Court Opinion

ID: 4128422
Source: CourtListenerOpinion
Date Created: 2017-02-18 00:38:36.980084+00
Date Added: 2024-06-11T14:33:14.731479
License: Public Domain

ATTORNEY GENERAL OF TEXAS
                                          GREG        ABBOTT

                                               May 12,2008

Ms. Peggy D. Rudd                                          Opinion No. GA-0626
Director and Librarian
Texas State Library and Archives Commission                Re: Authority ofa multi-jurisdictional library
Post Office Box 12927                                      district to assess and collect ad valorem taxes
Austin, Texas 78711-2927                                   (RQ-0648-GA)

Dear Ms. Rudd:

         You inquire about the taxing authority of multi-jurisdictional library districts ("library
districts") created under Local Government Code chapter 336. 1 See TEX. Loc. GOV'T CODE ANN.
ch. 336 (Vernon 2005 & Supp. 2007). You state that no library districts have been established under
this statute yet, but several jurisdictions wish to consider this option. See Request Letter, supra note
1, at 2. However, they hesitate to do so without legal guidance as to their taxing authority. See id

        You first ask whether Local Government Code chapter 336 provides sufficient authority to
enable library districts to assess and collect ad valorem taxes on property within district boundaries
or whether a constitutional amendment is necessary to grant this authority. See id. at 1. Section
336.021 provides that a multi-jurisdictional library district may be created by a "lead governmental
entity," defined as the county or municipality that proposes to create the district. See TEX. Loc.
GOV'T CODE ANN. § 336.021(a) (Vernon Supp. 2007); see also id. § 336.001(4) (Vernon 2005)
(defining "[l]ead governmental entity"). The lead governmental entity adopts a resolution proposing
"the creation of a district for specific counties and municipalities that by resolution agree to have
their territory in the district." Id. § 336.021(a); see id. § 336.022 (Vernon Supp. 2007) (territory
included in district). A district created under chapter 336 "is a special district and a political
subdivision of this state." Id. § 336.002 (Vernon 2005).

        A district has statutory authority to call an election to approve a sales tax or an ad valorem
tax on property in the district, or both. See id. § 336.023(a)-(b) (Vernon Supp. 2007); see also id.
§ 336.023 (c) (the lead governmental entity must set by resoIution the date ofthe election and the type
and rate of each tax that will appear on the ballot proposition). However, no provision ofthe Texas
Constitution expressly authorizes a library district to impose an ad valorem tax. Thus, your question

         lLetter from Ms. Peggy D. Rudd, Director and Librarian, Texas State Library and Archives Commission, to
Honorable Greg Abbott, Attorney General of Texas, at 1 (Nov. 14,2007) (on file with the Opinion Committee, also
available at http://www.oag.state.tx.us) [hereinafter-Request Letter].
Ms. Peggy D. Rudd - Page 2                              (GA-0626)

raises the following issue: Whether the Legislature may authorize a political subdivision to impose
an ad valorem2 tax absent express constitutional authority.

        We begin with the well-established rule that the Legislature may adopt any law "not
forbidden expressly or by implication" by the Texas Constitution. Brown v. City ofGalveston, 75
S.W. 488, 492 (Tex. 1903); see Gov'tServs. Ins. Underwriters v. Jones, 368 S.W.2d 560,563 (Tex.
1963) (Legislature's authority is limited only by the express or implied restrictions arising from the
constitution). Moreover,"[t]he power to prescribe taxes and penalties rests with the Legislature, and
[the Supreme] Court will not interfere with that authority and declare a law invalid unless the law
clearly appears to violate the Constitution of the State." Isbell v. Gulf Union Oil Co., 209 S.W.2d
762,765 (Tex. 1948). See also Stratton v. Comm'rs Court ofKinney County, 137 S.W. 1170,1177
(Tex. Civ. App.-San Antonio 1911, writ refd) (the power to tax for governmental purposes is
inherent in the state's sovereignty and is limited only by the constitution).

        The constitutional question before us was raised by the parties in Shepherd v. San Jacinto
Junior College District, which involved a challenge to the constitutionality oflegislation authorizing
a junior college district to levy and collect an ad valorem tax for the support and maintenance ofthe
junior college. See Shepherd v. San Jacinto Junior ColI. Dist., 363 S.W.2d 742, 743 (Tex. 1962).
The junior college district argued that the Legislature may create a political subdivision and
authorize it to levy, assess, and collect an ad valorem tax, without constitutional authorization. See
ida The majority opinion of the Texas Supreme Court declined to address this question, finding
instead that constitutional authority existed in Texas Constitution article VII, section 3. 3 See ide at
743,747.

