Court Opinion

ID: 4130434
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:04:15.125817+00
Date Added: 2024-06-11T12:17:53.916269
License: Public Domain

March 30, 1989

Mr. Perry L. Adkisson              Opinion No.   JM-1035
Chancellor
Texas A h M University System      Re: Assessment of Capital
219 Systems Administration Bldg.   Recovery Fees by the city
College Station, Texas    77843    of Houston against Texas
                                   A & M University for waste
                                   water services   (RQ-1533)

Dear Mr. Adkisson:

     you inform us that the city of Houston is seeking to
collect a capital  recovery fee for the use of the city's
waste water system, and ask the following question:

        Can the City of Houston legally assess the
        capital recovery fees set out herein against
        a state agency for utilizing its waste water
        system?

     Texas A 6rM University    is building   an Institute   of
Biosciences and Technology   in the Texas Medical Center    in
Houston.   In conjunction with the actual cost of connecting
with Andy using the city's waste water system, the city is
attempting to assess a capital recovery     fee in accordance
with a city ordinance.   The ordinance provides that amounts
collected as capital recovery charges shall be used solely
to pay or reimburse all or part of "the capital cost of
constructing specific facilities comprising or to comprise a
portion of the system and designed to increase the waste-
water capacity of the system," excluding         repairs   and
replacements   of existing   facilities,   and extensions   or
enlargements to certain sewer mains or laterals.      Houston,
Tex., Code of Ordinances S 47-323 (1968).

     You do not express any objection      to paying other
charges of providing sewer service, such as connection fees
or monthly service charges. A city may make a reasonable
charge to a public entity for the provision        of sewer
Service. BeXar Countv v. Citv of San Ant nio 352 S.W.2d
905 (Tex. Civ. App. - San Antonio 1961, wryt dism#d).   See
oenerally Attorney  General Opinions R-1289, Ii-1265 (1978)

                              p. 5352
Mr. Perry L. Adkisson - Page 2     (JR-1035)

(charges includible in rates charged the state for       electric
utility service and telephone service).

     you argue that the "capital recovery fee" is actually a
special assessment   and therefore  cannot be imposed on a
public entity in the absence of express legislative   author-
ity. Maverick Countv Water Contra Imnrovement D ist.. N     1
Y. Stat e, 456 S.W.ld 204, 207 (Tex. Civ. App. - San  An&o
1970, writ ref*d); Attorney General Opinions JW-523   (1986);
WW-551 (1982). A brief submitted in connection with your
request agrees that capital recovery       fees are special
assessments and argues that article XI, section 9, of the
Texas Constitution exempts public property from them.

     The Texas Supreme Court has defined special assessments
as follows:

        Special assessments . . . are those special
        and local impositions upon the property    in
        the immediate vicinity of municipal  improve-
        ments which are necessary to pay for the
        improvements, and are laid with reference  to
        the special benefit which the property     is
        supposed to have derived therefrom.

Citv of Wichita Falls v . Williij@S, 26cS.t:2d 910, 911 (Tex.
1930). See a lso Conlen Grain and Wer an ile I c        T
Grain Sorahum  Producers Board     519 S.W.2d  62:;6;3  (;:::
1975) (distinguishing  assessm&t    on grain processors   from
special assessments on land).

     Other briefs   argue that these fees are not special
assessments, but usage fees charged as a cost of providing
the service,   so that      the arguments    relevant   to     the
imposition of special assessments do not apply to capital
recovery fees. See aeneru        Bexar Countv v. Citv of San
Antonio, a       (sewer charges were not assessments,         even
though rates include costs of making          replacements     and
extending and improving system). The capital recovery         fees
are assessed against users of a sewage disposal and treat-
ment system to pay for improvements       necessary to provide
sewer disposal  services. The traditional special assess-
ment, a charge against landowners for the costs of building
a street bordering    on their property,     is not connected
with the delivery of municipal services. Thus, the capital
recovery fee may not fit easily into the category               of
special assessment.
                  . . See  aenerally  San  Marco6  Water    D ist.
v. San M~L~CO -fled       School Di t,                Rptr.
(Cal. App. lz85) (sewer fee used tg d;f:iG c%       of capi:::
improvements was not a special assessment but a usage       fee),

                                P- 5353
Wr. Perry L. Adkisson - Page 3   (JM-1035)

g erru&$   720 P.2d 935   (Cal. 1986) (such   sewer fee was   a
szecial a&essment).

