? It is our opinion that the question should be
      as.iswWed~inthe.negative. Opinion No. 6059; City of
      Athens v. Moody, 280 S.W. 514.
                  We call your attention f&her to.the fact
      that the bonds were-vote&under the.provikd.ons bf Title
      22, Revised~Cidl Statntes~of‘Texas,as amended.These
      statutes (Article701, et seq.) do not govern'th&is-
      suance of bonds by an independent school distriot.~Love
      v. Rockwall Independent,School D&strict, 230 S.W. 642.
      The Dallas InaepenaentSchool District is no longer a
      municipallycontWled district, but is an inaepenaent
      school aistrict subjeot to the provisions of Senate
      Bill No. 364 and the general laws relative to inaepena-
      ent school districts; In the.issuanceof bonds, there-
      fore, Articles 2704e, et seq., Vernon,ts.CivilStatutes,
      would control (not Articles 701, et seq.). Article .~
      2705 requires a petition as a predicate to the calling
      of a bona election. It'requires~adifferent notice
      than that outline&in Article 704. Article ~2786re-
      .@.res that "the petition, election order &Xi fioticeaf
      electionmust distinctlyspecify the amount of bonds,
      the rate of interest, their maturity dates, and the
      purpose for which the bonds are to be used. (J@phasis
      added I. It requires.adifferentlyworded ballot. It
      requires that the bonds shall mature in serial annual
      installments'overa perioa of not excee&ng forty yesrs
      from their date, but that when the sohoolhousesdareto
      be constructedof wood, the bonds shall mature in not
      more than twenty years.
Hon. L. A. Woods - Page 7   (v-334)                 3.93

            An independentdistrict in issuing bonds
must meet the terms of these statutes. It is obvious
that in the issuance'ofthe balance of the $lO,OOO,-
000 bonds, these terms could not be met. It is our
opinion that this fact alone would preclude the issu-
ance of such bonds.
            In view of the foregoing, you are advised
that the Board of Trustees of the Dallas Independent
School District is without authority to issue the bal-
ance of such bonds.
            You are interestedin a second question,
and this question concerns the tax of the new dis-
trict under Se&ion 5 of Senate Bilk No. 364. We quote
the following from your letter:
            "Prior to the said separation'elec-
      tion, a tax~in the amount of seventy-five
      cents was voted aa levied for maintenance
      of said school system';which/together
     with an approximateeleven cent bond re-
      tir~enient
               tax theretoforevqtea and levied,
     makes the total tax now leviedfor said
      school district amount to approximately
     weighty-sixcents on the one-hundreddol-
     ~larsvaluat%on.
            "Now, can the Board of Trustees of
      the UalLas Ind0pend8nt School District
      levy an additional tax,.whiohwhen added
      to the existing taxes does cot exceed one
      dollar and twenty-fivecents on the one
      hundred dollars valuation of taxable prop-
      erty of saia~aistrict,~forthe maintenance
      of the schools therein, without a vote of
      the tax paying property owners therein u+
      der Senate Bill 3643"
            Section 5 of Senate Bill No. 364 reads as
follows:
            "Except as herein denied or limited,
      all the powers conferred upon idependent'
      school districts and/or towns and villages
      incorporatedfor free school purposes
      only, by Title 49, of the Revisea Civil
      Statutes of Texas, of 1925, and amendments
      thereto, including the right to annex
      Hon. L. A. w00as - Page 0   (V-334)
694
            contiguousterritoryfor school pur-
            poses, and the right to levy taxes
            and issue bonas for school purposes,
           as provided by General Law, hereby
           are cotierredupon any inaepenaent
            school district separatedfrom muni-
            cipal control under the provisions
           of this Act; provided however, that
           the trustees of any independent
            sohool district that may hereafter
           be separatedfrom municipal control
            under the provision& of this Aot,
            shall have the power to levy and ool-
           lect an annual ad valorem'tax not to
           exceed One and 25/100 ($1.25)Dol-
           lars on the One Hundred (~lOO;OO)
           Dollars valuation of taxable propep-
           ty of.the dist~i0t,for the.mainten-
           ante'of the sohools therein, end
           whioh may be used to pay the prinoi-
           pal ana interest on all bonas issued
           for sohool building purposes out-
           standing$$@.nst the extended muni-
           cipal school district at th6 ti@ie~of
           separationfrom municipd bontrol,
           and the principal of and interesC0n
           all bonds to be.issued hereafter by
           any such independentschool district;
           provided that nothing herein shall be
           construedaspabrogating or in any m&n-
           ner repealing or affecting any kin-
           tenance tax and/or bona taxes hereto-
           fore voted, authorizedand/or levied
           on taxable properties situated within
           the limits of the extended municipa.1
           school district;PTOViaea further,
           that no increase in the maximum rate
           of school maintenancetax an&/or bona
           debt of any such district shall be
           authorizeauntil after an election
           shall have been held wherein a major-
           ity of the taxpayingvoters, voting
           at said election;shall .havevoted in
           favor of said tax, or the issuance of
           said bonds, or b&h, as the 0ase may
           be; ana provided further, that the
           bonds,,
                 of any such distriot shall not
           exceed in amount seVen (7%) per oent-
           um of the assessed value of taxable
d   -