        The concurring and dissenting opinions considered whether the Legislature may delegate ad
valorem taxing power to a political subdivision absent express constitutional authority. See ide
at 757-58. Justice Griffin, concurring, found no constitutional prohibition against legislation
authorizing a junior college district to levy an ad valorem tax, and also found the legislation to be
impliedly authorized by Texas Constitution article VII, section 1 and former article III, section 48.
See ida at 757.

        ChiefJustice Calvert's dissent reviewed relevantconstitutional provisions and constitutional
history.4 The Chief Justice noted that constitutions prior to the constitution of 1876 had not placed
any limitation on the legislative power to levy ad valorem taxes, but the 1876 constitution expressly
limited the Legislature's power to levy such taxes as well as "the power of every political

         Z"An ad valorem tax is levied against property on its value." State v. Wynne, 133 S.W.2d 951,957 (Tex. 1939),
eert. denied, 310 U.S. 659 (1940). In this opinion, we will use the terms "ad valorem tax" and "property tax"
interchangeably.

         3Article VII, section 3 authorizes the Legislature to provide for the formation of school districts with authority

to levy and collect an ad valorem tax.

         4Judge Walker joined in the dissent. See Shepherd, 363 S.W.2d at 781.
Ms. Peggy D. Rudd - Page 3                        (GA-0626)

subdivision or municipal corporation then known to delegates ofthe Convention and to the people."
Id. at 770. The constitutional provisions that expressly authorized specific entities to levy ad
valorem taxes also expressly limited the taxing power. See id 5 Moreover, the delegates to the 1875
constitutional convention defeated several proposed amendments that would. have authorized the
state, school districts, or cities and counties to levy ad valorem taxes to support schools. See ide
Chief Justice Calvert thus concluded that the intent of the people who adopted the constitution was
to deny the state and its political subdivisions the power to levy and collect ad valorem taxes except
as expressly provided in the constitution. 6 Id. at 770-71.

        Intermediate appellate court opinions subsequent to Shepherd have stated in dicta that the
Legislature may permit a political subdivision to levy an ad valorem tax only pursuant to express
constitutional authority, thus echoing the Shepherd dissent without citing it. The court in Texas
Municipal Power Agency, discussing the Legislature's creation ofa political subdivision without ad
valorem taxing power, stated that "[t]he restrictions on the power to levy ad valorem taxes found in
the Constitution necessarily limit the power of the legislature to create municipal corporations or
political subdivisions to be supported by ad valorem taxation." State ex reI. Grimes County
Taxpayers Ass 'n v. Tex. Mun. Power Agency, 565 S.W.2d 258,271 (Tex. Civ. App.-Houston [1st
Dist.] 1978, writ dism'd); see also Manges V. Freer Indep. Sch. Dist., 653 S.W.2d 553, 558 (Tex.
App.-SanAntonio 1983), rev 'd on other grounds, 677 S.W.2d488 (Tex. 1984) (school district has
no inherent authority to levy ad valorem taxes; the authority must arise from a grant ofpower found
in the constitution).

        Prior opinions of this office have recognized implied constitutional limitations on the
Legislature's authority to create a new political subdivision with authority to impose an ad valorem
tax. In 1944, the State Librarian requested an opinion on a question similar to your question. She
inquired as follows:

                         Would it take a constitutional amendment to allow a special
                 tax to be voted for county library support or additional county library
                 support?

Tex. Att'y Gen. Ope No. 0-5842 (1944) at 1. The opinion cited the limits on property tax found in
Texas Constitution article VIII, section 9, which at that time provided that "no county, city or town
shall levy more than twenty-five cents for city or county purposes [and other limits for roads and
bridges, jury fees, and other permanent improvements]·on the one hundred dollars valuation." TEX.
CONST. art. VIII, § 9 historical note (Vemon2007) [Act approved Apr. 7, 1883, 18thLeg., R.S., Tex.
J. Res. 4, § 1, 1883 Tex. Gen. Laws 133, 133, r.eprinted in 9 HP.N Gammel, The Laws of Texas
1822-1897, at 439 (Austin, Gammel Book Co. 1898)]. This office concluded that the county could

        5See TEX. CONST. art. VIII, §§ I-a, 9.