      However, there are Texas cases dealing with special
assessments for irrigation improvements which are necessary
to the provision     of irrigation    services to the land-
owner. See. e.a., Maverick Countv Water Control Imnrovement
Dist . a      v. St&g , m;     State v. Bexar- dina-Atascosa
Counties Water Imvro ement Dist. Wo. 1 310 S.W.Zd 641 (Tex.
Civ. App. - San AntoEio 1958, writ ref:d). See also Attorney
General Opinions JW-523 (1986) (capital recovery    fee for
water services treated as a special assessment);      WW-551
(1982) (drainage fee treated as a special assessment).     We
will not attempt to determine whether the capital   recovery
fee is more properly   characterized as a *user fee" than a
"special assessmentOV but will assume for purposes of this
opinion that the capital recovery fees are special assess-
ments. Since we conclude #at        the city of Houston may
collect the capital recovery fee in this case, the answer to
your question does not depend on the name we use to identify
the fee.

      The authorities  have generally    stated that special
assessments are levied as an exercise of the power of taxa-
tion. Citv of Wichita Falls v. Will-           *,     at 911;
see alw 14 McQuillin, Municipal      CorporaCions 8 38.01  (3d.
ed. 1987) (special assessments are sometimes held.to be an
exercise of the police power). However, they are not taxes
as that word is generally understood.    Citv of Wichita Falls
v. Williams, sunra. Taxes are charges imposed by the legis-
lative power of the state to raise revenue for the general
purposes of government   and are not related to any special
benefit to the taxpayer from the expenditure of the funds.
!&&en Grain and Mercantile.      Inc. v. Texas Grain Sorahum
  reducers Board, !sulazar at 623; see also Wichita     County
2                              v    -                   I 323
S.W.2d 298 (Tex. Civ. App. - Fort Worth 1959, writ ref'd
n.r.e.).

     Since special assessments are levied as an exercise  of
the taxing power, questions    arise as to the application
of constitutional   and statutory provisions   on taxation.
Some states have concluded that constitutional    provisions
exempting publicly owned and used property from taxes do not
apply to special assessments, but such assessments may be
imposed on public property only under express    legislative
authorization.   The California Supreme Court has stated as
follows:

                              p. 5354
Wr. Perry L. Adkisson - Page 4    (JM-1035)

           While publicly owned and used property    is
        not exempt from special assessments under the
        constitution or statutory law of this state,
        there is an      implied exemption   of    such
        property from burdens   of that nature. . . .
        The principle   which makes property    of the
        state . . . nontaxable . . . also precludes
        the imposition of a special assessment for a
        street or other local improvement upon such
        property,   unless   there   is  a    positive
        legislative authority therefor. . . .

           The rationale behind a public entity's
        exemption from property   taxes and special
        assessments is to prevent one tax-supported
        entity from siphoning tax money from another
        such entity: the end result of such a process
        could be unnecessary administrative costs and
        no actual gain in tax revenues. . . . On the
        other hand, when one tax-supported      entity
        provides  goods or    services to    another,
        neither the    California  Constitution    nor
        decisional law exempts the public entity from
        paying for these goods or services.

#                                                             t
720 P.2d 935  (Cal: 1986)  (citations         omitted): Citv ii
Inalewood v. Los Anaeles County, 280          P: 360, 363   (Cal.
1929).