        Hon. L. A. Woods - Page 9,,(V-334)               :   195

              property,of suoh district,as shown
              by the last annual assessmentOf
              such property. In the event an elec-
              tion is hela.for the purpose of sep-
              arating such'schooldis$riqt from
              municipal control, and such election
              ~1sin favor of the separationof the
              public schools from municipal con-
              trol, then such independentsohool
              district may levy ana collect taxes
              as of January lst, ,ofthe year in
              w,hiohthe election Was held, and
              thereafter levy and,colleotsuoh
              taxes on an annual ba,sis.*
                    You wish to know whetherthis t&x bf $1.25
        can be levied without a vote of the qualified property
        taxpaying voters of the district. Seotion 3 of Article
        vII,'Constitutionof Texas, provides in part:
                    n      -~providedthat a~major-
              ity of t~e*&alified proljertytaxpay-
              ing voters of the district voting at
            ~:an electioq to ,be~heldfor that pur-
              pose, shall vote such tax . . ."
                    This Constitutionalmandate must~be corn-
        plied with: Pyote Indep&ndentSchool District v. Dyer
        (Corn.App;), 34 S; 911.
                              (2) 578; Bigfoot Independent
        School Distr&ot v. Cenard (Civ. App.) 116 S. W. (2)
        804;Uff*a.., Corn.App.) 129 S. W. (21 1213; Crabb v.
        Celest6 Independent School'Dititrict,105 Tex. 194, 146
        S. W.~528,'39 L.R.A. (NS) 601; Burns v. Dilly Independ-    .
        ent So4001 Distriot (Corn.App.), 295 S.W. 1091.
                    You are, therefore,aavised that the Board
        of Trustees of the-DallasIndependentSch6ol District
        has no authority to levy a tax of $1.25~unless a "major-
        ity of the qualified property taxpayingvoters of the
        district voting at an eleM,ion to be held for that pur-
        pose, shall vote such tax . . .*
                    It has been hela that an election whereby
        the sohool sys$em is separatedfrom municipal oontrol
        is an amendment to the charter of the qity. -State v.
        City Commissionerof San Angelo (W. E. Ref.), 101 S.W.~
        (2) 360.' It is assumed that the charter,of the City
        of Dallas had not been amended within the two years
        preceding the election held on July 29, 1947.
      Hon. L. A. Woods - Page~lO (V-3344)
296

                  1. The Board of Trustees of the Dallas
            Independentschool District', which aistr#.ct
            has been separatedfrom municipal control is
            without authority to issue the balance of the
            ten'millibindollars of bonds authorizedat an
            eleotion held on Deoember'8,1945, when the
            districtwas a municipally controlledais-
            trict.
                  2. The Board~of Trustees of the Dallas
            IndependentSohool~Districtis without auth-
            ority to levy a tax of $1.25 unless "a major-
            ity of the qualifiedproperty taxpaying voters
            of the district votingat an'eleotionto be
            held for that purpose shall vote such tax."
                                   .~ Very truly yours
                                 ATTORNEP CENERAL OF TEXAS

                                 B;   hyT.           +       "
                                      George W. Sparks
      GWS-s:wb                        Assi.stant