          6See 2 GEORGE D. BRADEN et aI., THE CONSTITUTION OF THE STATE OF TEXAS: AN ANNOTATED AND
COMPARATIVE ANALYSIS 519-21 (1977) (Author's Comment on Texas Constitution, article VII, § 3, praising Shepherd
dissent).
Ms. Peggy D. Rudd - Page 4                           (GA-0626)

allocate to library purposes part of the twenty-five cents on the one hundred dollars valuation
allowed for county purposes, but a constitutional amendment would be required to authorize a library
purpose tax that would be in addition to the constitutionally-limited twenty-five cents per hundred
dollars valuation. See Tex. Att'y Gen. Ope No. 0-5842 (1944) at 3.

        Attorney General Opinion V-1116 addressed a 1949 enactment authorizing a commissioners
court to establish a mosquito control district with ad valorem taxing power in the county.7 See Tex.
Att'y Gen. Ope No. V-1116 (1950). No constitutional provision expressly permitted a mosquito
control district to impose an ad valorem tax. The opinion determined that the tax levy authorized
for mosquito control districts was part ofthe county ad valorem tax established and limited by article
VIII, section 9 of the constitution, citing the following statement from Anderson v. Parsley:

                 The power of the county commissioners under the Constitution, art.
                 8, § 9, as amended December 19, 1890, to levy a tax of25 cents on
                 $100 valuation to construct buildings, sewers, and other permanent
                 buildings, being limited to that levy for all such purposes, a levy can
                 be made for a courthouse and jail only so far as the limit has not
                 already been reached for the other purposes.

Anderson v. Parsley, 37 S.W.2d 358,363 (Tex. Civ. App.-Fort Worth 1931, writrefd). Thus, the
1949 statute did not add to the county taxation power authorized by Texas Constitution article VIII,
section 9.

         We also note the Legislature's consistent practice of proposing amendments to the
constitution to authorize new ad valorem taxes. As initially adopted in 1876, the constitution limited
the authority ofcounties, cities, and towns to assess and collect ad valorem taxes. See Shepherd, 363
S.W.2d at 770 (Calvert, C.l., dissenting). It has been amended numerous times to expressly grant
additional taxing authority to cities or counties or to authorize the Legislature to create new kinds
of political subdivisions with ad valorem taxing authority. See, e.g., TEX. CONST. art. III, §§ 48-e
(special districts for emergency services, adopted 1987), 52(b) (ad valorem tax for road and flood
purposes, adopted 1.904), see interp. commentary (Vernon 2007) (amendment adopted because
constitutional limits on state, city, and county taxing power made large scale water conservation
projects or road construction programs impossible to finance); TEX. CONST. arts. III, § 52d (tax for
road purposes in Harris County, adopted in 1937); VII, § 3 (authorizing state ad valorem tax for
school districts and authorizing Legislature to provide for additional ad valorem tax in school
districts, adopted 1883); IX, §§ 9 (hospital districts with ad valorem taxing power, adopted 1962),
9B (hospital districts with ad valorem taxing power in counties of75,000 or less, adopted 1989), 12
(airport authorities with ad valorem taxing power, adopted 1966); XI, §§ 4 (limits on property tax
authority of general law cities, adopted 1876 and amended to increase limits in 1920), 5 (limit on
property tax authority of home rule cities, adopted 1876), 7 (authorizing property tax in certain

        7See Act ofMar. 10, 1949, 51st Leg., R.S., ch. 46, 1949 Tex. Gen. Laws 80, 80-81 (now codified at Health and
Safety Code chapter 344).
Ms. Peggy D. Rudd - Page 5                            (GA-0626)

counties for seawalls; tax adopted in 1932); XVI, § 59 (authorizing Legislature to create conservation
and reclamation districts with authority to levy and collect taxes, adopted 1917). For more than a
century, the Legislature has proposed and the voters have adopted constitutional amendments to
authorize new ad valorem taxes or increase the amount that could be levied and collected under an
existing tax.

        Texas Constitution article VIII, section 17 is also relevant to our discussion ofyour question.
In contrast to the limits on ad valorem taxing power that permeate the Texas Constitution, article
VIII, section 17 provides broad authority for the Legislature to authorize the taxation ofsubjects and
objects in addition to those expressly named in the constitution:

                         The specification of the objects and subjects oftaxation shall
                 not deprive the Legislature of the power to require other subjects or
                 objects to be taxed in such manner as may be consistent with the
                 principles of taxation fixe'd in this Constitution.

