Court Opinion

ID: 4139627
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:49:42.387747+00
Date Added: 2024-06-11T14:31:44.788373
License: Public Domain

Honorable T. M. 'lkimble
First Assistant State Superintendent
Austin, Texas
Dear Sir:             Opinion No. O-6687
                      Re: Effect of tax and valuation re-
                           ductions under provisions of
                           3. B. 167, 49th Legislature, R.S.
          Your recent communication to this department reads
as follows:
          "Section 2 of Article I, of S.B. No. 167, an
    Act of the 49th Legislature, reads, in part as follows:
          "'No school district will be eligible for aid
    under the provisions of this Act which has reduced
    its tax rate within the two years immediately preced-
    ing the year for which aid is applied for hereunder
    or which has reduced its tax valuation in order to
    show budgetary need.'
         "A common school district, which contracts to
   a receiving district, has paid all outstanding bonds
   for which the second 50 cents on the $100.00 was levied.
   Now, the citizens plan to diminish the tax from one
   dollar to fifty cents per $100.00. Will this dis-
   qualify that district for Equalization Aid under the
   new Equalization Aid Law?
         "A school district, which has for the last two
   years had a 654 maintenance tax, has recently voted
   a bond issue, which will require a 5Oq!bond levy.
   This will mean that a school district will use 50#
   on a $1.00 tax for maintenance purposes and 50$ to
   liquidate their bonds. This means a reduction of
   15# in their local maintenance tax rate, but an in-
   crease of 35# in their over-all tax levy. Would such
   a district be ineligible to receive aid under the
   provisions of the Equalization Law quoted above?
         "An oil field district, which had a high val-
   uation has lost the value due to the depletion of
   the oil in the field. Under the provisions of
Honorable T. M. Trimble, page 2          0 -6687

    the Equalization Law quoted above, is such a dis-
    trict eligible to receive aid, since it has been
    necessary to reduce the values on the real estate
    as there is no longer an oil field in the district
    to hold up the values?"
          Chapter 304, Acts of the 49th Legislature, Regular
Session, listed by Vernon as Article 2784e, repeals Article
2784, Revised,Civil Statutes, 1925, after re-enacting its
provisions with the following changes:
          Subdivision 1 of Section 1 of Chapter 304, reads
as follows:
          "1 . In common school districts, for the
    further maintenance of public free schools and
    the erection and equipment of school buildings
    therein, a special tax; and in independent dis-
    tricts for the maintenance of schools therein,
    an ad valorem tax not to exceed One Dollar and
    Fifty Cents ($1.50) on the one hundred dollars
    valuatlon of taxable property of the district."
          In Subdivision 1 of Article 2784, Revised Civil
Statutes, 1925, the corresponding ad valorem tax was fixed at
$1.00.
           Subdivision 3 of Section 1 of Chapter 304, reads as
followsr
         “3 . The amount of maintenance tax, together
   with the amount of bond tax of any district, shall
   never exceed One Dollar and Fifty Cents ($1.50) on
   the one hundred dollars valuation of taxable property;
   and if the rate of bond tax, together with the rate
   of maintenance tax voted in the district shall at
   any time exceed One Dollar and Fifty Cents ($1.50)
   on the one hundred dollars valuation, such bond tax
   shall operate to reduce the maintenance tax to the
   difference between the rate of the bond tax and One
   Dollar and Fifty Cents ($1.50)
          In Subdivision 3 of Article 2784, Revised Civil
Statutes, 1925, it was provided that the amount of the w-
tenance tax, together with the amount of the bond tax, should
never exceed one dollar on the hundred dollars valuation.
          The fifty-cent maximum rate for bonds, as set forth
in Chapter 304 is the same as set forth in Subdivision 2 of
Article 2784, Revised Civil Statutes, 1925.
I   .

