Court Opinion

ID: 4137823
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:29:21.399118+00
Date Added: 2024-06-11T14:44:56.089487
License: Public Domain

LiUSTIN. TEXAS

                    Hovember 21, 1949

Bonorable Stewart Y. Rollman
Criminal Matrict Attorney
Fort Worth, Texas
                         opinion Ho. Y-949.
                         Re: Reduotion In valuation of
                             property ae aifecting eligl-
                             bllity of sahool distrlots
                             for Foundation School Fumd
                             grants, and requirementof
                             county-wide%q~llGatiOn
                             mzhool dietritts to report
                             funds derived from school
                             maintenance tex aa county
Dear Sirr                    amilable funds.
          Your request for an opinizm relates to ellgl-
bility of school districts Sor FoundationSchool Fund
grmt8 where the value of property baa decreased and the
valuation is reduced. It also relates to the accouuta-
bllity of county-videequalizationschool districts for
funds derived from school aaintenancetax in report+g
county available funds under S.3. 116, Aata 51st Leg.,
B.S., 1949. The questions submittedare:
          '1. There being no express provision
     In the Act, and there certainlybeing none
     in the paragraphsreferred to, to prohibit
           can a school district reduce the valu-
     ire; oa amy property or propertlea In said
     district and still be eligible for aid under
     said Act?
          ‘2.  Are these fund8 (oounty-wideequal-
     ixatloa funds) to be reported to the State
     Auditor under said Act, particularlyuuder
     SubdivisIon (b), Paragraph 13, State Audit-
     or's Form Ro. BA-2-6495"
            With respect to your first questian:
          State and county assessed valuation of the
taxable property of districts Is used in the formula
Hon. Stewart Y. Hellmen, page 2 (W4S)

designed for Celculetingthe amount of'local fuuda to be
oharged mbool dLatrZat8. Sectifm 5 of Article VI, S.B.
116, Aeta 51st Leg., R.S., 1949 (Found&ion Sahool Pro-
gram Act)       reads In part%
             “Mvide the state and county aaaes8sd Val-
     uaitiori  of all property In thQ county subject to
     school district taxation for the next preceding
     school year Into the State and county assessed
     ValPatlafiof the district for the aext p-cod-
     lng school year, finding the dlatrlct*aper-
     centage of the county valuation. Multiply the
     district’spercentage of the county valuation
     by the amount of funds assigned to all of’the
     dlatriata    in the county. The product shall be
     the emount of looal funds that the district
     shell be assigned to raise toward the fineming
     of its Foundation Sohool Prograa~.~
                Said section further provideat
          "The County Tax Aaaeaaor-Collectorin each
     county, . . . shell oertify to the State Gem-
     ~&x~?.I~~of Bdua&tlou e . . the followlag la-

                "(1) The assessed valuation, on a State
     and oounty valuation basis, of all property
     aubjeot to school district taxation in eaoh
     school diatr.ictor portion of aohool diatriot
     in such county, and the total aaaeaaed Value-
     tlon of all property aubjeot to school dla-
     trict taxatlan in the county; w o -”
          Section 1, Artfele VIII of'the Conatltuticmof
Texas, reeds lp pert%
          "       all property in this State abell
     be taxei in.proportloato its velue, which
     hhll be ascertainedas my be provided by
            .   .   e   l

                Seation 14, Article VIII of the Conatltutlon
of Texas,       provides that8
          “There shell be eleoted by the quellfled
     electors of aech county + e D an Assessor and
     Colleotor of Taxes, . . . end auoh Assessor
     and Collector of Tax88 shall perform all the
Hon. Stewart W. Bellman,      page 3 (V-949)

     duties with respect to assessing         property    for
     the purpose o? taxation.. . . .”
           Article   7174, V.C.S.,     reads in part:
           “Each separate parcel of real property
     shall be valued at its true and full value
     in money, excluding the value of crops grov-
     ing or ungathered thereon.  . . .”
           Article   7206,   V.C.S.,   reads in part:
           “Each ccaamlsaloners court shall convene
     and sit as a board of equalization     on the sec-
     ond l4ondag in May of each year, OF as soon
     thereafter   a8 practicable  before the first  day
     of June, to receive all the assessment lists
     or books of the assessors    of their aountles
     for inspection,   correction  or equalization  and
     approval. ’
             Uhen property Is rendered for taxation the
assessor-collector      places the property on the tax rolls
if he la satisfied      the property is pende~ed at the rea-
sonable cash market value.        I? he is not so satisfied
he enters the reasonable cash market value on the rendl-
tion and the party rendering the property may have the
true value dete&ed          by the county conrmissloners court,
if dissatls?led     vlth the value fixed by the assesaor-
collector.      Art. 7211, V.C.S.
           Article   7212, V.C.S.,     provides   thatr
           mThe boards of equalization   shall have
     power, and It is made their official     duty, to
     supervise the assessment of their respective
     counties,  and, if satisfied   that the valuation
     of any property Is not in accordance with the
     laws of this State, to increase or diminish
     the same and to affix a proper valuation there-
     to, as provided for in the preceding article;
     and, vhen any assessor In this State shall
     have furnished said court vith the rendition
     as provided for In the preceding article,     it
     shall be the duty of such court to call before
     It such persons as in Its judgment may knov
     the market value or true value of such proper-
     ty, as the case may be, by proper process,      who
Hon. Stewartu.       hellman,   page 4 (v-949)

