Untitled Texas Attorney General Opinion

The Attorney General of Texas

JIM MATTOX August 13, 1984
Attorney General

Supreme Court Building Honorable T. R. Ba"d:r Opinion No. JM-189
P. 0. BOX 12546 Nueces County Attonwy
Aus!in, TX. 76711. 2546 Courthouse Re: Whether an area to be developed
5121475-2501 Corpus Christi, Texas 78401 for tourist purposes within its
Telex 910/874-1367
Telecopier 5121475.0266
extraterritorial jurisdiction may
be designated by a city as a"
industrial district
714 Jackson, Suite 700
Dallas, TX. 75202-4506
Dear Mr. Bandy:
214/742-8944

You advise tha: certain areas along Mustang Island in Nueces
4624 Alberta Ave., Suite 160 County are being e:r:ensivelydeveloped for tourist-related purposes
El Paso, TX. 79905.2793 (through the const,ruction of hotels, condominiums, vacation home
9151533.3464 subdivisions, and rw:reation facilities). You ask:

PO1 Texas, Suite 700
May the governing body of a cj~tydesignate as a"
Juston, TX. 77002-3111 industria:ldistrict under the Municipal Annexation
7131223-5686 Act certain areas within its extraterritorial
jurisdict:lrm which it determines are primarily
utilized :iorthe tourist industry?
606 Broadway, Suite 312
Lubbock, TX. 79401-3479
6061747-5236 The Municipal Iumexation Act, article 970a, V.T.C.S., was enacted
in 1963. See Acts; 1963, 58th Leg., ch. 160, at 447. Section 5
thereof states in pertinent part:
4309 N. Tenth, Suite B
McA,,en, TX. 76501~1665
512/662-4547 Sec. 5. The governing body of any city shall
have the right, power, and authority to designate
w par: of the area located in its
200 Main Plaza, Suite 400 extraterr:it:orialjurisdiction as a" industrial
San Antonio, TX. 76205.2797
district, .XS the term is customarily used, and to
51212254191
treat witi such area from time to time as such
governing body may deem to be in the best interest
An Equal Opportunity/ of the city. Included in such rights and powers
Affirmative Action Employer of the governing body of any city is the
permissive right and power to enter into contracts
or agreemwts with the owner or owners of land in
such intcstrial district to guarantee the
continuat:1on of the extraterritorial status of
such distr:.ct,and its immunity from annexation by
the city for a period of time not to exceed seven
(7) years, and upon such other terms and

p. 825
Honorable T. R. Bandy - Pagr,2 (JM-189)

considerations iw the parties might deem
appropriate . . . . (Emphasis added).

The term "industrial distri':,:"
is not defined by article 970a, but is
to be understood "as the telxlis customarily used."

In Calvert v. Austin Liulndryand Dry Cleaning Co., 365 S.W.Zd 232
(Tex. Civ. App. - Austin 19c3, writ ref'd n.r.e.), the meaning of the
undefined term "industrial cperations," as used in a taxing statute,
was at issue, Declaring th:.t the word "industrial" has a meaning of
its own, and that the 1egis:l;lture
is presumed to have used the word in
the sense ordinarily underxood, the court held that the operations of
laundrv and drv cleanine xlants were "industrial onerations." The
court relied ;pon Nortlh 'Side Laundry Co. v. Board of Property
Assessment, Appeals and RevTew, 79 A.2d 419 (Pa. 1951), which held a
commercial laundry to be an'sdustrial plant" within the meaning of a
Pennsylvania taxing statute. Cf. State ex rel. Keystone Laundry and
Dry Cleaners, Inc. v. McDomxll~26
--* S.W.Zd 11 (MO. 1968).

The Pennsylvania SuprenleCourt in the North Side Laundry case,
responding to an argument tlat the Pennsylvania statute as construed
in a prior case unco"stit,lrionallydiscriminated against a laundry
because other "service induj:ries" were not equally taxed, explained:

[T]he fact that tte businesses to which plaintiff
referred are rometimes generically called
'industries' is Lrrelevant to the issue here
raised. The question is whether their establish-
ments are industrisl plants.

The answer to that question is self-evident.
By no stretch oE the imagination could a bank
building, a hate:.,a theater or any of the other
business establir;l,mentsreferred to by plaintiff
be considered ar industrial plant. It is true
that we sometimelrspeak of 'the movie industry',
'the hotel industry' or 'the banking industry',
but that is merf,~lya loose use of language to
convey that idea that the particular business is a
sizeable one. Irispite of that colloquialism, we
do not speak o!: the buildings housing such
businesses as '::"dustrial plants'. Plaintiff
attempts to gi~ve to that phrase a legal meaning
that goes far beyond anything that was
contemplated by the Courts when they pronounced
this rule and by the legislature when it adopted
it in the Act of 1933. The law can do no better
than to define ar industrial plant as that type of
establishment whj.(,h
the ordinary man thinks of as

p. 826
 : .

Honorable T. R. Bandy - Page 3 (JM-189)

C

such. Certainly a commercial laundry comes within
that definition bdt the other businesses here
mentioned do not.

See also Union Mutual Life Irsurance Co. v. Emerson, 345 A.2d 504 (Me.
1975); State Police DepartmelG:v. Hargrave, 237 N.E.Zd 269 (Ind. App.
1968); Attorney General Opinlcn MW-552 (1982).

Similarly, the question here is not whether businesses catering
to tourists might be regardcclas engaged in "the tourist industry."
The question is whether an srea primarily utilized for the tourist
industry can be properly regarded as an "industrial district" within
the meaning of the statute.

