Court Opinion

ID: 4143343
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:32:33.263404+00
Date Added: 2024-06-11T09:36:31.571549
License: Public Domain

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    Honorable John M. Turner
    County Attorney
    Bee County
    Beeville, Texas
    Dear Sir:                Opinion No. O-3025
                             Re: Authority to transfer surplus
                                  In bond fund of school district
                                  to another fund.
              We received your letter dated December 21, 1940,
    requesting our opinion on the following questions whioh we
    quote as follows:
             "1. Whether or not the money now in the de-
        pository credited to the sinking fund of former
        Common School District MO. 5 can be transferred
        by the depositary to the maintenance fund of Rural
        High School District No. 33, as all of the bonds
        of Common School District No. 5 have been fully
        paid, or
             "2~ Whether or not the amount of money now
        In the depository to the credit of the sinking
        fund of former Common School District No. 5 (which
        ceased to exist on December 14, 1937) can be trans-
        ferred by the school distriot or depository to the
        sinking fund of the bonded indebtedness of Rural
        Rlgh School District No. 33."
                We quote the following facts from your letter as
    follows:
              "1 . On Deoember 14, 1937, Rural High School
         District No. 33 was established, as is shown by
         a certified copy of the order of the County Board
         of School Trustees of Bee Count    Texas, entered
         Nunc Pro Tune, as of December 11', 1937, herewith
         enclosed and marked 'Exhibit A'.
Honorable John M. Turner, Page 2, O-3025

         "2. At the time of the establishment of
    this district there was an outstanding bonded
    Indebtedness owing by Pettus Common School Dis-
    trict No. 5, which Common School Distriot No. 5
    is now a part of Rural High School District No.
    33. At the time of the establishment of Rural
    High School Distriot No. 33 there had been levied
    and was being collected a tax of $1.00 upon the
    one hundred dollar valuation of all taxable pro-
    perty within said Common School District No. 33,
    a portion of which to be applied to create a slnk-
    ing fund to pay the Interest and principal as the
    same became due, and while said bonds or any of
    them were outstanding a tax for each year at a
    rate from year to year as will be ample and suffl-
    cient to provide funds to pay the current Interest
    on said bonds and to provide the necessary sink-
    ing fund. A certified copy of the order of the
    commlssioners~ court of Bee County authorlzlng
    the issuance of these bonds is hereto attached
    marked 'Exhibit B'.
          “3 . Since the incorporation of Rural High
     School District No. 33, which included Pettus
     Common School DistrFct No. 5, the school trustees
     of Rural High School District No. 33 have annually
     levied a tax of $1.00 upon the one hundred dollar
     valuation of all taxable property within said
     district for the maintenance of schools therein
     and the payment of interest and principal of
     bonded indebtedness.
          “4 . January 1, 1939, there was levied by
     the sohool trustees,of the Rural High School Dis-
     trict a tax of $1.00 upon the $100.00 valuation
     of all taxable property within said district, as
     is shown by the order of the school trustees,  a
     certified copy of which is hereto attached and
     marked 'Exhibit Cl.
          “5.  March 14, 1939, there being a sufficient
     amount of money in the sinking fund from taxes
     previously collected to retire and pay off the en-
     tire prinoipal and interest of the bonds that were
     issued for Common School District No. 5, hereln-
     above mentioned.
Honorable John M. Turner, Page 3, O-3025

         “6.  The taxes for the year 1939 had,
     priorto the date of the payment of these
    bonds, been levied by the school trustees of
    Rural High School District No. 33, and for the
    year 1939 the taxes so levied and assessed by
    Rural Elgh School District 33 were collected
    by the tax collector of Bee County and approxl-
    mately $6,500.00 thereof was placed In a sink-
    ing fund known as Common School District No. 5
    Sinking Fund with the depository, and this amount
    of money now remains with the depository and the
    entire bond issue of Common School District No.
    5 has been paid off, whFoh was paFd March 1939."
          "RxhFblt C", referred to in paragraph No. 4 of   your
letter reads, in Part, as follows:
         "On this the 14 day of October, 1940, there
    was convened a meeting of the Sohool Trustees
    of Pettus, Tuleta, Normanna Rural High Sohool
    District MO. 33, located In Bee County, with the
    following members present:
               "R. 3. Bill - President
                L. W. D1rk.s
                Bob Walton
                Guy Palmer
                H. A. Rabe
                E. E. Green
    "when among other proceedings had the matters
    hereinafter set out came on to be considered by
    the trustees.
         "On this day came on to be heard and conslder-
    ed by the Trustees of Rural High School District
    MO. 33, Bee County, the order of this Board here-
    tofore entered Fn 1939, levying the taxes for all
    purposes upon all taxable property within Rural
    High School District No. 33; and I,tappearing to
    the Trustees that the order levying taxes upon all
    taxable property wlthin Rural High School District
    No. 33 does not appear upon the minutes of the
    Board of Trustees, though said taxes were 1evFed
    by this district and assessed and have been collec-
    ted in part by the Tax Collector of Bee County,
    Texas.
Honorable John M. Turner, Page 4, O-3025