     shall testify  under oath the character,     quali-
     ty and quantity of such property,     as vell as
     the value thereof.     Said court, after hearing
     the evidence,  shall fix the value of such
     property In accordance with the evidence so
     introduced and as provided for in the preced-
     ing article;  and their action in such case or
     cases shall be final."
           Section     5 of Article   VI, S.B.   116, supra,   fur-
ther provides:
           "I? there has been a marked increase
     or decrease in the assessed valuation of a
     school district   within a county, and if the
     County School Board certifies    that the use
     of the county and school district    valuations
     for the PreCeding year in determinIng local
     fund assignments to the school districts     in
     the county would be Inequitable,    and recom-
     mends a different   distribution  of the county
     total than that made by the State Consnission-
     er of Education, such recommendations, sub-
     ject to the approval of said Commissioner,
     shall become and be the lawful local fund as-
     signments to such districts."
           hanifestly,   the quoted provisions    of Senate
hill 116 pertaining    to valuation of property are in har-
mony with general law and the Constitution.        Senate Bill
116 does not, in our opinion,     seek nor operate to alter,
change, or disturb the valuation procedure long estab-
lished and in use for purposes of taxation in this State.
Clearly,  the language, "I? there has been a marked in-
crease OP decrease in the assessed valuation of a school
district  . . .v recognlses     that there will be fluctua-
tions in the value of property in school districts.            Un-
der the organic and StatUtWy      law, Change in value must
be taken into account.     Increase OP decrease in assessed
valuation may be recognized without affecting       eligibili-
ty for Foundation School Fund grads       by giving effect,
in proper oases, to recommendations of the County School
Board.
              The Foundation School Program Act contemplates
limitations     upon districts with respect to reduction of
tax rate:
Hon. Stewapt W. Hellman, page 5 (V-949)

            %o school district    shall be eligible   to
     receive foundation school funds authorized
     herein vhich lovers its total school tax pate
     within tvo (2) years of the effective       date of
     this Act, I? the reduction of such tax rate
     would reduce thz local maintanauce tax re-
     ceipts   . . . .   Sec. 5, Art. VI, S. B. 116
     Acts 51St Leg.,  B.S.,    1949. (emphasis added)
             However, we do not construe this language as
in anyvise applicable      to the power to ascertain   value
for tax purposes as required by the Constitution        and
laws of this State, since the subject of this provision
is rate of tax as distinguished       from value of property
to which the rate is applied.       The Ae%T$%aina no pro-
vision of similar import relating        to valuation.  In-
crease OP decvease in valuation would operate to vary
the amount of local funds charged to conmcu school dia-
trlcts    and independent districts     using State and county
valuations    as indicated   by the formula quoted above, but
eligibility    for grants would not be disturbed.
             It Is apparent, therefore,  that valuation of
property in school districts     may be reduced, when cir-
cumstances and evidence determinative     of value require,
without affecting    eligibility  of such districts  for
foundation school fund grants for which they are other-
Vise  eligible.
           Uith respect   to your second questlont
            Section 3 of Article     VII of the Constitution
of Texas provides In part:
            ”
                    e And the Legislature    may authoriee
     au addl&al        ad valorem tax to be levied and
     collected    within all school districts     hereto-
     fore fomned or hereafter       formed, for the fur-
     ther mainteuauce of public free schools,        and
     for the erection and equipment of school build-
     ings therein;     provided that a majority of the
     qualified    property tax-paging voters of the
     district    voting at an electlou     to be held for
     that purpose, shall vote such tax not to ex-
     ceed in any one year one ($1.00) dollar on the
     one huudved dollars      valuation of the property
     subject to taxation In such district,        . . .*
Lou. Stewart W. Bellman,      page 6 (V-949)

