Court Opinion

ID: 4137549
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:26:09.339084+00
Date Added: 2024-06-11T14:36:36.581981
License: Public Domain

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                    .TEEA'ITORNEYGENERAL                                                '
                             OF ?IYExAs
PRICE  DANIEL
ATTORNEYGENERAL

                                         hly   31, 1951

      Hon. Walter   Oeltjen                      Opinion     No. V-1224
      County Attorney
      Fayette bounty                              Re:   Continuation    of State ad valo-
      La Grange,   Texas                                rem tax levies in county in
                                                        which tax donations were pre-
                                                        viously   granted to Flood Con-
                                                        trol District   which has no
      Dear   Sir:                                       outstanding    obligations,

                     You have requested     the opinion  of this office  as to
      whether   the State Automatic     Tax Board will cause to be levied an-
      nually in the Fayette    County Flood Control     District the full thirty
      cents State ad valorem      tax for the year 1951 and thereafter     until
      the expiration    date of the grant of State ad valorem    taxes heretofore
      made to said district.

                   The boundaries   of the Fayette   County Flood                  Control
      District coincide  with the boundaries   of’Fayette  County.                  H.B. 514,
      Acts 50th Leg.,   1947, ch. 185, p0 314.

                   Section l(b) of Senate’ Bill          77, Acts     49th Leg.,     1945, ch.
      364, p. 654, reads as follows:

                     “(b)    For a period of-ten (10) years,           commencing
             with September          1, following,   the,adoption    of this Act
             there is hereby donated and granted by the State of
             Texas to the Fayette            County.Flood    Control    District
             one-half     (l/2) of the state’ad       v&rem       taxes collected
             for general      revenue      purposes    upon the property       and
             from persons          in Fayette    County, which taxes when col-
             lected shall be used by the said county for the purposes
             of preventing        the continued ‘public calamity        caused by
             great floods,        and to construct     improvements       to control
             flood waters        in the said county for the protection           of life,
             property,      soil, forests,     and Rublic highways       lying with-
             in the said county.”

                      Section  l-a of Article  ,VIII of the Constitution       of the State
      of Texas,    adopted November       2, 1948,‘provides      that from and after
      January     1, 195i. no State ad valorem      tax will be levied upon any prop-
     erty    within the State for general     revenue    purposes.      It also author-
      izes a new county tax and further        provides     “that in those counties or
      political   subdivisions    or areas of the State from which tax donations
            C

I-Ion. Walter   Oeltjen,   Page   2 (V-1224)

 have heretofore    been granted,   the State Automatic      Tax Board shall
 continue to levy the full amount of the State ad valorem          tax for the
 duration of such dona.tion, or until all legal obligations       heretofore
 authorized   by the law granting    such donation or donations        shall have
~been fully discharged,   whichever     shall first occur; provided       that if
 such donation to any such county or political        subdivision    is for less
‘than the full amount of State ad valorem        taxes so levied,    the portion
 ~of such taxes remaining   over and above such donation shall be re-
 tained by said county or subdivision.”

                Article   7048a. V.C.S., enacted in pursuance            to the au-
thortiation    of Se&ion     l-a, provides  enabling machinery           for the new
county~ tax. Acts 51st Leg., R.S. 1949, ch. 464, p. 849.                 Section 10
(a)(l)  of Article     7048a reads as follows:

                “Beginning     in the year 1951 and each year there-
       after the State Automatic          Tax Board created         by Article
       7041 of the Revised         Civil Statutes of Texas,        1925, shall
       cause to be levied annually in each county, political                 sub-
       division    or other defined area. the full thirty cents (30$)
      State ad valorem         tax for general     revenue     purposes,     the
       proceeds      of which heretofore       were donated and granted
       by the Legislature        to certain   counties,    political    subdivi-
       sions or other defined areas for the purpose of carrying
       out and performing         actions of preventing       calamities,      im-
       proving,     protecting    and reclaiming      certain areas for and
       on behalf of the State as more fully declared                in each ap-
       plicable    law or laws making such donation or grant and
       said Board shall continue to levy such tax at said rate
      ,in each such designated          area until the bonds or other ob-
       ligations    of said areas authorized        or incurred       in connec-
       tion with the performance           of such action on behalf of the
       State shall have been fully paid or discharged                 or until
       the expiration      date of such donation or grant as may be
       determined       from the law or laws making such grant or
       donation, whichever         shall first occur. ”

              In the brief which you submitted      for our consideration
in connection   with your request,    you state that the Fayette    County
Flood Control    District  has never issued any bonds and does not have
any outstanding    indebtedness,   the flood control    program  in Fayette
County having been operated      on a cash basis since the program        was
inaugurated.    We quote the following     excerpt   from your brief:

              “In my opinion that clause in the Constitutional
       Amendment,    hereinbefore  mentioned,   which states ‘for
       the duration of such donation’ and the clause in Article
       7048a Sec. 10 (a) (1) which states ‘until the expiration
       date of such donation’ would not have been included in
                  ^.