     The Texas courts also recognize the principle         that
ordinarily the legislature does not intend to tax property
of the state. The Texas Supreme Court has said that this
would involve the state in "the senseless process of taxing
itself," the net result of which would be to take money
out of one pocket to put it into another, less assessment
and collection   costs. &ower    Colorado Ri er Aut&ritv
Chemical Bank 8 Tru t Co      190 S.W.Zd 4av 51 (Tex. 1945;.
The principle applizs to &itical     subdivi;ions supported by
taxation, as well as to the state. Citv f Wa.rlin v. State
205 S.W.2d 809 (Tex. Civ. App. - Waco lZ47, no writ).        1;
the absence of a constitutional     prohibition, however,   the
legislature may subject the state and political subdivisions
to taxation.   sler: Attorney  General Opinion WW-1502   (1962)
(state purchases of motor fuel subject to excise tax): a
8&~ Attorney General Opinions JW-987 (limited sales and use
tax law applies to state, its agencies, and political .sub-
divisions): JW-972    (1988) (state employees traveling      at
state expense on state business are not exempt from hotel
occupancy tax).

                                 p. 5355
.

    Mr. Perry L. Adkisson - Page 5   (JM-1035)

         The Texas Supreme Court has held that special assess-
    ments are not ntaxesn within article VIII of the Texas
    Constitution, within sections 4 and 5 of article XI, and
    within section 50 of article XVI, pertaining to the protec-
    tion of homesteads   from forced sale for debt.    Citv of
            Falls v. Williams rE!uRcar and authorities    cited
    therein: )&rris Countv v. Bovd, 7 S.W. 713 (Tex. 1888) and
    authorities cited therein.

        The supreme court has also stated, however, that article
    XI, section 9, of the Texas Constitution prohibited a city
    from imposing a special assessment on a county for improving
    the street bordering the courthouse site. Harris Countv V.
    BQYa suR.a. This provision states as follows:
               The property   of counties,   cities    and
            towns, owned and     held only for      public
            purposes, such as public buildings and the
            sites therefor . . . public grounds and all
            other property devoted exclusively to the use
            and benefit  of the public shall be exempt
            from forced sale and from taxation . . . .

    Tex. Const.   art. XI, 5 9. Article XI, section 9 also
    applies to    state-owned property.   Lower Colorado River
                               8 Trust Co<, m.

         The supreme court's conclusion in mris        Coun v    f
    &y&   sunrg, that the city could not impose a paving azsesz-
    ment on the county, was based partly on the absence of
    statutory authority for this charge.     The legislature   did
    not intend     the city's    charter provision    authorizing
    assessments   to interfere    With   governmental   functions
    committed   to the county     commissioners,  or .to    impose
    additional financial burdens upon~ the county against the
    orders of the commissioners. 7 S.W. at 715. The court went
    on to find the county exempt from the assessment         under
    article XI, section 9, of the constitution,       stating   as
    follows:

            [Tlhere is no apparent reason why the exemp-
            tions in the constitution should not be taken
            in the ordinary and more comprehensive sense,
            so as to include all taxation,    special as
            well as general.

    &    The court also noted that this question had been
    decided differently by other courts, and "there is great
    conflict in the decisions.W  &    Subsequent Texas cases

                                  p. 5356
Mr. Perry L. Adkisson - Page 6     (JM-1035)

have cast   doubt on   the constitutionally-based   holding    of
BS?El.
     In rify of Wichita Falls v. Wiw       the supreme court
construed article XVI, section 50, of de Texas Constitu-
tion, which exempts homesteads  from forced sale for debts,
except for taxes and certain other debts, and determined
that special   assessments were not "taxes" within      that
provision.   The court distinguished    the w      case   as
follows:

           It is true that the Commission of Appeals
        in the case of Countv   of I&&.s v. Bovd      70
Tex. 237, 7 S.W. 713, stated there wa; no
        apparent   reason why the exceptions        from
        'taxation, in the Constitution      should not
        be taken to include special        assessments.
        However, the constitutional provision    before
        the court in that case was section        9 of
        article 8 [sic], which contains other words
        coupled with the word       *taxation,,   which
        warranted the interpretation given. Besides,
        the decision in the Bovd Case was obvioa
        correct on other arounds    some of which were
        stated in the opinion, a;d some of which     are
        found in the general rules of law applicable
        to the taxation of public property. WcQuillin
        on Municipal   Corporations (2d Ed.) vol. 5,
        9 2212.   (Emphasis added.)