         "And It further appearing to the Board of
    Trustees that said order levying taxes, as afore-
    said, is not,properly entered upon the minutes of
    the Board of Trustees, Rural High School District
    No. 33, Bee County, for the year 1939, and it hav-
    Fng been conclusively shown to the Board of School
    Trustees, Rural High School District MO. 33, and
    the Board so finds that a proper levy was made on
    the 1st day of January, 1939, ordering the proper
    officials of Bee County, Texas, to assess and col-
    lect the same ordering that saFd taxes be a legal
    charge on the property and the owners thereof
    tithin the Rural High School District No. 33, In
    accordance with the following rates:
          '$1.00 upon the $100.00 valuation of all
     taxable property of the said DlstrFct for the
     maintenance of schools therein and such amount
     as may be necessary to retire and pay the unpaid
     balanoe of any bonded indebtedness then existing
     or unpaid for which bonds have been Fssued by any
     former Common School District within said Rural
     High School District No, 33, and a   balance re-
     maining out of said $1.00 upon theT 100.00 valua-
     tion not used and necessary to pay the bonded ln-
     debtedness of any former existing bonds shall be
     placed in the maintenance fund of said Rural High
     School District No. 33.
          "IT IS THRREPORE ORDRRED by the Trustees of
     Rural HFgh School District MO. 33, all members of
     the board.belmigp&zeenkand:;alP votiag,:;thatbald
     taxes of $1.00 upon the $100.00 valuation of all
     taxable property in said Rural High School District
     No. 33 for the year 1939 be, and the same is now,
     levied against the property tithln said Rural High
     School District No. 33 and the owners thereof, as
     are.subject to taxation, and that the same be, and
     is hereby, just and proper rate to be levied to
     raise the revenue sufficient to satisfy the obll-
     gations of said Rural High Sohool District No. 33
     and for the maintenance of schools therein, and
     that said taxes are made a legal charge on said pro-
     perty and against the owners of same; that the
     assessor of Bee County, Texas, is hereby ordered
     to extend the same on the tax rolls and the tax
     collector is ordered to collect said taxes, and
. .. .

         Honorable John M. Turner, Page 5, O-3025

              the secretary of this board is ordered to pre-
              pare and file with the tax assessor-collector
              a certified copy of this order to be entered Nuno
              Pro Tune as of the 1st day of January 1939."
                   Authority of the school board to .levyand collect
         the tax is provided for in ArtFcle 2922-1, Vernon's Annotated
         CLvil Statutes, whhiohreads, In part, as follows:
                   "The board of a rural high school district
              provided for in this Act shall have the power to
              levy and collect an annual ad valorem tax not to
              exceed One Dollar ($1) on the one hundred dollars
              valuation of taxable property of the district for
              the maintenance of schools therein, and a tax not
              to exceed Fifty (50) Cents on the one hundred dol-
              lars valuation of taxable property of the district
              for the purpose of purchasing, constructing, re-
              pairing, or equipping public free school buildings
              within the limits of such district, and the pur-
              chase of necessary sites therefor; providing that
              the amount of maintenance tax, together with the
              amount of bond tax of the district shall never
              exceed One Dollar ($1) on the one hundred dollars
              valuation of taxable property; . . ."
                   From the above quoted facts, it appears that Rural
         High School District No. 33 collected taxes from the rural dis-
         trict for the year 1939. A portion of said taxes were alloted
         to a sinking fund to retire the bonded indebtedness of Common
         School District No. 5. It appears further that the entire
         bonded indebtedness, for which the particular sinking fund in-
         volved was created, was paid off Fn March, 1939, leaving a
         balance in said fund of approximately $6,500.  We assume that
         this surplus was caused by alloting more money, collected by
         the rural distrFct from the 1939 taxes, to the sinking fund
         than was necessary to pay off the bonds.
                   The rule seems to be that money belonging to a bond
         fund cannot be used for maintenance. See McPhail et al v. Tax
         Collector of Van Zandt County et al., 280 S.W. 260 (writ re-
         fused.) This rule undoubtedly contemplates a situation where
         there exists outstanding bonds. However, where there are no
         outstanding bonds Fn existence, there is no need or purpose for
         an interest and sinking fund. In this connection, we quote
         from the case of Madeley et al v. Trustees of Conroe Indepen-
         dent School DFstrlct, et al., 130 S.W. (2d) 929 (writ dismissed
         as follows:
Honorable John M. Turner, Page 6, O-3025

          "The following illustration Is in point
    on our holding: Where a district has Issued
    bonds and voted a tax to retire them, what be-
    comes of the surplus of the tax when the bonds
    are retired? Sinoe it Is not reasonable that
    the exact amount of the bonds will be collected,
    on every bond issued the trustees     will have In
    their hands a surplus. Again,     a tax payer per-
    mlts his tax to beoome delinquent until after the
    bonds are retired; when sued, can he defend on
    the ground that the bands for which the tax against
    his property was levied have been paid off? When
    the delinquent tax is collected, how shall it be
    expended? These questions find their answer in
    Sec. 3 of Art. 7 of the Constitution; where the
    bonds have been paid off the statutes regulating
    the expenditure of the funds for their payment
    cease to oontrol the power of the trustees in
    the expenditure of the surplus, and its expendi-
    ture rests in the discretion of the trustees,
    under Sec. 3 of Art. 7 of the Constitution."
          It Is our opinion that the money in question now
deposited In the sinking fund of former Common School District
No. 5, all bonded indebtedness having been paid, can be pro-
perly transferred to the maintenance fund of Rural High Scho~ol
District No. 33 upon proper order executed by officers charged
with receiving and disbursing funds for said Rural High School
District.
         We trust that our answer to your first question will
satisfactorily answer your inquiry.
                                  Yours very truly
                             ATTORNRYGRNRRALOFTRXA3
APPROVRD JAN 22, 1941        By   /s/ Glenn R. Lewis
$/S~;;;;3;;~eps                       Glenn R. Lewis
                                           Assistant
ATTORNRYGRNRRAL
                             By   /s/ Lee Shoptaw
                                      Lee Shoptaw
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APPROVRD OPINION COMMITTEE
BY fs/ BWB CHAlRMAN