Hon.   Walter   Oeltjen,   Page   3 (V-1224)

       the Constitutional  Amehdrnent    and Statute if the legis-
       lature had not intended that such clause should have
       some meaning or effect.     The Fayette     County Flood
       Control   District which operates   on a cash basis would
       now be penalized    merely because    it is operating   on a
       cash basis and because it did not imm,ediately        go into
       debt at the commencement      of the donation perisd by
       issuing,bonds.

               “If,this    county would have issued bonds and such
       bonds were paid off in a given year, then most ce’rtain-
       ly the donation would end in the year the bonds are paid
       off since in such case the discharge             of legal obligations
       did ‘first occur.’        However,   in our instance where the
       Flood Controi        District  is on a cash basis, it wsald be
       impossible       for the discharge     of legal’obligations     to
       ‘first occur* since there are no legal obligations              to be
       paid off or to be discharged.          Therefore,       in my sepinion,
       the duration of the donation in our countyy must neces-
       sarily be for the fully ten year period.

                 “There   are two conditions      set out in the Consti-
        tutional Amendment         and the Statute, i.e. the expiration
        of the donation period or the discharge            of the legal ob-
        ligations    outstanding,    either of which will eaase the levy
        of the ad valorem       tax to terminate.      Since ,in ?be :zise
        of the Fayette     County Flood Control        District  !he second
        condition    cannot occur since there are no !egst obliga-
        tions to discharge,       then it appears    that the grant should
        continue until the first condition        occurs,    namri;~ the ex-
        piration    date of the donation.”

                We cannot agree with your conclusion              for the following
reasons.     The constitutional       requirement      that the ievy shall con-
tinue “for the duration of such donation, or until all, legal obliga-
tions heretofore      authorized     by the law granting       such donation or
donations     shall have been fully discharge&“‘          is broad enough to cover
any contractual      agreement      or undertaking      which hatjl been concluded
by the Fayette      County Flood Control District.            Such legal obliga-
tions, though paid for at the time from past donations,                 have, neces-
sarily,  been ‘“fully discharged.”          A bond issue is only one type of
legal obligation,     and we see no reason to limit the meaning of the
phrase    “legal obligations”      to bond issues.       Evidently    the Legisla-
ture did not so interpret        the phrase,    since Section lo(a)(l),      previous-
ly quoted, requires       the Board to continue to levy the previously              do-
nated tax “until the bonds or other obligations               of said areas a . D
shall have been fully paid or discharged             or until the expiration       date
of such donation or grant D ~ s whichever             shaP1 first occur.”
Hon. Walter     Oeltjen,    Page   4 (V-   1224)

                 Of course,   it was not necessary          for the Legislature        to
embody this provision        in Article      704ga because       the constitutional
provision     for ,the continued    levy is a mandatory          one; and, going a
step further,     had Section l-a omitted          this requirement,         it would
nevertheless      have been read into Section 1-a by reason of the pro-
visions    of the State and Federal         ,Constitution    which prohibit       impair-
ing the obligation      of contracts.      In expressly      providing      the require-
ment for the continued levy, we think that the framers                     of the con-
stitutional    amendment     sought to make clear that although existing
contracts     were not affected,      it was their desire        to cut off all dona-
tions which were not required            by law to be continued.           In this view
of the matter,      Fayette  County Flood Control            District    is no more
penalized     by virtue of the fact that it has operated              on a “cash basis”
than it would be had it issued bonds which matured in 1950 and were
retired.     You recognize      the unquestioned        termination       of a grant in
the latter instance.

            You are therefore advised that the State Automatic    Tax
Board should no longer levy the State ad valorem   tax in Fayette
County.

                                   SUMMARY

               Since the Fayette     County Flood Control    District
        has no outstanding    indebtedness,   it has discharged     all
        legal obligations   authorized   by the law granting    it a tax
        donation from Fayette      County.  The State Automatic       Tax
        Board should not continue to’levy       the State ad valorem
        tax in Fayette    County f r the duration of the donation.
        Tex. Const., Art. VIII, %e c. l-a.

                                           Yours      very   truly,

                                            PRICE       DANIEL
                                           Attorney      General

APPROVED:                                  BY @t&.&&-h”+0                         &AZ&
                                               Mrs.    MariettaMcGre        or Creel
W. V. Geppert                                                              Assistant
Taxation Division

Jesse P. Luton, Jr.
Reviewing Assistant

Charles  D. Mathews
First Assistant

MMC/mwb