i
THE ATTORNEY GENERAL
OF TEXAS
December23, 1987
Honorable Ii. Tati Santiesteban Opinion No. m-836
Chairman
Natural Resources Committee Re: Whether taxes on a
Texas State Senate defined area or desig-
P. 0. Box 12068 nated property to pay
Austin, Texas 78711 for improvements are, by
their nature, authorized
by article XVI, section
59, of the Texas Consti-
tution (RQ-1245)
Dear Senator Santiesteban:
You ask our opinion about the constitutionality of
House Bill No. 2571, Acts 1987, 70th Legislature, chapter
600, at 4700, which authorizes municipal utility districts
operating under chapter 54 of the Water Code to issue
"defined area bonds" to provide for facilities serving
only a defined area or designated real property within the
district. You note that the legislation requires that the
bonds be approved by voters within the defined area or
designated property, and that & property within the
area is to be subject to an ad valorem tax to pay the
interest and principal due on the bonds issued to pay for
improvements. (The property within the defined area, of
course, remains subject to taxes levied to pay for
improvements benefitting the entire district.) See
generally Water Code §§54.801-54.812.
Specifically, you ask whether taxes levied & on
certain property within a district to repay bonds issued
to finance improvements benefitting & that property
are, by their nature, "equally distributed" within the
meaning of article XVI, section 59, of the constitution.
We conclude that such taxes are equally distributed as
required by the constitution.
In Dallas Countv Levee District No. 2 v. Loonev 207
S.W. 310 (Tex. 1918), the Supreme Court provided what'must
be considered a classic explanation of the nature of the
"equal distribution" requirement of article XVI, section
59:
p. 4023
Honorable H. Tati Santiesteban - Page 2 LM-836)
The declaration [in article XVI, section
591 that the taxes shall be 'equally dis-
tributed' simply means that they must be
fairly proportioned according to benefit to
the property taxed. . . . In a word, they
must fairly represent the benefit to the
property. . . .
The measure of benefit that will accrue
to property from a local improvement is at
best an approximation, and hence there is no
general principal of constitutional law that
in the imposition of such taxes limits the
legislative power to the exact amount of
pecuniary benefit which the particular
property derives. While in some instances
the benefit may be generally distributed
throughout the district, in others it may be
more confined. . . .
. . . .
The effect of [article XVI, section 591
simply is that [a tax] shall be justly laid
in fair proportion to the benefit. If it is
so proportioned, then there can be no
question but that an 'equal distribution' of
the taxes will be accomplished within the
full meaning of the term.
207 S.W. at 312-13.
All that House Bill No. 2571 does, then, is to make
plain a constitutional principal which has long governed
the execution by a district of its constitutional mandate.
Accordingly, House Bill No. 2571, Acts 1987, 70th Legis-
lature, chapter 600, at 4700 and Water Code sections
54.801-54.812, provides for the equal distribution of a
defined area or designated property tax as required by
article XVI. section 59, of the Texas Constitution.
. JIM MATTOX
Attorney General of Texas
p. 4024
Honorable H. Tati Santiesteban - Page 3 UM-836)
MARYKELLeR
Executive Assistant Attorney General
JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Karen C. Gladney
Assistant Attorney General
p. 4025