Court Opinion

ID: 4138653
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:38:50.87723+00
Date Added: 2024-06-11T14:22:12.583662
License: Public Domain

R-248

                          ~IEATTORNEY                         GENERAL
                                         Q,F    TEXAS

     PRICE  DANIEL
     ATTORNEYGENERAL

                                                       Mar.   31, 1947

                   Hon.   Ben J. Dean                         Opinion No. V-ll8
                   District Attorney                          Re: Issuance of imPas by %.Q-
                   Stephens County                                 pheas Cow&y payable mt
                   Breckenridge,    Zi’&xas                        of Permanent Improvement
                                                                   Taxes.

                   Dear     Sir:

                               We have received your letter of March 15, 1947, relative
                   to a certain contemplated    hospital bond issue in the amount of
                   $120,000.   You state in your letter that “On August 25, 1945, by a
                   proper vote of the citizens of Stephens County, the Constitutional
                   Fund provided for under Section 9 of Article 8 af tbs Coastitutlon
                   *as re-allocated   as follows:

                                   Jury Fund         5 cents       on the $100 valuation
,                                  Road and Bridge
                                     Fund,           8 cents       on the $100 valuation
                                   General Fund     38 cents       on the $100 valuation
                                   Permanent   Im-
.1                                   provtmtnt  Fund 3 cents       on the $100 valuation

                               You fuither state that the Commissiontrs’     Court of Ste-
                   pbhns County “has not entered its order issuing the Hospital Bonds,
                   but contemplate’s doing so and they txpect to pay the inttrett     on
                   such bonds until 1951 out of 3 cent6 now allocated to permanent im-
                   provement,   and beginning with 1951 to starts retiring the bonds.    It is
                   contemplated    that at tht time the order is entered they will provide
                   for a tax sufficient to pay the interwst aad sinking fund on such Hes-
                   pita1 Bonds. *

                              You mention in your letter that there are certain cow!+
                   house and jail refunding bonds now outstanding and that these are
                   the only bonds which are paysblt out of the permanent knpsrvearti
                   tax.

                                   Izi connection   with these   facts   you ask the follc*ring   Q~S-
                   tions:

                            ‘1. Would this meth~od of paying the bonds meet w%h
                            the requirements of law and the election order?

                            “2. Since the order will provide for the levying and
                            colkactling of a sufficient tax ta pay the intereM and
Hon. Ben J. Dean - Page    2                         Opinion No. V-118

      sinking fund on these bonds, could any re-allocation
      election held hereafter  under the provision   of Section
      9, Article 8 of the Constitution prevent the court from
      levying and collecting  sufficient taxes to pay the Hos-
      pital Bonds?   In other words, since the order would
      be entered with the thought that in 1951 the Ptrmantnt
      Improvement    Fund would automatically    revert to 25
      cents on the $100.00 valuation, could any re-allocation
      election between now and said time in any way impair
      the order of the court so that the money could not be
      collected for these bonds?

      “3. If said order of the Commissioners’     Court of
      Stephens County, made in pursuance of this election,
      provides for the levying and collecting of taxes to
      pay the interest and sinking fund, would this author-
      ize the Commissioners’    Court to collect such taxes
      for such purposes,  regardless  of the fact that the re-
      allocation order now of record author&es     only 3 cents
      on the $100.00 valuation to be collected for parma-
      nent improvements.

      ‘“4. Would the Commissioners”     Court be authoriead
      to pay the interest on the Hospital Bonds as it accrued
      up until 1951 from the General Fund?