TEX. CONST. art. VIII, § 17 (emphasis added). Article VIII, section 17 must be read together with
the constitutional provisions expressly authorizing property taxes and other specific kinds of tax.
See Guinn v. State, 551 S.W.2d 783, 788 (Tex. Civ. App.-Austin 1977, writ refd n.r.e.). As
adopted in 1876, article VIII, section 1 authorized only a property tax, poll tax, income tax, and
occupation tax. 8 However, other kinds oftaxes, such as those imposed by the Limited Sales, Excise
and Use Tax Act, were not "by reason of such omission [from article VIII, section 1] invalid and in
violation of the Constitution." Am. Transfer & Storage Co. v. Bullock, 525 S.W.2d 918, 923 (Tex.
Civ. App.-Austin 1975, writ refd). The Legislature has plenary power under article VIII, section
17 to require the taxation of subjects and objects not expressly named in the constitution. See ide
The legislative power to tax must be exercised in a manner consistent with the principles oftaxation
fixed in the constitution, such as the requirement that "[t]axation shall be equal and uniform." TEX.
CONST. art. VIII, § 1(a); see Am. Transfer & Storage Co., 525 S.W.2d at 920.

        In State v. Wynne, the Texas Supreme Court determined that a tax on the distribution of
motor fuel was an excise tax and not a property tax, and for that reason the tax was valid under
article VIII, section 17 and did not violate the limits on property tax imposed by article VIII, section
9. See State v. Wynne, 133 S.W.2d 951, 957-58 (Tex. 1939), cert. denied, 310 U.S. 659 (1940).
And, article VIII, section 17 authorized the Legislature to adopt the statutes providing for the
unemployment tax. See Guinn, 551 S.W.2d at 788; see also Friedman v. Am. Surety Co., 151
S.W.2d 570, 580 (Tex. 1941) (characterizing unemployment compensation tax on employers as an
"excise tax," and finding that it did not violate various constitutional provisions). Article VIII,
section 17 authorizes the Legislature to impose taxes on "subjects or objects" other than those
expressly authorized by the constitution, but it does not authorize the Legislature to remove limits

         8See TEX. CONST.art. VIII, § 1,8 HP.N Gammel, The Laws of Texas 1822-1897, at 813 (Austin, Gammel
Book Co. 1898), available at http://texashistory.unt.edulpennalink/meta-pth-6731 :781 (last visited Apr. 29, 2008).
Article VIII, section 1 of the Texas Constitution was amended in 1978 to delete the poll tax and substitute taxation of
intangible property. See TEX. H.RJ. REs. 1, 65th Leg., 2d C.S., 1978 Tex. Gen. Laws 54 (adopted 1978).
Ms. Peggy D. Rudd - Page 6                             (GA-0626)

on taxation imposed by the constitution. See, e.g., TEX. CONST. art. VIII, §§ 9 (limits on property
tax assessed by counties, cities, towns), 24(a) (law imposing personal income tax may not take effect
until approved by majority of voters at a statewide referendum).

        In construing constitutional provisions, we try to give them the effect their makers and
adopters intended. See Stringer v. Cendant Mortgage Corp., 23 S.W.3d 353, 355 (Tex. 2000); City
ofEl Paso v. El Paso Cmty. CoIl. Dist., 729 S.W.2d 296, 298 (Tex. 1986). And we strive to avoid
a construction that renders any provision meaningless or inoperative. See Stringer, 23 S.W.3d at
355; Hanson v. Jordan, 198 S.W.2d 262,263 (Tex. 1946). The Supreme Court of Texas has not
definitively settled whether the Texas Constitution impliedly prohibits the Legislature from allowing
a political subdivision to impose ad valorem taxes absent express constitutional authorization.
However, the Legislature has shown a long-standing pattern of amending the constitution to
authorize new kinds ofpolitical subdivisions to impose ad valorem taxes, while certain intermediate
appellate courts have assumed that ad valorem taxes must be constitutionally authorized. This office
has also stated that the Legislature may not increase a county's ad valorem taxing power absent a
constitutional amendment. See Tex. Att'y Gen. Ope No. 0-5842(1944) at 3. The authority on this
question tends to indicate that the Legislature may not impose an ad valorem tax absent express
constitutional authority. In our opinion, it is more likely than not that a court would find that a multi-
jurisdictional library district established under Government Code chapter 336 lacks authority to
assess and collect ad valorem taxes on property within the district, absent express constitutional
authorization. 9

         You also ask whether the lead governmental entity, "the county or municipality that by
resolution creates a Library District, [may] collect ad valorem taxes on behalfofthe Library District
and disburse those taxes to the Library District under existing authority or is a constitutional
amendment required to grant this specific authority." See Request Letter, supra note 1, at 1. That
is, ifa duly constituted library district wishes to contract with the lead governmental entity to collect
its taxes, may it do SO?10 In answering this question, we reiterate our opinion that a court would
probably hold this ad valorem tax unconstitutional.