&   at 914; ~&8 14 McQuillin, Municipal Corporations       5 38.73
(3d ed. 1987).

      The court in Wichita    Countv Water Imnro e ent Dist.
No. 2     Citv of Wichita FaJ,& , m,     held tha: i city was
liablevto a water improvement district for "benefit assess-
mentsw levied against city-owned land within the district's
boundaries.   The water district,6   taxes were levied by the
benefit assessment    plan rather than upon an ad valorem
basis.    See aen-        Water Code 8 51.512.     The   court
reviewed case law and treatises stating that tax exemptions
apply only to ordinary taxes for the general purposes       of
government and not to special assessments for local improve-
ments. S e. e.a     State v. Citv of El P~SQ, 143 S.W.2d 366
(Tex. 194:) (citi;s are exempt from only three classes      of
taxes: ad valorem, occupation,     and income taxes); fitv of
Ci co . Var er      16 S.W.2d 265    (Tex. Comm,n App.   1929,
j&u,:     adopEed;   (special assessment   is not tax within
constitution, thus defense of limitation was available).    It
concluded   that article XI,      section 9, of the      Texas

                                 p. 5357
Mr. Perry L. Adkisson - page 7       (JM-1035)

Constitution did not    exempt the     city from   payment of   the
assessments.

     Attorney General Opinion No. WW-786      (1960)' issued
shortly after Wichita
v. Citv of Wichita p8,J.l~was decided, relied on that case to
hold that a hospital    district was liable to a city for
paving assessments.   After pointing out that the applica-
tion for writ of error was refused with the notation      %o
reversible error," the opinion stated as follows:

        Though this docket notation may have cast
        certain doubt (the extent of which has never
        been satisfactorily defined) upon the reason-
        ing of the Fort Worth Court, the Supreme
        Court's refusal to entertain the writ of
        error laid to rest any question as to the
        continued vitality   of the early case of
        y:;,;rtv      v. Bovd, 7 S.W. 713 (Tex. Sup.
          .      1 which reached a directly contrary
        result.

Attorney General Opinion WW-786      (1960).

      However, m       was relied upon in Citv of Garland
Garland Indeo. School Dist.          468 S.W.Zd  110   (Tex. Ci::
APP. - Dallas 1971, writ ref,; n.r.e.), in which the court
held that a city could not compel a school district to pay
special assessments       for paving streets ,next to school
property.    The court first determined that section 20.48 of
the Education Code did not permit the expenditure of school
funds for street improvement unless the trustees           of the
district    first     determined    that the    expenditure    was
,,necessary in the conduct of the public schools.~, XL          at
112.
.    . This  was  the  'primary  ground" of the court's   decision
         of    rland and it was supported by the holding         *
&     that tE city,charter provision authorizing the asses::
ment was not intended to impose additional financial burdens
on the county.

     The !&X&B.&  court also concluded that article XI,
section 9, exempted a political subdivision from assessments
for street improvements and that Barris C untv v. Bovd stood
as authoritative on this issue. &&     atO114. In reaching
this alternative ground for its decision,
sought to distinguish Wichita Co-    Water ‘::D%%%     :::it
No. 2 v. Citv of Wicbjta Fu     by stating that zheecity had
used the district's irrigatio;. services on the land, and
thus impliedly consented to pay reasonable charges for those
services. This distinction,    however, appears to confuse