             Pursuant to authority     of this provision    of the
Couatitutlou,     the Legislature   has created a number of
counties as county-wide equallaation         school districts
having the Cotmty Unit System of Mucation.           These dia-
tricts exeraiae the taxing power conierred upon school
districts    by suoh provision    with. limitations  prescribed
in the several Aots when voted by a majoflty         of the
qualified    property tax-payi      voters of the district.
Acts 44th Leg., R.S., 1935, 3 h. 103, p. 284, Art. 27408,
V.C.S. ; Acts 45th Leg., B.S., 1937, Ch. 231, p. 454,
Art. 2744e, V.C.S.; Acts 45th Leg., R.S., 1937, Ch. 163,
p. 315, Art. 27401-2, V.C .S . ; Acta 46th Leteg., R.S.,
19391 ;pS Lava, p. 677, Art. 2744e-1, V.C.S.; Acts 46th’
               1939, Sp. Lava, p. 673, Art. 2744e-2, V.C.S.;
;:$$&h’ieg.,        R.S., 1941, Ch. 95, p. 121, Art. 27401-3,
  . . .; Acta 47th Leg.      R.S., 1941, Ch. 2 3, p. 400, Art.
2740?-4, V.C.S. i Acts 47th Leg., R.S., 19 ;: 1, Ch. 150, p.
218, as aabanded, Acts 50th Leg., R.S., 1947, Ch. 85           p.
145, Art. 2744e3,      V.C.S.; Aota 50th Lag., R.S., 1947,
Ch. 331, p. 617, Art. 2702-A, V.C.S.; Acts 50th Lag.,, R.
S -9 1947, Ch. 399, p. 800, Art. 2740?-5, V.C.S.
            Sectiou   6 of Article   VII of the Constitution
of Texas creates the cow&j available fund:
          "       Said lends, and the proceeds
      thereof;   ihen sold, shall be held by said
      couuties alone as a truat for the benefit
      of public schools therein;      said proceeds to
      be Invested . . . and the counties shall be
      responsible    for all investments;    the inter-
      est thereon, and other revenue,      except the
      princlipsl   shall be available   fuud.”
            Interest   derived from investment of the pePma-
nent land or trust fund and other Pevenue from such fund,
except the p~lnolpal      thereof,    constitute    the couuty
available   fund; and only the interest          thereon leapbe un-
ed and expended annually.        Art. 2824, V.C.S.       Section   5
of Article VII of the Constitution           of Texas creates the
state available     school fund and enumeratea certain sour-
ces of Income and revenue for the fund.             The Legislature
la specifically    authoriced     to supplement the fund by
adding not to exceed l$ annually of the total value of
the pePamnent school fuud.         Section 6, supra, of this AP-
tlcle,   contains no provision      for adding to or SuppleaIent-
lng the county available       fuud.
Hon. Stewart W. Hellman, page 7 (V-949)

            Article   2692, V.C .S., provides that the county
superintendent     shall make pro rata distribution     of the
state available     school fund based on the scholastic     cen-
sus, and:
            I( . . . shall at the same time appor-
      tion the income arising from the county
      school fund to all the districts,      lnclud-
      ing the independent school districts       of the
      county, making a pro rata distribution       as
      per scholastic     census.*
           Thus, income arising from the county available
fund
_ _   Is distributed   in the same manner and upon the same
oasis (scholastic    census) as the state available funds
apportioned to counties.
           The only source of income to the county avall-
able fund provided In the Constitution     is interest    and
other revenue derived from the county permanent fund.
The Legislature   has in effect  defined other revenue to
Include leasing or renting of lands, while proceeds from
the sale of timber Is required to be invested as pro-
ceeds from the sale of land.     Art. 2825, V.C:S.     In
Simona v. Jackson County 63 Tex. 428 (1885), it Is said
 hat interest   on notes egeouted in part payment of the
purchase price of land becomes part of the available
fund.   But, proceeds from a lease conveying land for min-
ing and operating for oil and gas may be said to be per-
manent funds as the transaction    represents  a sale of the
minerals in place.     Ehlineer v. Clark, 117 Tex. 547, 8
S.W.2d 666 (1928).
             Article  2827, v.C .S . , enumerates the purposes
for   which the public free school funds may be expended:
             (I . . . State and county available        funds
       shall be used exclusively      for the payment of
       teachers’ and superintendentat       salaries,     fees
       for taking the scholastic      census, and interest
       on money borrowed on short time to pay salt-
       &es of teachers and superintendents.           . .
                 This article also describes   the purposes    for
vhich    local     funds may be expended:
                 l
                         local school funds from district
        taxes, iAt.&        fees of pupils not entitled   to
        free tuition,     and other local sources may be
Hon. Stewart W. Hellman,     page 8 (V-549)