         Local Government Code section 336.251 provides for collection of library district taxes:

                          (b) If the district imposes an ad valorem tax, the board shall
                  have the taxable property in its district assessed for ad valorem
                  taxation .and the ad valorem taxes in the district collected, in
                  accordance with anyone of the methods set forth in this section, and
                  any method adopted remains in effect until changed by the board.

        9The Legislature has authorized the creation of a multi-jurisdictional library district supported by a sales tax.
See TEX. Loc. GOV'T CODE ANN. § 336.027(a) (Vernon Supp. 2007).

         lOTelephone Interview with Peggy Rudd, Director and Librarian, Texas State Library and Archives Commission
(Mar. 13, 2008) (clarifying question 2).
Ms. Peggy D. Rudd - Page 7                     (GA-0626)

                       (c) The board may have the taxable property in its district
               assessed or its taxes collected, wholly or partly, by the tax assessors
               or tax collectors of any county, municipality, taxing district, or other
               governmental entity in which all or any part of the district is located.
               The tax assessors or tax collectors of a governmental entity, on the
               request of the board, shall assess and collect the taxes of the district
               in the manner prescribed in the Property Tax Code. Tax assessors
               and tax collectors shall receive compensation in an amount agreed on
               between the appropriate parties, but not to exceed two percent of the
               ad valorem taxes assessed.

TEX. Loc. GOV'T CODE ANN. § 336.251 (b)-(c) (Vernon 2005).

         Pursuant to subsection 336.251 (c), the district board may have the district's taxes collected
by the tax collector of any county or municipality in which all or any part of the district is located.
See ide § 336.251 (c). The lead governmental entity is a county or municipality in which at least part
of the district is located. See ide § 336.021 (creation of district by county or municipality that by
resolution assumes the role of lead governmental entity). Section 336.251(c) authorizes the library
district board to have the tax collector ofthe lead governmental entity collect its taxes in the manner
prescribed in the Property Tax Code. See ide § 336.251(c); see also TEX. TAX CODE ANN. § 1.01
(Vernon 2008) (title 1 of the· Tax Code may be cited as the Property Tax Code). The provisions
governing property tax collection are found in Tax Code chapter 31. See id. ch. 31. Subsection
336.251(c) of the Local Government Code establishes a limit on the compensation· that a tax
collector may receive from the district board. Thus, a library district board may have its taxes
collected by the tax collector of the lead governmental entity and remitted to it pursuant to Local
Government Code section 336.251. See TEX. Loc. GOV'T CODE ANN. § 336.251 (Vernon 2005).
While the board's power to negotiate the collector's compensation is limited by section 336.251, it
appears that the Legislature may amend this provision without also amending the constitution. See
TEX. TAX CODE ANN. § 6.24 (Vernon 2008) (authority of taxing unit to contract with other taxing
units for the assessment and collection of taxes).
Ms. Peggy D. Rudd - Page 8                    (GA-0626)

                                       SUMMARY

                      The Texas Supreme Court has not determined whether the
              Texas Constitution impliedly prohibits the Legislature from allowing
              a political subdivision to impose ad valorem taxes absent express
              constitutional authorization. However, the authority that exists
              indicates that a court would more likely than not find that express
              constitutional authority is necessary for legislation permitting a multi-
              jurisdictional library district established under Government Code
              chapter 336 to impose an ad valorem tax.

                      If the ad valorem tax authorized by Local Government Code
              chapter 336 were constitutional, the library district board could have
              the tax collector of the lead governmental entity collect and remit
              taxes to the district. Although section 336.251 limits the board's
              authority to negotiate the tax collector's compensation, it appears that
              the Legislature may amend this provision without also amending the
              constitution.

KENT C. SULLIVAN
First Assistant Attorney General

ANDREW WEBER
Deputy Attorney General for Legal Counsel

NANCY S. FULLER
Chair, Opinion Committee

Susan L. Garrison
Assistant Attorney General, Opinion Committee