Court Opinion

ID: 4132419
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:26:22.747901+00
Date Added: 2024-06-11T14:33:54.816908
License: Public Domain

March 22, 1977

The Honorable Tom C. Massey             Opinion No. H-961
Chairman
Special House Committee on              Re: Use of occupation
   Alternatives to Public School        tax revenues for areas of
   Financing                            school finance other than
P. 0. Box 2910                          the available school fund.
Austin, Texas 18767

Dear Chairman Massey:

        You have requested our opinion on the following ques-
tion:

            Since occuption taxes are authorized but
            not levied by the Texas Constitution, may
            these funds be used to support areas of
            public school finance other than the
            Available School Fund?

Answering your question requires an interpretation of article
7, section 3 and article 7, section 5 of the Texas Constitution,
which provide:

               Sec. 5. The principal of all bonds and
            other funds, and the principal arising from
            the sale of the lands hereinbefore set apart
            to said school fund, shall be the permanent
            school fund, and all the interest derivable
            therefrom --
                      and the taxes herein authorized
            and levied shall --
                             be the available school
            fund....

                Sec. 3. One-fourth of the revenue derived
             from the State occupation taxes and poll tax
             --
             of one dollar on every inhabitant of the State
             . . . shall --
                         be set apart annually for the
             benefit --
                     of the public free schools;ndn
             addition thereto, there shall be levied and
             collected an annual ad valorem State tax of
             such an amount not to exceed thirty-five cents

                              P. 4005
.     -

    The Honorable Tom C. Massey - page 2   (H-961)

              on the one hundred ($100.00) dollars valuation,
              as with the available school fund arising from
              all other sources, will be sufficient to maintain
              and support the public schools of this State for
              a period of not less than six months in each
              year . . . provided, however, that should the
              limit of taxation herein named be insufficient
              the deficit may be met by appropriation from the
              general funds of the State . . . . (Emphasis added).

    We believe your question turns on whether "the taxes herein
    authorized and levied" in section 5 includes "one-fourth of
    the revenue derived from the State occupation taxes" in
    section 3, article 7 of the Texas Constitution.

         Initially, it should be stressed that your question does
    not suggest that the twenty-five percent of the revenue
    derived from state occupation taxes might be diverted from
    the use of public schools. The only issue is whether the
    method of distribution to the schools is through the available
    school fund, rather than through some other method the
    Legislature might choose. The available school ffindis
    required to be distributed on the basis of scholastic
    population without regard to any equalizing factors such
    as recognition of the local tax base.

         An examination of the historical background of sections
    5 and 3 of article 7 may be of value in determining whether
    occupation taxes are included in the "taxes herein authorized
    and levied." The quoted portion of section 5 has remained
    the same since its adoption in 1876. Section 5 established
    the permanent school fund and the available school fund: the
    available fund was composed of two parts which included
    the interest derivable from the permanent fund and the
    "taxes herein authorized and levied." Section 3, however,
    was originally adopted to read as follows:

                 Sec. 3. There shall be set apart
              annually not
                       --- more than one-fourth --
                                                of the
              general revenue ---
                              of the State, and a poll
              tax of one dollar . . . for the benefit
              of the public free schools. (Emph,asis
              --
              added).

                             p. 4006
The Honorable Tom C. Massey - page 3   (H-961)

The twofold purpose behind the original section 3 was first,
to levy a one dollar poll tax for the benefit of the public
schools and second, to limit the amount of general revenues
that could be allocated for the support of the public school
system.  Arguably, the one dollar poll tax levied in section
3 must be a part of the available school fund; however, the
"taxes herein authorized and levied" phrase of section 5
could not have referred to the present "one fourth of the . . .
occupation taxes" language in section 3 because that language
was not added until 1883. Thus, as originally drafted, the
two sections of article 7 are independent of one another:
section 5 established the available school fund, and section 3
limited the amount of State revenue that could be spent on
public education in addition to that already provided in the
available fund. Furthermore, the only tax specifically
authorized and levied for the available school fund at the
time of the adoption of section 5 was the one dollar poll
tax. This interpretation of the Constitution finds some
support in Webb County v. Board of School Trustees of Laredo,
65 S.W. 878 (Tex. 190l)Twhereinthe   Texas Supreme ?&rt
stated that

         the annual income derived from the permanent
         fund, together with the tax provided for in
                                             r--

         section 3, shall constitis  the avallable school
         fund of the state, bv which is meant the fund
         which may be appropriated annually to the
         maintenance of the schools.

Id. at 880.  (Emphasis added).  "The tax" referred to by the
court was the one dollar poll tax.

      The present language of section 3 was added by amendment
in 1883.   The. impact of the changes were threefold: first,
the limitation on State spending for the public school
system was removed and the Legislature was authorized to
appropriate amounts necessary to fund the public school
system; second, one-fourth of the revenue from State occupation
taxes was dedicated to the support of the public free schools:
and third, the Legislature was authorized and directed to
levy an ad valorem tax to support the public school system
and to provide free textbooks. The amendment only required
that if an occupation tax were levied by the Legislature,
one-fourth of the proceeds must be set aside for the benefit
of the public school system. Therefore, it does not follow
that any occupation tax must be allocated to the available

                          p. 4007
The Honorable Tom C. Massey - page 4         (H-961)

school fund and subsequently alloted to the schools on the
basis of scholastic population.

     In our opinion, we answer your question in the
affirmative. Although article   7, section 3 requires that
one-fourth the revenue from State occupation taxes be set
aside for the benefit of the public free schools, there is
no constitutional requirement that these taxes be allocated
to the available school fund or distributed on a per scholastic
basis. The only revenues required to be allocated to the
available fund are, at present, the income from the permanent
fund, tax revenue constitutionally dedicated to the fund such
as a portion of motor fuel taxes under article 8, section la,
and specific taxes authorized and levied by the Constitution
for the benefit of the fund. This conclusion is not altered
by the fact that the Legislature 9    allocate other revenue
sources to the fund.

                       SUMMARY

            Occupation taxes may be used to support areas
            of public school finance other than the
            Available School Fund as long as such
            funds are used "for the benefit of the
            public free schools" as required by article
            7, section 3 of the Texas Constitution.

                             ,,ggiy?i&
                           (1 /Attorney       General of Texas

APPROVED:

Opinion Committee

                                 P.   4008