     used for the purposes enumerated for State and
     county funds and for purchasing appliances and
     supplies,   for the payment of insurance premi-
     ums, janitors   and other employees, for buying
     school sites,   buying, building and repairing
     and renting school houses, and for other pur-
     poses necessary in the conduct of the public
     schools to be determined by the Board of Trus-
     tees.   . . ."
            Sound reason supports the view that the avail-
able fund created by Section 6 of Article          VII, supra, is
a fund separate and distinct       from other funds made avail-
able by law under any other provision          of the Constitution
for the operation,   maintenance, and support of the public
free schools.    Likewise, the available        school fund pro-
vided in Section 5 of Article        VII, supra, is a fund sepa-
rate and distinct   from other funds made available         by law
under any other provision      of the Constitution.      Both are
constitutional   funds.    The sources of income or revenue
to each ape particularly      described by the Constitution
and laws of this State, and the use of each is defined
and restricted   by legislative      declaration.
           Section 1 of Article VI, S.B. 116; Acts 51st
Leg., R.S., 1949, provides that the Foundation School Pro-
gram shall be financed by:
            "a.   An equalized local school district
     effort    to the extent hereinafter provided to-
     ward the support of this program;
          "b.   Mstrlbution of the State and Coun-
     ty Available School Funds on the basis of the
     number of scholastics; and
          'C.   Allooation to each local district   a
     sum of State money appropriated   for the pur-
     poses of this Act sufflclent   to finance the
     remaining costs of the Foundation School PPO-
     gram in that district   computed and determined
     in accordanoe with the provisions    of this Act.'
         “It is abundantly clear, we think, that the
county available   fund referred  to in the Act and intend-
ed by the Legislature   is ~the available   fund provided in
Section 6 of Article   VII, supra, end that equalieation
funds made available   in county-vlde    equalization  school
Hon. Stewart W. Hellman,     page 9 (V-949)

districts    by the levy of a school maintenance tax con-
stitute   local funds as distinguished    from constitutional
available    funds and may not be included therein.      I? the
Legislature    had intended othervise,  it could have easily
so declared.
            County-wide equalization      funds are derived from
a tax levied by districts      exercising    the taxing power
conferred by the Legislature       uuder Section 3 of Article
VII, supra, vhile the available        fund Is derived from ln-
terest and other revenue from public lands OF county per-
manent fund.    In general,     county-wide equalization     funds
are by law distributed     to districts     on a per capita bas-
is according to the scholastic        census for the maintenance
and support of the schools of the district.           Hove;er, AP-
tlcle   27&O?-5, V.C.S.,   provides for distribution          . . .
according to the financial       needs of said school districts
. . . so as to provide a salary of not less than two
thousand ($2,000.00)     dollars   per year to any teacher em-
ployed.   . . .” With this one exception,        use of county-
wide equalicatlon    funds is unrestricted      as to purpose,
vhile use of the available       fund, as has already been
pointed out, Is limited by general statute to particular
purposes.
            The Foundation School Fond created by the Oil-
mer-Alkin lava, is an w              fund, grants frcnn which
are intended to pay professional       salaries, transporta-
tion and current operating costs other than professional
salaries  and transportation.     It supplements State and
county available    funds which are also o eratl
as seen from Article     2827, V.C.S.,       v
                                         supra.    ocal fonds~J
                                                          funds
from district   taxes may be used for the erection        of
mane& imorovements and certain other purposes, in ad         qfr
tion to those enumerated for State and county funds.
            Surely, it vas not the intention     of the Legis-
lature to supplement building funds of dlstriets       vlth
grants from the Foundation School Fund. As observed,
Foundation School Fund grants supplementtheoperating
funds.    Mstricts  that have levied the county-wide equal-
ization   tax, by vote, would be penalized if Gilmerdikin
gPadS were reduced by the amount raised locally        by such
levies.    We see no objection   to school districts   levying
county-wide equalieatlon     or other local taxes in addi-
tion to taxes levied to raise local funds Charged to such
districts   by Senate Bill 116 to supplement either operat-
ing funds or permsnent improvement funds.
Hon. Stewart W. Hellman, page 10 (V-949)

                                 -   l3veFett Hutchlnson
$Hrdb:bh                                      Assistant

                                APPROVED