                                p.    5358
Mr. Perry L. Adkisson - Page 8     (JM-1035)

benefit assessments   with charges for providing         water to
irrigate the land.  The  city of  Wichita  Falls   was  subject to
an assessment for each acre   of  irrigable   land  and  had  used
irrigation services on warnall areas" of its tract.        Wichita
Countv ater Imvrovement Dist. No. 2 v. Citv of Wichita
lzauil LRa.     Water   improvement districts impose benefit
assessments to finance the construction          of improvements
necessary to irrigate the land.     &,f& Water   Code   55 51.125,
51.502, 51.512, 51.516, 51.518.    In addition,    the   landowner
must pay a separate water charge or assessment for receiving
water to irrigate his land.      Water Code Sf 51.301-51.321,
51.508, 51.509. The    supreme court designated       the Citv of
Garland case "writ refused, no reversible error."

     The most recent Texas decision       on the payment    of
special assessments    by governmental   bodies   is Kgverick
Countv Water Control & Imorovement Dist. No. 1 v. State
EW2?2. The court noted that the Texas Supreme Court had
held in Bsyg that article XI, section 9, of the Texas
Constitution   applied to special assessments,      but   that
subsequent decisions   had reached a contrary    result. 456
S.W.2d at 206-07, n. 5.    The Wav;~i~o~;~w~;termined     that
land owned by the Veterans*                       exempted by
statute from ad valorem taxation and was not subject to
special assessments because no statute imposed them on the
state. &     at 206. .The court stated as follows:

          Although the power of a governmental agency
       to levy special assessments for local improve-
       ments  is generally     recognized  to be   an
       exercise  of the taxing power, there       are
       numerous decisions   holding that a special
       assessment is not a 'tax, in the sense in
       which that word is ordinarily used. We do not
       think it necessary to consider the question
       whether such an assessment is a tax within the
       meaning of constitutional provisions exempting
       property from taxation in a case where,     as
       here, a political  subdivision created by the
       sovereign is attempting   to impose a monetary
       exaction upon its creator.

           Even if it be assumed that a county or
        municipality is subject to special assessments
        levied by another political subdivision of the
        State, it does not necessarily follow that a
        subordinate political  subdivision can impose
        an involuntary monetary    obligation  on the
        sovereign.  It is generally held that, in the
        absence of clear legislative authorization,   a

                                p. 5359
 Mr. Perry L. Adkisson - Page 9    (JM-1035)

        political subdivision  of the State has no
        power to levy a special assessment     against
        State property. We adopt this view at least
        in a case where, as here, the sovereign     is
        neither making nor contemplating   any use of
        the allegedly benefitted land and has neither
        received nor requested the services rendered
        by the assessing agency.  (Footnotes omitted.)

 &   at 206-07.

       The Maverick case did not need to determine whether    a
 special assessment is a tax within article XI, section 9, of
 the constitution.    See also Attorney General Opinions JM-523
  (1986); WW-551   (1982) (did not reach question because    no
 statutory   authority   for assessment).    Nonetheless,   its
 references to this issue suggest that we cannot confidently
 rely  on the holding in m      that article XI, section 9, of
 the Texas Constitution, exempts publicly-owned property used
 for public purposes from special assessments.    The mverick
 decision   actually rests on the absence of legislative
 authorization for imposing the special assessment       on the
 state. The decisions in both &&       and in Citv of Garland
 are also supported by this non-constitutional ground -- the
 absence of express statutory authority      for imposing the
 special assessments on a political subdivision -- as well as
 their interpretation of article XI, section 9.

       The atv of Garlti.case,     which saidw~~u~;~ri~;:;;;-
1_tutional holding in -1s     Countv v. Bovd
  was designated "writ refused, no reversible     errorH by th6
  supreme court.     The m crick           questioned  the
  holding in &y&    and was ~esignat~?writ    refused.,, AlthlttE
  the supreme court has not explicitly reconsidered &y&      yours
  question requires us to form an opinion on how the supreme
  court might rule on it in the future. In the more than one
  hundred years since Harris Countv v. Bovd was issued, Texas
  courts, except for the Citv of Gaw          court, have dis-
  regarded   its constitutional   holding   or emphasized     the
  alternative basis for the decision. These courts have had
  the benefit of legal scholarship and judicial decisions      on
  special assessments   which did not exist when m            was
  decided. We believe the supreme court, if it were to
  consider this question again, would rule that the article
  XI, section 9 tax exemption does not encompass          special
  assessments.   Accordingly,  article XI, section 9, of the
  Texas Constitution does not bar the city of Houston        from
  imposing capital recovery fees on a state agency for using
  its waste water system.