        Honorable T. M. Trimble, page 3         O-6687

                  Subdivision 4 of Section 1 of Chapter 304 which
        is identical with Subdivision 4 of said Article 2784, Revised
        Civil Statutes, 1925, reads as follows:
                 "4 . No tax shall be levied, collected, abro-
           gated, diminished or increased, and no bonds shall
           be issued hereunder until such action has been au-
           thorized by a majority of the votes cast atan elec-
           tion held in the district for such-purposes, at
           which none but property taxpaying qualified voters
           of such district shall be entitled to vote."
                  Article 2785, Revised Civil Statutes, 1925, reads
        in part as follows:
                 "Before an election is held to determine the
           pro osition of the levy of such tax (maintenance
           taxP or the issuance of such bonds, a petition
           therefor, signed by twenty (20) or more, or a ma-
           jority of those entitled to vote at such election,
           shall be presented to the County Judge of the coun-
           ty if for a common shcool district, and to the dis-
           trict trustees if for an independent school dis-
           trict. . . . The petition, election order and no-
           tice of election shall in all cases either state
           the specific rate of tax to be voted on or.that
           the rate shall not exceed the limit herein speci-
           fied. *..)I
              Article 2787, Revised Civil Statutes, 1925, which
    applies to common school bonds, contains, among others, the
    following provisions:
              II
               . . . At the time of the issuance of said bonds
        and each year thereafter so long as any-,ofsaid bonds
        are outstanding, the said court shall levy a bond tax
        within the limits herein specified to pay the interest
        on said bonds and redeem the same at maturity. The
        rate of such tax shall be determined by the trustees
        of the district and county superintendent and certi-
        fied by the county superintendent to the commission-
        ers court, and said court shall levy the tax at said
        rate until a change is recommended by said school
        officers. Said tax shall be assessed and collected
        as provided by law for the assessment and collection
        of special local tax for the maintenance of public
        free schools. After said bonds shall have been is-
        sued and sold and said bond tax has been levied, it
        shall be unlawful to hold an election in said dis-
        trict to determine whether or not said tax shall be
                                                            .     .

Honorable T. M. Trlmble, Page 4         o-6687

    discontinued or lowered until said bonds, together
    with the interest thereon, shall have been fully
    paid, nor shall the limits and boundaries of said
    common school district ever be decreased by the
    county board of school trustees until all of said
    bonds and the accrued interest thereon shall have
    been fully paid."
          Article 2794, Revised Civil Statutes, 1925, apply-
ing to changes in common school tax, reads as follows:
          "At any time after the expiration of two years
    after any common school district has levied a school.
    tax on itself, twenty property taxpaying qualified
    voters, or a majority of such voters in the district,
    may have an election held, upon the proper petition
    to the county judge, to determine whether such tax
    shall be abrogated, increased or diminished. Said
    election shall be held and conducted as other elec-
    tions in said district. If the election be to abro-
    gate or diminish the school tax, the ballots shall
    have written or printed thereon the words: 'For
    abrogating school tax,' or 'For diminishing school
    tax to . . . cents;' and 'Against abrogating school
    tax,' or 'Against diminishing school tax to . . . .
    cents.' If the election be to determine whether the
    tax shall be increased, the ballots shall have writ-
    ten or printed thereon the words: 'For increase of
    school tax' and 'Against increase of school tax.'"
          Article 2795> Revised Civil Statutes, 1925, concern-
ing the levy of common school tax, provides in part as follows:
         "The commissioners court, at the time of levy-
   ing taxes for county purposes, shall also levy upon
   all taxable property within any common school dis-
   trict the rate of tax so voted if a specific rate
   has been voted; otherwise said court shall levy'such
   a rate within the limit so voted as has been deter-
   mined by the board of trustees of said district and
   the county superintendent and certified to said court
   by the county superintendent. . . .'
          In view of the foregoing provisions, your first
question is answered as follows:
          If, before levying the bond tax of fifty cents, only
fifty cents had theretofore been levied for maintenance pur-
poses, then said common school district need not levy over
fifty cents for maintenance purposes, and would not be dis-
Honorable T. M. Trimble, page 5        O-6687