      “‘5. Assuming   that the provisions   of the law with re-
      spect to the voting and issuance of such Hospital Bonds
      have been carried out, and the bonds were issued in
      the manner herein proposed,      would the same meetwith
      the approval of the Attorney General? R

            Section 9 of Articlt  VIII of the Constitution of Texas, aa
amtnded in November.      1944, authorizes   the re-allocation of the Con-
stitutional taxer upon a majority    of the qualified property taxpaying
voters of a county voting at an election for that purpose,

             It is also provided that *such re-allocations   and changes
shall remain in force and effect for a period of six (6) years from
the date of the electionat    which the same shall be approvtd,   unle,ss
the same again shall have been changed by a majority vote of the
qualified property taxpaying voters of such county, voting on the
proposition,    after submission  by the Commissioners     Court at a gen-
era1 or special election for that purpose.“”

            It follows that for a period of six years from the date of
the election the various constitutional   tax limits are those specified
in the election ‘“unless the same again shall have been changed by a
majority   vote of the qualified property taxpaying voters of such coun-
ty.w In Stephens County the Permanent       Improvement   tax was re-
allo,cated to an am,ount not to exceed 3$ on the $100.00 valuation.
Hon. Ben J. Dean,   Page   3     ;                    Opinion No.   V-118

             We have been advised by the Comptroller      of Public Ac-
counts that the assessed     valuation of Stephens County, bss,& upon
the latest approved rolls, is $,10,529,220.     A 3$ tax appZMI +e &is
valuation would realize,    even komputed at 100~ collect&n,      only
 $3,15!3.76.  The Constitution of Texas, in Seation 6 of Art’irle XI,
provides that no debt for any purpose shall have be,en incurred in
any marmer by any city or county “unless provision is made at t&e
time of creating the same for levying and collecting      a eufficient
tu to pay the interest thereon and provide at leant 2% a# a &&king
fund.”

            You do not state wha; rate of interest it i8 proposed that
the bonds are to bear, but it is aosumed that such interest ,rate will
be at Ieast 1%. A 1% intereut charged against $120,000         would amount
to $~200.  Add to this $1200 2% for the canatitwtien~l sinking fund
($2400) and the total amount is $3600.       It is obvious, therefore,   that
the county does not have sufficient taxing power to meet the canstitu-
tional requirement.     This conclusion is rare&d,      even without consid-
ering the bonded indcbtedneris of the county already outstandingagainst
its Permanent Improvement        Fund. We might add, however,       that in
Opinion No. O-6863 the proposition     is clearly set forth that a county
cannot by a re-allocation    of taxe$ infringe upon an existing contract.
A copy of Opinion No. O-6863 is enclosed herewith for your conside-
ration.

           In view of the foregoky,   yru are advised that Stephen6
County is without sufficient taxing power to warrant the i,ssuance of
the contemplated  bonds.   As we have reached the conclusion that the
be&s may not be issued, the answeriag      of your specific questions is
rendered unnecessary.     You are advised, however, that in connection
with Queetioa No. 4,’ with respect to the payment of the interebt on the
bonds with moneys from the General Fund, the Cernmieaioners’&art
laar no power to transfer moneyr from the General Fund to the Per-
manent Improvement     Fund, or to expend for permanent improvement
purposes tax moneys which were raised for general purpores.         11 Rx.
Jur. 609; Carroll v. Williunr,   109 Tex. 155, 202 9. W, 504.

                                     SUMMARY
                                                                       I

           As Stephens County has m-allocated      its taxes under
      the authority of Section 9, Article VIII, Constitution of
      Texas, whereby the permanent improvement         tax was
      reduced to an amount not to exceed 3$ on the $100.00
      valuati.on, said county does not have sufficient taxing
      power to warrant the issuance of contemplated       Hospital
      Bonds in the amount of $120,000.    It followa that or&ah
     Hon. Ben Jo Dean,         Page 4                                 Opinion No.       V-118

              bonds may not be legally   issued.

                                                       Yours   very truly

                                         ATTORNEY              GENERAL       OF TEXAS

                                              I

                                                        George Vi. Sparks           ’
                                                        Assistant

     GWS-a:    sl

     Enclosure                           APPROVED              APR 1, 1947’

                                          ZL        22
                                         ATTORNEYGENERALOFTEXAS

                                          .

 :
. ..~                 *.
                                                                 ..
                           .                      ..