                                 p. 5360
Mr. Perry L. Adkisson - Page 10   (JM-1035)

     We also conclude that the legislature has authorized
the city to impose such fees on state agencies that use its
waste water system.   Statutory authority  for charging   the
fees is found in chapter 26 of the Water Code, which was
enacted as part of the Texas Water Quality Act of 1967 and
codified in the Texas Water Code. m    Acts 1967, 60th Leg.,
ch. 313, at 745 (adopting Texas Water Quality Act of 1967);
Acts 1971, 62d Leg., ch. 933, at 2850 (amending Texas Water
Quality Act to include predecessor   of section  26.176(b));
Acts 1971, 62d Leg., ch. 612, at 1978, 1985        (repealing
chapter 933 of Acts 1971 and incorporating predecessor     of
section 26.176(b) into Texas Water Code).

     Local governments are granted certain   authority   under
chapter 26 to provide for water quality within their area.
Water Code fS 26.171-26.177.     Section   26.176 authorizes
every local government   which owns or operates     a sewage
disposal system to adopt rules to control the discharge     of
waste into the system. In the event of any conflict between
its provisions and any other laws, the provisions of section
26.176 shall control.    Water Code 5 26.176(e).       Section
26.176(b) provides as follows:

            (b) The local government in its rulethE;
        establish the charges and assessments
        may be made to and collected from U    nersons
        who discharge waste to the disposal system or
        who have conduits or other facilities       for
        discharging waste connected   to the disposal
        system, referred to in this subsection       as
        *users. * The charges and assessments     shall
        be equitable as between all users and shall
        correspond as near as can be practically
        determined to the cost of making the waste
        disposal services available to all users and
        of treating the waste of each user or class
        of users.    The charges and assessments    may
        include user charges, connection fees, or any
        other methods of obtaining revenue from the
        disposal   system available    to the     local
        government.   In establishing the charges   and
        assessments, the local government shall take
        into account:

            (1) the volume, type character, and gua-
        lity of the waste of each user or class of
        users ;

           (2)   the techniques of treatment required;

                              p. 5361
Mr. Perry L. Adkisson - Page 11    (JM-1035)

           (3) W                         debt-r.&irement
        exnenses of the    disposal svstem reouired to
                                  raes w    assegsments:

           (4) ,the costs of operating     and main-
        taining the system to comply with        this
        chapter and the permits, rules, and orders of
        the commission: and

            (5)   ~othertaattributable

Water Code 5 26.176(b).

     This statute expressly authorizes the local government
to take into account capital cost of the disposal system in
establishing charges and assessments, such as the capital
recovery costs in question.    Moreover, these charges     and
assessments are to be collected from ,,a11 persons,, using the
disposal system. In the context of section 26.176(b),     "all
personaH includes state agencies.

     The language of section 26.176(b) was adopted in 1971,
as an amendment to the Texas Water Quality Act of 1967.
Acts 1971, 62d Leg., ch. 933, at 2850. The Water Quality
Act defined    ,,personw to mean "individual,      corporation,
organization,   government   or governmental    subdivision   or
agency, business   trust . . . or any other legal entity,,
unless the context required a different result. Acts 1969,
61st Leg., ch. 760, at 2229 (amending Water Quality Act of
1967).    The legislature     intended npersonn in      section
26.176(b)   and its   predecessors   to include governmental
agencies in order to enable local governments to qualify for
federal grant funds under the federal Water Pollution
Control Act.    The provisions    of the Water Quality Act
demonstrate the legislature,6 intent to enable state and
local governments   to receive grants under federal water
pollution control legislation.      &9    Water Code S 26.035
(Water Commission may receive federal assistance, grants, or
loans for water quality control activities including waste
disposal   facilities);    S 26.175   (local   government
contract with commission for transfer of money for waZ
quality control   functions and for construction,     purchase,
maintenance, and operation     of sewage disposal     systems).
See also Attorney   General Opinions M-1069     (1972);' M-894,
M-822 (1971); M-32 (1967) (discussing state authority     under
Texas Water Quality Act to contract for federal grants       for