qualified to receive Equalization Aid under the new law. How-
ever, if before levying said ,fiftg-centbond tax,.the distrect
had voted a greater sneclflc maintenance tax than fifty cents,
and said greater maintenance tax has not been diminished or
increased by a majority vote cast at an election held in the
district for sala purpose, then said specific maintenance tax
must be continued by said district, even though said bona3
have been liquidated. (See Subsection 4 of Section 1 of
said Chapter 304 and also Articles 2785 and 2795, Revised (
Civil Statutes, 1925).
          Likewise, If before levying said fifty-cent bond
tax, the district had voted a maximum maintenance tax ,of,more
than fifty cents, but not a specific maintenance tax, and the
commissioners' court had been levying a greater rate for main-
tenance purposes, within the limit so voted, as had-been de-
termined by the board of trustees of said district and the
county superintendent, and certified to said court by the
county superintendent, then said maintenance tax so certified
must be continued by said dlstrlct in order to qualify for
Equalization Aid even though said bonds have been llquldated.
(See Subsection 4 of Section 1 of said Chapter 304, and also
Articles 2785 and 2795, R.C.S., 1925. Also see Opinion No.
o-6768 of this department, a copy of which is attached hereto).
          We now answer your second question:
          If the school district has $oted said fifty-cent .-
bond tax as a specific tax on or since June 4, 1945, the date
said Chapter 304 became effective, same would not affect the
sixty-five-cent maintenance tax, as from and lncludlng said
date, $1.50 Fs now the maximum for all tax purposes. However,
If said fifty-cent bond levy was voted prior to June 4, 1945,
the provisions of Subdivision 3 of Article 2784, Revised Civil
Statutes, (now repealed) Ewould apply. Therefore, by operation
of law. and not by reason of any action of the school district,
the fifty-cent bona tax reduced the sixty-five-cent mainten-
ance tax to the difference between the rate of bond tax (fifty
       and one dollar. This would leave the maintenance tax
cents),,
(orglnallg sixty-five cents), during the time said bond issue
was outstanding, to be fifty cents. However, unless said
sixty-five-cent maintenance tax is reduced, either by an
election or by action of the board of trustees and the county
superintendent, as per the provisions of Articles 2794 and
2795, Revised Civil Statutes, 1925, same is by operation of
law continued in force and effect when said bonds are liqui-
dated. Also, if the fifty-cent bond tax so voted by the dis-
trict ia a maximum tax and not a specific tax, and such bond
tax should be reduced by the trustees of said dlstrict and the
county superintendent at any time before said bonds have been
Honorable T. M. Trimble, page 6           O-6687

finally liquidated, as per Article 2787, then and in such
event the maintenance tax ~111 automatically be increased to
an amount which represents the difference between the rate
of the bond tax and one dollar, but in no event to exceed
sixty-five cents. The contents of the preceding sentence
are based on the assumption that the sixty-five-cent main-
tenance tax has not been reduced either by election, if voted
as a specific tax, or by actton of the board of trustees and
the county superintendent, if voted as a maximum tax. (See
Arts. 2794 and 2795, R. C. S., 1925).
          In view of the foregoing, said district will not
become Ineligible for Equallsation Aid under the provislons
of Senate Bill No. 167, 49th Legislature, Regular Ses31on,
so long only as its maintenance tax of sixty-five cent3 is
reduced by operation of the bond tax-
          Your third questton Implies and assumes that the
valuations of the district were lost as a result of depletion
rather than by a reductfon in tax valuation bv the dlstrlct
in order to show budgetary need. If such Is a fact, it
obviously follows that such a condition or result would not
render such district ineligible to receive aid. Each case
in which tax valuation is reduced, will necessitate a deter-
mination as to the cause there0 f. Where proper lnvestiga-
tion results in a determination that such reduced tax val-
uation has resulted from causes other than by action of the
district in order to show budgetary need, such tax reduction
will not render the affected district ineligible for aid.
                                  Yours very truly
                           ATTORNEY GENERAL OF TEXAS

                                  By s/L. H. Flewellen
                                        L. H. Fl~ewellen
                                              Assistant
LHF/JCP/wc
Enclosure-l

APPROVE0 SEP 28, 19'45
s/Carlos CI Ashley
FIRST ASSISTANT
ATTORNEY GENERAL
Approved Opinion Committee By,s/J. F. Chairman