We do not think the leE;jslatureintended to allow the extension
of a city's powers, in the mrner contemplated by section 5 of article
970a. to embrace every extraxrritorial are+ occupied by a commercial
venture that might be considt:.red
part of some "industry" in the broad
sense. As the Supreme Court: of Maine noted in Union Mutual Life
Insurance Co., supra, where 'Lndustrial plant" status was claimed for
the home office of an in3llrance company because it was highly
capitalized, had a large labcr force, and other indicia:

If the argument ai.xancedwere to be adopted, it
would seem that an:!general office building could
in theory qualify 5,san industrial plant.

345 S.W.Zd 507. The Maine Court relied upon and quoted from the
Indiana case of State Police Department v. Hargrave, m, to the
effect:

[Tlhe ordinary man rrouldunderstand an industrial
plant to be any factory. business or concern which
is engaged primarily in the manufacture or
assembly of good!; or the processing of raw
materials, or both.

We believe an "industrial district," as the term is customarily
used, is an area where indujrrial plants are located, as contrasted
with areas that are merely commercial in character. If the term
"industrial" were synonymous with the term "commercial" in ordinary
usage, it would be idle for osr statutes to refer to them separately.
See V.T.C.S. art. 1349 (":mxnercial or industrial" clubs); art.
5190.6, §2(10) ("manufacturing and industrial facilities," and
"commercial development," in addition); art. 5186 ("business and
industrial development"). Cf. V.T.C.S. art. 5190.1, 52(j)
("manufacturing or industrial enterprise"); art. 5190.2, §2(=)
("manufacturing or industrial enterprise"). Article lOlla, V.T.C.S..
grants certain cities zonin;: power over land "for trade, industry,

p. 827
Honorable T. R. Bandy - Page 4 (JM-189)

residence, or other purpose." Distinctions between cormnercialzones
or districts and manufacturing or industrial districts have been
readily applied. City of Corpus Christ1 v. Jones, 144 S.W.Zd 388
(Tex. Civ. App. - San Antonio 1940, writ dism'd judgmt car.). -.See
also City of Amarillo v. :;'&, 109 S.W.Zd 258 (Tex. Civ. App. -
Amarillo 1937, writ dism'd). Cf. City of Amarillo v. Stapf. 101
S.W.Zd 229 (Tex. Comm'n App. 1937,pinion adopted).

In only two cases that we have found is there a suggestion that
section 5 of article 970a might reach farther. See Mihailov v. City
of Cedar Hill, 453 S.W.Zd 111:(Tex. Civ. App. - Dallas 1970. no writ)
(mobile home site development); and Fox Development Co. v. City of San
Antonio, 459 S.W.2d 670 (Tex. Civ. App. - San Antonio 1970). affirmed,
468 S.W.2d 338 (Tex. 1971) (subdivision development). In the Mihailov
case, supra, the court merelr held that the city could not be denied
an opportunity to litigate the question of extraterritorial rights
under sections 4 and 5 of article 970a. In the Fox Development Co.
case, a, the Court o:i Civil Appeals said that because the
appellant had not shown a co:.laterallyattacked ordinance to be void,
the trial court did not err in holding that the land in dispute was
"within the extraterritoria:.jurisdiction of the City of San Antonio
under Article 970a, 55." But in affirming the result of the Fox
Development Co. case, the fupreme Court held that section 7 (not
section 5) of article 970a was the operative section.

Three cases to which Houston Endowment, Inc. was a party
concerned unimproved land, used for agricultural purposes, that was
considered subject to inclusion in an industrial district. We do not
believe that they represent a different view, however, because the
land was acknowledged to ,e "far more valuable for industrial
development than for any otter use." City of Pasadena v. Houston
Endowment, Inc., 438 S.W.Zd -52, 155 (Tex. Civ. App. - Houston [14th
Dist.] 1969, writ ref'd n.r.a.). [The land was within territory held
by a city under articles llfi:#-1187,V.T.C.S., which authorize limited
annexations for improving navigation along navigable streams and for
establishing and maintainin,:wharves, docks, railway terminals, and
other facilities for aidin]: navigation or wharves. Article 970a,
V.T.C.S., does not apply to s,lchterritory, City of Houston v. Houston
Endowment, Inc., 428 S.W.2d 706 (Tex. Civ. App. - Houston [lst Dist.1
1968, writ ref'd n.r.e.), but article 1187-l. V.T.C.S., allows the
designation of industrial disrricts there in words almost~identical to
those of article 970a. --Houston Endowment, Inc. v. City of Houston,
468 S.W.Zd 540 (Tex. Civ. Ap:?.- Houston [14th Dist.] 1971, writ ref'd
n.r.e.). Cf. City of Nassau Bay v. City of Webster, 600 S.W.Zd 905
(Tex. Civ.App. - Houston [ist Dist.] 1980), writ ref'd n.r.e.. per
curiam, 608 S.W.Zd 618 (Tex. ,.980).]

We are of the opinion, c.fteran examination of the statutes and
cases, that the governing bo+ of a city may not properly designate as

p. 828
Honorable T. R. Bandy - Page 5 (JM-189)

an industrial district unde:r the Municipal Annexation Act an area
within its extraterritorial jurisdiction which it determines is to be
primarily utiljzed for the tourist industry.

SUMMARY
.-
The governing bclc.yof a city may not properly
designate as an j.r.dustrialdistrict under the
Municipal Annexation Act an area within its
extraterritorial jurisdiction which it determines
is to be primarily utilized for the tourist
industry.

JIM MATTOX
Attorney General of Texas

TOM GREEN
First Assistant Attorney General

DAVID R. RICHARDS
Executive Assistant Attorney :?neral

Prepared by Bruce Youngblood
Assistant Attorney General

APPROVED:
OPINION COMMITTEE

Rick Gilpin, Chairman
David Brooks
Colin Carl
Susan Garrison
Jim Moellinger
Nancy Sutton
Bruce Youngblood

p. 829