                                p. 5362
Mr. Perry L. Adkisson - Page 12       (JM-1035)

local governments   under   federal     Water     Pollution   Control
Act).

     The Environmental     Protection Agency has authority     to
make grants to states and municipalities to build publicly
owned treatment works. 33 U.S.C. 5 1281(g)(l).       However, an
applicant may not receive a grant unless he has adopted or
will adopt a system of charges designed to assure that each
recipient of waste treatment      services will pay its propor-
tionate share "of the costs of operation and maintenance
(including replacement)      of any waste treatment     services
provided by the applicant . . . .w 33 U.S.C.       5 1284(b)(l).
Federal regulations     adopted under this provision     further
describe the user charges which must be collected            from
recipients  of waste treatment        services and demonstrate
that governmental agencies must pay such charges. &            40
C.F.R. 5 35.905 (definitions of "industrial user' and "user
charge"); f 35.929-1(b)   (4) (iii).

     Section 26.176(b) of the Water Code authorizes a local
government to establish  the 'user charges,w  which it must
adopt to qualify  for a federal grant for sewage treatment
works. The purpose   underlying this section shows that it
must be read to apply to governmental as well as private
entities.

     When the Texas Water Quality Act was codified in the
Water Code, the definition of wpersonw was deleted from its
list of definitions.    However,  the language    of section
26.176(b) was incorporated    into the Water Code by an
enactment which  included a provision making   it expressly
subject to all provisions   of the Code Construction    Act.
Acts 1971, 62d Leg., ch. 612, S 2, at 1985. See also Water
Code S 1.002 (application of Code Construction Act to code).
The Code Construction   Act defines   "person" as follows,
unless the context requires a different definition:

        \Person* includes corporation,   organization,
                 nt or aovernmW        subdi ision or
        aQencY..    . and any other legal en:ity.

Gov't Code 5 311.005(2).

     As shown by our discussion of the history of section
26.176(b) of the Water Code, in the context of that pro-
vision, ,,persoM must be defined to include governmental
agencies. Accordingly, section 26.176(b) of~the Water Code
expressly authori~xes a local government to require users of
its sewage disposal system, including a state agency, to pay
charges based in part on the capital costs of the system.

                                p. 5363
m.   Perry L. AdkiSSon - Page 13     (JM-1035)

The city of Houston may collect a capital recovery fee         from
a state agency for the use of its waste water system.

                       SUMMARY

             A special assessment is not a tax within
        article XI, section 9, of the Texas Constitu-
        tion, which exempts  property owned and held       -
        for public purposes   from taxation.    Thus,
        this provision of the constitution does not
        prohibit the imposition of a special assess-
        ment on a state agency.

             In the absence of express       statutory
        authority, a city may not impose a special
        assessment  on .a   state agency.      Section
        26.176(b) of the Water Code provides   express
        authority for the city of Houston to charge
        users of its sewage disposal system, includ-
        ing a state agency, a "capital recovery   fee,,
        for certain capital costs of the sewage
        disposal and treatment system.

                                        JIM     MATTOX
                                        Attorney General of Texas

WARYKELLER
First Assistant Attorney General

IOU MCCRBARY
Executive Assistant Attorney General

JUUGE ZOLLIE STEAXLF.Y
Special Assistant Attorney General

RICK GILPIN
Chairman, Opinion Committee

Prepared by Susan L. Garrison
Assistant Attorney General

                                p.   5364